REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated
as of November 30, 2007, is among (a) National Investment Managers Inc., a
Florida corporation (the “Company”),
(b)
Woodside
Capital Partners IV, LLC
(“Woodside
IV”),
Woodside
Capital Partners IV QP, LLC (“Woodside
QP”),
and
Xxxxxx
Brothers Commercial Bank
(“Xxxxxx”,
and
collectively with Woodside IV and Woodside QP, the “Investors”),
and
(c) each other Person who becomes a party to this Agreement upon acceptance
by
the Company of an Instrument of Accession in the form of Schedule
1.A
hereto
(an “Instrument
of Accession”)
executed by such Person. Each of the Investors and each other Person who becomes
a party hereto as aforesaid are referred to collectively herein as the
“Holders”
and
each individually as a “Holder”.
This
Agreement is made in connection with a Securities Purchase and Loan Agreement
of
even date herewith among the Company, the Investors and Woodside Agency
Services, LLC, as collateral agent for the Investors (the “Purchase Agreement”).
In
order to induce the Investors to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this
Agreement.
The
parties hereby agree as follows:
1. Definitions.
As used
herein, the following terms have the following meanings:
“Commission”
means
the Securities and Exchange Commission.
“Common Stock”
means
collectively, (a) the Company’s Common Stock, $0.001 par value per share, and
(b) any shares of any other class of capital stock of the Company previously
or
hereafter issued which are (i) not preferred as to dividends or the distribution
of assets upon liquidation over any class of stock of the Company, (ii) not
subject to redemption pursuant to the terms thereof, or (iii) issued to the
holders of shares of Common Stock upon any reclassification thereof,
reorganization, merger, sale of assets or otherwise.
“Company”
has
the
meaning specified in the preamble hereto.
“Demand Registration”
has
the
meaning specified in Section 2(a).
“Exchange Act”
means
the Securities Exchange Act of 1934, as amended.
“Holder”
means
one of the Holders identified in the introductory paragraph to this Agreement
or
such other Person to whom such Holder shall have assigned or transferred such
Holder’s Registrable Securities and the rights and obligations hereunder in
accordance with Section 12(g) of this Agreement.
“Indemnified Party”
has
the
meaning specified in Section 8(c) hereof.
“Indemnifying Party”
has
the
meaning specified in Section 8(c) hereof.
“Instrument of Accession”
has
the
meaning specified in the preamble hereto.
“Person”
means
any individual, partnership, corporation, limited liability company, trust
or
unincorporated organization, or a government or agency or political subdivision
thereof.
“Piggyback Registration”
has
the
meaning specified in Section 3(a).
“Prospectus”
means
the prospectus included in any Registration Statement, as amended or
supplemented by any Prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
“Public
Sale”
means
any sale of Common Stock to the public pursuant to a public offering registered
under the Securities Act, or to the public through a broker or market-maker
pursuant to the provisions of Rule 144 (or any successor rule) adopted under
the
Securities Act.
“Purchase Agreement”
has
the
meaning specified in the preamble hereto.
“registered”
and
“registration”
means
a
registration effected by preparing and filing a Registration Statement in
compliance with the Securities Act and the declaration or ordering by the
Commission of effectiveness of such Registration Statement.
“Registrable
Securities”
means,
at any time, all of the then issued and outstanding (a) shares of Common
Stock held by any Holder on the date hereof, (b) capital stock or other
securities into which or for which any such shares of Common Stock shall have
been converted or exchanged pursuant to any recapitalization, reorganization
or
merger of the Company, and (c) shares of capital stock issued with respect
to the foregoing pursuant to a stock split or stock dividend, provided
that the
foregoing capital stock shall be Registrable Securities only so long as such
capital stock has not been sold pursuant to a Public Sale, and provided
further
that the
foregoing capital stock shall cease to be Registrable Securities upon the
assignment of rights or obligations hereunder in violation of the terms of
this
Agreement.
“Registration Expenses”
has
the
meaning specified in Section 7(a).
“Registration Statement”
means
any registration statement of the Company which covers any of the Registrable
Securities pursuant to the provisions of this Agreement including the
Prospectus, amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by
reference in such Registration Statement.
-2-
“Securities Act”
means
the Securities Act of 1933, as amended.
“Underwriters’
Maximum Number”
means,
for any Piggyback Registration, Demand Registration or other registration which
is an underwritten registration, that number of securities to which such
registration should, in the opinion of the managing underwriters of such
registration in the light of marketing factors, be limited.
2. Demand Registration.
(a) Request for Demand Registration.
(i) Subject
to the limitations contained in the following paragraphs of this Section 2,
the
Holders of a majority of Registrable Securities then outstanding may, at any
time and from time to time, give to the Company, pursuant to this subparagraph
(i), a written request for the registration by the Company under the Securities
Act of all or any part of the Registrable Securities of such Holder (such
registration being herein called a “Demand Registration”).
Within ten (10) days after the receipt by the Company of any such written
request, the Company will give written notice of such registration request
to
all Holders of Registrable Securities.
(ii) Subject
to the limitations contained in the following paragraphs of this Section 2,
after the receipt of such written request for a Demand Registration, (A) the
Company will be obligated and required to include in such Demand Registration
all Registrable Securities with respect to which the Company shall receive
from
Holders of Registrable Securities, within thirty (30) days after the date on
which the Company shall have given to all Holders of Registrable Securities
a
written notice of registration request pursuant to Section 2(a)(i) hereof,
the
written requests of such Holders for inclusion in such Demand Registration,
and
(B) the Company will use its best efforts in good faith to effect promptly
the
registration of all such Registrable Securities. All written requests made
by
Holders of Registrable Securities pursuant to this subparagraph (ii) will
specify the number of shares of Registrable Securities to be registered and
will
also specify the intended method of disposition thereof.
