Document:

REGISTRATION RIGHTS AGREEMENT

                           Dated as of August 20, 2007

                                      among

                              GILMAN + CIOCIA, INC.

                                       and

                                 THE PURCHASERS

================================================================================

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1.   DEFINITIONS...............................................................1

2.   REGISTRATION..............................................................4

     2.1      Automatic Registration...........................................4
     2.2      Demand Registration..............................................5
     2.3      Tag-along Registration...........................................7
     2.4      Parity of Holders in Public Offerings............................8
     2.5      Underwritten Demand Registration and Repurchase Offer............8
     2.6      Expenses.........................................................9
     2.7      Additional Securities............................................9
     2.8      Priority on Registrations........................................9

3.   REGISTRATION PROCEDURES..................................................10

4.   INDEMNIFICATION AND CONTRIBUTION.........................................14

5.   MISCELLANEOUS............................................................17

     5.1      Rule 144........................................................17
     5.2      Due Diligence Review; Information...............................17
     5.3      Amendments and Waivers..........................................18
     5.4      Notices.........................................................18
     5.5      Assignment; Benefits............................................18
     5.6      Entire Agreement................................................18
     5.7      Governing Law...................................................18
     5.8      Submission to Jurisdiction; Waiver of Jury Trial................19
     5.9      Severability....................................................19
     5.10     Counterparts....................................................19
     5.11     Third Party Beneficiaries.......................................19

                                      -i-
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                          REGISTRATION RIGHTS AGREEMENT

      This Registration Rights Agreement (the "Agreement") is made and entered
into this 20th day of August 2007 between Gilman + Ciocia, Inc., a Delaware
corporation (the "Company"), and each of the purchasers set forth on Schedule A
attached hereto (each a "Purchaser" and, collectively, the "Purchasers").

      This Agreement is made pursuant to the Purchase Agreement, dated April 25,
2007, by and among the Company and the purchasers named therein (the "Investor
Purchasers") (the "Investor Purchase Agreement"), which provides for the
issuance by the Company to the Investor Purchasers of an aggregate of 40,000,000
shares (the "Investor Shares") of Common Stock and the Purchase Agreement, dated
August 20, 2007, by and among the Company and the purchasers set forth on
Schedule A thereto (the "Placement Purchasers") (the "Placement Purchase
Agreement" and, together with the Investor Purchase Agreement, the "Purchase
Agreements"), which provides for the issuance to the Placement Purchasers of an
aggregate of 40,000,000 shares (the "Placement Shares" and, together with the
Investor Shares, the "Shares") of Common Stock. The execution of this Agreement
is a condition to the closing under the Purchase Agreements.

      In consideration of the foregoing, the parties hereto agree as follows:

      1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:

      "1933 Act" shall mean the Securities Act of 1933, as amended from time to
time and the rules and regulations promulgated thereunder.

      "1934 Act" shall mean the Securities Exchange Act of l934, as amended from
time to time and the rules and regulations promulgated thereunder.

      "Affiliate" shall mean, with respect to any Person, (i) a director or
executive officer of such Person, (ii) a spouse, parent, sibling or descendant
of such Person (or a spouse, parent, sibling or descendant of any director or
executive officer of such Person), and (iii) any other Person that, directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such Person.

      "Agreement" shall have the meaning set forth in the preamble.

      "Automatic Registration" shall mean a registration effected pursuant to
Section 2.1(a) hereof.

      "Automatic Registration Statement" shall mean a registration statement
which covers the Registrable Securities on Form S-1, S-2 or S-3 (or, if such
forms are not then available to the Company, on such form of registration
statement as is then available to effect a registration for resale of the
Shares, subject to the consent of the Purchasers, which shall not be
unreasonably withheld or delayed) under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

<PAGE>

      "Black-out Periods" shall mean suspensions of the effectiveness of the
Automatic Registration Statement or Demand Registration Statement as permitted
by Section 3 hereof.

      "Closing Date" shall mean the Closing Date as defined in the Purchase
Agreements.

      "Common Stock" shall mean the common stock, par value $.01 per share, of
the Company.

      "Company" shall have the meaning set forth in the preamble and shall also
include the Company's successors.

      "control" (including the terms "controlled by" and "under common control
with"), with respect to the relationship between or among two or more Persons,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.

      "Demand" shall have the meaning set forth in Section 2.2(a) hereof.

      "Demand Registration" shall mean a registration effected pursuant to
Section 2.2(a) hereof.

      "Demand Registration Statement" shall mean a registration statement which
covers the Registrable Securities covered by a Demand on Form S-1, S-2 or S-3
(or, if such forms are not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of the Shares, subject to the consent of the Purchasers, which shall not be
unreasonably withheld or delayed) under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

      "Holder" shall mean a Purchaser and it successors and permitted assigns,
for so long as it owns any Registrable Securities (subject to and in accordance
with Section 5.5, including any direct or indirect transferee of a Purchaser who
has acquired Registrable Securities from the Purchaser).

      "indemnified party" shall have the meaning set forth in Section 4(c)
hereof.

      "indemnifying party" shall have the meaning set forth in Section 4(c)
hereof.

      "Investor Purchase Agreement" shall have the meaning set forth in the
preamble.

      "Investor Shares" shall have the meaning set forth in the preamble.

                                      -2-
<PAGE>

      "Losses" shall have the meaning set forth in Section 4(a) hereof.

      "Notice" shall have the meaning set forth in Section 2.3(a) hereof.

      "Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.

      "Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, and by all other
amendments and supplements to a prospectus, including post-effective amendments,
and in each case including all material incorporated by reference therein.

      "Placement Purchase Agreement" shall have the meaning set forth in the
preamble.

      "Placement Shares" shall have the meaning set forth in the preamble.

      "Purchase Agreements" shall have the meaning set forth in the preamble.

      "Registrable Securities" shall mean the Shares and any Common Stock or
other securities of the Company or any successor entity which may be issued or
distributed in respect of the Registrable Securities by way of stock dividend or
stock split or other distribution, recapitalization, merger, conversion or
reclassification; provided, however, the Shares shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Shares shall
have been declared effective under the 1933 Act and such Shares shall have been
disposed of pursuant to such Registration Statement, (ii) such Shares have been
sold to the public pursuant to Rule l44 under the 1933 Act (or any similar
provision then in force), (iii) and for so long as such Shares are eligible for
sale pursuant to Rule 144(k) (or any similar provision then in force) without
any limitation as to volume or (iv) such Shares shall have ceased to be
outstanding.

      "Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC filing fees, (ii) all expenses of the Company in
preparing or assisting in preparing and printing any Registration Statement, any
Prospectus, any amendments or supplements thereto, and other documents relating
to the performance of and compliance with this Agreement, (iii) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company, (iv) fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (v) fees
and expenses incurred in connection with the listing or quotation of the
Registrable Securities, if any, and (vi) fees and expenses of any additional
experts retained by the Company in connection with such registration, but
excluding fees, expenses and disbursements of counsel and any other advisor
retained by the Holders and underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable Securities by
the Holders.

                                      -3-
<PAGE>

      "Registration Statement" shall mean an Automatic Registration Statement, a
Demand Registration Statement or a Tag-along Registration Statement.

      "SEC" shall mean the United States Securities and Exchange Commission or
any successor agency or government body performing the functions currently
performed by the United States Securities and Exchange Commission.

      "Shares" shall have the meaning set forth in the preamble.

      "Tag-along Percentage" shall have the meaning set forth in Section 2.3(b)
hereof.

      "Tag-along Registration" shall mean a registration effected pursuant to
Section 2.3 hereof in which Registrable Securities are included.

      "Tag-along Registration Statement" shall have the meaning set forth in
Section 2.3(a) hereof.

      "Tag-along Securities" shall have the meaning set forth in Section 2.3(b)
hereof.

      "Underwritten Demand" shall have the meaning set forth in Section 2.4(a)
hereof.

      "Underwritten Demand Registration" shall mean a registration effected
pursuant to Section 2.4(a) hereof.

      "Underwritten Demand Registration Statement" shall mean a registration
statement which covers the Registrable Securities covered by an Underwritten
Demand made in accordance with Section 2.4 on Form S-1, S-2 or S-3 (or, if such
forms are not then available to the Company, on such form of registration
statement as is then available to effect a registration for resale of the Shares
on an underwritten basis, subject to the consent of the Purchasers, which shall
not be unreasonably withheld or delayed), and all amendments and supplements to
such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

      2. Registration.

            2.1 Automatic Registration. The Company shall, for the benefit of
the Holders, at the Company's cost:

      (a) Use its commercially reasonable efforts to file, as soon as
practicable following the Closing Date (but no later than the later of (x)
forty-five (45) days after the Closing Date and (y) thirty (30) days after the
Company has filed its annual report on Form 10-K for the fiscal year ending June
30, 2007 (the "Automatic Filing Deadline")) with the SEC an Automatic
Registration Statement relating to the offer and sale of Registrable Securities
by the Holders; provided, however, that if the SEC shall comment or inquire
about the Company's use of the Automatic Registration Statement to register all
of the Registrable Securities, the Company may exclude such Registrable
Securities in accordance with Section 2.7 as it deems necessary or appropriate
to respond to the SEC's comment or inquiry in order to permit the SEC to declare

                                      -4-
<PAGE>

the Automatic Registration Statement effective for a lesser number of
Registrable Securities. If the Automatic Registration Statement covering the
Registrable Securities is not filed with the SEC on or prior to the Automatic
Filing Deadline, the Company will make pro rata payments to each of the
Purchasers, as liquidated damages and not as a penalty, in an amount equal to
1.00% of the aggregate amount invested by such Purchaser for each 30-day period
or pro rata for any portion thereof following the date by which such
Registration Statement should have been filed for which no Registration
Statement is filed with respect to the Registrable Securities; provided,
however, that the amount of liquidated damages payable under this Section 2(a)
payable to each Purchaser shall not exceed the aggregate amount paid by such
Purchaser for such Registrable Securities less any other amount the Company
otherwise actually pays to such Purchaser plus an amount equal to Purchaser's
reasonable attorney fees and costs of collection in respect of such liquidated
damages as a remedy for such event. Such payments shall be in partial
compensation to the Purchasers, and shall not constitute the Purchasers'
exclusive remedy for such event. Such payments shall be made to each Purchaser
in cash.

