GILMAN & CIOCIA INC
FORBEARANCE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>file003.txt
<DESCRIPTION>FORBEARANCE AGREEMENT
<TEXT>
<PAGE>


                              FORBEARANCE AGREEMENT
                              ---------------------

     This Forbearance Agreement (this "Agreement") dated as of November 27, 2002
is by an between Gilman + Ciocia, Inc., a Delaware corporation, located at 11
Raymond Avenue, Poughkeepsie, New York 12603 (the "Borrower"), North Ridge
Securities Corp. ("North Ridge"), Prime Capital Services, Inc. ("Prime"), the
following guarantors: Prime Financial Services, Inc., North Shore Capital
Management Corp., Asset & Financial Planning, Ltd., e1040.com, inc, G + C
Schlager & Associates Inc., G + C Mortgage Line Inc. (the "Corporate
Guarantors"), Thomas Povinelli, James Ciocia and Michael Ryan (the "Individual
Guarantors" and collectively, with the Corporate Guarantors, the "Guarantors")
and Wachovia Bank, National Association, formerly known as First Union National
Bank, having an office at 190 River Road, Summit, New Jersey 07901 (the "Bank").

                             W I T N E S S E T H :
                             - - - - - - - - - -

     WHEREAS, the Bank, the Borrower, North Ridge, Prime and the Guarantors
entered into a certain Revolving Credit and Term Loan Agreement dated as of
December 27, 2001 ("Loan Agreement"), pursuant to which the Bank made available
certain credit facilities described herein (the Loan Agreement, together with
all of the security agreements, assignments and any other documents given by the
Borrower and/or Guarantors in favor of the Bank, hereinafter the "Loan
Documents");

     WHEREAS, the Bank extended a credit facility to the Borrower for working
capital pursuant to a Revolving Credit Note dated as of December 27, 2001 in the
original principal amount of $2,000,000. (the "Revolving Credit Note");

     WHEREAS, the Bank extended a term credit facility to the Borrower pursuant
to a Term Loan Note dated as of December 27, 2001 in the original principal sum
of $5,000,000. (the "Term Loan Note" and together with the Revolving Credit
Note, the "Loan");

     WHEREAS, Borrower is in default of certain financial covenants described in
that certain Notice of Default and Demand for Payment dated September 19, 2002
from counsel to the Bank to Borrower and Guarantors (the "Demand Letter");

     WHEREAS, the because of such default, the obligations under the Loan are
due and payable;

     WHEREAS, the Borrower and Guarantors are unable to repay the Loan which are
due and payable and as a result have requested that the Bank further forbear and
extend the time of payment for the Loan to and including November 1, 2003 (the
"Maturity Date") and the Bank has agreed to so forbear, absent its demand, under
the terms and conditions set forth herein;

     WHEREAS, the Borrower has advised the Bank that it will comply with a
repayment schedule to repay the Bank as set forth herein;
<PAGE>

     WHEREAS, the Borrower has further advised the Bank that it will comply
with a repayment schedule whether or not the Royal/Pinnacle Transaction occurs
all as more particularly set forth herein; and

     WHEREAS, the Borrower has advised the Bank that Pinnacle Taxx Advisors LLC
("Pinnacle"), Thomas Povinelli and David Puyear are negotiating the terms of a
Rights and Information Transfer Facilitation Agreement with Royal Alliance
Associates, Inc. ("Royal") and such agreement (the "Royal/Pinnacle Transaction")
would provide additional cash flow to repay the Bank;

     NOW, THEREFORE, in consideration of the premises and in order to induce the
Bank to continue the existing loan facility and extend payment of the Loan, the
Borrower and Guarantors hereby agree with the Bank as follows:

                                   ARTICLE I
                                  Definitions

     A. General Definitions. The terms defined herein include the plural as well
as the singular, as the context may require. Except as otherwise indicated, all
agreements defined herein refer to the same as they may from time to time be
amended or supplemented or the terms thereof waived or modified in accordance
herewith and therewith. All such terms not defined herein shall have the
meanings and definitions as defined in the Loan Agreement.

