AMENDMENT NO. 1 TO REVOLVING LINE OF CREDIT AND TERM LOAN AGREEMENT

A.

Reference is hereby made to a certain Revolving Line of Credit and Term Loan Agreement dated as of November 30, 2007 by and between Borrower and Lender as (the “Loan Agreement”). The loan obligations of Borrower to Lender are further evidenced by (i) a certain Term Promissory Note dated November 30, 2007 from the Borrower to the Lender in the maximum principal amount of up to $13,000,000.00 and (ii) a certain Revolving Line of Credit Note dated November 30, 2007 from the Borrower to the Lender in the maximum principal amount of $2,000,000.00 (together, the “Notes”). All capitalized terms used herein and not otherwise defined herein shall have the meanings as set forth in the Loan Agreement.

B.

Borrower has requested that Lender approve the acquisition of California Investment Annuity Sales, Inc., a California corporation with its principal place of business at 4640 Admiralty Way, Marina Del Ray, CA 90292 (the “Subsidiary”).

C.

Lender has agreed to approve the acquisition of the Subsidiary, provided that Borrower joins with Lender in the execution of this Agreement and satisfies the conditions precedent set forth herein, including, without limitation, the execution by the Subsidiary of a Guaranty of the Loans.

1.

The Lender hereby consent to the acquisition of the Subsidiary on the terms set forth in a certain Stock Purchase Agreement, dated as of March 31, 2008 among the Borrower, the Subsidiary, Richard L. Kaplan and Hana E. Kaplan Inter Vivos Trust Agreement dated 1/29/97 as amended and restated 1//10/03 and Anthony Delfino, and the acquisition of the Subsidiary shall be deemed to be a permitted Acquisition.

2.

To evidence that the Subsidiary is an additional Guarantor of the Loans, Schedule A to the Loan Agreement is hereby deleted in its entirety and the attached Schedule A is substituted therefor.

3.

Lender and Borrower hereby agree that, with respect to the acquisition of the Subsidiary as an Acquired Entity (as defined in the Loan Agreement), the calculation of Acquired EBITDA shall be as follows:

Amendment No. 1 to Revolving Line of Credit and Term Loan Agreement 

For the four fiscal quarter period ending June 30, 2008, an amount equal to:

 

$363,945.04

For four fiscal quarter period ending September 30, 2008, an amount equal to:

 

$259,517.79

For the four fiscal quarter period ending December 31, 2008, an amount equal to:

 

$124,841.55

4.

As a condition of this Agreement, Borrower shall at the time of execution of this Agreement:

(a)

reimburse Lender for its costs in connection with this Agreement and the Modification Documents (as defined below), including legal fees and expenses incurred by Lender;

(b)

deliver to Lender the following documents in form and substance satisfactory to Lender or, if applicable, as required by the terms and conditions of the Loan Agreement:

an Amendment No.1 to Stock Pledge executed by Borrower;

(ii)

an Amendment No. 1 to Intercreditor Agreement executed by Borrower and by Junior Lender;

(iii)

a Stock Power certificate executed in blank by Borrower in favor of Lender with respect to the stock of the Subsidiary;

(iv)

a Seller Subordination Agreement executed by the seller of the equity interests in the Subsidiary in connection with any Seller Financing;

a Perfection Certificate executed by the Subsidiary;

a Guaranty in favor of Lender executed by the Subsidiary;

a Security Agreement executed by the Subsidiary in favor of Lender; and

(viii)

any other documents the Lender deems necessary to effectuate this amendment to the Loan.

The foregoing documents and any additional documents executed herewith, together with this Agreement, shall be referred to herein as the “Modification Documents”; and

(c)

satisfy and/or be in compliance with the Financed Acquisition Conditions on the date hereof and at the time of the advance by Lender of the Term Loan Advance contemplated hereby.

5.

Borrower hereby represents and warrants that: (i) its representations and warranties set forth in the Loan Agreement are true on and as of the date hereof as if made on such date (except to the extent that the same expressly relate to an earlier date or are affected by the consummation of transactions permitted hereby or by the Agreement); (ii) it is in compliance in all material respects with all of the terms and provisions set forth in the Loan Agreement on its part to be observed or performed; (iii) after giving effect to any extension of credit to be made on the date hereof, no Event of Default (as defined in the Loan Agreement) or Default Event has occurred and is continuing; (iv) since the date of the financial statements most recently provided to Lender by Borrower, there has occurred no material adverse change in the assets or liabilities or the financial or other condition of Borrower; (v) it has full power to execute, deliver and perform its obligations under the Modification Documents and the execution, delivery and performance of the Modification Documents have been authorized and directed by the appropriate parties; (vi) the Modification Documents constitute the legal, valid and binding obligations of Borrower and/or the Subsidiary, as applicable, enforceable in accordance with their terms; (vii) the execution, delivery and performance thereof will not violate any provision of any existing law or regulation applicable to Borrower or the Subsidiary or their respective governing documents or of any order or decree of any court, arbitrator or governmental authority or of any contractual undertaking to which either is a party or by which either may be bound; and (viii) no consents, licenses, approvals or authorizations of, exemptions by or registrations or filings with, any governmental authority are required with respect to the Modification Documents.

6.

If Borrower fails to comply with all the terms and conditions of the Modification Documents, such failure shall constitute a default under this Agreement and an Event of Default under the Loan Agreement and other Loan Documents.

LENDER:

RBS CITIZENS, NATIONAL ASSOCIATION

_____________________________

By: /s/ David Bugbee

Witness

Name: David Bugbee

Title: Senior Vice President

BORROWER:

NATIONAL INVESTMENT MANAGERS INC.

___________________________

By: /s/ Steven Ross

Witness

Name: Steven Ross

Title: CEO