      (b) Use its commercially reasonable efforts to keep the Automatic
Registration Statement continuously effective, other than during Black-out
Periods, in order to permit the Prospectus forming part thereof to be usable by
Holders for a period of 365 days from the date that the Automatic Registration
Statement is declared effective by the SEC.

      (c) Notwithstanding any other provisions hereof, use commercially
reasonable efforts to ensure that (i) the Automatic Registration Statement and
any amendment thereto and any Prospectus forming part thereof and any supplement
thereto complies in all material respects with the 1933 Act and the rules and
regulations thereunder, (ii) the Automatic Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of the Automatic Registration Statement, and
any supplement to such Prospectus (as amended or supplemented from time to
time), does not include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading.

            2.2 Demand Registration.

      (a) The Company shall, for the benefit of the Holders, in the event that
the Company is unable to register all of the Registrable Securities in the
Automatic Registration Statement, on one occasion, upon the demand by Holders of
a majority of the then Registrable Securities, commencing six months after the
Automatic Registration Statement is declared effective by the SEC:

                  (i) Following a demand (a "Demand") by the Holders of a
      majority of the then Registrable Securities to register all or a portion
      of the Registrable Securities, use commercially reasonable efforts to file
      with the SEC a Demand Registration Statement relating to the offer and
      sale of such Registrable Securities by the Holders (but are not subject to
      an existing Registration Statement which is current and available for use
      by the Holders) from time to time; provided, however, that if the SEC

                                      -5-
<PAGE>

      shall comment or inquire about the Company's use of the Demand
      Registration Statement to register all of the Registrable Securities, the
      Company may exclude such Registrable Securities in accordance with Section
      2.7 as it deems necessary or appropriate to respond to the SEC's comment
      or inquiry in order to permit the SEC to declare the Demand Registration
      Statement effective for a lesser number of Registrable Securities.

                  (ii) Use its commercially reasonable efforts to keep the
      Demand Registration Statement continuously effective, other than during
      Black-out Periods, in order to permit the Prospectus forming part thereof
      to be usable by Holders for a period of 365 days from the date that the
      Demand Registration Statement is declared effective by the SEC.

                  (iii) Notwithstanding any other provisions hereof, use
      commercially reasonable efforts to ensure that (i) any Demand Registration
      Statement and any amendment thereto and any Prospectus forming part
      thereof and any supplement thereto complies in all material respects with
      the 1933 Act, (ii) any Demand Registration Statement and any amendment
      thereto does not, when it becomes effective, contain an untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading and
      (iii) any Prospectus forming part of any Demand Registration Statement,
      and any supplement to such Prospectus (as amended or supplemented from
      time to time), does not include an untrue statement of a material fact or
      omit to state a material fact necessary in order to make the statements,
      in light of the circumstances under which they were made, not misleading.

      (b) If a Demand Registration Statement is not filed with the SEC within
forty-five (45) days of the request of the Purchasers, provided that, if the
Company is required to include audited financial statements in such registration
statement which have not previously been filed (and were not previously required
to have been filed) with the SEC prior to the expiration of such forty-five (45)
day period, such period shall be extended to the 30th day following the date on
which the Company is required to file (subject to any applicable extensions
under Rule 12b-25 under the 1934 Act (or any similar provision then in force))
an annual report on Form 10-KSB (or Form 10-K) including such financial
statements, subject to Black-out Periods, the Company will make pro rata
payments to each of the Purchasers, as liquidated damages and not as a penalty,
in an amount equal to 1.00% of the product of (x) $0.10 multiplied by (y) the
number of Shares of such Purchaser as to which the Demand relates for each
30-day period or pro rata for any portion thereof following the date by which
such Registration Statement should have been filed for which no Registration
Statement is filed with respect to the Registrable Securities; provided,
however, that the amount of liquidated damages payable under this Section 2.1(b)
payable to each Purchaser shall not exceed the aggregate amount paid by such
Purchaser for such Registrable Securities less any other amount the Company
otherwise actually pays to such Purchaser plus an amount equal to Purchaser's
reasonable attorney fees and costs of collection in respect of such liquidated
damages as a remedy for such event. Such payments shall be in partial
compensation to the Purchasers, and shall not constitute the Purchasers'
exclusive remedy for such events. Such payments shall be made to each Purchaser
in cash.

                                      -6-
<PAGE>

            2.3 Tag-along Registration.

      (a) If, at any time during the period commencing on the one year
anniversary of the Closing Date, the Company proposes to prepare and file a
registration statement relating to the sale by the Company of Common Stock in an
underwritten public offering, other than pursuant to Form S-4, Form S-8 or a
successor form (collectively, a "Tag-along Registration Statement"), it will
give written notice of its intention to do so by registered mail ("Notice"), at
least twenty (20) days prior to the filing of each such Registration Statement,
to each Holder.

      (b) Upon the written request of a Holder made within ten (10) business
days after receipt of the Notice that the Company include all or a portion of
the Registrable Securities held by the Holder in the proposed Tag-along
Registration Statement, the Company shall permit the Holder to include in the
Tag-along Registration as part of the offering a number of Registrable
Securities (the "Tag-along Securities") up to the Tag-along Percentage. The
"Tag-along Percentage" shall mean the percentage of shares of Common Stock to be
sold in the underwritten offering (after inclusion of the Tag-along Securities)
equal to the Holder's beneficial ownership percentage of the Common Stock on the
date of the Notice, subject to reduction in accordance with the last sentence of
this Section 2.3(b). If, in the opinion of the Company's managing underwriter
for the offering evidenced by such Tag-along Registration Statement, the
inclusion of all or a portion of the Tag-along Securities, when added to the
securities being registered, will either (i) exceed the maximum amount of the
Company's securities which can be marketed at a price reasonably related to
their then-current market value or (ii) otherwise materially adversely affect
the entire offering, then the Company may exclude from such offering all or a
portion of the Tag-along Securities.

      (c) If securities are proposed to be offered for sale pursuant to such
Tag-along Registration Statement by other security holders of the Company and
the total number of securities to be offered by the Holders and such other
selling security holders is required to be reduced pursuant to a request from
the managing underwriter (which request shall be made only for the reasons and
in the manner set forth above), after inclusion of all of the securities being
offered by the Company, the number of Tag-along Securities to be offered by the
Holder pursuant to such Tag-along Registration Statement shall equal the number
which bears the same ratio to the maximum number of securities that the
underwriter believes may be included for all the selling security holders
(including the Holders) as the original number of Tag-along Securities proposed
to be sold by the Holders bears to the total original number of securities
proposed to be offered by a Holder and the other selling security holders. If,
as a result of the provisions of this Section 2.3(c), the Holder shall not be
entitled to include all Registrable Securities in a registration that the Holder
has requested to be so included, a Holder may withdraw its request to include
Registrable Securities in such Tag-along Registration Statement prior to its
effectiveness.

      (d) Notwithstanding the provisions of this Section 2.3, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 2.3 (irrespective of whether any written request for inclusion of
Tag-along Securities shall have already been made) to elect not to file any such
proposed Tag-along Registration Statement or to withdraw the same after its
filing but prior to the effective date thereof.

                                      -7-
<PAGE>

      (e) Each Holder shall, as a condition to the inclusion of any Tag-along
Securities in a Tag-along Registration Statement, execute and deliver an
underwriting agreement in form and substance satisfactory to the managing
underwriter of the underwritten offering, as well as such other agreements,
certificates or documents reasonably requested to be executed and delivered by
the Company, its legal counsel or the managing underwriter in connection with
such offering.

            2.4 Parity of Holders in Public Offerings. To the extent that any
Holders shall at any time make a demand for the Company to register all or a
portion of the Registrable Securities held by them for sale in a public offering
(hereafter "Demand Holders"), then the Company shall promptly give all other
Holders ("Other Holders") written notice of the Company's receipt of such demand
("Demand Notice"), including all of the terms of such demand, which shall
include but not be limited to whether such offering is to be underwritten. Any
Other Holders electing to participate in such registration and offering on the
same terms as the Demand Holders shall confirm their election by delivering a
written notice of such election (an "Election Notice") to the Company and the
Other Holders on or before the tenth business day following the date the Demand
Notice was received. If such Other Holders do not deliver such Election Notice
within such ten (10) business day period, then the Company shall proceed with
such registration without the inclusion of the shares held by such Other
Holders. The Company shall bear all costs of preparing and filing such
registration statement, except for the fees of counsel retained by the Other
Holders.