     B. Terms Defined in Uniform Commercial Code. All other terms contained in
this Agreement (and which are not otherwise specifically defined herein or in
the Loan Documents) shall have the meanings provided by the Uniform Commercial
Code of the State of New York (the "Uniform Commercial Code") to the extent the
same are used or defined therein.

                                   ARTICLE II
                                 Payment Terms

     A. Obligations. The Borrower and Guarantors hereby confirm and acknowledge
that as of November 26, 2002 the outstanding principal amount of the Revolving
Credit Note is $2,000,000.00, and the outstanding principal amount of Term Loan
Note is $4,250,000.00 both of which loan facilities are due without defense,
offset, counterclaim or right of recoupment. The Borrower hereby confirms and
acknowledges that the Bank is no longer obligated to make any Advances under the
Revolving Credit Note.

     B. Repayment of Loan. The Borrower shall make payments to the Bank:

        (i) with respect to the Revolving Credit Note, absent demand, interest
monthly as set forth below on the 10th day of each month until the Maturity
Date, plus principal payments in accordance with the Individual Buyouts
Projections submitted to the Bank (the "Individual Buyouts Projections") as set
forth on Schedule A, in reduction of the Revolving

                                       2
<PAGE>

Credit Note, in the principal amount of $250,000 on March 10, 2003, $250,000 on
April 10, 2003, $250,000 on May 10, 2003 and $250,000. on June 10, 2003 and the
remaining principal balance on the Maturity Date; and

     (ii) with respect to the Term Loan Note, absent demand, by making its
regular payments of principal in the amount of $83,333.33 plus interest as set
forth below on the 10th day of each month thereafter until the Maturity Date
when remaining principal balance is due. Notwithstanding the terms of repayment
on the Term Loan Note contained in the immediately preceding sentence, the
principal payment shall be recalculated by the Bank in June, 2003 in its sole
and absolute discretion and a revised repayment schedule will begin in July,
2003 on the 10th day of July and on the 10th day of each month thereafter
until the Maturity Date when the remaining balance, if any, is due.

     C. Interest. The Loans shall continue to bear interest at the LIBOR Market
Index Rate plus the Applicable Margin. For purposes of this Agreement, the term
Applicable Margin is hereafter increased one (1.0%) so that the LMI Spread and
the Eurodollar Spread is increased from 2.75% to 3.75%. Interest shall be
charged on the Revolving Credit Note and on the Term Loan Note, from the date of
this Agreement, at the new rate.

     D. Mandatory Payment of Cash Flow. Commencing on May 1, 2003, Borrower
shall pay to the Bank on or before the tenth day of each month under this
Agreement the amount equal to 50% of the amount of cash and marketable
securities possessed by the Borrower, directly or indirectly, that exceeds
$1,500,000 for such monthly period. For purposes of this mandatory payment, the
determination shall be made as of the last day of each month and shall be paid
on the 10th day of the next ensuing month. All payments pursuant to this
Section shall be applied first to the outstanding balance on the Revolving
Credit Note and then to the Term Loan Note. Further, amounts contained in the
broker-dealer reserve to the extent of regulatory requirements and historical
levels shall not be included in the calculation of cash and marketable
securities for purposes of this Section.

     E. The Borrower shall pay a $50,000. default waiver fee to the Bank,
payable in two installments: $25,000. on or before December 31, 2002 and the
balance on or before March 10, 2003.

     F. The Borrower shall pay $17,000., for past due legal fees paid by the
Bank to Esanu Katsky Korins & Siger, LLP on or before December 31, 2002.

