Exhibit
10.41


 


FIRST AMENDMENT TO
FORBEARANCE AGREEMENT

AND FOURTH AMENDMENT TO CREDIT AGREEMENT


 


This First Amendment to Forbearance Agreement and
Fourth Amendment to Credit Agreement (herein, the “Agreement”)
is made as of this 25th day of August, 2008, by and among Smart
Business Advisory and Consulting, LLC, a Delaware limited liability company  (the “Borrower”),
Smart Business Holdings, Inc., a Delaware corporation (the “Parent”), the direct and indirect subsidiaries of the
borrower party to the Credit Agreement (hereinafter defined), as guarantors
(the “Guarantors”), the banks and other
financial institutions party to this Agreement, as lenders (the “Lenders”), and Bank of Montreal, as Administrative Agent
for the Lenders (the “Administrative Agent”).


 


R E C I T A L S:


 


A.                   The Lenders currently extend credit to the Borrower on
the terms and conditions set forth in that certain Credit Agreement dated as of
May 15, 2007, as amended, by and among the Borrower, the Parent, the
Guarantors from time to time party thereto, the Lenders, and the Administrative
Agent (as amended, the “Credit Agreement”).


 


B.                     The Borrower, the Parent, the Guarantors, the Lenders
and the Administrative Agent are parties to that certain Forbearance Agreement
dated as of June 30, 2008 (the “Forbearance Agreement”),
pursuant to which, among other things, the Lenders agree to forbear from
enforcing certain rights and remedies as a result of the Existing Defaults
referred to therein.


 


C.                   The Borrower acknowledges that it has failed to comply
with (i) Section 8.5(b) of the Credit Agreement due to the
Parent’s failure to timely deliver its annual financial statements in
accordance with such section for the fiscal year ended December 31, 2007
and, as a result of such failure, an Event of Default has occurred under Section 9.1(b) of
the Credit Agreement (the “Reporting Default”)
and (ii) Sections 8.22(a), 8.22(b) and 8.22(c) of the Credit
Agreement as of December 31, 2007, March 31, 2008 and June 30,
2008 and, as a result of such non-compliance, an Event of Default has occurred
under Section 9.1(b) of the Credit Agreement (the “Covenant Default”; and, together with the Reporting
Default, the “Existing Defaults”).


 


D.                    The Lenders are not willing to waive the Existing
Defaults.


 


E.                      The Borrower has requested that (i) the
Scheduled Standstill Expiration Date set forth in the Forbearance Agreement be
extended to September 23, 2008, and (ii) certain other amendments be
made to the Forbearance Agreement and the Credit Agreement, and the Lenders are
willing to do so on the terms, conditions, and provisions contained in this
Agreement.


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:


 


1.                        Incorporation of Recitals;
Defined Terms.  The Borrower acknowledges that the Recitals
set forth above are true and correct in all material respects.  The defined terms in the Recitals set forth
above are hereby incorporated into this Agreement by reference.  All other


 

















 


capitalized terms used
herein without definition shall have the same meanings herein as such terms
have in the Forbearance Agreement or Credit Agreement, as applicable.


 


2.                        Amounts Owing. 
The Borrower acknowledges and agrees that the principal amount of Loans,
Letters of Credit and Hedging Liability as of August 25, 2008, is
$45,434,650 ($44,550,000 in Term Loans, $0 in Revolving Loans, $0 in Swing
Loans, $0 in Letters of Credit and $884,650 in Hedging Liability), and such
amount (together with interest and fees thereon) is justly and truly owing by
the Borrower without defense, offset or counterclaim.


 


3.                        Acknowledgment of Default(s). 
The Existing Defaults constitute Events of Default under the Credit
Agreement.  The Borrower acknowledges
that, as a result of the Existing Defaults, the Lenders are permitted and
entitled under Sections 7.1 and 9.2 of the Credit Agreement to decline to
provide further credit to the Borrower, to terminate the Commitments, to
accelerate the Obligations, to enforce Liens granted under the Collateral
Documents, and to exercise any other rights or remedies that may be available
under the Loan Documents or under applicable law.  Except as set forth on Schedule 1
hereto, which Events of Default shall constitute Existing Defaults for all
purposes of this Agreement, the Borrower represents to the Administrative Agent
and Lenders that there are no Defaults or Events of Default other than the
Existing Defaults.  Notwithstanding the
foregoing, the inclusion of the events set forth on Schedule 1 as Existing
Defaults for the purposes of this Agreement shall not be deemed a waiver or
approval by the Lenders of such events or any Default or Event of Default
arising therefrom.


