Document:

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                                                                    EXHIBIT 10.6

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into
as of the 18th day of June, 2000 (the "Effective Date"), by and between
INTERLEUKIN GENETICS, INC., a Texas corporation ("Employer"), and FENEL ELOI, an
individual ("Employee").

                                    RECITALS

         A. Employer desires to obtain the benefit of the services of Employee
and Employee desires to render such services to Employer.

         B. The Board of Directors of Employer (the "Board") has determined that
it is in Employer's best interest to employ Employee and to provide certain
benefits to Employee.

         C. Employer and Employee desire to set forth the terms and conditions
of Employee's employment with Employer on the terms and subject to the
conditions of this Agreement.

                                    AGREEMENT

         In consideration of the foregoing recitals and of the mutual covenants
and conditions contained herein, the parties, intending to be legally bound,
agree as follows:

         1. Term. Employer agrees to employ Employee, and Employee agrees to
serve Employer, in accordance with the terms of this Agreement, for a term (the
"Term") beginning on the Effective Date and continuing for a period of four (4)
years thereafter unless earlier terminated in accordance with the provisions
hereof.

         2. Employment of Employee.

         (a) Specific Positions. Employer and Employee hereby agree that,
subject to the provisions of this Agreement, Employer will employ Employee and
Employee will serve as an employee of Employer. Employee shall have the titles
and perform the duties of Chief Operating Officer and Chief Financial Officer
and such other reasonable, usual and customary duties of such office as may be
delegated to Employee from time to time by the Board, subject always to the
policies as reasonably determined from time to time by the Board.

         (b) Promotion of Employer's Business. During the Term, Employee shall
not engage in any business competitive with Employer. Employee agrees to devote
his full business time, attention, knowledge, skill and energy to the business,
affairs and interests of Employer and matters related thereto, and shall use his
best efforts and abilities to promote Employer's interests; provided, however,
that Employee is not precluded from devoting reasonable periods to time
required: (i) for serving as a director or committee member of any organization
that does not compete with Employer or that does not involve a conflict of
interest with Employer; or (ii) for managing his personal investments; so long
as in either case, such activities do not materially interfere with the regular
performance of his duties under this Agreement.

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         3. Salary. Employer shall pay to Employee during the term of this
Agreement a base salary ("Base Salary") of $195,000.00 per year, payable in
equal monthly installments. The Base Salary may be increased (but not decreased)
annually at the Employer's sole discretion throughout the Term on each
anniversary of the Effective Date in the discretion of Employer's Board.

         4. Bonus. In addition to the Base Salary, Employee shall also receive a
bonus, if any, as determined annually by the Board of Directors of Employer in
its sole discretion.

         5. Benefits.

         (a) Stock Options. The Employer shall issue to Employee stock options
to purchase 200,000 shares of the Employer's stock. These options will be issued
under the Employer's 2000 Employee Stock Compensation Plan which will be
approved by shareholders at the June 2000 Annual Meeting. The options will be
issued as soon as practical after shareholder approval of the Plan and the
strike price will be set at the closing price of the stock on the date the
options are issued. The options will vest as follows:

o     20,000 shares on December 31, 2000

o     3,333 shares each month from January 31, 2001 through June 30, 2001

o     4,167 shares each month from July 31, 2001 through June 30, 2002

o     5,000 shares each month from July 31, 2002 through June 30, 2003

o     4,167 shares each month from July 31, 2003 through May 31, 2004

o     4,161 shares on June 30, 2004

         We will maximize the ISO portion of the award, utilizing the maximum
allowable under IRS code ($100,000 per year), The strike price for the ISOs will
be the closing price on the first business day following the effective date of
this agreement. All remaining options will be nonqualified stock options with a
strike price based on the closing price on the date this agreement is executed
by both parties.

         In the event there is a Change of Control (as defined in the Employer's
2000 Employee Stock Compensation Plan), all outstanding unvested options will
immediately vest.

         (b) Fringe Benefits. During Employee's employment by Employer under
this Agreement, Employee shall be eligible for participation in and shall be
covered by any and all such medical, disability, vision, dental, life and other
insurance plans and such other similar benefits available to other employees.

         (c) Reimbursements. During Employee's employment with Employer under
this Agreement, Employee shall be entitled to receive prompt reimbursement of
all reasonable expenses incurred by Employee in performing services hereunder,
including all expenses of travel at the request of, or in the service of,
Employer provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by Employer.

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         (d) Vacation. During Employee's employment with Employer hereunder,
Employee shall be entitled to an annual vacation leave of three (3) weeks at
full pay, which shall be adjusted in accordance with the vacation policy
generally applicable to employees of the Employer.

         6. Termination.

         (a) Termination for Cause. Employer shall have the right, exercisable
immediately upon written notice, to terminate Employee's employment for "Cause."

             (i) Definition of Cause. As used herein, "Cause" means any of the
following: (A) habitual drunkenness under the influence of alcohol by Employee
or illegal use of narcotics; (B) Employee is convicted by a court of competent
jurisdiction, or pleads "no contest" to, a felony or any other conduct of a
criminal nature (other than minor traffic violations) by Employee; (C) Employee
engages in fraud, embezzlement, or any other illegal conduct; (D) Employee
imparts confidential information relating to Employer or its business to
competitors or to other third parties other than in the course of carrying out
Employee's duties; (E) Employee refuses to perform his duties hereunder or
otherwise breaches any covenant, warranty or representation of this Agreement or
Employee's Non-Disclosure and Confidentiality Agreement executed concurrently
herewith, and, except for any conduct described in clauses (A) through (D) of
this Section 6(a)(i), fails to cure such breach (if such breach is then capable
of being cured) within ten (10) business days following written notice thereof
specifying in reasonable detail the nature of such breach, or if such breach is
not capable of being cured in such time, a cure shall not have been diligently
initiated within such ten (10) business day period.

             (ii) Effect of Termination. Upon termination in accordance with
this Section 6(a), Employee shall be entitled to no further compensation
hereunder other than the Base Salary and other benefits accrued hereunder
through, but not including, the effective date of such termination. Employer's
exercise of its right to terminate for Cause shall be without prejudice to any
other remedy to which it may be entitled at law, in equity or under this
Agreement.

         (b) Voluntary Termination. Employee may terminate his employment at any
time by giving no less than thirty (30) days' written notice to Employer.

             (i) No Reason. Upon termination in accordance with this Section
6(b), except as otherwise provided in Section 6(b)(ii) below, Employee shall be
entitled to no further compensation hereunder other than the Base Salary and
other benefits accrued hereunder through, but not including, the effective date
of such termination.

             (ii) Good Reason. Notwithstanding anything to the contrary in
Section 6(b)(i) above, if Employee terminates his employment under this Section
6(b) for Good Reason (as defined below), Employee shall be entitled to receive
from Employer all of the compensation and benefits provided for in Section 6(e)
below. As used herein, "Good Reason" means any of the following: (A) the
assignment to Employee of duties materially inconsistent with those of other
employees of Employer in like positions where Employee provides written notice
to Employer within six (6) months of such assignment that such duties are
materially inconsistent with those duties of similarly situated employees and
Employer fails to release Employee from

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his obligation to perform such inconsistent duties within twenty (20) business
days after Employer's receipt of such notice; or (B) a failure by Employer to
comply with any other material provision of Sections 3 through 5, inclusive, of
this Agreement which has not been cured within fifteen (15) business days after
notice of such noncompliance has been given by Employee to Employer, or if such
failure is not capable of being cured in such time, a cure shall not have been
diligently initiated by Employer within such fifteen (15) business day period.

         (c) Termination Due to Death or Disability. This Agreement shall
automatically terminate upon the death of Employee. In addition, if Employee, is
unable to perform the essential functions of his job with or without a
reasonable accommodation because of a physical or mental impairment for a period
of six (6) months, Employer may terminate Employee's employment upon written
notice to Employee. Upon termination in accordance with this Section 6(c),
Employee (or Employee's estate, as the case may be) shall be entitled to no
farther compensation hereunder other than the Base Salary and other benefits
accrued hereunder through, but not including, the date of death or, in the case
of disability, the date of termination.

         (d) Termination Upon Cessation of Business. Employer shall have the
right to immediately terminate Employee's employment under this Agreement upon a
"Cessation of Business." For purposes of this Agreement, a "Cessation of
Business" shall mean Employer's ceasing to operate in the ordinary course of
business, whether by dissolution, liquidation, sale of assets, consolidation,
merger or otherwise, in connection with, pursuant to or arising out of a good
faith determination by the Board that the continuing operation of the business
in its ordinary course is reasonably likely to render Employer unable to meet
its liabilities as they mature. Upon termination in accordance with this Section
6(d), Employee shall be entitled to no further compensation hereunder other than
the Base Salary and other benefits accrued hereunder through, but not including,
the effective date of such termination. If Employee is so terminated by Employer
pursuant to this Section 6(d) during the Term, Employer shall (i) pay to
Employee the Base Salary, and (ii) provide the same health insurance benefits to
which Employee was entitled hereunder, in each case (i.e., the Base Salary and
health insurance benefits), until the earlier to occur of (A) the expiration of
the remaining portion of the Term, or (B) the expiration of the twelve (12)
month period commencing on the date Employee is terminated. Employer may make
such payments in accordance with its regular payroll schedule or in a single
lump sum payment in its sole discretion.

         (e) Termination Without Cause. Employer shall have the right,
exercisable upon 30 days' prior written notice, to terminate Employee's
employment under this Agreement for any reason other than set forth in Sections
6(a), (c) and (d) above, at any time during the Term. If Employee is so
terminated by Employer pursuant to this Section 6(e) during the Term, Employer
shall (i) pay to Employee the Base Salary, and (ii) provide the same health
insurance benefits to which Employee was entitled hereunder, in each case (i.e.,
the Base Salary and health insurance benefits), until the expiration of the
twelve (12) month period commencing on the date Employee is terminated.

         7. Publicity. During the term of this Agreement and for a period of one
(1) year thereafter, Employee shall not, directly or indirectly, originate or
participate in the origination of any publicity, news release or other public
announcements, written or oral, whether to the public

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press or otherwise, relating to this Agreement, to any amendment hereto, to
Employee's employment hereunder or to the Company, without the prior written
approval of the Company.

         8. Restrictive Covenants.

         (a) Non-Competition. In consideration of the benefits of this
Agreement, including Employee's access to and limited use of proprietary and
confidential information of the Company, as well as training, education and
experience provided to Employee by the Company directly and/or as a result of
work projects assigned by the Company with respect thereto, Employee hereby
covenants and agrees that during the term of this Agreement and for a period of
twelve (12) months following termination of this Agreement, regardless of how
such termination may be brought about, Employee shall not, directly or
indirectly, as proprietor, partner, stockholder, director, officer, employee,
consultant, joint venture, investor or in any other capacity, engage in, or own,
manage, operate or control, or participate in the ownership, management,
operation or control, of any entity which engages anywhere in the world in any
business activity which is competitive to current business activities in which
the Company participates during Employee's employment with the Company;
provided, however, the foregoing shall not, in any event, prohibit Employee from
purchasing and holding as an investment not more than 1% of any class of
publicly traded securities of any entity which conducts a business in
competition with the business of the Company, so long as Employee does not
participate in any way in the management, operation or control of such entity.
It is further recognized and agreed that, even though an activity may not be
restricted under the foregoing provision, Employee shall not during the term of
this Agreement and for a period of twelve (12) months following termination of
this Agreement, regardless of how such termination may be brought about, provide
any services to any person or entity which may be used against, or in conflict
with the interests of, the Company or its customers or clients.

