REPLACEMENT SUBORDINATED CONVERTIBLE PROMISSORY NOTE

EXHIBIT 10.2

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THIS NOTE OR SUCH SECURITIES, FILED AND MADE EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH ACT AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

REPLACEMENT SUBORDINATED CONVERTIBLE PROMISSORY NOTE

     For value received, Tejas Incorporated, a Delaware corporation (the “ Company ”), hereby promises to pay to Salter Family Partners, Ltd. or registered assigns (the “ Holder ”), the principal sum of ONE MILLION DOLLARS AND NO CENTS ($1,000,000.00), on the dates specified herein, with interest as specified herein.

     This Note is subject to the following additional provisions, terms and conditions:

ARTICLE 1. DEFINITIONS .

     Section 1.1. Certain Definitions .

     “ Applicable Rate ” means 10% per annum.

     “ Bankruptcy Law ” means Title 11, United State Code or any similar federal or state law for the relief of debtors.

     “ Business Day ” means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in Austin, Texas.

     “ Common Stock ” means the Company’s common stock, $0.001 par value.

     “ Conversion Price ” means Ten Dollars ($10.00).

     “ Default Rate ” means 14% per annum.

     “ DGCL ” means the Delaware General Corporation Law, as amended from time to time.

     “ Distribution Event ” means any insolvency, bankruptcy, receivership, liquidation, reorganization or similar proceeding (whether voluntary or involuntary) relating to the Company or its property, or any proceeding for voluntary or involuntary liquidation, dissolution or other winding up of the Company, whether or not involving insolvency or bankruptcy.

     “ Holder ” has the meaning given to such term in the first paragraph of this Note.

     “ Interest Payment Date ” means the first day of each calendar quarter.

     “ Maturity Date ” means December 1, 2005.

     “ Maximum Rate ” means the maximum nonusurious interest rate permitted under applicable law.

     “ Note ” means this Replacement Subordinated Convertible Promissory Note made by the Company payable to the Holder, together with all amendments and supplements hereto, all substitutions and replacements herefor, and all renewals, extensions, increases, restatements, modifications, rearrangements and waivers hereof from time to time.

     “ Person ” means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

     “ Preferred Stock Conversion Price ” means One Thousand Dollars ($1,000.00).

     “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

     “ Subsidiary ” means Tejas Securities Group, Inc., a wholly-owned subsidiary of the Company.

ARTICLE 2. BASIC TERMS .

     Section 2.1. Principal .

          (a)  Scheduled Repayment . The principal of this Note shall be due and payable on the Maturity Date.

          (b)  Prepayment . The principal and/or interest on this Note may not be prepaid in whole or in part without the prior consent of Holder.

     Section 2.2. Interest .

          (a) The Company agrees to pay interest in respect of the unpaid principal amount of this Note at a rate per annum equal to the lesser of the Applicable Rate or the Maximum Rate. Notwithstanding the preceding sentence, the Company agrees to pay interest in respect of overdue principal, and, to the extent permitted by law, overdue interest, at a rate per annum equal to the lesser of the Default Rate or the Maximum Rate.

          (b) Interest on the unpaid principal amount of this Note shall be due and payable (i) on each Interest Payment Date and the Maturity Date, (ii) upon the payment or conversion of any of the principal of this Note, (iii) at the maturity of this Note (whether by

acceleration or otherwise), and (iv) after maturity (whether by acceleration or otherwise), on demand.

          (c) All computations of interest, both before and after maturity, shall be made on the basis of a year of 365 days (or 366 days, as applicable) for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable.

     Section 2.3. Payments in General . Whenever any payment to be made under this Note shall be stated to be due on a day that is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the applicable rate during such extension. Each payment received by the Holder shall be applied first to collection expenses, if any, then to the payment of accrued but unpaid interest hereunder, and then to the reduction of the unpaid principal balance hereof.

     Section 2.4. Surrender of Note on Transfer or Conversion . This Note shall, as a condition to transfer, be surrendered to the Company in exchange for a new Note in a principal amount equal to the principal amount remaining unpaid on the surrendered Note, and with the same terms and conditions as this Note. In case the entire principal amount of this Note is prepaid or converted pursuant to Article 4 , this Note shall be surrendered to the Company for cancellation and shall not be reissued.

     Section 2.5. No Collateral . This Note is unsecured.