                                       3
<PAGE>

                                  Article III
                              Conditions Precedent

     A. The Bank's obligations under this Agreement are subject to its
satisfactory receipt and review of the following and upon the completion of the
following items by the Borrower and receipt and satisfactory review by the Bank,
shall this Agreement by effective on such date (the "Effective Date") of the
following:

         (i) this Agreement, which shall be duly executed by the parties hereto,
and the agreements and documents referred to herein;

         (ii) the receipt of a UCC, tax lien and judgment search demonstrating
that the Bank has a first priority security interest in the assets of Borrower
and Guarantors, except for certain permitted liens shown on the schedule of
permitted liens attached hereto as Schedule C, against Borrower and Guarantors,
the costs for the account of Borrower;

         (iii) the Individual Buyouts Projections (herein defined);

         (iv) Pinnacle Buyout Projections (herein defined);

         (v) payment of $60,342.50 of fees and $2,691.01 of expenses of the
Bank's counsel; and

         (vi) such other agreements and instruments as the Bank reasonably deems
necessary to carry out the terms and provisions of this Agreement.

                                   Article IV
                                Representations

     A. The Borrower, North Ridge, Prime and Guarantors each, hereby represents
and warrants that:

         (i) no default has occurred under the Loan Agreement except that
Borrower has failed to comply with material financial covenants as described in
the Demand Letter;

         (ii) it has no defenses, claims, counterclaims, causes of action, right
of offset or right of recoupment against the Bank;

         (iii) no litigation, proceeding or action is pending or threatened
against them other than as separately disclosed by Borrower to the Bank on
Exhibit A attached hereto and made a part hereof; and

         (iv) the execution and delivery of this Agreement and all of the other
Loan Documents are within its powers, corporate or otherwise, have been duly
authorized or will be ratified by all necessary corporate action, and do not
contravene, or constitute a default under any

                                       4
<PAGE>


provision of applicable law or regulation of any of its corporate documents or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon it.

                                   Article V
                                   Covenants

     A. The Borrower covenants and agrees that all of the covenants,
representations, warranties and agreements set forth in the Loan Documents
(except its financial covenants) are true as of the date hereof.

     B. In addition to the financial reporting requirements set forth in the
Loan Agreement, the Borrower covenants and agrees that so long as this Agreement
remains in effect (whether or not there are any outstanding obligations):

       (i) Except as otherwise expressly provided for herein, the Borrower shall
keep proper books and records in accordance with a consistent application
(except as otherwise disclosed to the Bank) of GAAP in which full and true
entries will be made of all dealings or transactions of or in relation to the
business and affairs of the Borrower;

       (ii) as soon as practicable but in any event within seven (7) Business
Days of delivery to the Borrower, a copy of any letter issued by the Borrower's
independent public accountants or other management consultants with respect to
the Borrower's financial or internal accounting systems or controls;

       (iii) as soon as practicable but in any event not more than three (3)
Business Days after the President, any Vice President or Chief Financial Officer
of the Borrower obtains knowledge of the occurrence or the existence of a
Default or Event of Default hereunder, notice of any and all such Defaults or
Events of Default;

       (iv) as soon as practicable but in any event within five (5) Business
Days after the respective due dates, copies of all federal, state and local
corporate income and/or franchise tax returns, and any other correspondence or
notices from any federal, state or local taxing authority; and

       (v) as soon as practicable, such other business or financial data,
reports, evaluations or studies (whether or not prepared by the Borrower) as the
Bank may reasonably request.

     All financial statements delivered to the Bank pursuant to this Article
(except where otherwise expressly indicated) shall be prepared in accordance
with GAAP, applied on a consistent basis (except as otherwise disclosed to the
Bank), and shall be certified by (a) the President or Chief Financial Officer of
the Borrower and (b) with respect to such financial statements described in
clause (iv) above the independent public accountants performing the review
pursuant to a certificate stating that, in conducting the review necessary to
permit them to issue a report with respect to such financial statements, they
have obtained no knowledge of the existence of a Default or Event of

                                       5
<PAGE>

Default, or, if such accountants did obtain such knowledge, specifying the
nature of the Default or Event of Default.

