AMENDMENT NO. 4 TO SECURED SUBORDINATED
PROMISSORY NOTES AND WARRANTS

DCAP GROUP, INC.
1158 Broadway
Hewlett, New York 11558

August 13, 2008

Jack Seibald as representative and attorney-in-
fact for the holders of the Secured Subordinated
Promissory Notes of DCAP Group, Inc., dated
July 10, 2003, in the outstanding aggregate
principal amount of $1,500,000 as set forth
on Schedule A attached hereto
1336 Boxwood Drive West
Hewlett Harbor, NY  11557

Dear Jack:

Reference is made to the Secured Subordinated Promissory Notes of DCAP Group,
Inc. (the “Company”), dated July 10, 2003, in the outstanding aggregate
principal amount of $1,500,000 (collectively, the “Notes”) and held by the
persons and entities set forth on Schedule A attached hereto (collectively, the
“Noteholders”).
 
All capitalized terms used and not defined herein shall have the meanings
ascribed thereto in the Notes.
 
The parties agree as follows:
 
1. The Maturity Date for each of the Notes is hereby extended from September 30,
2008 to the earlier of (a) July 10, 2009 or (b) ninety (90) days following the
effective date on which Commercial Mutual Insurance Company (“CMIC”) is
converted from an advance premium cooperative insurance company to a stock
property and casualty insurance company and the surplus notes of CMIC held by
the Company are converted into a controlling interest in CMIC (subject to
acceleration as hereinafter provided).
 
2. On the date on which the aggregate principal amount of the Notes is paid in
full, an additional amount (the “Additional Amount”) equal to $10,000 (in the
aggregate for all of the Noteholders), multiplied by the number of whole or
partial calendar months from October 1, 2008 through the Maturity Date, shall be
paid to the Noteholders.  Notwithstanding the foregoing, in the event that a
portion, but not all, of the aggregate principal amount of the Notes is paid,
from the date on which such partial payment is made and through the Maturity
Date, the $10,000 amount shall be reduced proportionately to the extent of the
partial payment.  The Noteholders shall be entitled to their respective pro rata
portion of the Additional Amount based upon the principal amount of their Note
redeemed in relation to the aggregate principal amount of the Notes
redeemed.  As an illustration of the foregoing, in the event the entire
$1,500,000 aggregate principal amount of the Notes is paid on July 10, 2009, the
Additional Amount for the Noteholders, in the aggregate, would be $100,000
($10,000 x 10 months (October 2008 through July 2009)).  As a further
illustration of the foregoing, in the event $750,000 of the aggregate principal
amount of the Notes is paid on February 14, 2009 and the remaining $750,000
aggregate principal amount of the Notes is paid on July 10, 2009, the Additional
Amount for the Noteholders, in the aggregate, would be $72,500 ($10,000 x 4.5
months (October 2008 through February 14, 2009) plus $5,000 (based on one-half
of the aggregate principal amount of the Notes having been repaid) x 5.5 months
(February 15, 2009 through July 2009)) and would be payable on July 10, 2009.
 

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3. In the event that the Company consummates a sale of assets, borrows funds,
and/or consummates a debt or equity financing, and/or any combination of the
foregoing, the Company shall each time a transaction is consummated, use the net
proceeds from such transaction in the following order of priority:  (x) set
aside $750,000 on a cumulative basis for working capital needs, (y) satisfy the
Company’s existing indebtedness, if any, to Manufacturers and Traders Trust
Company; and (z) prepay the principal amounts of the Notes on a pro rata basis.
 
4. The Company agrees that, prior to the payment in full of the amounts due
under the Notes, it will not grant a security interest in any of its assets as
security for the repayment of indebtedness.
 
5. This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof, and supersedes all prior agreements or
understandings as to such subject matter.
 
6. No amendment or modification of this Agreement shall be valid unless made in
writing and signed by the party to be charged therewith.
 
7. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, assigns and personal
representatives.
 
8. This Agreement shall be construed and interpreted and the rights granted
herein governed in accordance with the laws of New York, without giving effect
to conflict of laws principles.
 
9. The parties acknowledge that they have been represented by counsel, or have
been accorded the opportunity to be represented by counsel, in connection with
this Agreement.  Accordingly, any rule or law or any legal decision that would
require the interpretation of any claimed ambiguities in this Agreement against
the party that drafted it has no application and is expressly waived by the
parties.  The provisions of this Agreement shall be interpreted in a reasonable
manner to give effect to the intent of the parties hereto.
 

 
 
 

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10. Except as amended hereby, the Notes and shall continue in full force and
effect in accordance with their respective terms.
 
Very truly yours,

DCAP GROUP, INC.

By: /s/ Barry B. Goldstein             
      Barry B. Goldstein, President

Agreed:
 
/s/ Jack Seibald                                             
Jack Seibald, as representative and attorney-in-
fact for the holders of the Secured Subordinated
Promissory Notes of DCAP Group, Inc., dated
July 10, 2003, in the outstanding aggregate principal amount
of $1,500,000 as set forth on Schedule A attached hereto

 
 
 

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SCHEDULE A

 
 
Name
 
 
Outstanding Principal
Amount of Note
IRA FBO Stewart R. Spector,
   Pershing LLC Custodian
 
 
$461,538.49
 
IRA FBO Jack D. Seibald,
     Pershing LLC Custodian
 
 
 
$288,461.54
 
J.M.J Realty Company
 
 
$230,769.23
 
Sanders Opportunity Fund (Inst.), LP
 
 
$166,153.85
 
Take-Two Capital LP
 
 
$115,384.61
 
Sanders Opportunity Fund, LP
 
 
$64,615.39
 
Michael Rosen and Catherine Rosen
 
 
$57,692.31
 
Kidstone LLC
 
 
$115,384.61