            2.5 Underwritten Demand Registration and Repurchase Offer.

      (a) If at any time (i) the Company has failed to file the reports required
to be filed by it under the 1934 Act such that the Company has not had available
adequate current information as required by Rule 144(c)(1) to permit the Holders
to make sales of Common Stock under Rule 144 for a period of 60 or more
consecutive trading days (the "Rule 144 Default Period") and (ii) during the
Rule 144 Default Period the Company has not offered to purchase all of the
Registrable Securities then held by the Holders at a price per share equal to
the average closing sales price of the Common Stock during the ten (10) trading
days ending on the second trading day immediately preceding the date on which
the Company makes a written offer to purchase such Registrable Securities, then
the Holders of a majority of the then outstanding Registrable Securities shall
have the right, on one occasion, to make a demand, in writing, for the Company
to register all or a portion of the Registrable Securities held by them for sale
in an underwritten offering (an "Underwritten Demand"); provided, however, that
the Holders shall only be entitled to make an Underwritten Demand in the event
Registrable Securities thereof are at the time not included in another
Registration Statement which is then current and available for use by the
Holders. Following an Underwritten Demand, the Company shall use commercially
reasonable efforts to file with the SEC an Underwritten Demand Registration
Statement relating to the offer and sale of those Registrable Securities to
which the Underwritten Demand relates, by and on behalf of the Holders, in the
manner requested by the Holders and the managing underwriters for such offer.

                                      -8-
<PAGE>

      (b) Notwithstanding any other provisions hereof, the Company shall use
commercially reasonable efforts to ensure that (i) the Underwritten Demand
Registration Statement and any amendment thereto and any Prospectus forming part
thereof and any supplement thereto complies in all material respects with the
1933 Act and the rules and regulations thereunder, (ii) the Underwritten Demand
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming part of the Underwritten
Demand Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements, in light of the circumstances under which they were made, not
misleading.

      (c) The Holders shall have the right to select the managing underwriters
to be used in connection with any underwritten offering under this Section 2.4,
subject to the approval of the Company, which approval shall not be unreasonably
withheld or delayed.

      (d) In the event the Company (i) fails to cause the Underwritten Demand
Registration to be declared effective by the SEC within 135 days (the
"Underwritten Demand Deadline") from receipt by the Company of (x) an
Underwritten Demand and (y) written notice from an investment banking firm that
it has agreed to serve as managing underwriter in connection with the
Underwritten Demand, or (ii) exercise its right to repurchase all of the Shares,
the Company shall pay to the Holders of the Investor Shares, as liquidated
damages, and in full satisfaction of its obligations under this Agreement, an
amount equal to $0.10 per Share. Notwithstanding the foregoing, the Underwritten
Demand Deadline shall be extended by any delay in effectuating the Underwritten
Demand related to or caused by any Holder or underwriter.

            2.6 Expenses.

      (a) The Company shall pay all Registration Expenses in connection with any
registrations pursuant to Article 2 hereof.

      (b) The Holders shall pay the fees, expenses and disbursements of counsel
and other experts and advisors retained to represent it and transfer taxes, if
any, relating to the sale or disposition of Registrable Securities pursuant to a
Registration Statement.

            2.7 Additional Securities. Notwithstanding anything in this
Agreement to the contrary, except as provided in Section 2.3 hereof, the Company
shall be permitted to include any other debt or equity securities on its own
behalf and on behalf of other selling security holders in any Registration
Statement filed pursuant to this Agreement unless and to the extent the
inclusion of any such securities would result in a reduction of any Holders'
securities in a Registration Statement filed pursuant to Section 2.1, 2.2 or
2.4.

            2.8 Priority on Registrations. Notwithstanding anything in this
Agreement to the contrary, to the extent that any lesser amount of Registrable
Securities are registered pursuant to this Section 2, then any reduction shall
be allocated pro rata among the Placement Purchasers as to sixty percent (60%)
of the reduction, and pro rata among the Investor Purchasers as to forty percent
(40%) of the reduction.

                                      -9-
<PAGE>

      3. Registration Procedures. In connection with the obligations of the
Company with respect to a Registration Statement pursuant to Section 2.1, 2.2 or
2.4, the Company shall:

            (a) use its commercially reasonable efforts to prepare and file as
promptly as practicable with the SEC a Registration Statement on the appropriate
form under the 1933 Act, which form (i) shall be available for the sale of
Registrable Securities covered by such Registration Statement by the Holders and
(ii) shall comply as to form in all material respects with the requirements of
the applicable form and include or incorporate by reference all financial
statements required by the SEC to be filed therewith or incorporated by
reference therein, and (ii) in the case of the Automatic Registration or a
Demand Registration, use commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective in accordance
with Section 2.1(b) or 2.2(a)(ii) hereof, as applicable;

            (b) in the case of a Demand Registration or an Underwritten Demand
Registration, use commercially reasonable efforts to prepare and file with the
SEC such amendments and post-effective amendments to the Registration Statement
as may be necessary under applicable law to keep such Registration Statement
continuously effective for the applicable period hereunder for the Registrable
Securities covered thereby; and use commercially reasonable efforts to cause
each Prospectus to be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the 1933 Act (or any
similar provision then in force) and comply with the provisions of the 1933 Act
and the 1934 Act applicable to them with respect to the disposition of all
securities covered by the Registration Statement during the applicable period
set forth in Section 2;

            (c) provide copies to and permit counsel designated by the
Purchasers to review each Registration Statement and all amendments and
supplements thereto no fewer than three (3) business days prior to their filing
with the SEC and not file any document to which such counsel reasonably objects,
it being acknowledged and agreed that any time period during which the
Purchasers' counsel is reviewing any Registration Statement or part thereof
after such three (3) business days period shall not be counted or applied in
determining whether any liquidated damages shall be due and owing under this
Agreement;

            (d) (i) promptly after the same is prepared and publicly
distributed, filed with the SEC or received by the Company (but not later than
two (2) business days after filing date, receipt date or sending date, as the
case may be) and at such additional times and from time to time as the
Purchasers (and, in the case of Registration Statement under Section 2.4, the
managing underwriters) may request in order to facilitate the disposition of the
Registrable Securities, furnish or make available (including by filing with and
available through EDGAR) to the Holders (and, in the case of Registration
Statement under Section 2.4, the managing underwriters) and their designated
counsel, without charge, as many copies of each Prospectus, and any amendment or
supplement thereto and such other documents as the Holders (and, in the case of
Registration Statement under Section 2.4, the managing underwriters) may
reasonably request, including financial statements and schedules and, if the

                                      -10-
<PAGE>

Holders (and, in the case of Registration Statement under Section 2.4, the
managing underwriters) so requests, all exhibits; and (ii) hereby consent to the
use of the Prospectus or any amendment or supplement thereto by the Holders
(and, in the case of Registration Statement under Section 2.4, the managing
underwriters) in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement thereto;

            (e) use commercially reasonable efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue sky" laws
of such jurisdictions as the Holder may reasonably request, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
the Holders (and, in the case of Registration Statement under Section 2.4, the
managing underwriters) to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by the Holders; provided, however, that the
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(e), or (ii) take any action which
would subject it to general service of process or taxation in any such
jurisdiction where it is not then so subject;

            (f) notify promptly each Holder and, if requested by a Holder (and,
in the case of Registration Statement under Section 2.4, the managing
underwriters), confirm such advice in writing promptly (i) when a Registration
Statement has become effective and when any post-effective amendments and
supplements thereto become effective, (ii) of any request by the SEC or any
state securities authority for post-effective amendments and supplements to a
Registration Statement and Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
a Registration Statement or the initiation of any proceedings for that purpose,
(iv) of the happening of any event or the discovery of any facts during the
period a Registration Statement is effective which makes any statement of a
material fact made in such Registration Statement or the related Prospectus
untrue in any material respect or which requires the making of any changes in
such Registration Statement or Prospectus in order to make the statements
therein not misleading, (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (vi) of any determination by the Company that a
post-effective amendment to such Registration Statement would be appropriate;

            (g) use commercially reasonable efforts to (i) prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement and (ii) if such order is issued, obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;

            (h) upon the occurrence of any event or the discovery of any facts,
each as contemplated by Section 3(f)(ii), (iii), (iv), (v) or (vi) hereof, as
promptly as practicable after the occurrence of such an event, use commercially
reasonable efforts to prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such Prospectus (x)
will not contain at the time of such delivery any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,

                                      -11-
<PAGE>

in light of the circumstances under which they were made, not misleading or (y)
will remain so qualified. At such time as such public disclosure is otherwise
made or the Company determines that such disclosure is not necessary, in each
case to correct any misstatement of a material fact or to include any omitted
material fact, the Company agrees promptly to notify each Holder of such
determination and to furnish or make available to each Holder such number of
copies of the Prospectus, as amended or supplemented, as the Holder may
reasonably request;

            (i) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus after
initial filing of a Registration Statement, provide copies of such document to
each Holder (and, in the case of Registration Statement under Section 2.4, the
managing underwriters), which documents will be subject to the reasonable review
of the Holder (and, in the case of Registration Statement under Section 2.4, the
managing underwriters);

            (j) use commercially reasonable efforts to cause all Registrable
Securities to be listed or quoted on any securities exchange or inter-dealer
quotation system on which similar securities issued by the Company are then
listed or quoted if requested by the Holders, if any;

            (k) otherwise comply with all applicable rules and regulations of
the SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;

            (l) in connection with an Underwritten Demand Registration under
Section 2.4:

                  (i) enter into customary agreements (including an underwriting
      agreement in customary form, including customary representations,
      warranties, covenants, conditions and indemnities) and, at the Company's
      cost, take such other actions as are required or reasonably requested by
      the Holders or the managing underwriters in order to expedite or
      facilitate the sale of such Registrable Securities; provided, however,
      that the Company's participation in a "road show" or other marketing
      efforts shall be limited to one "overnight road show" for the Underwritten
      Demand shall not be disruptive to the Company's business, except in the
      case of an Underwritten Demand Registration that covers Registrable
      Securities with a market value at the time the Underwritten Demand
      Registration Statement is filed of at least $10,000,000, in which case the
      Company's participation in a "road show" or other marketing efforts shall
      be extended to cover a seventy-two (72) hour period;

                  (ii) at the request of the managing underwriters in connection
      with an underwritten offering, furnish to the underwriters (i) an opinion
      of counsel, addressed to the underwriters, covering such customary matters
      as the managing underwriters may reasonably request and (ii) a comfort
      letter or comfort letters (and updates thereof) from the Company's
      independent public accountants covering such customary matters as the
      managing underwriters may reasonably request; and

                                      -12-
<PAGE>

                  (iii) if requested by the managing underwriters or the
      Holders, promptly incorporate in a prospectus supplement or post effective
      amendment such information as the managing underwriters or the Holders
      reasonably request to be included therein, including, without limitation,
      with respect to the Registrable Securities being sold by the Holders, the
      purchase price being paid therefor by the underwriters and with respect to
      any other items of the underwritten offering of the Registrable Securities
      to be sold in such offering, and promptly make all require filings of such
      prospectus supplement or post effective amendment.