         (b) Judicial Reformation. Employee acknowledges that, given the nature
of the Company's business, the covenants contained in Section 8(a) establish
reasonable limitations as to time, geographic area and scope of activity to be
restrained and do not impose a greater restraint than is reasonably necessary to
protect and preserve the goodwill of the Company's business and to protect its
legitimate business interests. If, however, Section 8(a) is determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too long a period of time or over too large a geographic area or by reason
of it being too extensive in any other respect or for any other reason, it will
be interpreted to extend only over the longest period of time for which it may
be enforceable and/or over the largest geographic area as to which it may be
enforceable and/or to the maximum extent in all other aspects as to which it may
be enforceable, all as determined by such court.

         (c) Customer Lists; Non-Solicitation. In consideration of the benefits
of this Agreement, including Employee's access to and limited use of proprietary
and confidential information of the Company, as well as training, education and
experience provided to Employee by the Company directly and/or as a result of
work projects assigned by the Company with respect thereto, Employee hereby
further covenants and agrees that for a period of twelve (12) months following
the termination of this Agreement, regardless of how such termination may be
brought about, Employee shall not, directly or indirectly, (i) use or make known
to any person or entity the names or addresses of any clients or customers of
the Company or any other

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information pertaining to them, (ii) call on for the purpose of competing,
solicit, take away or attempt to call on, solicit or take away any clients or
customers of the Company on whom Employee called or with whom he became
acquainted during his employment with the Company, nor (iii) recruit or attempt
to recruit any employees of the Company.

         (d) Affiliates. When used in this Section 8, the term "Company"
includes Interleukin Genetics, Inc. and all affiliates and subsidiaries of
Interleukin Genetics, Inc.

         9. Miscellaneous.

         (a) Withholdings. All payments to Employee hereunder shall be made
after reduction for all federal, state and local withholding and payroll taxes,
all as determined under applicable law and regulations, and Employer shall make
all reports and similar filings required by such law and regulations with
respect to such payments, withholdings and taxes.

         (b) Succession. This Agreement shall inure to the benefit of and shall
be binding upon Employer, its successors and assigns. The obligations and duties
of Employee hereunder shall be personal and not assignable.

         (c) Notices. Any and all notices, demands, requests or other
communications hereunder shall be in writing and shall be deemed duly given when
personally delivered to or transmitted overnight express delivery or by
facsimile to and received by the party to whom such notice is intended (provided
the original thereof is sent by mail, in the manner set forth below, on the next
business day after the facsimile transmission is sent), or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, on
receipt when deposited in the United States mail, first-class, certified or
registered, postage prepaid, return receipt requested, addressed to the
applicable party at the address set forth below such party's signature to this
Agreement. The parties may change their respective addresses for the purpose of
this Section 9(c) by giving notice of such change to the other parties in the
manner which is provided in this Section 9(c).

         (d) Entire Agreement. This Agreement contains the entire agreement of
the parties relating to the subject matter hereof, and it replaces and
supersedes any prior agreements between the parties relating to said subject
matter.

         (e) Headings. The headings of Sections herein are used for convenience
only and shall not affect the meaning of contents hereof.

         (f) Waiver; Amendment. No provision hereof may be waived except by a
written agreement signed by the waiving party. The waiver of any term or of any
condition of this Agreement shall not be deemed to constitute the waiver of any
other term or condition. This Agreement may be amended only by a written
agreement signed by the parties hereto.

         (g) Severability. If any of the provisions of this Agreement shall be
held unenforceable by the final determination of a court of competent
jurisdiction and all appeals therefrom shall have failed or the time for such
appeals shall have expired, such provision or provisions shall be deemed
eliminated from this Agreement but the remaining provisions shall nevertheless
be given full effect. In the event this Agreement or any portion hereof is more

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restrictive than permitted by the law of the jurisdiction in which enforcement
is sought, this Agreement or such portion shall be limited in that jurisdiction
only to the extent required by the law of that jurisdiction.

         (h) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.

         (i) Arbitration. Except for the provisions of Sections 7 and 8 with
regard to which the Company expressly reserves the right to petition a court
directly for injunctive or other relief, any dispute arising out of or relating
to this Agreement, or the breach, termination or the validity hereof, shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. Judgment upon the award rendered by the
arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. THE ARBITRATOR OR ARBITRATORS ARE NOT EMPOWERED TO AWARD DAMAGES IN
EXCESS OF COMPENSATORY DAMAGES (INCLUDING REASONABLE ATTORNEYS FEES AND EXPERT
WITNESS FEES) AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO RECOVER SUCH
DAMAGES (INCLUDING, WITHOUT LIMITATION, PUNITIVE DAMAGES) IN ANY FORUM. The
arbitrator or arbitrators may award equitable relief in those circumstances
where monetary damages would be inadequate. The arbitrator or arbitrators shall
be required to follow the applicable law as set forth in the governing law
section of this Agreement. The arbitrator or arbitrators shall award reasonable
attorneys fees and costs of arbitration to the prevailing party in such
arbitration.

         (j) Equitable Relief. In the event of a breach or a threatened breach
by Employee of any of the provisions contained in Sections 7 or 8 of this
Agreement, Employee acknowledges that the Company will suffer irreparable injury
not fully compensable by money damages and, therefore, will not have an adequate
remedy available at law. Accordingly, the Company shall be entitled to obtain
such injunctive relief or other equitable remedy from any court of competent
jurisdiction as may be necessary or appropriate to prevent or curtail any such
breach, threatened or actual, without having to post bond. The foregoing shall
be in addition to and without prejudice to any other rights that the Company may
have under this Agreement, at law or in equity, including, without limitation,
the right to sue for damages.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

"EMPLOYER"                                 "EMPLOYEE"

INTERLEUKIN GENETICS, INC.

By:
   ---------------------------             -------------------------------------
                              , President  FENEL ELOI
   ---------------------------

Address:                                   Address:
100 N.E. Loop 410, Suite 820               135 Beaver Street, 2nd Floor
San Antonio, Texas 78216                   Waltham, Massachusetts 02452

                                       7<PAGE>   1
                                                                   EXHIBIT 10.13

Tejas Securities Group, Inc.
May 19, 2000

                               CLEARING AGREEMENT

         This agreement, made this 19th day of May ("the Agreement") between
First Clearing Corporation, (hereinafter referred to as the "Clearing Agent" or
"Clearing Firm") and Tejas Securities Group, Inc. (hereinafter referred to as
the "Introducing Firm"),

                                WITNESSETH THAT:

         WHEREAS, the Introducing Firm is desirous of availing itself of
clearing, execution and other services related to the securities business as
more fully set forth herein; and

         WHEREAS, the Clearing Firm desires to extend the foregoing types of
services to the Introducing Firm.

         NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and other good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereto hereby covenant and agree as follows:

I.       Services

         A.       Services to be Performed by the Clearing Firm

                  (i)      The Clearing Firm will execute orders for the
                           Introducing Firm's customers whose cash or margin
                           accounts have been accepted by Clearing Agent
                           ("Introduced Accounts"), but only insofar as such
                           orders are transmitted by the Introducing Firm to the
                           Clearing Firm. For purposes of the Securities
                           Investor Protection Act of 1970, as amended, and the
                           broker-dealer financial responsibility rules
                           promulgated by the Securities and Exchange Commission
                           under the Securities Exchange Act of 1934, as
                           amended, the Introducing Firm's customers who have
                           Introduced Accounts shall be customers of the
                           Clearing Firm, and not of the Introducing Firm.

                  (ii)     The Clearing Firm will generate, prepare and, to the
                           extent mutually agreed upon by the parties hereto,
                           mail confirmations respecting each of the Introduced
                           Accounts. Upon mutual agreement of the parties
                           hereto, the Clearing Firm may transmit the necessary
                           information via the available communication
                           facilities in order to effect the printing of
                           confirmations at the location of the Introducing
                           Firm.

                  (iii)    The Clearing Firm will prepare and mail the summary
                           monthly statements (or quarterly statements if no
                           activity in any Introduced Account occurs during any
                           quarter covered by such statement) to every
                           Introduced Account.

                  (iv)     The Clearing Firm will settle contracts and
                           transactions in securities (including options to buy
                           or sell securities) (i) between the Introducing Firm
                           and other brokers and dealers, (ii) between the
                           Introducing Firm and the Introduced Accounts, and
                           (iii) between the

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Tejas Securities Group, Inc.
May 19, 2000

                           Introducing Firm and persons other than the
                           Introduced Accounts or other brokers and dealers.

                  (v)      The Clearing Firm will engage in all cashiering
                           functions for the Introduced Accounts, including the
                           receipt, delivery and transfer of securities
                           purchased, sold, borrowed and loaned, receiving and
                           distributing payment therefor, holding in custody and
                           safekeeping all securities and payments so received,
                           the handling of margin accounts, the receipt and
                           distribution of dividends and other distributions,
                           and the processing of exchange offers, rights
                           offerings, warrants, tender offers and redemptions
                           only to the extent the Clearing Firm is timely
                           notified of such transactions by the appropriate
                           third parties. The Clearing Firm will not be
                           responsible for errors caused by such third parties
                           with respect to such transactions. Upon mutual
                           agreement of the parties hereto, the cashiering
                           functions with respect to the receipt of securities
                           and the making and receiving payment therefore may
                           be relinquished to the Introducing Firm. All deposits
                           for Introduced Accounts, which constitute Individual
                           Retirement Account contributions, must be physically
                           received by the Clearing Firm (or deposited into the
                           local bank deposit account established on behalf of
                           the Introducing Firm's customers pursuant to this
                           Agreement) on the date they are due, or they may be
                           rejected by the Clearing Firm in its sole
                           discretion).

                  (vi)     The Clearing Firm will construct and maintain books
                           and records of all transactions executed or cleared
                           through it and not specifically charged to the
                           Introducing Firm pursuant to the terms of this
                           Agreement, including a daily record of required
                           margin and other information required by Rule 432(a)
                           of the rules of the Board of Directors of the New
                           York Stock Exchange, Inc. (the "Rules"), or by the
                           constitution, articles of incorporation, by-laws (or
                           comparable instruments) or rules, regulations or
                           other instruments corresponding to the foregoing,
                           and the stated policies or practices of any other
                           securities exchange (the "Standards"), including but
                           not otherwise limited to any national securities
                           exchange registered under the Securities Exchange Act
                           of 1934, as amended ("National Securities Exchange").