 


4.                        Amendments to Forbearance
Agreement.  Subject to the satisfaction of the conditions
precedent set forth in Section 13 below, the Forbearance Agreement shall
be amended as follows:


 


4.1.                              The term “Scheduled
Standstill Expiration Date” as defined in the Forbearance Agreement
shall be amended in its entirety to read as follows:


 


“Scheduled Standstill Expiration
Date” means 5:00 p.m.,
Chicago time, on September 23, 2008.


 


4.2.                              Section 4 of the Forbearance
Agreement shall be amended in its entirety and as so amended shall be restated
as follows:


 


4.                                       Forbearance. 
Unless and until a Standstill Termination occurs, the Lenders will not
accelerate the Obligations or enforce any of the Liens granted under the
Collateral Documents or, except as provided below, exercise any other rights or
remedies available solely by reason of the Existing Defaults, including without
limitation the imposition of increased pricing pursuant to Section 1.10 of
the Credit Agreement and the making of a demand for payment under any Loan
Document executed by any Guarantor.  Each
Guarantor shall be a third party beneficiary of this provision of the
Agreement.


 


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5.                        Amendments to Credit Agreement. 
Subject to the satisfaction of the conditions precedent set forth in Section 14
hereof, the defined term “Obligations”
appearing in Section 5.1 of the Credit Agreement is hereby amended in its
entirety and as so amended shall be restated to read as follows:


 


“Obligations” means all obligations of the Borrower to
pay principal and interest on the Loans and the Hedging Liability evidenced by
that certain ISDA Master Agreement dated as of June 25, 2007 between the
Borrower and Bank of Montreal, all Reimbursement Obligations owing under the
Applications, all fees and charges payable hereunder, and all other payment obligations
of the Borrower or any of its Subsidiaries arising under or in relation to any
Loan Document, in each case whether now existing or hereafter arising, due or
to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired.


 


6.                        Principal and Interest Payments. 
The Borrower shall continue to pay all principal and interest on the
Loans and Reimbursement Obligations on all Letters of Credit (if any) when due,
including, without limitation, the Borrower shall continue to make all
scheduled payments of principal on the Term Loans as and when due under the
Credit Agreement.


 


7.                        Capital Contribution Agreement. 
The parties hereto acknowledge and agree that the Required Lenders have
directed the Administrative Agent to deliver a written request to Great Hill
Equity Partners III, L.P. (the “Equity Sponsor”)
directing the Equity Sponsor to make a cash equity contribution (the “Contribution”) to the Parent in accordance with the terms
of that certain Capital Contribution Agreement dated as of October 23,
2007 (the “Capital Contribution Agreement”), among
the Borrower, the Parent, the Equity Sponsor and the Administrative Agent.  The parties hereto acknowledge and agree that
notwithstanding anything contained in the Credit Agreement, the Capital
Contribution Agreement or any other Loan Document to the contrary, the
Contribution may be made by the Equity Sponsor in the form of equity or
Subordinated Debt convertible into equity and, any such Subordinated Debt shall
be deemed permitted to exist under the terms of Section 8.7 of the Credit
Agreement.  To the extent that the
Contribution is made in the form of Subordinated Debt convertible into equity,
any capital stock of the Parent deemed issued in consideration of such
conversion shall not be deemed an equity issuance for purposes of Section 1.9(b)(ii) or
1.9(b)(iv) of the Credit Agreement.


 


By its execution hereof, the Parent acknowledges and
agrees to immediately contribute the entire amount of the Contribution to the
Borrower as required by the terms of the Capital Contribution Agreement.  Notwithstanding anything contained in the
Credit Agreement (including any amendments thereto) or the other Loan Documents
to the contrary, the Borrower shall deliver all proceeds of the Contribution to
the Administrative Agent promptly upon its receipt of the same and the
Administrative Agent shall deposit such proceeds into the Collateral Account to
be held as security for, and for application by the Administrative Agent to the
Obligations as directed by the Required Lenders.