     C. The Borrower shall maintain in full force and effect its corporate
existence, licenses, bonds, franchises, leases, patents, trademarks, contracts
and other rights necessary to the profitable conduct of its business. The
Borrower shall comply with any and all labor or employment related laws,
statutes, rules and regulations of any governmental or quasi-government
authority asserting jurisdiction for such transfer of business location. The
Borrower shall continue in and limit its operations to the same general line or
type of business as that presently conducted by it and shall comply in all
material respects with all applicable laws and regulations of all federal, state
or local governmental authorities. The collateral and all books and records
shall remain, at all times, at the Borrower's principal place of business and
the Borrower may not transfer the collateral, books or records from Borrower's
principal place of business to any other location without the prior written
consent of the Bank except, if applicable, sales of inventory in the ordinary
course of business.

     D. The Borrower shall prepare and timely file all federal, state and local
tax returns required to be filed by it and pay and discharge all taxes,
assessments and other governmental charges or levies imposed upon it or in
respect of any of its property and assets before the same shall become in
default, as well as all lawful claims which, if unpaid, might become a Lien upon
its property and assets or any part thereof, except those which are contested in
good faith by it and for which it has maintained adequate reserves in accordance
with GAAP.

     E. The Borrower shall at all times and at its expense maintain public
liability, professional liability, product liability and third party property
insurance, and shall keep such of its tangible assets as constitute collateral
insured against loss or damage by fire, theft, explosion and all other hazards
and risks insured against by other owners or users of similar businesses in
amounts at least equal to the lesser of (i) the outstanding principal balance of
the Loan, or (ii) the full replacement value of all such assets. All such
policies of insurance shall (i) be in a form, in amounts and with insurers
acceptable to the Bank, (ii) require at least thirty (30) days written notice to
the Bank of termination or material alteration, (iii) name the Bank as a lender
loss payee or additional insured as the case may be or be validly assigned to
the Bank, in form and substance satisfactory to the Bank, and (iv) allow the
Bank to pay any premiums therefor or deductibles thereunder for or on account of
the Borrower. The Borrower shall deliver to the Bank certificates of such
insurance and evidence of payment of all premiums therefor, quarterly statements
which describe any and all claims in excess of $10,000. made thereunder and, at
least ten (10) days prior to the expiration of such policies, certificates of
renewal.

     F. The Borrower shall, as soon as practicable but in any event within five
(5) Business Days after the Borrower learns of any of the following, give
written notice to the Bank of (i) any material proceeding instituted or
threatened to be instituted, by or against the Borrower in any federal, state,
local or foreign court or before any commission or other regulatory body
(federal, state, local or foreign), and (ii) any material adverse change in
business, assets or condition, financial or otherwise, of the Borrower.


                                       6
<PAGE>

     G. The Borrower shall deliver to the Bank, no later than the 30th calendar
day after each quarter annual period, a written report ("Receivable Report"),
which shall include, as of the last Business Day of the preceding quarter, the
following, in form reasonably satisfactory to the Bank, including a comparison
with the Individual Buyouts Projections or, if the Royal/Pinnacle Transaction is
completed, a comparison with the Pinnacle Buyout Projections as set forth on
Schedule B attached hereto and made a part hereof:

         (i) a detailed aged trial balance of Accounts as of the last day of the
prior quarter annual period; and

         (ii) a detailed aged trial balance of Accounts as of the last day of
the prior quarter annual period compared to Individual Buyouts Projections or
the Pinnacle Buyout Projections, if the Royal/Pinnacle Transaction is completed;
and

         (iii) a detailed schedule as of the last day of each quarter listing
any adjustments on the Borrower's books and records to Accounts previously
included in any Receivable Report.

     H. The Borrower shall deliver to the Bank, monthly on the 10th day of each
month (i) the Borrower's internally prepared statements of income, retained
earnings and changes in financial conditions for the prior month and year to
date to such prior month, (ii) a monthly forecast for the prior month, on a
rolling basis showing actual receipts and expenditures as compared to the
budgeted amounts in form and content acceptable to the Bank and (iii) a monthly
report of the amount being held as reserves by its broker/dealer and a
certificate that the reserves are in compliance with applicable NASD, SEC and
SIPC regulations.