                  (vii)    The Clearing Firm will report all transactions
                           cleared and settled for Introducing Firm in Nasdaq
                           NMS and Small Cap securities, and convertible bonds
                           on behalf of Introducing Firm in accordance with NASD
                           rules governing the NASD Order Audit Trail System.
                           ("OATS"). The Clearing Firm represents that it (a) is
                           familiar with OATS rules and the OATS Reporting
                           Technical Specifications; (b) completed or will
                           complete testing, as described in the OATS Technical
                           Specifications; (c) agrees to make reports to OATS in
                           compliance with OATS rules and Technical
                           Specifications, and any subsequent modifications
                           thereto; (d) agrees that the records of OATS data
                           prepared on behalf of Introducing Firm and maintained
                           by the Clearing Firm is property of the Introducing
                           Firm and will be surrendered upon the Introducing
                           Firm's request; (e) agrees to permit examination of
                           any records of OATS data prepared on behalf of
                           Introducing Firm and maintained by the Clearing Firm
                           at any time or from time to time during normal
                           business hours by representatives of NASD Regulation
                           and to promptly furnish to NASD Regulation or its
                           designee true, correct, complete, and current hard
                           copy of any of these records; (f) has processes and
                           procedures reasonably designed to ensure compliance
                           with OATS requirements; and (g) agrees to promptly
                           notify the Introducing Firm upon the occurrence of
                           any event, including physical damage to the Clearing
                           Firm's facilities or legal proceedings involving the
                           Clearing Firm that would material affect the Clearing
                           Firm's ability to make OATS reports on behalf of
                           Introducing Firm. Clearing Firm's agreement to
                           undertake OATS reporting on behalf of Introducing
                           Firm does not relieve

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Tejas Securities Group, Inc.
May 19, 2000

                           Introducing Firm of its responsibilities under OATS
                           rules or Rules 17a-3 and 17a-4 under the Securities
                           Exchange Act of 1934, as amended. Clearing Firm may
                           in its sole and absolute discretion, upon ninety (90)
                           days written notice, stop performing OATS reporting
                           on behalf of the Introducing Firm.

                  (viii)   Introducing Firm authorizes and directs Clearing Firm
                           to forward promptly any written customer complaints
                           received by Clearing Firm regarding the Introducing
                           Firm or any of its associated persons relating to any
                           of the functions and responsibilities allocated to
                           the Introducing Firm under this Agreement directly
                           to: (a) Introducing Firm and (b) the Introducing
                           Firm's examining authority designated under Section
                           17 of the Securities Exchange Act of 1934, as amended
                           ("DEA"). In addition, Introducing Firm acknowledges
                           and understands that Clearing Firm is required to
                           notify any such customers in writing that Clearing
                           Firm has received the written complaint and that the
                           complaint has been forwarded to the Introducing Firm
                           and the Introducing Firm's DEA.

         B.       Services which shall not be Performed by the Clearing Firm

                  Unless otherwise agreed to in a writing executed by the
                  parties hereto, the Clearing Firm shall not engage in any of
                  the following services, nor be responsible for the same, on
                  behalf of the Introducing Firm:

                  (a)      Accounting, bookkeeping or recordkeeping, cashiering,
                           or any other services with respect to any transaction
                           other than securities transactions.

                  (b)      Preparation of the Introducing Firm's payroll
                           records, financial statements or any analysis or
                           review thereof or any recommendation relating
                           thereto.

                  (c)      Preparation or issuance of checks in payment of the
                           Introducing Firm's expenses, other than expenses
                           (incurred by the Clearing Firm on behalf of the
                           Introducing Firm) pursuant to this Agreement.

                  (d)      Payment of commissions, salaries or other
                           remuneration to the Introducing Firm's salesmen or
                           any other employees of the Introducing Firm.

                  (e)      Preparation and filing of reports (the "Reports")
                           with the Securities and Exchange Commission, any
                           state securities commission, any National Securities
                           Exchange, or other securities exchange or securities
                           association or any other regulatory or
                           self-regulatory body or agency with which the
                           Introducing Firm is associated and/or by which it is
                           regulated. Notwithstanding the foregoing, the
                           Clearing Firm will, at the request of the Introducing
                           Firm, furnish the Introducing Firm with any necessary
                           information and data contained in books and records
                           kept by the Clearing Firm and not otherwise
                           reasonably available to the Introducing Firm if such
                           information is required in connection with the
                           preparation and filing of Reports by the Introducing
                           Firm.

                  (f)      Making and maintaining reports and records required
                           to be kept by the Introducing Firm by the Currency
                           and Foreign Transactions Reporting Act of 1970 and
                           the regulations promulgated pursuant thereto, or any
                           similar law or regulations enacted or adopted
                           hereafter.

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Tejas Securities Group, Inc.
May 19, 2000

                  (g)      Obtaining and verifying new account information, and
                           insuring that such information meets the requirements
                           of Rule 405(1) of the Rules and any other Laws,
                           Regulations or applicable Standards as defined
                           herein.

                  (h)      Maintaining a record of all personal and financial
                           information concerning any Introduced Account and all
                           orders received therefrom, and maintaining documents
                           and agreements executed by an Introduced Account.

                  (i)      Accepting deposits from the Introducing Firm in the
                           form of coin or currency of the United States or any
                           other country.

II.      Clearing Charges

         See Appendix I attached hereto and incorporated herein by reference.

         In no event shall the fees charged in this Article II for the above
         services be in contravention of the Securities Act of 1933, as amended,
         the Security Exchange Act of 1934, as amended, the Investment Advisers
         Act of 1940, as amended, and the Employee Retirement Income Security
         Act of 1974, as amended, or any rules or regulations thereunder, or any
         other law, rule or regulation, federal, state or local, or any
         constitution, by-law, rule, regulation or instrument corresponding to
         the foregoing, or stated policy or practice of any National Securities
         Exchange or other securities exchange or association or other
         regulatory or self-regulatory body or agency ("Laws and Regulations").
         In the event that such fees are deemed by the Clearing Firm to be in
         contravention of the Laws and Regulations, they shall be replaced with
         fees mutually agreed upon by the Clearing Firm and the Introducing
         Firm.

III.     Interest

         Interest income earned through charges on debit balances in any
         Introduced Account shall be proprietary to and fully retained by the
         Clearing Firm. No interest shall be paid or credit given for any credit
         balances which from time to time may be left on deposit with the
         Clearing Firm, unless otherwise mutually agreed upon by the Clearing
         Firm and the Introducing Firm.

IV.      Notations on Statements, Confirmations and Other Written Material

         The Clearing Firm shall carry all Introduced Accounts in the name of
         the Introducing Firm's customer, with a notation on its books and
         records and on all monthly or quarterly statements, and confirmation
         that such Introduced Accounts were introduced by the Introducing Firm.
         The role of the Clearing Firm is to perform only the clearing functions
         and related services expressly set forth herein, and the Introducing
         Firm will continue as broker for the Introduced Accounts. Inadvertent
         omission of such notations shall not be deemed to constitute a breach
         of this Agreement. Copies of the forms covering all of the foregoing
         shall be furnished by the Clearing Firm to the Introducing Firm.

V.       Opening of Accounts

         A.       At the time of the opening of each Introduced Account, the
                  Introducing Firm shall furnish the Clearing Firm with all
                  financial and personal information concerning such Introduced
                  Accounts as the Clearing Firm may reasonably require including
                  but not limited to the tax identification number for each
                  Introduced Account. At the time of the opening of Introduced
                  Accounts that are margin accounts, the Introducing Firm shall
                  furnish the Clearing Firm with executed customers' agreements,
                  hypothecation agreements and consents to loans of securities

                                       4
<PAGE>   5

Tejas Securities Group, Inc.
May 19, 2000

          (collectively, the "margin agreement"). With respect to Introduced
          Accounts which are Individual Retirement Accounts for which the
          clearing agent serves as custodian, the Introducing Firm shall furnish
          such documentation and information as may be required by the Clearing
          Agent. The Clearing Firm shall supply the Introducing Firm with "new
          account" and margin agreement forms regarding margin accounts in
          sufficient quantities. If any Introduced Account may have been opened
          without the Clearing Firm having previously received the foregoing
          information or, in the case of a margin account, without the Clearing
          Firm having previously received properly executed margin agreements,
          failure of the Clearing Firm to receive such information or margin
          agreements shall not be deemed to be a waiver of the information
          requirements set forth herein. The Introducing Firm shall make and
          maintain copies of all agreements executed by or related to Introduced
          Accounts, including but not limited to tax identification number and
          appropriate certification thereof. Upon the written and oral request
          of the Clearing Firm, the Introducing Firm shall furnish the Clearing
          Firm with any other documents and agreements executed by the
          Introduced Account on forms which shall be supplied by the Clearing
          Firm in sufficient quantities and which may reasonably be required by
          the Clearing Firm in connection with the opening, operating or
          maintaining of Introduced Accounts. The Clearing Firm may, at its
          option, mail margin agreements and/or option agreements directly to
          the Introduced Accounts upon notification to the Introducing Firm
          and/or require completion of its own margin agreement or new account
          form and, if required, option account agreement for an Introduced
          Account. The Introducing Firm shall promptly provide the Clearing Firm
          with basic data and copies of documents relating to each of the
          Introduced Accounts, including, but not otherwise limited to, copies
          of records of any receipts of the Introduced Accounts' funds and/or
          securities received directly by the Introducing Firm, as shall be
          necessary for the Clearing Firm to discharge its service obligations
          hereunder.

     B.   All transactions in any Introduced Account are to be considered cash
          transactions until such time as the Clearing Firm has received margin
          agreements, duly and validly executed in respect of such Introduced
          Account. Nevertheless, it is intended that the Introducing Firm will
          obtain executed margin agreements within 15 days after the opening of
          Introduced Accounts that are margin accounts. In the event that the
          Clearing Firm has not received an executed margin agreement within 15
          days of opening, the Clearing Firm has the right to place limitations
          on the trading of the account, including, but not limited to,
          restricting the account to a cash basis. In the event credit is
          inadvertently extended with respect to such Introduced Accounts, the
          Introducing Firm shall indemnify and hold the Clearing Firm harmless
          from and against all loss, liability, damage, cost and expense
          (including, but not otherwise limited to fees and expenses of legal
          counsel arising therefrom).

     C.   At the time of the opening of any agency Introduced Account, including
          any account for which the Introducing Firm is acting pursuant to
          discretionary authority or a power of attorney, the Introducing Firm
          shall obtain appropriate written authority from the Introduced Account
          and upon request shall furnish the Clearing Firm with the name of any
          principal for whom the Introducing Firm is acting as agent, and
          written evidence of such authority. With respect to Delivery vs.
          Payment Accounts, it is the responsibility of the Introducing Firm to
          obtain a written assurance from the client that all trades will be
          settled pursuant to Section 64 of the NASD Uniform Practices Code and
          Section 387 of the New York Stock Exchange.