      The Company may (as a condition to the preparation of, or otherwise
proceeding with the Automatic Registration, a Demand Registration or an
Underwritten Demand Registration Statement or the inclusion of a Holder's
securities in a Registration Statement) require each Holder to furnish to the
Company such information regarding the Holder and the proposed distribution by
the Holder as the Company (and the managing underwriter in the case of a
Tag-along Registration or an Underwritten Demand Registration Statement) may
from time to time reasonably request in writing. Notwithstanding anything herein
to the contrary, the Holder may not include any of its Registrable Securities in
any Registration Statement pursuant to this Agreement unless it (i) furnishes to
the Company any such information reasonably requested by the Company, (ii)
agrees to promptly furnish additional information required to be disclosed in
order to make the information previously furnished to the Company by the Holder
not materially misleading and (iii) in the case of a Tag-along Registration or
an Underwritten Demand Registration Statement, agrees to execute and deliver the
agreements, documents and certificates required under and in accordance with
Section 2.3(e) hereof.

      Each Holder agrees that, upon receipt of any notice from the Company of
the happening of any event or the discovery of any facts, each of the kind
described in Section 3(f)(iii), (iv), (v) and (vi) hereof, the Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until the Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Company, the Holder will deliver to the Company (at its
expense) all copies in the Holder's possession, other than permanent file copies
then in the Holder's possession, of the Prospectus covering Registrable
Securities current at the time of receipt of such notice. In addition, if the
Company shall furnish to a Holder a certificate signed by an executive officer
of the Company stating that the Company's Board of Directors has determined in
good faith the disclosure of information in any Registration Statement or
related Prospectus would materially interfere with any acquisition, divestiture,
financing or other material event or transaction which is then intended or the
public disclosure of which at the time would be materially prejudicial to the
Company, the Company may postpone the filing or effectiveness of a Registration
Statement or suspend the use of a Prospectus for a period of not more than
ninety (90) days; provided, however, that the Company shall not exercise its
right to postpone or suspend any registration pursuant to this sentence for more
than one hundred and twenty (120) days in the aggregate during any period of
three hundred sixty (360) consecutive days. If the Company shall give any such
notice to postpone, suspend or discontinue the disposition of Registrable
Securities pursuant to the Registration Statement as set forth in this

                                      -13-
<PAGE>

paragraph, the Company shall extend the period during which a Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and including the date of giving such notice to
and including the date when the Holders shall have received copies of the
supplemented or amended Prospectus necessary to resume such dispositions. Any
such suspension shall be referred to as a "Black-out Period." The Company shall
not be entitled to initiate a Black-out Period unless it shall, in accordance
with its policies then in effect, forbid purchases and sales in the open market
by its senior executives.

      4. Indemnification and Contribution.

            (a) The Company agrees to indemnify and hold harmless each Holders
and its directors, officers and employees, each person, if any, who controls any
Holder within the meaning of either Section 15 of the 1933 Act or Section 20 of
the 1934 Act, and each Affiliate of any Holder within the meaning of Rule 405
under the 1933 Act from and against any and all losses, claims, damages,
liabilities, judgments and expenses (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) (collectively, "Losses") caused by, arising out of, or
based upon (A) (i) any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or in any
blue sky application or other document executed by the Company which is filed in
any state or other jurisdiction in order to qualify any or all of the
Registrable Securities under the securities laws thereof (any such application,
document or information herein called a "Blue Sky Application"), or (ii) any
omission or alleged omission to state in such Registration Statement or Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, except that the Company shall not be
liable to indemnify a Holder insofar as such Losses are (I) caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to a Holder furnished to the Company in writing by the
Holder expressly for use therein (which was not subsequently corrected in
writing prior to the sale of Registrable Securities to the person asserting the
Loss in sufficient time to permit the Company to amend or supplement the
Registration Statement or such Prospectus appropriately), (II) based upon a
Holder's failure to provide the Company with a material fact relating to the
Holder which is required to be included in the Registration Statement or Blue
Sky Application necessary to make a statement in the Registration Statement or
Blue Sky Application not be misleading, or (III) arising out of or based upon
sales of Registrable Securities by a Holder to the person asserting any such
Losses, if such person was not sent or given a Prospectus by or on behalf of the
Holder, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Registrable Securities to such person, and if
the Prospectus (as so amended or supplemented) had been provided to the Holder
and would have cured the defect giving rise to such Losses; (B) any violation by
the Company or its agents of any rule or regulation promulgated under the 1933
Act applicable to the Company or its agents and relating to action or inaction
required of the Company in connection with any registration of its securities;
or (C) any failure to register or qualify the Registrable Securities included in
any Registration Statement in any state where the Company or its agents has
affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on a Holder's behalf (the undertaking of any
underwriter chosen by the Company being attributed to the Company).

                                      -14-
<PAGE>

            (b) Each Holder agrees severally and not jointly to indemnify and
hold harmless the Company and its directors, officers and each person, if any,
who controls the Company (within the meaning of either Section 15 of the 1933
Act or Section 20 of the 1934 Act) and any of their Affiliates, to the same
extent as the foregoing indemnity from the Company to the Holders, but only (i)
with reference to information relating to the Holder furnished to the Company in
writing by or on behalf of such Holder expressly for use in such Registration
Statement, Prospectus, Blue Sky Application or amendment or supplement thereto
(which was not subsequently corrected in writing prior to the sale of
Registrable Securities to the Person asserting the Loss in sufficient time to
permit the Company to amend or supplement the Registration Statement, Prospectus
or Blue Sky Application appropriately), (ii) with reference to information
relating to such Holder which the Holder fails to provide in writing for use in
the Registration Statement, Prospectus or Blue Sky Application resulting in an
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or in connection with a sale of
Registrable Securities or (iii) arising out of or based upon sales of
Registrable Securities by such Holder to the person asserting any such Losses if
such person was not sent or given a Prospectus by or on behalf of the Holder, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Registrable Securities to such person, and if
the Prospectus (as so amended or supplemented) had been provided to the Holder
and would have cured the defect giving rise to such Losses.

            (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 4(a) or 4(b) hereof, such person
(the "indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall assume the defense of such proceedings and retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding; provided, however, that the failure of any indemnified party so
to notify an indemnifying party shall not relieve the indemnifying party of its
obligations hereunder except to the extent that the indemnifying party is
prejudiced by such failure to notify. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate under applicable ethical legal standards due to actual or
potential differing interests between them based upon the indemnified party's
reasonable judgment upon advice of counsel to the indemnified party or (iii) the
indemnifying party fails to agree to assume the defense of such proceeding
within thirty (30) business days after receipt of written notice thereof from
the indemnified party. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings, be liable for the fees and expenses of more
than one separate firm for all such indemnified parties. Such firm shall be
reasonably acceptable to the indemnifying party and shall be designated in
writing by, in the case of parties indemnified pursuant to Section 4(a) the

                                      -15-
<PAGE>

indemnifying Holder or Holders and, in the case of parties indemnified pursuant
to 4(b), the Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any Loss by reason of such settlement or judgment that is indemnifiable pursuant
to Section 4(a) or 4(b), as the case may be. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and does not require the
indemnified party to admit culpability or fault.

            (d) To the extent that the indemnification provided for in Section
4(a) or 4(b) is unavailable to an indemnified party or insufficient in respect
of any Losses referred to therein, then each indemnifying party under such
section, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such Losses, as well as any other relevant
equitable considerations. The relative fault of the Holders on the one hand and
the Company on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Holders or by the Company or the failure of such party to
provide information, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

            (e) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 4(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

            (f) The remedies provided for in this Section 4 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
an indemnified party at law or in equity, hereunder, under the Purchase
Agreements or otherwise.

            (g) The indemnity and contribution provisions contained in this
Section 4 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement and (ii) the sale of any Registrable
Securities by the Holders.

                                      -16-
<PAGE>

            (h) Notwithstanding any provision of this Section 4, in no event
shall the contribution obligation of any Holder be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such Holder in
connection with any claim relating to this Section 4 and the amount of any
damages such Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission) received by it upon
the sale of the Registrable Securities giving rise to such contribution
obligation.

      For purposes of this Section 4, each Person, if any, who controls a Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Holder or its directors,
officers or employees, and each director of the Company, and each Person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.

