EMPLOYMENT AGREEMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(d)           Termination for Good Reason . For purposes of this Agreement, “Good Reason” shall mean (i) the failure of the Employer to pay or cause to be paid Employee’s Annual Base Salary or any amount earned under the Bonus Plan or Profit Sharing Plan, (ii) any diminution in the Employee’s title or substantial diminution in Employee’s authority or responsibilities from those described in Section 1(a) hereof, (iii) a material breach by the Employer of any other material obligations pursuant to this Agreement or of any material obligations pursuant to the Purchase Agreement; or (iv) the occurrence of a Change-in-Control (defined below); provided, that any of th