Document:

Unassociated Document

    EXHIBIT
10.1

    

    Document
Capture Technologies, Inc.

    4255
BURTON ROAD

    SANTA
CLARA, CA 95128

     

    December
29, 2010

    

    VIA
EMAIL

    

    Garden
State Securities, Inc.

    328
Newman Springs Road

    Red Bank,
NJ 07701

    Attn:  Ernest
Pellegrino

    

    
      	
               
      

            	
              Re:

            	
              Financial
      Advisory Agreement dated October 29, 2010 (the “Agreement”) by and between
      Document Capture Technologies, Inc.  (the “Company”) and Garden
      State Securities, Inc. (“GSS”)

            

    

    

    Dear Mr.
Pellegrino:

    

    Please let this letter serve as notice
to GSS that the Company has elected to terminate the Agreement
immediately.  Notwithstanding Sections 3 and 10 of the Agreement, by
countersigning below GSS acknowledges and agrees that the Company shall not be
required to issue any shares of its common stock to
GSS.  Additionally, GSS acknowledges that it is not owed any
reimbursable expenses pursuant to Section 4 of the Agreement.

    

    If you agree with the terms of this
termination letter please countersign this letter below and return to the
Company.

     

    
      	 	      
              Very
      truly yours,

              

              /s/
      David P. Clark

              

              David
      P. Clark, CEO

            

    

     

    AGREED
AND ACCEPTED:

    

    GARDEN
STATE SECURITIES, INC.

    

    By:  /s/
Ernest Pellegrino

    Name:
Ernest Pellegrino

    Title:
Director of Corporate FinanceUnassociated Document

    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

     

    
      	
                 

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    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

                

        

      

    

    
      
         

      

      
        -i-

        
          

        

      

      
         

      

    

    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

                

        

      

    

    
      
         

      

      
        -ii-

        
          

        

      

      
         

      

    

    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

                

        

      

    

    
      
         

      

      
        -iii-

        
          

        

      

      
         

      

    

     

    
      
        	
                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

              

      

    

    
      
         

      

      
        -iv-

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    "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;

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -24-

        
          

        

      

      
         

      

    

    "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.

    
      
         

      

      
        -25-

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        -26-

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        -27-

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        -28-

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        -29-

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        -30-

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        -31-

        
          

        

      

      
         

      

    

    (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

    
      
         

      

      
        -34-

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        -35-

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        -36-

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        -39-

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        -40-

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        -47-

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        -48-

        
          

        

      

      
         

      

    

    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;

    
      
         

      

      
        -49-

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        -50-

        
          

        

      

      
         

      

    

    (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.

      
        
           

        

        
          -69-

          
            

          

        

        
           

        

      

      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.

      
        
           

        

        
          -70-

          
            

          

        

        
           

        

      

      (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.

      
        
           

        

        
          -71-

          
            

          

        

        
           

        

      

      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.

      
        
           

        

        
          -72-

          
            

          

        

        
           

        

      

      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.

      
        
           

        

        
          -73-

          
            

          

        

        
           

        

      

      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.

       

      [remainder
of this page intentionally left blank]

      
        
           

        

        
          -74-

          
            

          

        

        
           

        

      

      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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