 


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In furtherance of the foregoing, the Parent confirms
and agrees to take all actions necessary to convert any such Subordinated Debt
into capital stock of the Parent in satisfaction and payment in full of the
entire then outstanding principal amount of such Subordinated Debt on or prior
to the earlier to occur of (i) September 10, 2008 and (ii) any
such earlier date upon which the Administrative Agent acting at the direction
of the Required Lenders requires such conversion by written notice to the
Parent and the Equity Sponsor.


 


8.                          Additional Agreements. 
The Borrower further agrees that:


 


(a)                             The Administrative Agent shall have the
right to re-engage on behalf of the Lenders FTI Consulting, Inc., to
evaluate the financial condition, operating performance, and business prospects
of the Borrower and its Subsidiaries and to perform such other information
gathering or evaluation acts as may be reasonably requested by the Administrative
Agent or the Required Lenders, and the reasonable costs and expenses of such
financial advisor shall be borne by the Borrower (without any agreement to cap
such expenses) and constitute part of the Obligations.  The Borrower shall take reasonable steps to
make available to such financial advisor and its representatives such
information respecting the financial condition, operating performance, and
business prospects of the Borrower and its Subsidiaries as may be reasonably
requested and shall make its officers, employees, and requests its independent
public accountants to be available with reasonable prior notice to discuss such
information with such financial advisor and its representatives.


 


(b)                            Notwithstanding anything contained in the
Credit Agreement to the contrary, during the period from and including the date
hereof to and including the Scheduled Standstill Expiration Date, the Borrower
shall not, nor shall it permit any of its Subsidiaries to, incur Capital
Expenditures in an aggregate amount in excess of $100,000.


 


9.                          Additional Standstill Termination
Events.  Any failure by the Borrower for any reason to
comply with any term, condition or provision contained in this First Amendment
to Forbearance Agreement shall be deemed an additional Standstill Termination
for all purposes of the Forbearance Agreement. 
Without limiting the foregoing, any failure by the Parent or the Equity
Sponsor to comply with the terms and conditions of the Capital Contribution Agreement
(as modified or amended by Section 7 hereof) and the terms of Section 7
of this Agreement shall constitute an additional Standstill Termination for all
purposes of the Forbearance Agreement.


 


10.                            No Waiver and Reservation of
Rights.  The Borrower acknowledges that the Lenders
are not waiving the Existing Defaults, but are simply agreeing to forbear from
exercising their rights with respect to the Existing Defaults to the extent
expressly set forth in this Agreement. 
Without limiting the generality of the foregoing, the Borrower
acknowledges and agrees that immediately upon expiration of the Standstill
Period, the Administrative Agent and the Lenders have all of their rights and
remedies with respect to the Existing Defaults to the same extent, and with the
same force and effect, as if the forbearance had not occurred.  The Borrower will not assert and hereby
forever waives any right to assert that the Administrative Agent or the Lenders
are obligated in any way to continue beyond the Standstill Period to forbear
from enforcing their rights or remedies or that the Administrative Agent and
the Lenders are not


 


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entitled to act on the Existing Defaults after the
occurrence of a Standstill Termination as if such default had just occurred and
the Standstill Period had never existed. 
The Borrower acknowledges that the Lenders have made no representations
as to what actions, if any, the Lenders will take after the Standstill Period
or upon the occurrence of any Standstill Termination, a Default or Event of
Default, and the Lenders and the Administrative Agent must and do hereby
specifically reserve any and all rights, remedies, and claims they have (after
giving effect hereto) with respect to the Existing Defaults and each other
Default or Event of Default that may occur.


 