     I. The Borrower will comply with all applicable laws and regulations
with respect to its properties and business, or such laws and regulations as are
hereafter enacted or promulgated by any governmental authority having
jurisdiction over it or any of its properties.

     J. The Borrower shall discharge or cause to be paid and discharged all
license fees, taxes, assessments and governmental charges or levies imposed upon
it or upon its income and profits or upon its properties, or upon any part
thereof, respectively, before the same shall become in default, as well as all
lawful claims for labor, materials and supplies or otherwise which, if unpaid,
might become a lien or charge upon its properties, or any part thereof, provided
that it shall not be required to pay and discharge or cause to be paid and
discharged any such tax, assessment, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate proceedings and
it shall have set aside on its books adequate reserves with respect to any such
tax, assessment, levy or claim so contested.

     K. The Borrower shall comply with all leases, mortgages or other
instruments relating to any premises where any collateral is located or from
where business is conducted.

     L. The Borrower and Guarantors covenant and agree that as long as this
Agreement remains in effect, they shall not incur, create, assume or permit to
exist any indebtedness or liability

                                       7
<PAGE>

on account of borrowed money, except indebtedness subordinated to the payment of
the obligations to the Bank on terms approved by the Bank in writing.

     M. The Borrower covenants and agrees that it shall make no payments on any
subordinated debt, including the Investor Subordinated Debt. However, provided
there is no default by the Borrower under the terms of this Agreement, the
Borrower shall be permitted to pay The Travelers Insurance Company such amounts
set forth in Individual Buyouts Projections or, if the Royal/Pinnacle
Transaction is completed, as set forth in the Pinnacle Buyout Projections.

     N. The Borrower covenants and agrees that as long as this Agreement remains
in effect, Borrower shall provide to the Bank copies of all term sheets or
explanations for new joint ventures, new financing or sale of the Borrower,
affiliate Borrower within two (2) business of its receipt of the same.

     O. The Borrower covenants and agrees that so long as this Agreement remains
in effect, Borrower shall strictly achieve the earnings and expense forecasts
shown on the Individual Buyouts Projections. However, if and when the
Royal/Pinnacle Transaction is completed, the Borrower covenants and agrees that
so long as this Agreement remains in effect, then Borrower shall strictly
achieve the earnings and expense forecasts shown on the Pinnacle Buyout
Projections.

     P. The Borrower covenants and agrees that so long as this Agreement remains
in effect, Borrower shall not incur and pay for any capital or expense items
which are not reflected on the Individual Buyouts Projections. However, if and
when the Royal/Pinnacle Transaction is completed, the Borrower covenants and
agrees that so long as this Agreement remains in effect, then Borrower shall not
incur and pay for any capital or expense items which are not reflected on the
Pinnacle Buyout Projections.

                                   Article VI
                        Consent to Pinnacle Transaction

     Upon the Effective Date, the Bank hereby consents to the sale of certain
assets by the Borrower to Pinnacle provided that: (i) the Asset Purchase
Agreement dated as of September 1, 2002, by and among Pinnacle and Borrower (the
"Asset Purchase Agreement"), contains the substantive provisions contained in
the September 24, 2002 draft, a copy of which is attached as Exhibit B, for
which Pinnacle shall have indemnified Borrower for certain personal property and
real property leases for which Borrower may remain liable to the applicable
lessor; (ii) Pinnacle and Royal, Thomas Povinelli and David Puyear enter into
the Rights and Information Transfer Facilitation Agreement (the "Facilitation
Agreement") which contains the substantive provisions that are contained in
version 6 of the Facilitation Agreement that was emailed to the Bank on November
7, 2002, attached as Exhibit C; (iii) the Bank has received a fully executed
Assignment of Proceeds of Asset Purchase Agreement by Borrower to the Bank which
has been accepted and agreed to by Pinnacle and Royal, in form and substance
acceptable to the Bank and substantially in the form attached as Exhibit D (the
"Assignment of Proceeds of Asset Purchase Agreement"); (iv) Borrower has filed a
UCC-1 financing statement, in form acceptable to the Bank, perfecting Borrower's
security interest in the assignment of the cash flow from Pinnacle to Borrower
described in the Asset Purchase Agreement, which filing has been simultaneously
assigned to the

                                       8
<PAGE>

Bank and (v) Borrower has provided sufficient documentation to the Bank that
Borrower has a perfected security interest in Pinnacle's contract rights with
Royal.