     D.   The Introducing Firm shall have the sole and exclusive responsibility
          for compliance with Rule 405(3) of the Rules and shall specifically
          approve the opening of any new account before forwarding such account
          to the Clearing Firm as a potential Introduced Account. The Clearing
          Firm, in its reasonable business judgement, reserves the right to
          reject any account which the Introducing Firm may tender to the
          Clearing Firm as a potential Introduced Account. The

                                       5

<PAGE>   6
Tejas Securities Group, Inc.
May 19, 2000

          Clearing Firm also reserves the right to terminate any account
          previously accepted by it as an Introduced Account.

     E.   Pursuant to written notification received by the Introducing Firm and
          forwarded to the Clearing Firm, any account of the Introducing Firm
          may choose to reject the services to be performed by the Clearing Firm
          pursuant to this Agreement and thus choose not to be serviced as an
          Introduced Account pursuant hereto. Upon notice from another member
          organization that an Introduced Account intends to transfer his
          account thereto, the Clearing Firm shall expedite such transfer and
          shall have the sole and exclusive responsibility for compliance with
          Rule 412 of the Rules.

     F.   It shall be the sole and exclusive responsibility of the Introducing
          Firm to make every reasonable effort to ascertain the essential facts
          relative to any Introduced Account and any order therefor, in
          compliance with Rule 405(1) of the Rules, including but not otherwise
          limited to ascertaining the authority of all orders for Introduced
          Accounts, and the genuineness of all certificates, papers and
          signatures provided by each Introduced Account. Any investment advice
          furnished to an Introduced Account shall be the sole and exclusive
          responsibility of the Introducing Firm.

     G.   The Introducing Firm shall be solely and exclusively responsible for
          the handling and supervisory review of any Introduced Accounts over
          which the Introducing Firm's partners, officers or employees have
          discretionary authority, as required by Rule 408 of the Rules and any
          other applicable Laws and Regulations. The Introducing Firm shall
          furnish the Clearing Firm with such documentation with respect thereto
          as may be requested by the Clearing Firm. The Introducing Firm hereby
          agrees to indemnify and hold the Clearing Firm harmless against any
          loss, liability, damage, cost or expense (including but not otherwise
          limited to fees and expenses of legal counsel) suffered or incurred by
          the Clearing Firm directly or indirectly as a result of any
          liabilities or claims arising from the exercise by the Introducing
          Firm, its partners, officers or employees of discretionary authority
          over Introduced Accounts. The Introducing Firm hereby warrants that
          with regard to any order or instructions given by the Introducing Firm
          with respect to such discretionary accounts, its partners, officers or
          employees shall have been fully and properly authorized relative
          thereto and that the execution of such orders shall not be in
          violation of the Laws and Regulations. Furthermore, the Introducing
          Firm hereby agrees to indemnify and hold the Clearing Firm harmless
          against any loss, liability, damage, cost or expense (including but
          not otherwise limited to fees and expenses of legal counsel) suffered
          or incurred by the Clearing Firm directly or indirectly as a result of
          any breach of the Introducing Firm's said warranty. The Introducing
          Firm hereby agrees and warrants that it will maintain appropriate
          blanket brokers bond insurance policies covering any and all acts of
          its employees, agents and partners adequate to fully protect and
          indemnify the Clearing Firm against any loss, liability, damage, cost
          or expense (including but not otherwise limited to fees and expenses
          of legal counsel) which the Clearing Firm may suffer or incur,
          directly or indirectly, as a result of any act of the Introducing
          Firm's employees, agents or partners.

     H.   The Introducing Firm shall have the sole and exclusive responsibility
          for the handling and supervisory review of any Introduced Account for
          an employee or officer of any member organization, self-regulatory
          organization, bank, trust company, insurance company or other
          organization engaged in the securities business, and for compliance
          with Rule 407 of the Rules relating thereto. The Introducing Firm
          shall furnish the Clearing Firm with such documentation with respect
          thereto as may be requested by the Clearing Firm.

                                       6
<PAGE>   7
Tejas Securities Group, Inc.
May 19, 2000

     I.   The Introducing Firm shall have the sole and exclusive responsibility
          to insure that those of its customers who become Introduced Accounts
          hereunder shall not be minors or subject to those prohibitions
          existing under the Laws and Regulations generally relating to the
          incapacity of any Introduced Account or any conflict of interest
          relating to such Introduced Account.

     J.   The Introducing Firm shall be solely and exclusively responsible for
          the loss, liability, damage, cost or expense (including but not
          otherwise limited to fees and expense of legal counsel) sustained
          or incurred by either the Introducing Firm or the Clearing Firm,
          arising out of or resulting from any orders the Introducing Firm has
          taken from Introduced Accounts residing or being domiciled in
          jurisdictions in which the Introducing Firm or its representatives
          have not been or are no longer authorized or registered to do
          business.

     K.   It shall be the sole and exclusive responsibility of the Introducing
          Firm to comply with any and all prospectus delivery requirements in
          connection with Introduced Accounts which are option accounts.

     L.   In addition to the previous requirements for opening accounts, the
          following conditions govern the conversion of the Introducing Firm's
          existing Introduced Accounts onto the Clearing Firm's systems and
          records. The Introducing Firm shall obtain from such customers
          executed copies of the Clearing Firm's Margin and Automatic Cash
          Investment Agreements (and such other agreements which the Clearing
          Firm shall reasonably require in connection with such conversion
          process). Further, the Introducing Firm certifies and warrants with
          respect to such converted Introduced Accounts that it has obtained
          with respect to each Introduced Account the correct taxpayer
          identification number for the Introduced Account to the extent
          required by section 3406 and the regulations thereunder together with
          the certifications required by section 3406 and the regulations
          thereunder. The Introducing Firm shall indemnify the Clearing Firm for
          any loss, liability, damage, cost or expense (including but not
          limited to fees and expenses of legal counsel) sustained or incurred
          as a result of the Introducing Firm's failure to fulfill its
          obligations under this section. The Clearing Firm shall provide the
          Introducing Firm sufficient quantities of such Agreements. Unless
          specifically requested to the contrary by Clearing Firm, Introducing
          Firm shall provide Clearing Firm with copies of all Introduced
          Accounts' taxpayer identification number certifications immediately
          upon conversion.

     M.   Clearing Firm Acting as Executing Broker.

          If the Clearing Firm agrees in its sole discretion to act as an
          "Executing Broker" as such term is understood in that certain letter
          dated January 25, 1994 from the Division of Market Regulation of the
          Securities and Exchange Commission, as the same may be amended,
          modified or supplemented from time to time (the "No-Action Letter"),
          then all terms herein shall have the same meaning as ascribed thereto
          either in this Agreement or in the No-Action Letter as the sense
          thereof shall require.

          The Clearing Firm may, from time to time, execute trades for Prime
          Brokerage Accounts in compliance with the requirements of the
          No-Action letter. The No-Action Letter requires, inter alia, that a
          contract be executed between the Executing Broker and the Prime Broker
          and the Prime Broker and Prime Brokerage Customer prior to the
          transaction of any business hereunder. Introducing Broker agrees to
          arrange for execution by the Prime Broker, and the Prime Brokerage
          Customer, of any contracts prepared by and provided by the Clearing
          Broker.

                                       7
<PAGE>   8
Tejas Securities Group, Inc.
May 19, 2000

          Introducing Broker shall promptly notify Clearing Broker of any trades
          to be cleared hereunder, and such notification shall be given not
          later than 5:00 p.m. Eastern standard time on the day when the trade
          was executed on an exchange or other market (the "Trade Date").
          Notification shall be given in a mutually acceptable fashion, in
          sufficient detail for Clearing Broker to be able to report and
          transfer any trade executed by Introducing Broker on behalf of a Prime
          Brokerage Account to the appropriate Prime Broker.

          Introducing Broker understands and agrees that if Prime Broker shall
          disaffirm or "DK" any trade executed by Introducing Broker on behalf
          of a Prime Brokerage Account, Introducing Broker shall open an account
          for such Prime Brokerage Account in its range of accounts and shall
          transfer or deliver the trade to such account at the risk and expense
          of Introducing Broker to the same extent as for any account introduced
          by Introducing Broker pursuant to this Agreement.

          Introducing Broker understands and agrees that all Prime Brokerage
          Accounts shall be conducted in accordance with the requirements of the
          No-Action Letter and any relevant agreement between Introducing Broker
          and a Prime Brokerage Customer, or between Clearing Broker and the
          relevant Prime Broker. Introducing Broker further agrees to supply
          Clearing Broker with such documents and information which, from time
          to time, may be required by Clearing Broker to carry out the intention
          of this Paragraph.

          Introducing Broker agrees that it "shall know its customer," obtain
          appropriate documentation, including new account forms, conduct its
          own credit check with respect to the Prime Brokerage Customer, and
          determine the availability of shares for any short sales. Introducing
          Broker shall make arrangements, by written contract, for the clearance
          of any disaffirmed trades.

     N.   Clearing Firm Acting as Prime Broker.

          If, in its sole discretion, the Clearing Broker agrees to act, in
          accordance with the requirements of the No-Action Letter, as a Prime
          Broker on behalf of the Introducing Broker or on behalf of a customer
          of the Introducing Broker (the "Prime Broker Customer"), the Prime
          Broker Customer agrees to execute and comply with a separate Customer
          Prime Broker Agreement provided for execution by the Clearing Broker,
          which is incorporated by reference herein. In addition, the
          Introducing Broker shall execute, or shall arrange for its Prime
          Broker Customer, to execute, any other documents required by the
          Clearing Broker, or by the No-Action Letter, in order to carry out the
          intention of this Article or shall provide any information which may
          be required in that connection either by the Clearing Broker or by the
          No-Action Letter.

VI.       Financial Responsibility

     A.   Hypothecation of Customer Securities

          Clearing Firm will maintain possession and control of Introducing
          Firm's customer funds and securities in accordance with the
          broker-dealer financial responsibility rules promulgated under the
          Securities Exchange Act of 1934, as amended and other applicable laws,
          rules or regulations. Within limitations imposed by applicable laws,
          rules and regulations, securities and other property in Introducing
          Firm's customer and proprietary accounts may be pledged and
          hypothecated by Clearing Firm from time to time, without notice to
          Introducing Firm. Clearing Firm may do so without retaining in its
          possession or under its control for delivery a like amount of similar
          securities or other property.

     B.   PAIB Reserve Computation

                                       8
<PAGE>   9
Tejas Securities Group, Inc.
May 19, 2000

        (i)    Clearing Firm agrees to perform a computation for Proprietary
               Accounts of Introducing Firm assets ("PAIB reserve computation")
               in accordance with the customer reserve computation set forth in
               Rule 15c3-3 ("customer reserve formula") modified as follows:

               (a)  Any credit (including a credit applied to reduce a debit)
                    that is included in the customer reserve formula cannot be
                    included as a credit in the PAIB reserve computation;

               (b)  Note E(3) to Rule 15c3-3a which reduces debit balances by 1%
                    under the basic method and subparagraph (a)(1)(ii)(A) of
                    Rule 15c3-1 under the Securities Exchange Act of 1934 which
                    reduces debit balances by 3% under the alternative method
                    will not apply; and

               (c)  Neither Note E(1) to Rule 15c3-3a nor NYSE Interpretation
                    /04 to Item 10 of Rule 15c3-3a regarding securities
                    concentration charges is applicable to the PAIB reserve
                    computation.