11.                            RELEASE. 
FOR VALUE RECEIVED, INCLUDING WITHOUT LIMITATION, THE AGREEMENTS OF THE
LENDERS IN THIS AGREEMENT, THE BORROWER HEREBY RELEASES THE ADMINISTRATIVE
AGENT AND EACH LENDER, ITS CURRENT AND FORMER SHAREHOLDERS, DIRECTORS, OFFICERS,
AGENTS, EMPLOYEES, ATTORNEYS, CONSULTANTS, AND PROFESSIONAL ADVISORS
(COLLECTIVELY, THE “RELEASED PARTIES”)
OF AND FROM ANY AND ALL DEMANDS, ACTIONS, CAUSES OF ACTION, SUITS,
CONTROVERSIES, ACTS AND OMISSIONS, LIABILITIES, AND OTHER CLAIMS OF EVERY KIND
OR NATURE WHATSOEVER, BOTH IN LAW AND IN EQUITY, KNOWN OR UNKNOWN, WHICH THE
BORROWER HAS OR EVER HAD AGAINST THE RELEASED PARTIES FROM THE BEGINNING OF THE
WORLD TO THIS DATE, INCLUDING, WITHOUT LIMITATION, THOSE ARISING OUT OF THE
EXISTING FINANCING ARRANGEMENTS BETWEEN THE BORROWER AND THE LENDERS, AND THE
BORROWER FURTHER ACKNOWLEDGES THAT, AS OF THE DATE HEREOF, IT DOES NOT HAVE ANY
COUNTERCLAIM, SET-OFF, OR DEFENSE AGAINST THE RELEASED PARTIES, EACH OF WHICH
THE BORROWER HEREBY EXPRESSLY WAIVES.


 


12.                            Loan Documents Remain Effective. 
Except as expressly set forth in this Agreement, the Loan Documents and
all of the obligations of the Borrower thereunder, the rights and benefits of
the Administrative Agent and Lenders thereunder, and the Liens created thereby
remain in full force and effect.  Without
limiting the foregoing, the Borrower agrees to comply with all of the terms,
conditions, and provisions of the Loan Documents except to the extent such
compliance is irreconcilably inconsistent with the express provisions of this
Agreement.  This Agreement and the Loan
Documents are intended by the Lenders as a final expression of their agreement
and are intended as a complete and exclusive statement of the terms and
conditions of that agreement.


 


13.                            Fees and Expenses. 
The Borrower hereby agrees to pay to the Administrative Agent, for
ratable distribution to the Lenders in accordance with their respective
outstanding Term Loans, a forbearance fee (the “Forbearance
Fee”) of $30,000.  The
Forbearance Fee shall be due and payable on the date hereof.  The Borrower shall also pay on demand all
fees and expenses (including attorneys’ fees) incurred by the Administrative
Agent and its counsel in connection with this Agreement and the other
instruments and documents being executed and delivered in connection herewith,
and all fees and expenses of counsel to the Administrative Agent with respect
to the credit facilities subject to the Credit Agreement.


 


14.                            Conditions Precedent. 
The effectiveness of this Agreement is subject to the satisfaction of
the following conditions precedent:  (a) the
Borrower, the Administrative Agent, and the Required Lenders shall have
executed and delivered this Agreement, and the Guarantors shall have executed
and delivered their reaffirmation, acknowledgment, and consent in the space


 


5

















 


provided for that purpose below, (b) the Equity
Sponsor shall have executed and delivered a Debt Subordination Agreement in
form and substance acceptable to the Required Lenders and (c) the Borrower
shall have made payment of the Forbearance Fee and current legal fees and
expenses referred to in Section 14 above.


 


15.                            Miscellaneous. 
By its acceptance hereof, the Borrower hereby represents that it has the
necessary power and authority to execute, deliver, and perform the undertakings
contained herein, and that this Agreement constitutes the valid and binding
obligation of the Borrower enforceable against it in accordance with its terms.  Any provision of this Agreement held invalid,
illegal, or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity, illegality, or
unenforceability without affecting the validity, legality, and enforceability
of the remaining provision hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties hereto hereby
acknowledge and agree that this Agreement shall constitute a Loan Document for
all purposes of the Credit Agreement and the other Loan Documents.  Unless otherwise expressly stated herein, the
provisions of this Agreement shall survive the termination of the Standstill
Period.  This Agreement may be executed
in counterparts and by different parties on separate counterpart signature
pages, each of which constitutes an original and all of which taken together
constitute one and the same instrument. 
Delivery of executed counterparts of this Agreement by telecopy shall be
effective as an original.  This Agreement
shall be governed by Illinois law and shall be governed and interpreted on the
same basis as the Credit Agreement.


 


[SIGNATURE PAGES TO FOLLOW]


 


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This First Amendment to Forbearance Agreement and
Fourth Amendment to Credit Agreement is entered into as of the date and year
first above written.