                                  Article VII
                               Security Interest

     A. Ratification of Prior Security Interest. The Borrower and Guarantors
hereby ratify and confirm that the security interest in and to the collateral is
valid, binding and in full force and effect and that the Bank has been granted a
perfected first security interest in all assets of the Borrower pursuant to the
terms of the Security Agreement, dated December 27, 2001 between the Borrower
and the Bank.

     B. Financing Statements. The Borrower and Guarantors hereby authorize the
Bank to file any and all Uniform Commercial Code financing statements,
amendments or continuation thereto reasonably required by the Bank to perfect
and maintain its security interests granted herein and in accordance with the
Loan Documents.

     C. Uniform Commercial Code. As secured party the Bank shall have all of the
rights of a secured party under the Uniform Commercial Code.

     D. Assignment of Proceeds of Asset Purchase Agreement. All proceeds paid to
Borrower in accordance with the Asset Purchase Agreement shall in accordance
with the terms of the Assignment of Proceeds of Asset Purchase Agreement (herein
defined) be deposited in an account at the Bank in the name of Prime. So long as
no default has occurred or demand been made on the Loan, the Bank shall permit
Prime or the Borrower to utilize the funds in such account for payments in
accordance with the terms of the Individual Buyouts Projections or, if the
Royal/Pinnacle Transaction is completed, as set forth in the Pinnacle Buyout
Projections. The Bank is hereby authorized to utilize the funds, when such funds
are received in the account, to pay the amounts referred to in Article II of
this Agreement to the extent such payments have not yet been paid. After a
default or demand has occurred, the Bank is authorized to setoff against such
funds as and when received and apply such funds in the account to any amounts
outstanding in the sole and absolute discretion of the Bank.

     E. Further Assurances. The Borrower shall sign and deliver any other
documents or perform such action in each case reasonably requested by the Bank
to further the intent of or monitor this Agreement and the Loan Documents.

                                  Article VIII
                                  Acceleration

     A. Acceleration. In the event that the Bank makes demand for payment, the
Borrower defaults in the prompt payment of the aforesaid indebtedness, or in the
due performance of or compliance with any of the terms or conditions hereof or
of the Loan Documents, the Bank

                                       9
<PAGE>

may declare all of the indebtedness in accordance with the original terms of the
Loan Documents to be immediately due and payable.

     B. Remedies. In the event of a demand or default, the Bank shall have such
rights and remedies as are provided and permitted by the Loan Documents and
applicable law and be reimbursed for its reasonable attorneys' fees and legal
expenses incurred in connection with the enforcement of this Agreement.

     C. Default Interest Rate. After the occurrence of any default or demand for
payment is made under the Loan Documents (other than the defaults in the Demand
Letter), the interest rate shall be charged and be deemed payable at the rate
per annum otherwise set forth in the Loan plus four (4%) percent per annum. In
no event shall the rate of interest charged hereunder be in excess of the rate
permitted by applicable law.

                                   Article IX
                                 Miscellaneous

     A. Reaffirmation by the Guarantors. The Guarantors confirm and acknowledge
that they are legally and validly indebted to the Bank under the Guaranty of
Payment without defense, counterclaim or offset, and affirms that the Guaranty
of Payment remains in full force and effect and includes, without limitation,
the indebtedness, liabilities and the obligations arising under, or in any way
connected with, the Loan, this Agreement and the Loan Documents, whether now
existing or hereafter arising and acknowledges that the liens and security
interests granted pursuant to the Loan Documents to which such Guarantor is a
party secures the foregoing indebtedness and the obligations.