        (ii)   Clearing Firm agrees that all PAIB assets will be kept separate
               and distinct from customer assets under the customer reserve
               formula in Rule 15c3-3;

        (iii)  Clearing Firm agrees that the PAIB reserve computation will be
               prepared within the same time frame as those prescribed by
               Rule 15c3-3 for the customer reserve formula;

        (iv)   Clearing Firm agrees to establish and maintain a separate
               "Special Reserve Account for the Exclusive Benefit of Customers"
               with a bank in conformity with paragraph (f) of Rule 15c3-3
               ("PAIB Reserve Account"). Cash and/or qualified securities as
               defined in the customer reserve formula must be maintained in the
               PAIB reserve requirement;

        (v)    Clearing Firm and Introducing Firm agree that if the PAIB reserve
               computation results in a deposit requirement, the requirement can
               be satisfied to the extent of any excess debit in the customer
               reserve formula on the same date;

        (vi)   Introducing Firm agrees that commission receivable and other
               receivables of Introducing Firm (excluding clearing deposits)
               that are otherwise allowable assets under Rule 15c3-1 will not be
               included in the PAIB reserve computation, and to identify them as
               receivables on the books and records of Introducing Firm and as
               payables on the books of Clearing Firm;

        (vii)  Clearing Firm and Introducing Firm agree that the proprietary
               account of Introducing Firm that is a guaranteed subsidiary of a
               clearing firm or who guarantees a clearing firm is to be excluded
               from the PAIB reserve computation; and

        (viii) Introducing Firm understands and agrees that upon discovery that
               any deposit made to the PAIB Reserve Account did not satisfy its
               deposit requirement, Clearing Firm will be facsimile or telegram
               will immediately notify its designated examining authority and
               the Securities and Exchange Commission. Unless a corrective plan
               is found acceptable by the Securities and Exchange Commission and
               the designated examining authority, Clearing Firm will provide
               written notification within 5 business days of the date of
               discovery to Introducing Firm that PAIB assets held by Clearing
               Firm will not be deemed

                                       9
<PAGE>   10
Tejas Securities Group, Inc.
May 19, 2000

               allowable assets for net capital purposes. These assets will
               become non-allowable on the last day of the subsequent month
               unless a deposit is remedied.

VII. Concentration of Positions

       Introducing Firm will ensure that its net aggregate proprietary and
       customer Introducing Firm's positions for any particular security (and/or
       options or warrants thereon) ("net aggregate position of Introduced
       Accounts") carried by the Clearing Firm for Introducing Firm will not
       exceed such limits as may be set by Clearing Firm ("concentration
       limits") in a schedule of concentration limits, as amended by Clearing
       Firm from time to time and communicated in writing to the Introducing
       Firm. The Clearing Firm may at any time refuse to execute, clear and/or
       settle transactions that would otherwise increase the Introducing Firm's
       net aggregate position of Introduced Accounts in excess of the applicable
       concentration limit. The Clearing Firm also may at any time require the
       Introducing Firm to promptly take steps to reduce the Introducing Firm's
       net aggregate position of Introduced Accounts below the applicable
       concentration limit. If such position is not so reduced by the
       Introducing Firm in a timely manner as determined by the Clearing Firm
       and promptly communicated to the Introducing Firm, the Clearing Firm in
       its sole and absolute discretion and without further notice, is
       authorized to sell or otherwise dispose of (in the case of a net
       aggregate long position), or purchase or otherwise acquire (in the case
       of a net aggregate short position) such securities (and/or options or
       warrants thereon) in an amount and manner sufficient to reduce the net
       aggregate position of Introduced Accounts below the applicable
       concentration limit. Introducing Firm agrees to indemnify and hold the
       Clearing Firm harmless from and against any loss, liability, damage, cost
       or expense, penalties or taxes, (including but not otherwise limited to
       fees and expenses of legal counsel) arising out of or resulting from
       Introducing Firm's failure to comply with the terms of this Article VII.

VIII.  Transactions and Margin

       A.      It is understood that with respect to Introduced Accounts which
               are margin accounts the Clearing Firm is responsible for
               compliance with Regulation T, 12 C.F.R. Part 220, the federal
               margin regulation promulgated by the Board of Governors of the
               Federal Reserve System (the "Board"), and any interpretive
               ruling issued by the Board, and letter rulings of the Federal
               Reserve Bank of New York, Rules and Interpretations of the New
               York Stock Exchange, Inc. and any other applicable margin and
               margin maintenance requirements of the Laws and Regulations. The
               Introducing Firm is responsible to the Clearing Firm for the
               collection of the margin required to support each transaction
               for, and to maintain margin in, each Introduced Account, in
               conformity with the above margin and margin maintenance
               requirements. After such initial margin on each transaction has
               been received, maintenance margin calls shall be generated by
               the Clearing Firm and made by the Clearing Firm. The Clearing
               Firm shall have the right to modify, in its sole discretion, any
               margin requirements of any Introduced Account from time to time
               so that the Clearing Firm may call for additional margin.
               Therefore, the Clearing Firm shall be the sole judge as to the
               amount of margin to be required of and maintained by Introduced
               Accounts, which may be imposed by security or specific
               Introduced Accounts and need not be of general application. The
               Clearing Firm shall impose no fees on the Introducing Firm, other
               than any fees or charges imposed directly by an regulatory body
               with regard to margin extensions granted by the Clearing Firm
               pursuant to written requests from a principal of the Introducing
               Firm.

       B.      On all transactions, the Introducing Firm shall be solely and
               exclusively responsible to the Clearing Firm for any loss,
               liability, damage, cost or expense (including but not otherwise
               limited to fees and expenses of legal counsel) incurred or
               sustained by the Introducing Firm or the Clearing Firm as a
               result of the failure of any Introduced Account to make timely
               payment for

                                       10

<PAGE>   11
Tejas Securities Group, Inc.
May 19, 2000

          the securities purchased by it or timely and good delivery of
          securities sold for it, or timely compliance by it with margin or
          margin maintenance calls (provided that the Clearing Firm has timely
          issued under its then current policies such call and given notice
          thereof to the Introducing Firm), whether or not any margin extensions
          have been granted by the Clearing Firm pursuant to the request of the
          Introducing Firm, except that no interest will be charged by the
          Clearing Firm for cash shorts in Introduced Accounts. The Introducing
          Firm agrees to be solely and exclusively responsible to the Clearing
          Firm for any loss or liability whatsoever should any check or draft
          given to the Clearing Firm by any of the Introduced Accounts be
          returned to the Clearing Firm unpaid. The Introducing Firm furthermore
          agrees to be solely and exclusively responsible for the payment and
          delivery of all "when issued" or "when distributed" transactions which
          the Clearing Firm may accept, forward or execute for Introduced
          Accounts.

     C.   On all over-the-counter transactions for Introduced Accounts, the
          Introducing Firm shall furnish the Clearing Firm with the names of the
          respective purchasing and selling broker/dealers (except as otherwise
          provided in Section D of this Article VIII, as set forth below), the
          names of the purchasing and selling customers, and the wholesale and
          retail purchase and sale prices and any other information required by
          the Clearing Firm.

     D.   Should the Introducing Firm give an order in an over-the-counter
          security to the Clearing Firm and the counter party is left to the
          Clearing Firm's discretion, the Clearing Firm will assume the
          responsibility of paying the Introducing Firm that which the counter
          party has failed to pay pursuant to the over-the-counter transaction
          ("del credere risk"). In case the Introducing Firm executes its own
          over-the-counter order or designates the counter party, it shall be
          understood that in the event the over-the-counter dealer with whom the
          Introducing Firm dealt or whom it designated fails to live up to its
          part of the transaction, the Introducing Firm will assume the del
          credere risk and reimburse the Clearing Firm for any loss sustained
          thereby.

     E.   The Introducing Firm shall be solely and exclusively responsible for
          approving all orders for the Introduced Accounts and for establishing
          procedures to insure that such approved orders are transmitted
          properly to the Clearing Firm for execution. The Clearing Firm, in its
          sole and absolute business judgement, reserves the right to reject any
          order which the Introducing Firm may transmit to the Clearing Firm for
          execution.

     F.   The Introducing Firm shall be solely and exclusively responsible for
          the supervisory review of all orders for the Introduced Accounts and
          shall insure that any orders and instructions given by it or any of
          its employees to the Clearing Firm pursuant to the terms of this
          Agreement shall have been properly authorized in advance.

     G.   The Introducing Firm shall be solely and exclusively responsible for
          sales and purchases for the Introduced Accounts that may create or
          result in a violation of any of the Laws and Regulations, Rules or
          Standards.

     H.   All transactions pursuant to the Terms of this Agreement shall be
          subject to the constitution, rules, by-laws, regulations, stated
          policies, practices, and customs and any modifications thereof of any
          National Securities Exchange or other securities exchange or market
          and its clearing house, if any, where executed, and the Laws and
          Regulations. It is understood that the Introducing Firm assumes sole
          and exclusive responsibility for compliance with the Laws and
          Regulations in the same manner and to the same degree as if the
          Introducing Firm were performing the services for the Introduced
          Accounts that have been assumed by the Clearing Firm pursuant to this
          Agreement, except insofar as the Clearing Firm may, pursuant to
          Section D of this Article VIII, as set forth above, select the counter
          party to a particular transaction.

                                        11
<PAGE>   12
Tejas Securities Group, Inc.
May 19, 2000

     l.   All Transactions hereto between the Introducing Firm and the Clearing
          Firm with respect to orders given by or for the Introduced Accounts
          and cleared through the Clearing Firm shall be subject to the
          provisions of this Agreement.

IX.  Supervisory Responsibility

     A.   The Introducing Firm shall have the sole and exclusive responsibility
          for the review of all Introduced Accounts, including an introduced IRA
          account for which the clearing agent serves as custodian, and for
          compliance with any supervisory responsibility under Rule 405(2) of
          the Rules, including but not otherwise limited to matters involving
          the investments made by the Introduced Accounts, the reasonable basis
          for recommendations made to Introduced Accounts, and the frequency of
          trading in the Introductory Accounts, whether or not such transactions
          are instituted by the Introducing Firm, its partners, employees or any
          registered investment advisor.

     B.   The Introducing Firm and the Clearing Firm shall each be responsible
          for compliance with any supervisory procedures under Rules 342 and 351
          of the Rules and, to the extent applicable, any other provisions of
          the Laws and Regulations, including but not otherwise limited to
          supervising the activities and training of their respective registered
          representatives, as well as all of their respective employees in the
          performance of functions specifically allocated to them pursuant to
          the terms of this Agreement.

     C.   Introducing Firm will maintain compliance and supervisory procedures
          which are adequate to assure compliance with restricted/control stock
          requirements.