      5. Miscellaneous.

            5.1 Rule 144. For so long as the Company is subject to the reporting
requirements of Section 13 or 15 of the 1934 Act, the Company will use
commercially reasonable efforts to file the reports required to be filed by it
under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder and that it will take such further
action as the Holders may reasonably request to the extent required from time to
time to enable the Holders to sell Registrable Securities without registration
under the 1933 Act within the limitations of the exemptions provided by Rule 144
under the 1933 Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC. Upon the reasonable
request of the Holders, the Company will deliver to the Holders (i) a written
statement as to whether it has complied with such reporting requirements, (ii)
if it is not filed with and available through EDGAR,` a copy of the Company's
most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and
(iii) such other information as may be reasonably requested in order to avail
such Purchaser of any rule or regulation of the SEC that permits the selling of
any such Registrable Securities without registration. In addition, the Company
covenants to make and keep public information available, as those terms are
understood and defined in Rule 144, until the earlier of (A) six months after
such date as all of the Registrable Securities may be resold pursuant to Rule
144(k) or any other rule of similar effect or (B) such date as all of the
Registrable Securities shall have been resold.

            5.2 Due Diligence Review; Information. The Company shall make
available, during normal business hours, for inspection and review by the
Holders, advisors to and representatives of the Holders (who may or may not be
affiliated with the Holders and who are reasonably acceptable to the Company),
any underwriter participating in any disposition of shares of Common Stock on
behalf of the Holders pursuant to a Registration Statement filed under Section
2.4 or amendments or supplements thereto or any blue sky, NASD or other filing,
all financial and other records, all SEC Filings (as defined in the Purchase
Agreement) and other filings with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for the purpose of such
review, and cause the Company's officers and directors, within a reasonable time
period, to supply all such information reasonably requested by the Holders or
any such representative, advisor or underwriter (in the case of a Registration

                                      -17-
<PAGE>

Statement filed under Section 2.4) in connection with such Registration
Statement (including, without limitation, in response to all questions and other
inquiries reasonably made or submitted by any of them), prior to and from time
to time after the filing and effectiveness of the Registration Statement for the
sole purpose of enabling the Holders and such representatives, advisors and
underwriters (in the case of a Registration Statement filed under Section 2.4)
and their respective accountants and attorneys to conduct initial and ongoing
due diligence with respect to the Company and the accuracy of such Registration
Statement. The Company shall not disclose material nonpublic information to the
Holders, or to advisors to or representatives of the Holders, unless prior to
disclosure of such information the Company identifies such information as being
material nonpublic information and provides the Holders, such advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review and any Holder wishing to obtain such
information enters into an appropriate confidentiality agreement with the
Company with respect thereto.

            5.3 Amendments and Waivers. This Agreement may not be amended,
modified or supplemented without the written consent of the Company and the
Holders of a majority of the Registrable Securities, and waivers or consents to
departures from the provisions hereof may only be given in writing by the party
granting such waiver, consent or departure.

            5.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing and duly given when delivered by
hand or mailed by express, registered or certified mail, or any courier
guaranteeing overnight delivery (a) if to a Holder, at the most current address
given by the Holder to the Company by means of a notice given in accordance with
the provisions of this Section 5.4, which address initially is the address set
forth in the respective Purchase Agreement with respect to the Holder, and (b)
if to the Company, to the attention of its General Counsel, initially at the
Company's address set forth in the Purchase Agreements, and thereafter at such
other address of which notice is given in accordance with the provisions of this
Section 5.4, with a copy to (i) Blank Rome LLP, 405 Lexington Avenue, New York,
New York 10174, attention, Robert J. Mittman, Esq. and (ii) Kane Kessler, PC,
1350 Avenue of the Americas, 26th Floor, New York, New York 10019, Attention:
Jeffrey S. Tullman, Esq.

            5.5 Assignment; Benefits. Each Holder may assign all or any part of
its rights under this Agreement to any Affiliate of the Holder. In the event
that the Holder shall assign its rights pursuant to this Agreement in connection
with the transfer of less than all its Registrable Securities, the Holder shall
also retain its rights with respect to its remaining Registrable Securities.

            5.6 Entire Agreement. This Agreement (including any schedules or
exhibits hereto), together with the Purchase Agreements and the Shareholder
Agreement (as defined in the Purchase Agreement) constitutes the full and entire
understanding and agreement among the parties with respect to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
to the subject matter hereof in any way.

            5.7 Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of New York,
without giving effect to any choice of law or conflict of laws rules or

                                      -18-
<PAGE>

provisions (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of New York.

            5.8 Submission to Jurisdiction; Waiver of Jury Trial. No proceeding
related to this Agreement or the transactions contemplated hereby may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and each of the Company
and each Holder hereby irrevocably and unconditionally consent to the
jurisdiction of such courts and personal service with respect thereto, waive any
objection to the laying of venue of any such litigation in such courts and agree
not to plead or claim that such litigation brought in any courts has been
brought in an inconvenient forum. Each of the Company and each Holder hereby
waive all right to trial by jury in any proceeding (whether based upon contract,
tort or otherwise) in any way arising out of or relating to this Agreement.

            5.9 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby
provided that the essential terms and conditions of this Agreement for the
parties remain valid, binding and enforceable; provided, further, that the
economic and legal substance of the transactions contemplated by this Agreement
is not affected in any manner materially adverse to any party. In event of any
such determination, the parties agree to negotiate in good faith to modify this
Agreement to fulfill as closely as possible the original intents and purposes
hereof. To the extent permitted by law, the parties hereby to the same extent
waive any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.

            5.10 Counterparts. This Agreement and any amendments, modifications
and supplements hereto may be executed in any number of 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.

            5.11 Third Party Beneficiaries. The indemnified parties pursuant to
Section 4 are intended to be third party beneficiaries of this Agreement, and
this Agreement shall inure to the benefit of, and be enforceable by, such
indemnified parties.

                  [Remainder of Page Intentionally Left Blank]

                                      -19-
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                                    GILMAN + CIOCIA, INC.

                                    By: /s/ Ted H. Finkelstein

                                        Name: Ted H. Finkelstein
                                        Title: Vice President

                                    Purchaser

                                    By: /s/
                                        Name:

                                      -20-
<PAGE>

                                   Schedule A

                                   Purchasers

                                      -21-EMPLOYMENT AGREEMENT

      EMPLOYMENT AGREEMENT (the "Agreement"), entered into as of August 20,
2007, by and between Gilman + Ciocia, Inc., a Delaware corporation (the
"Company"), and Michael P. Ryan (the "Executive").

                              W I T N E S S E T H:

      WHEREAS, the Company desires to employ the Executive as its President and
Chief Executive Officer upon the terms and subject to the conditions set forth
in this Agreement; and

      WHEREAS, the Executive is willing to accept such employment upon such
terms;

      NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

      1.    EMPLOYMENT AND DUTIES

            1.1. Term of Employment. The Executive's employment under this
Agreement shall commence as of July 1, 2007 and shall continue until June 30,
2011 (such period being herein referred to as the "Term").

            1.2. General.

                  1.2.1. During the Term, the Executive shall have the title of
President and Chief Executive Officer of the Company and shall have such duties
as may be from time to time delegated to him by the Board of Directors of the
Company (the "Board"). The Executive shall faithfully and diligently discharge
his duties hereunder and use his best efforts to implement the policies
established by the Board. The Executive's responsibilities shall include, among
other things, to render executive, policy, operations and other management
services to the Company of the type customarily provided by persons situated in
similar executive and management capacities.

<PAGE>

                  The Executive shall serve the Company loyally, faithfully and
to the best of the Employee's abilities and shall devote the Employee's full
working time and efforts to the performance of the Employee's duties hereunder.
The Executive shall not engage in any business activity that interferes with the
performance of the Executive's obligations under this Agreement and,
specifically, shall not engage in any business similar to the Company's business
as defined in the Company's then most recently filed Form 10-K, 10-Q or 8-K
apart from the Employee's employment hereunder during the Term.

            1.3. Reimbursement of Expenses. The Company shall pay to the
Executive the reasonable expenses incurred by him in the performance of his
duties hereunder, in accordance with current practice, including, without
limitation, those incurred in connection with business related travel or
entertainment, or, if such expenses are paid directly by the Executive, the
Company shall promptly reimburse him for such payments, provided that the
Executive properly accounts for such expenses in accordance with the Company's
policy.

            1.4. Consideration. In consideration for the Executive's execution
of this Agreement, the Company agrees that the Executive shall become employed
by the Company as set forth in this Agreement, the Executive shall be permitted
access to the Company's confidential information and shall be eligible to
receive post-Term severance payments as set forth in this Agreement (subject to
his compliance with Sections 7 and 8 of this Agreement). The Executive
understands, acknowledges and agrees that the Executive would not receive the
consideration specified in this Section 1.4, except for the Executive's
execution of this Agreement and the fulfillment of the promises contained
herein.

      2.    COMPENSATION

            2.1. Base Salary. During the Term, the Executive shall be entitled
to receive a base salary ("Base Salary") at a rate of Three Hundred Fifty
Thousand Dollars ($350,000) per annum during the Term, which Base Salary shall
be payable in arrears in equal installments not less frequently than on a
bi-weekly basis in accordance with the payroll practices of the Company. The
Base Salary may be increased by the recommendation of the Compensation Committee
and as approved by the majority vote of the entire Board.

