AMENDMENT AGREEMENT
This AMENDMENT AGREEMENT, dated as of August 10, 2006 (this "Agreement"),
between NATIONAL INVESTMENT MANAGERS INC., a Florida corporation (f/k/a Fast
Xxxxx Racing Stables, Inc.)(the "Company"), and LAURUS MASTER FUND, LTD., a
Cayman Islands company ("Laurus"). Capitalized terms used herein without
definition shall have the meanings ascribed to such terms in (i) that certain
Securities Purchase Agreement, dated as of March 9, 2005, by and between the
Company and Laurus (together with the Related Agreements referred to therein, as
amended, modified or supplemented from time to time, the "March 2005 Loan
Documents"), (ii) that certain Securities Purchase Agreement, dated as of
November 30, 2005, by and between the Company and Laurus (together with the
Related Agreements referred to therein, as amended, modified or supplemented
from time to time, the "November 2005 Loan Documents"), (iii) that certain
Securities Purchase Agreement, dated as of May 30, 2006, by and between the
Company and Laurus (together with the Related Agreements referred to therein, as
amended, modified or supplemented from time to time, the "May 2006 Loan
Documents"), or (iv) that certain Amended and Restated and Amended Agreement,
dated as of November 30, 2005, by and between the Company and Laurus (as
amended, modified or supplemented from time to time, the "Amended Registration
Rights Agreement") and, together with the March 2005 Loan Documents and the
November 2005 Loan Documents, the "Loan Documents"), as applicable.
WHEREAS, reference is made to the following Related Agreements: (i) that
certain Secured Convertible Term Note, dated as of March 9, 2005 and issued by
the Company to Laurus (as amended, modified and/or supplemented, the "Term
Note"); (ii) that certain Common Stock Purchase Warrant, dated as of March 9,
2005 and issued by the Company to Laurus (as amended, modified and/or
supplemented, the "2005 Warrant"); (iii) that certain Common Stock Option, dated
as of March 9, 2005 and issued by the Company to Laurus (as amended, modified
and/or supplemented, the "Option"); and (iv) (ii) that certain Common Stock
Purchase Warrant, dated as of May 30, 2006 and issued by the Company to Laurus
(as amended, modified and/or supplemented, the "2006 Warrant");
WHEREAS, Laurus and the Company wish to enter into to certain amendments
related to the Loan Documents;
NOW, THEREFORE, in consideration of the above, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each of the Company and Laurus agree as follows:
1. The Company and Laurus hereby agree that Section 3.2 of the Term Note
is hereby amended to read in it's entirety as follows:
"3.2 Conversion Limitation. Notwithstanding anything contained herein to
the contrary, the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible into that number of Conversion
Shares which would exceed the difference between 4.99% of the issued and
outstanding shares of Common Stock and the number of shares of Common Stock
beneficially owned by such Holder or issuable upon exercise of Warrants held by
such Holder. For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and Regulation 13d-3 thereunder."
2. The Company and Laurus hereby agree that Section 10 of the 2005 Warrant
is hereby amended to read in it's entirety as follows:
"10. Maximum Exercise. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this proviso is being made on
an exercise date, which would result in beneficial ownership by the Holder and
its affiliates of more than 4.99% of the outstanding shares of Common Stock of
the Company on such date. For the purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder."
3. The Company and Laurus hereby agree that Section 10 of the Option is
hereby amended to read in it's entirety as follows:
"10. Maximum Exercise. The Holder shall not be entitled to exercise this
Option on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Option with respect to which the determination of this proviso is being made on
an exercise date, which would result in beneficial ownership by the Holder and
its affiliates of more than 4.99% of the outstanding shares of Common Stock of
the Company on such date. For the purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder."
4. The Company and Laurus hereby agree that Section 10 of the 2006 Warrant
is hereby amended to read in it's entirety as follows:
"10. Maximum Exercise. Notwithstanding anything herein to the contrary, in
no event shall the Holder be entitled to exercise any portion of this Warrant in
excess of that portion of this Warrant upon exercise of which the sum of (1) the
number of shares of Common Stock beneficially owned by the Holder and its
Affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unexercised portion of the Warrant or the
unexercised or unconverted portion of any other security of the Holder subject
to a limitation on conversion analogous to the limitations contained herein) and
(2) the number of shares of Common Stock issuable upon the exercise of the
portion of this Warrant with respect to which the determination of this proviso
is being made, would result in beneficial ownership by the Holder and its
Affiliates of any amount greater than 4.99% of the then outstanding shares of
Common Stock (whether or not, at the time of such exercise, the Holder and its
Affiliates beneficially own more than 4.99% of the then outstanding shares of
Common Stock). As used herein, the term "Affiliate" means any person or entity
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a person or entity, as such terms
are used in and construed under Rule 144 under the Securities Act. For purposes
of the proviso to the second preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided
in clause (1) of such proviso."
2
5. The definition of "Effectiveness Date in the Amended Registration
Rights Agreement, is hereby amended to read in its entirety as follows:
"Effectiveness Date" means (i) with respect to the initial Registration
Statement required to be filed hereunder, a date no later than September 15,
2006 and (ii) with respect to each additional Registration Statement required to
be filed hereunder, a date no later than thirty (30) days following the
applicable Filing Date.
6. The amendments and waivers set forth herein shall be effective as of
the date first above written (the "Effective Date") on the date when each of the
Company and Laurus shall have executed and the Company shall have delivered to
Laurus its respective counterpart to this Agreement.
7. Except as specifically set forth in this Agreement, there are no other
amendments, modifications or waivers to the Loan Documents, and all of the other
forms, terms and provisions of the Loan Documents remain in full force and
effect.
8. The Company hereby represents and warrants to Laurus that (i) no Event
of Default exists on the date hereof, (ii) on the date hereof, all
representations, warranties and covenants made by the Company in connection with
the Loan Documents are true, correct and complete and (iii) on the date hereof,
all of the Company's covenant requirements have been met.
9. From and after the Effective Date, all references in the Loan Documents
shall be deemed to be references to the Loan Documents as modified hereby.
10. The Company hereby agrees to file an 8-K, completed as appropriate,
with the Securities and Exchange Commission disclosing the terms and conditions
set forth in this Agreement as soon as practicable, but no later than the fourth
(4th) business day following the date hereof.
3
11. This Agreement shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and its successors and
permitted assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument.
4
IN WITNESS WHEREOF, each of the Company and Laurus has caused this
Agreement signed in its name effective as of the first date set forth above.
NATIONAL INVESTMENT
MANAGERS INC.
By:/s/ Xxxxxxx Xxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxx
Title: CFO/COO
LAURUS MASTER FUND, LTD.
By:/s/Xxxxxx Grin
---------------------
Name: Xxxxxx Grin
Title: Director
5