X.   Information to be Provided by the Introducing Firm

     A.   The Introducing Firm shall provide the Clearing Firm with copies of
          all financial information and reports filed by the Introducing Firm
          with the New York Stock Exchange, Inc. (if a member), the National
          Association of Securities Dealers, Inc. the Securities and Exchange
          Commission, and any other National Securities Exchange (where a
          member) (including but not otherwise limited to monthly and quarterly
          Financial and Operational Combined Uniform Single Reports, i.e.,
          "FOCUS" Reports) simultaneous with the filing therewith.

     B.   The Introducing Firm shall submit to the Clearing Firm on a monthly
          basis or, if so requested by the Clearing Firm, at more frequent
          intervals, information and reports relating to the Introducing Firm's
          financial integrity, including but not otherwise limited to
          information regarding the Introducing Firm's aggregate indebtedness
          ratio and net capital.

     C.   The Introducing Firm shall provide the Clearing Firm with all
          appropriate data in its possession pertinent to the proper performance
          and supervision of any function or responsibility specifically
          allocated to the Clearing Firm pursuant to the terms of this
          Agreement.

     D.   The Introducing Firm shall provide the Clearing Firm with any
          amendment or supplement to the Form BD of the Introducing Firm.

XI.  Information to be Provided by the Clearing Firm

     A.   The Clearing Firm shall provide the Introducing Firm with all
          appropriate data in its possession pertinent to the proper performance
          and supervision of any function specifically allocated to the
          Introducing Firm pursuant to the terms of this Agreement.

                                       12
<PAGE>   13
Tejas Securities Group, Inc.
May 19, 2000

      B.  No later than October 18, 1999 and annually thereafter, Clearing Firm
          will provide Introducing Firm with a list or description of all
          reports (exception and other types of reports) which Clearing Firm
          offers to Introducing Firm to assist Introducing Firm in supervising
          Introducing Firm's activities, monitoring Introducing Firm's customer
          accounts and carrying out its functions and responsibilities under the
          Clearing Agreement. After receipt of this information, Introducing
          Firm agrees to promptly notify Clearing Firm in writing of the
          specific reports offered by Clearing Firm that Introducing Firm
          requires to supervise and monitor its customer accounts.

      C.  As part of its books and records, Clearing Firm will retain copies of
          the reports requested by or provided to Introducing Firm by Clearing
          Firm (or alternatively, Clearing Firm may retain the data from which
          such original report was produced and at the request of Introducing
          Firm's DEA, Clearing Firm can either recreate the report or provide
          the data and the data formatting that was used by Clearing Firm to
          prepare the report).

      D.  Each year, no later than July 31, Clearing Firm is required to
          provide written notification to the chief executive officer and chief
          compliance officer of Introducing Firm (with a copy of such
          notification to the Introducing Firm's DEA) of the reports offered by
          Clearing Firm and the reports requested by or supplied to Introducing
          Firm as of the date of such notification.

XII.  Customer Notification and Correspondence

      A.  The Introducing Firm shall be solely and exclusively responsible for
          informing its customers in a written correspondence, the form and
          substance of which will be mutually agreed upon, prior to the
          effective date of this Agreement, as to the general nature of the
          services to be provided by the Clearing Firm pursuant to this
          Agreement and the right of such customers to reject the services
          provided herein. Any new customers of the Introducing Firm shall be so
          informed on or about the date such customers become Introduced
          Accounts by the Clearing Firm.

      B.  The Introducing Firm shall inform its customers pursuant to such
          written correspondence that all inquiries and correspondence should be
          directed to the Introducing Firm. All customer correspondence shall be
          reviewed and responded to by the party responsible for the specific
          area to which the inquiry or complaint relates pursuant to the terms
          of this Agreement. In the event such correspondence is not directed to
          such party originally, the Introducing Firm or Clearing Firm shall
          expeditiously forward such correspondence to the appropriate party.

XIII. Errors, Controversies and Indemnities

      A.  Errors, misunderstandings or controversies, except those specifically
          otherwise covered in this Agreement, between the Introduced Accounts
          and the Introducing Firm or any of its employees, which shall arise
          out of acts or omissions of the Introducing Firm or any of its
          employees (including, without limiting the foregoing, the failure of
          the Introducing Firm to deliver promptly to the Clearing Firm any
          instructions received by the Introducing Firm from an Introduced
          Account with respect to the voting, tender or exchange of shares held
          in such Introduced Account), shall be the sole and exclusive
          responsibility and liability of the Introducing Firm. In the event,
          however, that by reason of such error, misunderstanding or
          controversy, the Introducing Firm in its discretion deems it advisable
          to commence an action or proceeding against an Introduced Account, the
          Introducing Firm shall indemnify and hold the Clearing Firm harmless
          from any loss, liability, damage, cost or expense, penalties or taxes
          (including but not otherwise limited to fees and expenses of legal
          counsel) which the Clearing Firm may incur or sustain in connection
          therewith or under any settlement thereof. If such error,
          misunderstanding or controversy shall

                                       13
<PAGE>   14
Tejas Securities Group, Inc.
May 19, 2000

          result in the bringing of an action or proceeding against the
          Clearing Firm, the Introducing Firm shall indemnify and hold the
          Clearing Firm harmless from any loss, liability, damage, cost or
          expense, penalties or taxes, (including but not otherwise limited to
          fees and expenses of legal counsel) which the Clearing Firm may incur
          or sustain in connection therewith or under any settlement thereof.

     B.   Errors, misunderstandings or controversies, except those specifically
          otherwise covered in this Agreement, between the Introduced Accounts
          and the Introducing Firm or any of its employees, which shall arise
          out of acts or omissions of the Clearing Firm or any of its employees,
          shall be the sole and exclusive responsibility and liability of the
          Clearing Firm. In the event, however, that by reason of such error,
          misunderstanding or controversy, the Clearing Firm in its discretion
          deems it advisable to commence an action or proceeding against an
          Introduced Account, the Clearing Firm shall indemnify and hold the
          Introducing Firm harmless from any loss, liability, damage, cost or
          expense, penalties or taxes, (including but not otherwise limited to
          fees and expenses of legal counsel) which the Introducing Firm may
          incur or sustain in connection therewith or under any settlement
          thereof. If such error, misunderstanding or controversy shall result
          in the bringing of an action or proceeding against the Introducing
          Firm, the Clearing Firm shall indemnify and hold the Introducing Firm
          harmless from any loss, liability, damage, cost or expense, penalties
          or taxes, (including but not otherwise limited to fees and expenses of
          legal counsel) which the Introducing Firm may incur or sustain in
          connection therewith or under any settlement thereof.

     C.   The Clearing Firm and the Introducing Firm both agree to indemnify the
          other and hold the other harmless from and against any loss,
          liability, damage, cost or expense, penalties or taxes, (including but
          not otherwise limited to fees and expenses of legal counsel) arising
          out of or resulting from any failure by the indemnifying party or any
          of its employees to carry out fully the duties and responsibilities
          assigned to the indemnifying party herein (including, without
          limitation, the indemnification obligations contained in this
          Agreement) or any breach of any representation or warranty herein by
          the indemnifying party under this Agreement. The Introducing Firm
          hereby agrees to indemnify and hold the Clearing Firm harmless from
          and against any loss, liability, damage, cost or expense, penalties or
          taxes, (including but not otherwise limited to fees and expenses of
          legal counsel) sustained or incurred in connection herewith in the
          event any Introduced Account fails to meet any initial margin call or
          maintenance call, in conformity with Article VIII hereof.

     D.   The indemnification provisions in this Agreement shall remain
          operative and in full force and effect, regardless of the termination
          of this Agreement, and shall survive any such termination.

     E.   Introducing Firm agrees to maintain, and to provide a certificate of
          insurance thereof to the Clearing Firm, brokers indemnity bond
          insurance providing coverage for an Introducing Firm that acts in the
          capacity of market maker equal to the greater of (a) $1 million or (b)
          the minimum coverage as required under NASD rules, and for all other
          Introducing Firms, the minimum coverage as required under NASD rules
          and other applicable law (or other such reasonable indemnity bond
          insurance requirements as communicated in writing upon 30-days notice
          to Introducing Firm) covering any and all acts of its employees,
          agents and partners, listing the Clearing Firm as an additional
          insured party and permitting the Clearing Firm to assume the policy in
          the event of the Introducing Firm ceasing operations. Such indemnity
          bond insurance shall contain a rider or provision whereby the
          insurance company will notify the Clearing Firm, as an insured party,
          of any modification to or claims under such policy by the Introducing
          Firm.

                                       14
<PAGE>   15
Tejas Securities Group, Inc.
May 19, 2000

XIV. Representations, Warranties and Covenants

     A.   The Introducing Firm represents, warrants and covenants as follows:

          (i)    The Introducing Firm will (a) maintain at all times a net
                 capital computed in accordance with Rule 15c3-1 of at least
                 75,000 in excess of the minimum net capital required by such
                 rule if the Introducing Firm does not make a market in any
                 security and of at least 150,000 in excess of the minimum net
                 capital required by such rule if the Introducing Firm makes a
                 market in any security and (b) immediately notify the Clearing
                 Firm when (i) its net capital is less than the applicable
                 amount set forth in (a) above, (ii) its Aggregate Indebtedness
                 Ratio reaches or exceeds 10 to 1 or (iii) if the Introducing
                 Firm has elected to operate under paragraph (f) of Rule 15c3-1
                 of the Securities Exchange Act of 1934, as amended, when its
                 net capital is less than 5% of aggregate debit items computed
                 in accordance with Rule 15c3-3.

          (ii)   The Introducing Firm is a member in good standing of the
                 National Association of Securities Dealers, Inc. The
                 Introducing Firm will promptly notify the Clearing Firm of any
                 additional exchange memberships or affiliations. The
                 Introducing Firm shall also comply with whatever non-member
                 access rules have been promulgated by any National Securities
                 Exchange or any other securities exchange of which it is not a
                 member.

          (iii)  The Introducing Firm and its representatives are and during the
                 term of this Agreement will remain duly registered or licensed
                 and in good standing as a broker/dealer and registered
                 representatives under all applicable Laws and Regulations.

          (iv)   The Introducing Firm has all the requisite authority in
                 conformity with all applicable Laws and Regulations to enter
                 into this Agreement and to retain the services of the Clearing
                 Firm in accordance with the terms hereof.

          (v)    The Introducing Firm is in compliance, and during the term of
                 this Agreement will remain in compliance with (i) the capital
                 and financial reporting requirements of every National
                 Securities Exchange or other securities exchange and/or
                 securities association of which the Introducing Firm is a
                 member, (ii) the capital requirements of every state in which
                 the Introducing Firm is licensed as a broker/dealer. In the
                 event that the Introducing Firm is notified at anytime by any
                 regulatory authority of a net capital deficiency or similar
                 notice, a copy shall be provided immediately to the Clearing
                 Firm. The Introducing Firm, in addition, will provide to the
                 Clearing Firm copies of any and all net capital deficiency
                 notices or reports that the Introducing Firm files with such
                 regulatory authorities including, but not limited to, notices
                 and reports made pursuant to section 17a(11) of the Securities
                 and Exchange Act of 1934.