                                       2
<PAGE>

            2.2. Bonus. The Executive will be paid a bonus with respect to each
fiscal year (the "Bonus") at such time as determined by the Board, but not later
than one hundred twenty (120) days after the due date of the Company's 10-K for
such fiscal year, and not later than the March 15th following such fiscal year.
The Bonus will be based on actual EBITDA results for such fiscal year (the
"Actual EBITDA") compared to the EBITDA amounts for such fiscal year in the
budget that was approved by the Board of Directors (the "Budget EBITDA"), as
follows:

            a)    If the Actual EBITDA equals at least 120% of the Budget
                  EBITDA, the Bonus will equal 100% of Base Salary.
            b)    If the Actual EBITDA equals at least 100% of the Budget
                  EBITDA, but is less than 120% of the Budget EBITDA, the Bonus
                  will equal 75% of Base Salary.
            c)    If the Actual EBITDA equals at least 85% of the Budget EBITDA,
                  but is less than 100% of the Budget EBITDA, the Bonus will
                  equal 40% of Base Salary.
            d)    If the Actual EBITDA is less than 85% of the Budget EBITDA,
                  there will be no Bonus.

      For these purposes, "EBITDA" shall mean the Net Income of the Company for
such period plus an amount which, in the determination of the Net Income of the
Company for such period, has been deducted for (i) interest expense, (ii) total
federal, state, local and foreign income taxes, and (iii) depreciation and
amortization expenses, each of (i) through (iii) as calculated in accordance
with GAAP. "Net Income" shall mean the net income for such period as determined
in accordance with GAAP. "GAAP" shall mean United States generally accepted
accounting principles.

            2.3. Personal Commissions. The Executive will be paid commissions
and trails ("Commissions") at a payout rate consistent with the present payments
of Commissions to the Executive. All Commissions paid to the Executive will be
paid as a draw against Bonus (i.e., Bonus will be reduced dollar for dollar for

                                       3
<PAGE>

Commissions paid). However, the Executive will not have to pay back any
Commissions paid no matter what Bonus is calculated to be in Section 2.2, or if
no Bonus is payable as calculated in Section 2.2.

            2.4. Additional Compensation. In addition to the Base Salary,
Commissions and the Bonus, the Executive shall be entitled to receive such other
cash bonuses and such other compensation in the form of stock, stock options or
other property or rights as may from time to time be awarded him by the Board
during or in respect of his employment hereunder. The Base Salary, the Bonus and
such other compensation may be increased by the recommendation of the
Compensation Committee and as approved by the majority vote of the entire Board.

      3.    PLACE OF PERFORMANCE

            In connection with his employment by the Company, the Executive
shall be based at the Company's principal executive offices in Poughkeepsie, New
York, or Fort Lauderdale, Florida, subject to the mutual agreement of the
Executive and the Company to relocate him to another office of the Company.

      4.    EMPLOYEE BENEFITS

            4.1. Benefit Plans. The Executive shall, during the Term, be
included to the extent eligible thereunder in all employee benefit plans,
programs or arrangements of general application (including, without limitation,
any plans, programs or arrangements providing for retirement benefits, options
and other equity-based incentive compensation, profit sharing, bonuses,
disability benefits, health and life insurance, or vacation and paid holidays)
which shall be established by the Company or any affiliate of the Company, for,
or made available to, their respective senior executives ("Benefits"). During
the Term, the Benefits described in this paragraph 4 may only be reduced as a
result of a general reduction for senior executives.

            4.2. Vacation. The Executive shall be entitled to not less than four
(4) weeks vacation at full pay for each year during the Term. Such vacation may
be taken in the Executive's discretion, and at such time or times as are not
inconsistent with the reasonable business needs of the Company.

                                       4
<PAGE>

      5.    TERMINATION OF EMPLOYMENT

            5.1. General. The Executive's employment under this Agreement may be
terminated with or without cause only on the following circumstances:

                  5.1.1. Death. The Executive's employment under this Agreement
shall terminate upon his death.

                  5.1.2. Disability. If, as a result of the Executive's
Disability (as defined below), the Executive shall have been absent from his
duties under this Agreement for ninety (90) consecutive days, or for an
aggregate of one hundred twenty (120) days during any 360 consecutive day period
, the Company may terminate the Executive's employment upon fifteen (15) days
prior written notice following the last day of such ninety (90) day or one
hundred twenty (120) day period; provided that the Executive has not returned to
full time performance of his duties during such fifteen (15) day period. For
purposes hereof, "Disability" shall mean that the Executive is unable to perform
his normal and customary duties hereunder as a result of physical or mental
incapacity, illness or disability.

                  5.1.3 Cause. The Company may terminate the Executive's
employment under this Agreement for Cause. Termination for "Cause" shall mean
termination of the Executive's employment because of the occurrence of any of
the following as determined by the Board after an in person hearing to determine
if Cause exists. The Executive shall have the opportunity to appear at the
hearing with counsel to testify and to present evidence to the Board.

                  (i) the failure or refusal by the Executive to substantially
                  perform his obligations under this Agreement or any directive
                  of the Board which is not inconsistent with the terms of this
                  Agreement, or any material breach of this Agreement by the
                  Executive (other than any such failure resulting from the
                  Executive's Disability); provided, however, that the Company
                  shall have provided the Executive with written notice that
                  such actions are occurring and the Executive has been afforded
                  a reasonable opportunity of at least ten (10) days to cure
                  same, or

                                       5
<PAGE>

                  (ii) the indictment of the Executive for a felony or other
                  crime involving moral turpitude or dishonesty, or the
                  conviction of the Executive or the plea of nolo contendere by
                  the Executive to a misdemeanor (other than traffic
                  infractions); or

                  (iii) a material breach of Section 7 or Section 8 hereof or a
                  breach of any representation contained in this Agreement by
                  the Executive; or

                  (iv) a breach of fiduciary duty involving personal profit; or

                  (v) an act of dishonesty in connection with his employment
                  with the Company; or

                  (vi) the Executive's possession or use of illicit drugs, a
                  prohibited substance or alcohol, to the extent that in the
                  reasonable determination of the Board it impairs his ability
                  to perform his duties and responsibilities; or

                  (vii) the Executive having committed acts or omissions
                  constituting gross negligence or willful misconduct (including
                  theft, fraud, embezzlement, and securities law violations)
                  which is injurious to the Company, monetarily, or otherwise;
                  or.

                  (viii) If at any time the Company's securities are listed on a
                  stock exchange or Nasdaq Stock Market, the Executive having
                  committed any material violation of, or material noncompliance
                  with, any securities law, rule or regulation or stock exchange
                  or Nasdaq Stock Market regulation rule relating to or
                  affecting the Company;

                  (ix) The Executive's material failure or refusal to honestly
                  provide a certificate in support of the chief executive
                  officer's and/or principal executive officer's certification
                  required under the Sarbanes-Oxley Act of 2002, or any other
                  filings under the federal securities laws including the rules
                  and regulations promulgated thereunder.

                                       6
<PAGE>

            5.1.4. Termination by the Executive for Good Reason. The Executive
may terminate this Agreement for Good Reason (as defined below) by delivering to
the Board written Notice of Termination within fifteen (15) days following the
event which constitutes such Good Reason, to be effective on the tenth (10th)
day following the date of such Notice of Termination. "Good Reason" means that,
without the express written consent of the Executive, the occurrence of any of
the following events occurs: (i) there is any material reduction or diminution
(except temporarily during any period of disability) in the Executive's
authority, duties or responsibilities with the Company; (ii) the Executive no
longer reports to the Company's board of directors (or similar governing body)
or (iii) there is a material breach by the Company of any material provision of
this Agreement, including a reduction in the Base Salary or the relocation of
the Executive's principal place of employment by more than fifty (50) minutes
from either of the locations set forth in Section 3, in either case, without the
Executive's consent) and, in any such case, within 90 days following the
occurrence of an event described in (i), (ii) or (iii) the Executive notifies
the Company that such event has occurred and the Company fails to cure the event
(and the Executive does not waive the Company's failure to cure the event)
within thirty (30) days after its receipt of such notice.

            5.2. Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive (other than termination by reason
of the Executive's death) shall be communicated by written Notice of Termination
to the other party of this Agreement. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.

            5.3. Date of Termination. The "Date of Termination" shall mean (a)
if the Executive's employment is terminated by his death, the date of his death,
(b) if the Executive's employment is terminated pursuant to subsection 5.1.2
above, fifteen (15) days after Notice of Termination is given (provided that the
Executive shall not have returned to the performance of his duties on a
full-time basis during such fifteen (15)-day period), (c) if the Executive's

                                       7
<PAGE>

employment is terminated pursuant to subsection 5.1.3 above, the date specified
in the Notice of Termination after the expiration of any applicable cure
periods, if any, (d) if the Executive's employment is terminated pursuant to
subsection 5.1.4 above, the date specified in the written Notice, and (e) if the
Executive's employment is terminated for any other reason, the date on which a
Notice of Termination is given.

            5.4 Compensation Upon Termination.

                  5.4.1 Termination for Cause. If prior to the expiration of the
Term, the Executive's employment shall be terminated for Cause, the Company
shall pay the Executive his Base Salary (but no Bonus for the current fiscal
year other than Commissions) through the Date of Termination, at the rate in
effect at the time Notice of Termination is given, and all expenses and accrued
Benefits arising prior to such termination which are payable to the Executive
pursuant to this Agreement through the Date of Termination and the Company shall
have no further obligation with respect to this Agreement. In addition, the
Executive shall be entitled to any Bonus earned but not yet paid for a prior
fiscal year.