 


	
   

  	
  “BORROWER”

  
	
   

  	
   

  
	
   

  	
  SMART
  BUSINESS ADVISORY AND CONSULTING, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  



 


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  Accepted and agreed to.

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF MONTREAL, as
  L/C Issuer, and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  BMO CAPITAL MARKETS
  FINANCING, INC., as a Lender and as Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF MONTREAL, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  MC
  FUNDING LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Monroe
  Capital Management LLC,

  
	
   

  	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  MC
  FUNDING 2007-1 LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Monroe
  Capital Management LLC,

  
	
   

  	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


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  GARRISON
  FUNDING 2008-1 LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  MASSACHUSETTS
  MUTUAL LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Babson
  Capital Management LLC,

  
	
   

  	
   

  	
  as
  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BABSON
  MD-MARKET CLO LTD. 2007-II

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Babson
  Capital Management LLC,

  
	
   

  	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY AMERICAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
				



 


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  SARGAS
  CLO I LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Sargas
  Asset Management, LLC, its

  
	
   

  	
   

  	
  Portfolio
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CS
  ADVISORS CLO II LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CapitalSource
  Advisors LLC,

  
	
   

  	
   

  	
  as
  Portfolio Manager and attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CS
  ADVISORS CLO III LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CapitalSource
  Advisors LLC,

  
	
   

  	
   

  	
  as
  Portfolio Manager and attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COLTS
  2005-2 LTD, AS LENDER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Structured
  Asset Investors, LLC

  
	
   

  	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
					



 


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  COLTS
  2007-1 LTD, AS LENDER

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Structured
  Asset Investors, LLC

  
	
   

  	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  
				



 


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REAFFIRMATION,
ACKNOWLEDGEMENT, AND CONSENT OF GUARANTORS


 


Each of the undersigned heretofore executed and
delivered to the Administrative Agent and the Lenders one or more Loan
Documents in support of the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability referred to
above.  Each of the undersigned
acknowledges and consents to the Agreement set forth above and agrees to be
bound thereby (and, without limiting the foregoing, each of the undersigned
further agrees that the undersigned shall be bound by Sections 1, 2, 3, 7,
9, 10 and 11 above as if all references in such Sections to the Borrower were
references to the Borrower and the undersigned) and confirms that the Loan
Documents executed by it, and all of the obligations of the undersigned
thereunder, remain in full force and effect. 
Each of the undersigned further agrees that the consent of the
undersigned to any amendment or modification to the Agreement or any of the
Loan Documents referred to therein shall not be required as a result of this
consent having been obtained.  Each of
the undersigned acknowledges that the Administrative Agent and the Lenders are
relying on the assurances provided herein in entering into the Agreement set
forth above and maintaining credit outstanding to the Borrowers.


 


	
   

  	
  SMART BUSINESS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  



 


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SCHEDULE 1


 


The repayment of a Parent Subordinated Note for
approximately $25,000.


 


The repayment of a Parent Subordinated Note for
approximately $13,500 and the repurchase by the Parent of capital stock of the
Parent for approximately $66,500.


 


The repurchase by the Parent of $500,000 of capital
stock of the Parent previously held by terminated Managing Directors in April of
2008 from SBAC, LLC (“SBAC”).  SBAC
initially acquired the capital stock of the Parent from departing Managing
Directors upon their departure for administrative purposes as opposed to the
Parent directly repurchasing the capital stock of the Parent at such time.


 


The settlement of litigation currently in process
related to the non-compete agreements of individuals hired by the Borrower that
is currently being negotiated.  The
Borrower will pay approximately $1.5 million to settle the suit.


 


The failure of the Parent to timely file and pay
franchise tax for 2007 in the state of Delaware.  The Parent has since filed and paid the
franchise tax and the minor interest and penalties.


 


The divesture of the Borrower’s Baltimore Private
Client practice for approximately $1.3 million that is currently being
negotiated.


 


The Borrower has not transferred its operating cash
accounts to the Agent pursuant to Section 8.23 of the Credit
Agreement.  Additionally, deposit account
control agreements were not executed until March of 2008.


 


Commencing with the calendar month ended June 30,
2008, the monthly financial reports provided by the Borrower pursuant to Section 8.5(a) of
the Credit Agreement will be compared against the revised business plan dated August 12,
2008 for purposes of Section 8.5(a)(ii).