     B. Loan Documents Remain Effective. Except for any modification
specifically set forth herein or in the exhibits, the Loan Documents remain in
full force and effect. Nothing herein shall be construed as a waiver of any
rights or remedies which the Bank may have at law, equity, under the Loan
Documents, as modified hereby, or otherwise, all of which are specifically
reserved.

     C. Waiver and Release. The Borrower, North Ridge, Prime and Guarantors
hereby unconditionally and irrevocably release, acquit and discharge the Bank,
its subsidiaries and affiliates and all of their past and present officers,
directors, agents, employees, servants, successors, attorneys, representatives
and assigns of and from any and all liability, claims, actions, causes of
actions, demands, rights, damages, costs, loss, expenses and attorneys fees, of
whatsoever kind or nature, which in any way arise from, or are in any way
connected with any aspect of the credit relationship between the Bank and the
Borrower, North Ridge, Prime or the Guarantors, and from all events,
transactions, circumstances and dealings surrounding or pertaining to such
relationship, the Loan Documents, this Agreement or the exercise by the Bank of
any legal or contractual remedies in connection with the Loan Documents, in each
case only to the extent arising through the date hereof. The Borrower, North
Ridge, Prime and Guarantors agree not to sue the Bank from the date hereof to
the end of the world arising out of or pertaining to the provisions of this
Agreement or the conduct of the Bank in connection with its relationship with
Borrower, North Ridge, Prime and the Guarantors.

                                       10
<PAGE>

     D. Notices. All notices, demands, requests, consents, approval and other
instruments under this Agreement shall be in writing and shall be deemed to have
been actually or properly given when mailed by certified mail or by a reliable
overnight courier, postage prepaid, addressed (a) if to Borrower or any of the
Guarantors, to such party c/o the Borrower, at its address set forth on the
first page hereof, or at such other address as Borrower or any Guarantor may
have designated by notice to Bank and (b) to the Bank originally named herein at
its address set forth on the first page hereof with a copy to Zeichner Ellman &
Krause LLP, 575 Lexington Avenue, New York, New York 10022, Attn: Frederic M.
Umane, Esq. or at such other address as Bank may have designated by notice to
Borrower or Guarantor. Any notice can be given by the attorney for such party.

     E. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York.

     F. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     G. Amendments, Etc. No amendment, modification, termination, or waiver of
any provision of this Agreement, nor consent to any departure by the Borrower
from this Agreement, shall in any event be effective unless the same shall be in
writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

     H. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Bank and the Borrower or Guarantors and their respective
successors and assigns, except that the Borrower or Guarantors may not assign or
transfer any of its rights under this Agreement without the prior written
consent of the Bank.

     I. Right to Inspect. At any time during the term of this Agreement, the
Bank shall have the right to inspect the books and records and work in process
of the Borrower during normal business hours upon two (2) days notice to the
Borrower.

     J. No Waiver. No delay or omission in the exercise of any power or remedy
herein provided or otherwise available to the Bank shall impair or affect the
Bank's right thereafter to exercise same, including the execution of the
Agreement.

     K. Waiver of Arbitration. The Borrower, North Ridge, Prime and each
Guarantor hereby specifically waive their right to have any claim or controversy
arising out of or relating to the Loan Documents or this Agreement be resolved
by binding arbitration.

                                       11
<PAGE>

     L. Submission to Jurisdiction. (i) Any legal action or proceeding with
respect to this agreement or any document related hereto may be brought in the
courts of the City of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
the Borrower, North Ridge, Prime or Guarantors, respectively, hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including, without limitation, any objection to the laying
of venue or based on the grounds of forum non conveniens, which any of them may
now or hereafter have to the bringing of any such action or proceeding.

         (ii) The Borrower, North Ridge, Prime or Guarantors, respectively,
irrevocably consents to the service of process of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Borrower or Guarantors at
its address, and such service will become complete on the date such process is
so mailed.

         (iii) Nothing contained in this Section, "Submission to Jurisdiction",
shall affect the right of the Bank to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against the
Borrower in any other jurisdiction.