                  5.4.2 Termination Due to an Involuntary Change of Control.

                  (a) Subject to the provisions of subsections 5.4.4 and 5.4.7
hereof, if, prior to the expiration of the Term, the Executive's employment
hereunder is terminated by the Company due to an "Involuntary Change of
Control", the Company shall pay to the Executive all expenses and accrued
Benefits arising prior to such termination which are payable to the Executive
pursuant to this Agreement through the Date of Termination. In addition, the
Company shall pay to the Executive an amount equal to his Base Salary at the
rate as then in effect on the date of the Notice of Termination, and his
Termination Bonus (as defined in Section 5.4.6), for a period (such period being
referred to hereinafter as the "Severance Period") measured as the greater of
three (3) years from the Date of Termination, or the ending date of the Term. In
addition, the Executive shall be entitled to any Bonus earned but not yet paid
for a prior fiscal year in accordance with Section 2.2.

                  (b) During the Severance Period, the Executive shall be
entitled to continue to participate in all employee benefit plans that the
Company provides (and continues to provide) generally to its senior executives.

                                       8
<PAGE>

                  (c) An "Involuntary Change of Control" shall be deemed to have
occurred when, without being initiated or solicited by the Company or by the
Executive, by tender offer, merger, acquisition or similar means, any "person"
as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and as used in Section 13(d) and 14(d) thereof, including
a "group" as defined in Section 13(d) of the Exchange Act, but excluding the
Executive, or the Company or any subsidiary or any affiliate of the Company or
any employee benefit plan sponsored or maintained by the Company or any
subsidiary of the Company (including any trustee of such plan acting as
trustee), becomes the "beneficial owner" (as defined in Rule 13(d)(3) under the
Exchange Act) of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities, or there is
a sale of substantially all of the Company's assets (meaning more than 50% of
the assets are sold).

                  5.4.3. Termination Without Cause Including a Voluntary Change
of Control.

                  (a) Subject to the provisions of subsections 5.4.4 and 5.4.7
hereof, if, prior to the expiration of the Term, the Executive's employment
hereunder is terminated by the Company Without Cause, including a Voluntary
Change of Control a ("Voluntary Change of Control"), the Company shall pay to
the Executive all expenses and accrued Benefits arising prior to such
termination which are payable to the Executive pursuant to this Agreement
through the Date of Termination. In addition, the Company shall pay to the
Executive an amount equal to his Base Salary at the rate as then in effect on
the date of the Notice of Termination, and his Termination Bonus (as defined in
Section 5.4.6), for a period (such period being referred to hereinafter as the
"Severance Period") measured as the greater of one (1) year from the Date of
Termination, or the ending date of the Term. In addition, the Executive shall be
entitled to any Bonus earned but not yet paid for a prior fiscal year in
accordance with Section 2.2

                  (b) During the Severance Period, the Executive shall be
entitled to continue to participate in all employee benefit plans that the
Company provides (and continues to provide) generally to its senior executives.

                  (c) "Without Cause" under this Section 5.4.3 shall mean any
termination of this Agreement that is not due to: the death or disability of the
Executive; a termination of the Executive with Cause; or a termination by the
Executive with Good Reason.

                                       9
<PAGE>

                  (d) A "Voluntary Change of Control" shall be deemed to have
occurred when, after being initiated or solicited by the Company or by the
Executive, by tender offer, merger, acquisition or similar means, any "person"
as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and as used in Section 13(d) and 14(d) thereof, including
a "group" as defined in Section 13(d) of the Exchange Act, but excluding the
Executive, or the Company or any subsidiary or any affiliate of the Company or
any employee benefit plan sponsored or maintained by the Company or any
subsidiary of the Company (including any trustee of such plan acting as
trustee), becomes the "beneficial owner" (as defined in Rule 13(d)(3) under the
Exchange Act) of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities, or there is
a sale of substantially all of the Company's assets (meaning more than 50% of
the assets are sold).

                  5.4.4. Death During Severance Period. In the event of the
Executive's death during the Severance Period, payments of Base Salary and the
Termination Bonus under this Section 5.4 and payments under the Company's
employee benefit plan(s) shall continue to be made in accordance with their
terms during the remainder of the Severance Period to the beneficiary designated
in writing for such purpose by the Executive or, if no such beneficiary is
specifically designated, to the Executive's estate.

                  5.4.5. Termination upon Death or Disability. In the event of
the termination of the Executive's employment by reason of death or Disability,
the Company shall pay the Executive his Base Salary and a termination Bonus
prorated through the Date of Termination, at the rate then in effect, and all
expenses or accrued Benefits, including any earned and unpaid Bonus for a prior
fiscal year, arising prior to such termination which are payable to the
Executive pursuant to this Agreement through the Date of Termination. In
addition, the Executive and/or his beneficiaries shall be entitled to such other
Benefits as shall be determined in accordance with the benefit plans maintained
by the Company.

                  5.4.6. Termination Bonus. For purposes of this Section 5.4,
Termination Bonus shall be a bonus computed at one hundred percent (100%) of the
Executive's Base Salary.

                                       10
<PAGE>

                  5.4.7 Payments and Benefits During Severance Period.

      (a) Except as provided in Subsection (b), the cash amounts payable under
Section 5.4.2 or Section 5.4.3 shall be paid in equal monthly installments
during the applicable Severance Period.

      (b) If the Executive is a "specified employee" within the meaning of
section 409A of the Internal Revenue Code of 1986, as amended, as of his Date of
Termination (as determined in accordance with the methodology established by the
Company as in effect on the Date of Termination), then to the extent that cash
payments and benefits under Section 5.4.2 or Section 5.4.3 (other than benefits
described in Subsection (c)) during the Applicable Period would exceed the
Applicable Amount, such payments shall be paid to the Executive in a single sum
on the first business day following the end of the Applicable Period.

      (c)Subject to Subsection (b), during the applicable Severance Period, the
Executive shall be entitled to continue to participate in all employee benefit
plans that the Company provides (and continues to provide) generally to its
senior executives (to the extent permitted by the plans as then in effect), to
the extent such plans provide for coverage and benefits that are not includible
in the Executive's gross income for Federal Income Tax purposes.

      (d) The "Applicable Period" is the period beginning on the Executive's
Date of Termination and ending on the first date that is six (6) months after
the Executive's Date of Termination.

      (e) The "Applicable Amount" is the amount equal to two times the lesser
of: (1) the sum of the Executive's annualized compensation from the Company
based upon the annual rate of pay for services provided to the Company for the
taxable year of the Executive preceding the taxable year of the Executive's Date
of Termination (adjusted for any increase during that year that was expected to
continue indefinitely if the Executive had not terminated employment); or (2)
the maximum amount that may be taken into account under a qualified plan
pursuant to section 401(a)(17) of the Code for the year of the Executive's Date
of Termination.

                                       11
<PAGE>

      6.    INSURABILITY; RIGHT TO INSURE

      During the continuance of the Executive's employment hereunder, the
Company shall have the right to maintain key man life insurance in its own name
covering the Executive's life in such amount as shall be determined by the
Company, for a term ending on the termination or expiration of this Agreement.
The Executive shall use his reasonable best efforts to assist the Company in
procuring of such insurance by submitting to the required medical examinations,
if any, and by filling out, executing and delivering truthful applications and
other instruments in writing as may be reasonably required by an insurance
company or companies to which application or applications for insurance may be
made by or for the Company.

      7.    PROPRIETARY INFORMATION; CONFIDENTIALITY; NON-COMPETITION;
            NONSOLICITATION

      7.1. The term "Proprietary Information" means information that was or is
developed by, became or becomes known by, or was or is assigned or otherwise
conveyed to or required by the Company, and which has any commercial or economic
value, actual or potential, in the Company's business, and includes, without
limitation, trade secrets, copyrights, ideas, techniques, know-how, inventions
(whether patentable or not), and/or any other information of any type relating
to designs, configurations, toolings, documentation, recorded data, schematics,
source code; object code, master works, master databases, algorithms, flow
charts, formulae, circuits, works of authorship, mechanisms, research,
manufacture, improvements, assembly, installation, intellectual property
including patents and patent applications, business plans, past or future
financing, marketing, forecasts, pricing, customers, vendors, costs, the
salaries, duties, qualifications, performance levels, and terms of compensation
of other employees, and/or cost, financial statements or other financial data
concerning any of the foregoing or the Company and its operations generally. The
Executive understands that the provision of his employment creates a
relationship of confidence and trust between him and the Company with respect to
the Company and the Proprietary Information of the Company and its customers
which may be learned by the Executive during the period of the Executive's
employment.

      7.2 The Executive acknowledges and agrees that all Proprietary Information
and all patents, copyrights, trade secret rights, rights with respect to mask
works and other rights (including throughout, without

                                       12
<PAGE>

limitation, any extensions, renewals, continuations or divisions of any of the
foregoing) in connection therewith shall be the sole property of the Company. To
the extent that, for any reason, such Proprietary Information or rights may not
vest in the Company, the Executive hereby sells, transfers, conveys and assigns
to the Company any such rights or rights he may have or acquire in such
Proprietary Information. At all times, both during the Term and thereafter, the
Executive will keep in strict confidence and trust and will not use or disclose
any Proprietary Information or anything relating to it to any other person,
whether or not for reasons of gain, without the written consent of the Company,
except as may be necessary in the ordinary course of performing his duties to
the Company. The Executive will defend the Company against all claims, actions,
suits, or other proceedings against the Company arising out of or resulting from
breach of this Section 7, and shall indemnify and hold the Company harmless from
and against all judgments, losses, liabilities, damages, costs and expenses
(including without limitation, reasonable attorneys' fees and attorneys'
disbursements) arising out of or incurred in connection with all such claims,
actions, suits or other proceedings.