          (vi)   The Introducing Firm shall not generate and/or prepare any
                 statements, billings or confirmations respecting any Introduced
                 Account unless expressly so instructed in writing by the
                 Clearing Firm.

          (vii)  The Introducing Firm shall keep confidential any information it
                 may acquire as a result of this Agreement regarding the
                 business and affairs of the Clearing Firm, which requirement
                 shall survive the life of this Agreement.

                                       15
<PAGE>   16

Tejas Securities Group, Inc.
May 19, 2000

          (viii)    Introducing Firm agrees that it will not use the name of or
                    make any representations on behalf of Clearing Firm or any
                    of its affiliates without the express written consent of
                    Clearing Firm.

     B.   The Clearing Firm represents, warrants and covenants as follows:

          (i)       The Clearing Firm is a member in good standing of the
                    National Association of Securities Dealers, Inc. and the New
                    York Stock Exchange, Inc.

          (ii)      The Clearing Firm is and during the term of this Agreement
                    will remain duly licensed and in good standing as a
                    broker/dealer under all applicable Laws and Regulations.

          (iii)     The Clearing Firm has all the requisite authority, in
                    conformity with all applicable Laws and Regulations, to
                    enter into and perform this Agreement.

          (iv)      The Clearing Firm is in compliance, and during the term of
                    this Agreement will remain in compliance with (i) the
                    capital and financial reporting requirements of every
                    National Securities Exchange and/or other securities
                    exchange or association of which it is a member, (ii) the
                    capital requirements of the Securities and Exchange
                    Commission, and (iii) the capital requirements of every
                    state in which it is licensed as a broker/dealer.

          (v)       The Clearing Firm represents and warrants that the names
                    and addresses of the Introducing Firm's customers which have
                    or which may come to its attention in connection with the
                    clearing and related functions it has assumed under this
                    Agreement are confidential and shall not be utilized by the
                    Clearing Firm except in connection with the functions
                    performed by the Clearing Firm pursuant to this Agreement.
                    The Clearing Firm shall send no written information to such
                    customers other than statements, bills or notices of
                    transactions in connection with its role as Clearing Firm.

                    Notwithstanding the foregoing, should a client who has an
                    Introduced Account request, on an unsolicited basis, that
                    the Clearing Firm or an organization affiliated with the
                    Clearing Firm become its broker, acceptance of such client
                    by the Clearing Firm or such affiliated organization shall
                    in no way violate this representation and warranty, nor
                    result in a breach of this Agreement.

          (vi)      The Clearing Firm shall keep confidential any information
                    it may acquire as a result of this Agreement regarding the
                    business and affairs of the Introducing Firm, which
                    requirement shall survive the life of this Agreement.

XV.  Termination - Event of Default

     Notwithstanding any provision in this Agreement, the following events or
     occurrences shall constitute an Event of Default under this Agreement:

     (1)  either the Clearing Firm or the Introducing Firm shall fail to
          perform or observe any term, covenant or condition to be performed or
          observed by it hereunder and such failure shall continue to be
          unremedied for a period of 60 days (30 days in the case of a failure
          of the Introducing Firm to maintain the net capital ratios set forth
          in Section A(i)(a) of Article XIV) after written notice from the
          non-defaulting party to the defaulting party specifying the failure
          and demanding that the same be remedied; or

                                       16

<PAGE>   17

Tejas Securities Group, Inc.
May 19, 2000

          (2)  any representation or warranty made by either the Clearing Firm
               or the Introducing Firm herein shall prove to be incorrect at any
               time in any material respect; or

          (3)  a receiver, liquidator or trustee of either the Clearing Firm or
               the Introducing Firm, or of its property, held by either party is
               appointed by court order and such order remains in effect for
               more than 30 days; or either the Clearing Firm or the Introducing
               Firm is adjudicated bankrupt or insolvent; or any of its property
               is sequestered by court order and such order remains in effect
               for more than 30 days; or a petition is filed against either the
               Clearing Firm or the Introducing Firm under any bankruptcy,
               reorganization, arrangement, insolvency, readjustment of debt,
               dissolution or liquidation law of any jurisdiction, whether now
               or hereafter in effect, and is not dismissed within 30 days after
               such filing; or

          (4)  either the Clearing Firm or the Introducing Firm files a petition
               in voluntary bankruptcy or seeking relief under any provision of
               any bankruptcy, reorganization, arrangement, insolvency,
               readjustment of debt, dissolution or liquidation law of any
               jurisdiction, whether now or hereafter in effect, or consents
               to the filing of any petition against it under any such law; or

          (5)  either the Clearing Firm or the Introducing Firm makes an
               assignment for the benefit of its creditors, or admits in writing
               its inability to pay its debts generally as they become due, or
               consents to the appointment of a receiver, trustee or liquidator
               of either the Clearing Firm or the Introducing Firm, or of any
               property held by either party.

     Upon the occurrence of any such Event of Default, the non-defaulting party
     may, at its option, by notice to the defaulting party declare that this
     Agreement shall be thereby terminated and such termination shall be
     effective as of the date such notice has been sent or communicated to the
     defaulting party.

XVI. Remedies Cumulative

     The enumeration herein of specific remedies shall not be exclusive of any
     other remedies. Any delay or failure by any party to this Agreement to
     exercise any right, power, remedy or privilege herein contained, or now or
     hereafter existing under any applicable statute or law, shall not be
     construed to be a waiver of such right, power, remedy or privilege or to
     limit the exercise of such right, power, remedy or privilege. No single,
     partial or other exercise of any such right, power, remedy or privilege
     shall preclude the further exercise thereof or the exercise of any other
     right, power, remedy or privilege.

XVII. Miscellaneous

     A. As of the effective date of this Agreement, the Clearing Firm will not
        convert to its records as Introduced Accounts customer accounts of the
        Introducing Firm that are partially or totally unsecured, securities in
        the name of the Introducing Firm's customers, or legal transfer
        securities (securities in the name of estates, trust, joint ownership
        and such).

     B. The Clearing Firm shall have the power to place open orders as
        instructed by the Introducing Firm as of the effective date of this
        Agreement, and appropriate adjustments shall be made by the Clearing
        Firm to reflect that the Clearing Firm has acted as broker on the open
        orders with specialists on any National Securities Exchange or other
        securities exchange.

     C. The Clearing Firm shall have the power to effect appropriate
        adjustments with respect to pending dividends and other distributions
        from the effective date of this Agreement through the last payable date
        of such pending dividends.

                                       17
<PAGE>   18

Tejas Securities Group, Inc.
May 19, 2000

     D.   The Introducing Firm shall be responsible for providing annual
          dividend and distribution information as contained in IRS Form 1087
          and any other information required to be reported by federal, state,
          or local tax laws, rules or regulations, to its customers until the
          effective date of this Agreement, whereupon the Clearing Firm shall
          assume this function as to Introduced Accounts.

     E.   The Clearing Firm shall have the power to allocate and make
          appropriate adjustments for fails, reorganization accounts, other
          work in process accounts, and coverages relating to accounts of the
          customers of the Introducing Firm that have become Introduced Accounts
          pursuant to the terms of this Agreement.

     F.   The Introducing Firm shall assume all liabilities in connection with
          uncompared principal trades. The Introducing Firm shall also assume
          all liabilities in connection with the bad debts of all Introduced
          Accounts. Unsecured debits in the Introduced Accounts shall be paid
          within 15 days of their origin date, and it shall be the
          responsibility of the Introducing Firm to collect such payments from
          its customers and transmit them to the Clearing Firm within such
          15-day period. If any debit balances remain outstanding for a period
          of more than 15 days after their origin date, the Clearing Firm is
          authorized to apply as payment of such debit balances commission fees
          owed to the Introducing Firm in connection with transactions pursuant
          to this Agreement.

     G.   Transfers of securities relating to Introduced Accounts shall be
          frozen 10 business days prior to the effective date of this Agreement.

     H.   The Clearing Firm shall limit its services pursuant to the terms of
          this Agreement to that of clearing functions and the related services
          expressly set forth herein and the Introducing Firm shall not hold
          itself out as an agent of the Clearing Firm or any of the subsidiaries
          or companies controlled directly or indirectly by or affiliated with
          the Clearing Firm. Should the Introducing Firm in any way attempt to
          hold itself out as, advertise or in any way represent that it is the
          agent of the Clearing Firm, the Clearing Firm shall have the power, at
          its option, to terminate this Agreement and the Introducing Firm shall
          be liable for any loss, liability, damage, cost or expense (including
          but not otherwise limited to fees and expenses of legal counsel)
          sustained or incurred by the Clearing Firm as a result of such a
          representation of agency or apparent authority to act as an agent of
          the Clearing Firm or agency by estoppel.

     I.   This Agreement supersedes any previous agreement and may be modified
          only by a writing signed by both parties to this Agreement. Such
          modification shall not be deemed as a cancellation of this Agreement.

     J.   This Agreement shall be submitted to and/or approved by any National
          Securities Exchange, or other regulatory and self-regulatory bodies
          vested with the authority to review and/or approve this Agreement or
          any amendment or modifications hereto. In the event of any such
          disapproval, the parties hereto agree to bargain in good faith to
          achieve the requisite approval.

     K.   (i) The arrangement contemplated by this Agreement shall be for a term
          of three (3) years from the date first written above (the "Term").
          Unless either party hereto gives the other party sixty (60) days
          advance written notice before the expiration of the Term of its
          intention not to renew, this Agreement shall renew for one (1) year.

          (ii) In the event that the Introducing Firm desires to terminate the
          Agreement and cancel the relationship contemplated hereby prior to
          the expiration of the Term or Renewal Term as

                                       18
<PAGE>   19
Tejas Securities Group, Inc.
May 19, 2000

          applicable, the Introducing Firm shall pay to the Clearing Firm the
          following early termination fees:

<TABLE>
<CAPTION>

               Termination in Year                Early Termination Fee
               -------------------                ---------------------
                      <S>                                   <C>
                       1                                 $100,000
                       2                                 $50,000
                       3                                 $25,000
</TABLE>

          (iii) Notwithstanding the foregoing provisions of this Paragraph K,
          this Agreement may be cancelled by either party upon thirty (30) days'
          written notice if (a) the ratio of aggregate indebtedness to net
          capital of the other party exceed 10 to 1 or (b) if the other party
          has elected to operate under paragraph (f) of Rule 15c3-1 of the
          Securities Exchange Act of 1934, as amended, when its net capital is
          less than 3% of aggregate debit items computed in accordance with Rule
          15c3-3, and provided, further, that this Agreement may be cancelled by
          the Clearing Firm at any time between the date on which this Agreement
          is executed and the effective date of this Agreement if there is a
          material change in the control or management of the Introducing Firm.

          (iv)  Notwithstanding any other provision of this Agreement, this
          Agreement may be terminated and the relationship contemplated hereby
          cancelled by the Clearing Firm at any time for any reason, and without
          liability therefor, upon sixty 60 prior written notice to the
          Introducing Firm.