     M. Expenses. The Borrower shall promptly pay all reasonable expenses of the
Bank with respect to: (i) the drafting, negotiation and enforcement of this
Agreement, including, but not limited to, reasonable attorneys fees and
disbursements; (ii) inspection and evaluation of any collateral, from time to
time, including collateral audits, consultants and appraisals; (iii) any filing,
recording, title insurance or other fees and taxes or search fees incurred in
protecting, perfecting and insuring the Bank's lien or security interest in the
collateral; and (iv) all out of pocket expenses in connection therewith incurred
by the Bank, including, but not limited to, site visits to view and observe the
collateral.

     N. Non-Business Day Payments. Whenever any payment to be made under this
Agreement shall be a Saturday, Sunday or a public holiday or the equivalent for
banks generally under the laws of the State of New York (any other day being a
"Business Day"), such payment shall be made on the next succeeding Business Day.

     O. TRIAL BY JURY. THE PARTIES HEREBY KNOWINGLY AND INTENTIONALLY WAIVE ANY
RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY MATTER RELATING IN ANY WAY TO THE
CONSOLIDATED LOAN OR THIS AGREEMENT.

                          [Signature page to follow.]

                                       12
<PAGE>

     IN WITNESS WHEREOF, the undersigned, if a corporation, has caused this
Agreement to be executed by its respective officer thereunto duly authorized, as
of the date first above written.

                                      Gilman + Ciocia, Inc., as Borrower


                                      By: /s/ Michael Ryan
                                         -----------------------------------
                                         Michael Ryan
                                         President


                                      Wachovia Bank, National Association,
                                      f/k/a First Union National Bank, as Bank


                                      By: /s/ Joseph P. Hanley
                                         -----------------------------------
                                         Joseph P. Hanley
                                         Vice President


AGREED AND ACCEPTED:


/s/ Michael Ryan
--------------------------
Michael Ryan, Individual Guarantor


/s/ James Ciocia
--------------------------
James Ciocia, Individual Guarantor


/s/ Thomas Povinelli
--------------------------
Thomas Povinelli, Individual Guarantor


Prime Capital Services, Inc.


By: /s/ Michael Ryan
    ----------------------
    Michael Ryan
    President


North Ridge Securities Corp.


By: /s/ Michael Ryan
    ----------------------
    Michael Ryan
    President

Signature pages follow

                                       13
<PAGE>

Prime Financial Services, Inc.


By: /s/ Michael Ryan
    ----------------------
    Michael Ryan
    President


North Shore Capital Management Corp.


By: /s/ Michael Ryan
    ----------------------
    Michael Ryan
    President


Asset & Financial Planning, Ltd.


By: /s/ Michael Ryan
    ----------------------
    Michael Ryan
    President


e1040.com, Inc.


By: /s/ Michael Ryan
    ----------------------
    Michael Ryan
    President


G + C Schlager & Associates Inc.,


By: /s/ Michael Ryan
    ----------------------
    Michael Ryan
    President


G + C Mortgage Line Inc.


By: /s/ Michael Ryan
    ----------------------
    Michael Ryan
    President


                                       14
<PAGE>

COUNTY OF DUTCHESS,
STATE OF NEW YORK.


On the 2nd day of December in the year 2002 before me, the undersigned, a Notary
Public in and for said State, personally appeared Michael Ryan, personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

                                                    /s/ Ted H. Finkelstein
                                                    ____________________________
                                                    Notary Public


COUNTY OF QUEENS,
STATE OF NEW YORK.


On the 2nd day of December in the year 2002 before me, the undersigned, a Notary
Public in and for said State, personally appeared James Ciocia, personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

                                                    /s/ Paula Barba
                                                    ____________________________
                                                    Notary Public

COUNTY OF WESTCHESTER,
STATE OF NEW YORK.

On the 27th day of November in the year 2002 before me, the undersigned, a
Notary Public in and for said State, personally appeared Thomas Povinelli,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

                                                    /s/ Louis P. Karol
                                                    ____________________________
                                                    Notary Public



</TEXT>
</DOCUMENT>