      7.3 In the event of the termination of the Executive's employment, whether
by the Company or the Executive, for any reason, the Executive shall return all
documents, records, apparatus, equipment and other physical property, or any
reproduction of such property, whether or not pertaining to Proprietary
Information, furnished to the Executive by the Company or produced by the
Executive or others in connection with the Executive's employment immediately as
and when requested by the Company.

      7.4 During the Term of this Agreement and for a period of two (2) years
thereafter (whether or not this Agreement has been terminated by the Company or
the Executive for any reason prior to the expiration of the Term), the Executive
will not, either directly or through others:

            (a) solicit, cause to be solicited, or attempt to solicit any
      employee, independent contractor, consultant or customer or client of the
      Company to terminate his relationship with the Company in order to become
      an employee, consultant, independent contractor, customer or client to or
      for any other person or entity, or otherwise encourage or solicit any
      employee, consultant, independent contractor, customer or client of the
      Company to leave the Company for any reason or to devote less than all of
      any such employee's efforts to the affairs of the Company; or

                                       13
<PAGE>

            (b) take any action which constitutes an interference with or a
      disruption of any of the business activities of the Company.

      7.5 During the Term of this Agreement and for a period of one (1) year
thereafter (whether or not this Agreement has been terminated by the Company or
the Executive for any reason prior to the expiration of the Term), the Executive
will not, either directly or through others: engage, directly or indirectly, or
have an interest, directly or indirectly, anywhere in the United States of
America or any other geographic area where the Company does business or in which
its products or services are marketed, alone or in association with others, as
principal, officer, agent, employee, director, partner or stockholder (except
with respect to the Executive's employment by the Company), or through the
investment of capital, lending of money or property, rendering of services or
otherwise, in any business competitive with or substantially similar to the
businesses engaged in by the Company during the Term of this Agreement (it being
understood hereby, that the ownership by the Employee of five percent (5%) or
less of the stock of any company listed on a national securities exchange shall
not be deemed a violation of this Section 7.5).

      7.6 At no time during the Term, or thereafter shall the Executive directly
or indirectly, disparage the commercial, business or financial reputation of the
Company;

      7.7 The Executive represents that his performance of services to the
Company will not breach any agreement or obligation to keep in confidence
Proprietary Information acquired by him in confidence or in trust prior to the
Executive's provision of services to the Company. The Executive has not entered
into, and the Executive agrees that he will not enter into, any agreement either
written or oral in conflict with this Agreement or in conflict with his
employment by the Company.

      7.8 During the Executive's employment by the Company, the Executive will
not improperly use or disclose any confidential information or trade secrets, if
any, of any former employer or any other person to whom the Executive has an
obligation of confidentiality, and the Executive will not bring onto the

                                       14
<PAGE>

premises of the Company any unpublished documents or any property belonging to
any former employer or any other person to whom the Executive has an obligation
of confidentiality unless expressly authorized in writing by that former
employer or person. The Executive will use in the performance of his services
only information which is generally known and used by persons with training and
experience comparable to his own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.

      7.9 In the event that the Executive is no longer employed by the Company,
he hereby consents to the notification of any new employer of his rights and
obligations under this Agreement.

      7.10 Without intending to limit the remedies available to the Company,
including damages for breach of contract, the Executive acknowledges that a
breach of any of the covenants contained in this Section 7 may result in
material and irreparable injury to the Company, or its affiliates or
subsidiaries, for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat the Company shall be entitled to seek a temporary
restraining order and/or a preliminary or permanent injunction restraining the
Executive from engaging in activities prohibited by this Section 7 or such other
relief as may be required specifically to enforce any of the covenants in this
Section 7. The Executive hereby acknowledges and agrees that the type and
periods of restrictions imposed in this Section 7 are fair and reasonable and
are reasonably required for the protection of the Company's confidential
information and the goodwill associated with the business of the Company.
Further, the Executive acknowledges and agrees that the restrictions imposed in
this Section 7 will not prevent his from obtaining suitable employment after his
employment with the Executive ceases or from earning a livelihood. If for any
reason it is held that the restrictions under this Section 7 are not reasonable
or that consideration therefor is inadequate, such restrictions shall be
interpreted or modified to include as much of the duration and scope identified
in this Section as will render such restrictions valid and enforceable.

                                       15
<PAGE>

      8.    EXECUTIVE'S COOPERATION

      During the Term and thereafter, the Executive shall cooperate with the
Company in any internal investigation or administrative, regulatory or judicial
proceeding as reasonably requested by the Company (including, without
limitation, the Executive being available to the Company upon reasonable notice
for interviews and factual investigations, appearing at the Company's request to
give testimony without requiring service of a subpoena or other legal process,
volunteering to the Company all pertinent information and turning over to the
Company all relevant documents which are or may come into the Executive's
possession, all at times and on schedules that are reasonably consistent with
the Executive's other permitted activities and commitments). In the event the
Company requires the Executive's cooperation in accordance with this section
after the termination of the Term, the Company shall reimburse the Executive for
all of his reasonable costs and expenses incurred, in connection therewith, plus
pay the Executive a reasonable amount per day for his time spent.

      9.    RIGHTS OF INDEMNIFICATION

      The Company shall indemnify the Executive to the fullest extent permitted
by the General Corporation Law of the State of Delaware, as amended from time to
time, for all amounts (including without limitation, judgments, fines,
settlement payments, expenses and attorney's fees) incurred or paid by the
Executive in connection with any action, suit, investigation or proceeding
arising out of or relating to the performance by the Executive of services for,
or the acting by the Executive as a director, officer or employee of the
Company, or any other person or enterprise at the Company's request.

                                       16
<PAGE>

      10.   MISCELLANEOUS

            10.1. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:

                  To the Company:        Gilman + Ciocia, Inc.
                                         11 Raymond Avenue
                                         Poughkeepsie, NY 12603

                                         Attn: Legal Department
                                         Fax: (845) 622-3638

                  To the Executive:      Michael P. Ryan
                                         1 Dallas Drive
                                         Poughkeepsie, NY 12603

                                         Fax: (845) 622-3665

All such notices shall be conclusively deemed to be received and shall be
effective (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy
or facsimile transmission, upon confirmation of receipt by the sender of such
transmission, (iii) if sent by overnight courier, one business day after being
sent by overnight courier, or (iv) if sent by registered or certified mail,
postage prepaid, return receipt requested, on the fifth day after the day on
which such notice is mailed.

            10.2. Severability. Each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement, including the provisions of Section 7,
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

                                       17
<PAGE>

            10.3. Binding Effect; Benefits. Executive may not delegate his
duties or assign his rights hereunder. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.

            10.4 Entire Agreement. This Agreement represents the entire
agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the Company and the Executive. This
Agreement may be amended at any time by mutual written agreement of the parties
hereto. In the case of any conflict between any express term of this Agreement
and any statement contained in any employment manual, memo or rule of general
applicability of the Company, this Agreement shall control.

            10.5 Warranty. The Executive hereby represents and warrants as
follows: (i) that the execution of this Agreement and the discharge of the
Executive's obligations hereunder will not breach or conflict with any other
contract, agreement, or understanding between the Executive and any other party
or parties; and (ii) the Executive's resume which was provided to the Company by
the Executive and other statements made about the Executive's employment history
to the Company by the Executive are true, accurate and complete in all material
respects.

            10.6 Withholding. The payment of any amount pursuant to this
Agreement shall be subject to applicable withholding and payroll taxes, and such
other deductions as may be required under the Company's employee benefit plans,
if any.

            10.7 Governing Law; Consent to Personal Jurisdiction.

                  (a) This Agreement shall be deemed to have been made and
delivered in Poughkeepsie New York and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
laws of the State of New York.

                  (b) At the Company's option, any dispute or controversy under
this Agreement shall be determined: in an arbitration proceeding before three
(3) arbitrators at the AAA; or in a lawsuit at the New York State Supreme Court.
The award in any arbitration hereunder shall be final, and judgment upon the
award rendered may be entered in any court, state or Federal, having
jurisdiction and the parties hereby submit to the jurisdiction of any such court
for the purpose of such arbitration and the entering of such judgment.

                                       18
<PAGE>

                  (c) The venue of the arbitration or the Supreme Court action
shall be picked and determined by the Company from one of the following:
Dutchess County, New York; New York County; New York or Broward County, Florida.

                  (d) The prevailing party in any arbitration or lawsuit shall
recover from the other party all costs and disbursements of the arbitration or
lawsuit, including reasonable legal fees.

                  (e) The parties further agree to accept and acknowledge
service of any and all process which may be served in any such suit, action or
proceeding, and agree that service of process upon either such party may be made
in accordance with Section 10.1 of this Agreement and shall be deemed in every
respect effective service of process upon such party, in any such suit, action
or proceeding.

            10.8 Execution in Counterparts. This Agreement may be executed by
the parties in one or more counterparts, each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto. A photocopy or electronic facsimile of this Agreement or of any
signature hereon shall be deemed an original for all purposes.

            10.9 Survival. The provisions of Sections 7 and 8 of this Agreement
shall survive the termination of this Agreement.

                                       19
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Executive has hereunto set his hand, as of the day and year
first above written:

                                                    THE COMPANY:

                                                    GILMAN + CIOCIA, INC.

                                                    By: /s/ Ted H. Finkelstein
                                                        ------------------------
                                                        Name: Ted H. Finkelstein
                                                        Title: Vice President

                                                    EXECUTIVE:

                                                    /s/ Michael P. Ryan
                                                    ----------------------------
                                                    Michael P. Ryan

                                       20

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