     L.   ANY DISPUTE OR CONTROVERSY BETWEEN THE INTRODUCING FIRM AND THE
          CLEARING FIRM RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE
          SETTLED BY ARBITRATION BEFORE AND UNDER THE RULES OF THE ARBITRATION
          COMMITTEE OF THE NEW YORK STOCK EXCHANGE, INC., UNLESS THE TRANSACTION
          WHICH GAVE RISE TO SUCH DISPUTE OR CONTROVERSY WAS EFFECTED IN ANOTHER
          EXCHANGE OR MARKET WHICH PROVIDES ARBITRATION FACILITIES, IN WHICH
          CASE IT SHALL BE SETTLED BY ARBITRATION UNDER SUCH FACILITIES.

     M.   The Clearing Firm will not be bound to make any investigation into the
          facts surrounding any transaction that it may have with the
          Introducing Firm on a principal or agency basis or that the
          Introducing Firm may have with its customers or other persons, nor
          will the Clearing Firm be under any responsibility for compliance by
          the Introducing Firm with any Laws or Regulations which may be
          applicable to the Introducing Firm.

     N.   To facilitate the keeping of records by the Clearing Firm the
          Introducing Firm will turn over promptly to the Clearing Firm any and
          all payments and securities which the Introducing Firm receives from
          its customers. Concurrently with the delivery of such payments or
          securities to the Introducing Firm, it shall furnish the Clearing Firm
          with such information as may be relevant or necessary to enable the
          Clearing Firm to record promptly and properly such payments and
          securities in the respective Introduced Account.

     O.   This Agreement shall be binding upon all successors, assigns or
          transfers of both parties hereto, irrespective of any change with
          regard to the name of or the personnel of the Introducing Firm or the
          Clearing Firm. Any assignment of this Agreement shall be subject to
          the requisite review and/or approval of any regulatory or
          self-regulatory agency or body whose review and/or approval must be
          obtained prior to the effectiveness and validity of such assignment.
          No assignment of this Agreement by the Introducing Firm shall be valid
          unless the Clearing Firm consents to such an assignment in writing.
          Any assignment by the Clearing Firm to any subsidiary that it may
          create or to a company affiliated with or controlled directly or

                                       19
<PAGE>   20

Tejas Securities Group, Inc.
May 19, 2000

          indirectly by it will be deemed valid and enforceable in the absence
          of any consent from the Introducing Firm. Neither this Agreement nor
          any operation hereunder is intended to be, shall not be deemed to be,
          and shall not be treated as a general or limited partnership,
          association or joint venture or agency relationship between the
          Introducing Firm and the Clearing Firm.

     P.   Notwithstanding the provisions of Section L of Article XVII that any
          dispute or controversy between the parties relating to or arising out
          of this Agreement shall be referred to and settled by arbitration, in
          connection with any breach by the Introducing Firm of Section H, the
          Clearing Firm may, at any time prior to the initial arbitration
          hearing pertaining to such dispute or controversy, by application to
          the United States District Court for the Eastern District of Virginia
          or the Circuit Court of the State of Virginia or the City of Richmond
          seek any such temporary or provisional relief or remedy ("provisional
          remedy") provided by the laws of the United States or the laws of the
          Commonwealth of Virginia would be available in an action based upon
          such dispute or controversy in the absence of an agreement to
          arbitrate. The parties acknowledge and agree that it is their
          intention to have any such application for a provisional remedy
          decided by the court to which it is made and that such application
          shall not be referred to or settled by arbitration. No such
          application to either said court for a provisional remedy, nor any act
          or conduct by either party in furtherance of or in opposition to such
          application, shall constitute a relinquishment or waiver of any right
          to have the underlying dispute or controversy with respect to which
          such application is made settled by arbitration in accordance with
          Section L above.

     Q.   The Introducing Firm shall not, without having obtained the prior
          written approval of the Clearing Firm, agree to place or place any
          advertisement in any newspaper, publication, periodical or any other
          media or communicate with any customer or the public in any manner
          whatsoever if such advertisement or communication in any manner makes
          reference to the Clearing Firm, to any person or entity that directly,
          or indirectly through one or more intermediaries, controls or is
          controlled by, or is under common control, with the Clearing Firm and
          to the clearing arrangements and/or any of the services embodied in
          this Agreement.

     R.   The Laws and Regulations require that the Clearing Firm must have
          proper documentation to support any account opened on its books,
          including Introduced Accounts. If, after reasonable request therefor,
          the necessary documents so as to enable the Clearing Firm to comply
          with such account documentation requirements of the Laws and
          Regulations have not been received by the Clearing Firm, the
          Introducing Firm shall receive notification that no further orders
          will be accepted for the Introduced Accounts involved. Should it
          happen that inadvertent orders are placed for such account after this
          notice is received, no commission credit will be granted from such
          orders. On receipt of the necessary documents, this restriction will
          be lifted on future commissions, but any commissions, withheld will
          not be credited or paid. This Agreement is not in any way intended to
          limit the responsibility of the Clearing Firm under the Laws and
          Regulations with respect to Introduced Accounts.

     S.   The construction and effect of every provision of this Agreement, the
          rights of the parties hereunder and any questions arising out of the
          Agreement, shall be subject to the statutory and common law of the
          Commonwealth of Virginia.

     T.   The headings preceding the text, articles and sections hereof have
          been inserted for convenience and reference only and shall not be
          construed to affect the meaning, construction or effect of this
          Agreement.

     U.   This Agreement shall cover only the types of services set forth herein
          and is no way intended nor shall it be construed to bestow upon the
          Introducing Firm any special treatment regarding

                                       20
<PAGE>   21
Tejas Securities Group, Inc.
May 19, 2000

          any other arrangements, agreements or understanding which presently
          exist between the Introducing Firm and the Clearing Firm or which may
          hereafter exist. The Introducing Firm shall be under no obligation
          whatsoever to deal with the Clearing Firm or any of its subsidiaries
          or any companies controlled directly or indirectly by or affiliated
          with the Clearing Firm, in any capacity other than as set forth in
          this Agreement. Likewise, the Clearing Firm shall be under no
          obligation whatsoever to deal with the Introducing Firm or any of its
          affiliates in any capacity other than as set forth in this Agreement.

     V.   If any provision or condition of this Agreement shall be held to be
          invalid or unenforceable by any court, or regulatory or
          self-regulatory agency or body, such invalidity or unenforceability
          shall attach only to such provision or condition. The validity of the
          remaining provisions and conditions shall not be affected thereby and
          this Agreement shall be carried out as if any such invalid or
          unenforceable provision or condition were not contained herein.

     W.   For the purposes of any and all notices, consents, directions,
          approvals, restrictions, requests or other communications required or
          permitted to be delivered hereunder, the Clearing Firm's address shall
          be First Clearing Corporation, 901 E. Byrd Street, P.O. Box 1357,
          Richmond, VA 23211-1357 and the Introducing Firm's address shall be
          2700 Via Fortuna, Suite 400, Austin, TX 78746.

          Either party may change its address for notice purposes by giving
          written notice pursuant to registered mail of the new address to the
          other party.

     X.   This Agreement shall become effective on or about May 19, 2000 or such
          other date mutually agreed upon by the parties hereto.

     Y.   The Clearing Firm shall not be liable for any loss caused, directly or
          indirectly, by government restrictions, exchange or market ruling,
          suspension of trading, war, strikes or other conditions beyond the
          control of the Clearing Firm. In the event that any communications
          network or computer system used by the Clearing Firm, whether or not
          owned by the Clearing Firm, is rendered inoperable, the Clearing Firm
          shall not be liable to the Introducing Firm for any loss, liability,
          claim, damage or expense resulting, either directly or indirectly,
          therefrom.

     Z.   The Clearing Firm shall have the right to investigate, or arrange for
          an appropriate party to investigate, the Introducing Firm's credit;
          provided, however, that the Introducing Firm may make a written
          request for disclosure of the nature of such investigation within a
          reasonable time. Nothing in this paragraph shall be construed to
          relieve the Introducing Firm of its obligation to oversee its
          financial integrity.

XVIII.    Introducing Firm Deposit Account

     A.   In order to further assure compliance with its representations,
          agreements and indemnifications herein, the Introducing Firm agrees to
          establish an Introducing Firm Deposit Account ("the Deposit Account")
          in the name of the Introducing Firm with the Clearing Firm.

          The Introducing Firm shall deposit good and free funds in the amount
          of $250,000 into the Deposit Account prior to the date September 30,
          2000. The Clearing Firm will pay interest on cash deposited in the
          Deposit Account in accordance with its then accepted Free Credit
          Balance Interest Rates.

                                       21
<PAGE>   22
Tejas Securities Group, Inc.
May 19, 2000

         B.       The establishment of the Deposit Account and deposit of funds
                  therein shall be for the purposes described in this section
                  and shall not constitute an ownership interest in the Clearing
                  Firm by the Introducing Firm.

         C.       In the event (1) the Clearing Firm has a claim arising in any
                  fashion under this agreement against the Introducing Firm, (2)
                  if an Introduced Account has made a claim against the Clearing
                  Firm arising from the Introducing Firm's actions or inactions
                  hereunder or (3) if the Introducing Firm is otherwise
                  obligated to indemnify the Clearing Firm herein, then if the
                  Introducing Firm has not resolved its obligation within five
                  business days after receipt of notice of the obligation from
                  the Clearing Firm, the Clearing Firm may deduct such
                  obligation from commissions then owed to the Introducing Firm,
                  and if such commissions are insufficient to satisfy such
                  obligation, the Clearing Firm is authorized to withdraw the
                  amount from the Deposit Account and pay amount to itself.

                  After the resolution of such obligation, the Introducing Firm
                  will promptly deposit additional cash into the Deposit Account
                  so that the principal balance equals the amount required in
                  the first paragraph of this section.

         D.       Return of Required Clearing Deposit. Upon termination of this
                  Agreement in accordance with the provisions hereof, and
                  subject to, (a) FCC's receipt of payment in full of any and
                  all amounts owing to FCC hereunder, and (b) Correspondent's
                  satisfaction of each and every of Correspondent's outstanding
                  obligations to FCC hereunder, FCC shall return the required
                  clearing deposit to Correspondent within thirty (30) calendar
                  days of the date on which all of said payments have been
                  received, and obligations satisfied. These obligations
                  include, but are not limited to, any open and unsettled
                  litigation matters between FCC and either Correspondent or
                  Customer, any unresolved, unsecured Correspondent-Account or
                  Customer-Account debit balances, any open fails as a result of
                  trades executed on behalf of Correspondent Account or Customer
                  Accounts, and any failures to transfer to another broker any
                  Customer Accounts introduced by Correspondent.

Made and executed at Richmond, VA on the date first hereinabove set forth.

                                                Tejas Securities Group, Inc.

                                                By       /s/ JAY W. VAN ERT
                                                     ---------------------------

                                                             President
                                                     ---------------------------
                                                               Title

                                                Date          5-24-00
                                                     ---------------------------

ACCEPTED:
FIRST CLEARING CORPORATION

By  [ILLEGIBLE]
   ------------------------

     Managing Director
   ------------------------
          Title

Date     5-31-00
   ------------------------

                                       22

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