     Section 2.6. Subordination . The Holder’s rights to payments hereunder are subordinate to the rights and security interests of First United Bank pursuant to Promissory Note dated February 17, 2004, as amended, modified, revised or restructured from time to time. The Company shall obtain the prior written consent of Holder prior to (i) incurring any indebtedness for borrowed money following the date of this Note or (ii) subordinating this Note to any rights and security interests granted to a bank or other third party institutional lender following the date of this Note. Upon giving such written consent, the Holder agrees to execute all documentation reasonably requested by a bank or other third party institutional lender to subordinate the Holder’s rights to payment under this Note.

ARTICLE 3. DEFAULT AND REMEDIES .

     Section 3.1. Events of Default . An “ Event of Default ” occurs if:

          (a) the Company defaults in the payment of principal or interest on the Note when the same becomes due and payable and such default continues for 3 days after the Company has received written notice thereof;

          (b) default by the Company in the punctual performance of any other obligation, covenant, term or provision contained in this Note, and such default shall continue unremedied for a period of 10 days or more following written notice of default by Holder to the Company;

          (c) the closing price of the Company’s publicly traded Common Stock, as reported on a national or regional securities exchange, quotation system, or over-the-counter bulletin board, is less than $1.00 per share for ten (10) consecutive trading days;

          (d) Mark Salter is no longer employed by the Company or the Subsidiary;

          (e) the net liquidating equity of the Subsidiary held at its clearing organization as of the close of business on the last Business Day of a calendar month is less than Two Million Dollars ($2,000,000); or

          (f) the Company (i) commences a voluntary case concerning itself under any Bankruptcy Law now or hereafter in effect, or any successor thereof; (ii) is the object of an involuntary case under any Bankruptcy Law; or (iii) commences any Distribution Event or is the object of an involuntary Distribution Event.

     Section 3.2. Remedies .

          (a) If an Event of Default (other than an Event of Default under Section 3.1(f)) shall occur, the Holder may declare by notice in writing given to the Company, the entire unpaid principal amount of the Note, together with accrued but unpaid interest thereon, to be immediately due and payable, in which case the Note shall become immediately due and payable, both as to principal and interest, without presentment, demand, default, notice of intent to accelerate and notice of such acceleration, protest or notice of any kind, all of which are hereby expressly waived, anything herein or elsewhere to the contrary notwithstanding; provided, that if the only Event of Default arises under Section 3.1(d) because Mark Salter has died or become disabled, then the Notice shall become due and payable, both as to principal and interest, sixty (60) days after receipt of such notice by the Company.

          (b) If an Event of Default under Section 3.1(f) shall occur and be continuing, the entire unpaid principal amount of the Note, together with accrued but unpaid interest thereon, shall automatically become immediately due and payable, both as to principal and interest, without presentment, demand, default, notice of intent to accelerate and notice of such acceleration, protest or notice of any kind, all of which are hereby expressly waived, anything herein or elsewhere to the contrary notwithstanding.

          (c) If any Event of Default shall have occurred, the Holder may proceed to protect and enforce their rights either by suit in equity or by action at law, or both.

ARTICLE 4. CONVERSION .

     Section 4.1. Right of Conversion .

          (a) The Holder shall have the right at any time, to convert, subject to the terms and provisions of this Article 4 , the unpaid principal of this Note into a number of fully paid and nonassessable shares of Common Stock equal to (i) the amount of unpaid principal that the Holder elects to convert pursuant to Section 4.2 , divided by (ii) the Conversion Price.

          (b) In the event (i) the Company amends its certificate of incorporation in accordance with the DGCL and its existing certificate of incorporation and bylaws (including but not limited to obtaining approval of the Company’s stockholders for such amendment) to authorize the Company to issue shares of preferred stock with such terms as described in (c) below and (ii) the Board of Directors of the Company establishes, in accordance with the DGCL and its amended certificate of incorporation and bylaws, a separate series of the Company’s preferred stock with such terms as described in (c) below and for the purpose of enabling the Holder to convert this Note into shares of such preferred stock, then the Holder shall have the right at any time to convert, subject to the terms of this Article 4 , the unpaid principal of this Note into a number of fully paid and nonassessable shares of the Company’s preferred stock (the terms of which are described in Section 4.1(c) below, the “ Preferred Stock ”) equal to (i) the amount of unpaid principal that the Holder elects to convert pursuant to Section 4.2 , divided by (ii) the Prefer