(b) Limitations on Demand Registration.
(i) The
Holders of Registrable Securities will not be entitled to require the Company
to
effect more than two (2) Demand Registrations other than on Form S-3 (or any
comparable form adopted by the Commission) pursuant to Section 2(a).
-3-
(ii) Any
registration initiated by Holders of Registrable Securities as a Demand
Registration pursuant to Section 2(a) hereof shall not count as a Demand
Registration for purposes of Section 2(b)(i) hereof (A) unless and until such
registration shall have become effective and all Registrable Securities required
to be included in such registration, less limitations required by the Securities
Exchange Commission pursuant to Rule 415 under the Securities Act, shall have
actually been sold and (B) if such Holders withdraw their request for a Demand
Registration at any time because such Holders (1) reasonably believed that
the
Registration Statement or Prospectus contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements made therein (in the case of the Prospectus,
in
the light of the circumstances under which they were made) not misleading,
(2)
notified the Company of such fact and requested that the Company correct such
alleged misstatement or omission, and (3) the Company has refused to correct
such alleged misstatement or omission.
(iii) The
Company shall not be obligated or required to effect the Demand Registration
of
any Registrable Securities pursuant to Section 2(a) hereof during the period
commencing on the date falling thirty (30) days prior to the Company’s estimated
date of filing of, and ending on the date 180 days following the effective
date
of, any Registration Statement pertaining to any underwritten registration
initiated by the Company, for the account of the Company, if the written request
of Holders of Registrable Securities for such Demand Registration pursuant
to
Section 2(a)(i) hereof shall have been received by the Company after the Company
shall have given to all Holders of Registrable Securities a written notice
stating that the Company is commencing an underwritten registration initiated
by
the Company for its own account; provided,
however,
that
the Company will use its best efforts in good faith to cause any such
Registration Statement to be filed and to become effective as expeditiously
as
shall be reasonably possible.
(c) Priority on Demand Registrations.
If the
managing underwriters in any underwritten Demand Registration shall give written
advice to the Company and the Holders of Registrable Securities that the number
of securities proposed to be included in such registration exceeds the
Underwriters’ Maximum Number, then: (i) the Company will be obligated and
required, in the first instance, to include in such registration that number
of
Registrable Securities requested by the Holders thereof to be included in such
registration, together with securities (“Existing Registrable Securities”
and
together with the Registrable Securities, the “Combined Registrable Securities”)
issued
by the Company to holders that have registration rights (the “Existing Holders”
and
together with the Holders, the “Combined Holders”),
which
does not exceed the Underwriters’ Maximum Number, and such number of Combined
Registrable Securities shall be allocated pro rata
among
the Combined Holders of such Combined Registrable Securities on the basis of
the
number of Combined Registrable Securities requested to be included therein
by
each such Combined Holder; (ii) if the Underwriters’ Maximum Number exceeds the
number of Combined Registrable Securities requested by the Combined Holders
thereof to be included in such registration, then the Company will be entitled
to include in such registration that number of securities which shall have
been
requested by the Company to be included in such registration for the account
of
the Company and which shall not be greater than such excess; and (iii) if the
Underwriters’ Maximum Number exceeds the sum of the number of Combined
Registrable Securities which the Company shall be required to include in such
Demand Registration and the number of securities which the Company proposes
to
offer and sell for its own account in such registration, then the Company may
include in such registration that number of other securities which persons
(other than the Combined Holders as such) shall have requested be included
in
such registration and which shall not be greater than such excess.
-4-
(d) Selection of Underwriters.
If a
written request for a Demand Registration is made pursuant to Section 2(a),
then
the Holders of a majority of the Registrable Securities to be included in any
Demand Registration shall determine whether or not such Demand Registration
shall be underwritten and shall select the investment banker(s) and managing
underwriter(s) to administer such offering.
(e) Unlimited
Registrations on Form S-3.
In
addition to the rights contained in the foregoing provisions of this Section
2,
Holders shall have the right, subject to the rights of the Company set forth
below and the limitation set forth in Section 2(b)(iii) at any time and from
time to time to request in writing a registration with respect to which the
Registrable Securities being sold have an aggregate offering price of at least
$3,000,000 (before underwriter’s discounts and commissions) on Form S-3 (or any
successor form) (which request will specify the number of shares of Registrable
Securities to be registered and will also specify the intended method of
disposition thereof).
3. Piggyback Registrations.
(a) Rights to Piggyback.
(i) If
(and
on each occasion that) the Company proposes to register any of its securities
under the Securities Act either for the Company’s own account or for the account
of any of its stockholders (other than for Holders of Registrable Securities
pursuant to Section 2 hereof entitled to Demand Registrations and other than
pursuant to a Form S-4 or Form S-8) (each such registration not withdrawn or
abandoned prior to the effective date thereof being herein called a
“Piggyback Registration”),
the
Company will give written notice to all Holders of Registrable Securities of
such proposal not later than the earlier to occur of (A) the tenth day following
the receipt by the Company of notice of exercise of any registration rights
by
any persons, and (B) the thirtieth day prior to the anticipated filing date
of
such Piggyback Registration.
-5-
(ii) Subject
to the provisions contained in paragraph (b) of this Section 3 and in the last
sentence of this subparagraph (ii), (A) the Company will be obligated and
required to include in each Piggyback Registration all Registrable Securities
with respect to which the Company shall receive from Holders of Registrable
Securities, within fifteen (15) days after the date on which the Company shall
have given written notice of such Piggyback Registration to all Holders of
Registrable Securities pursuant to Section 3(a)(i) hereof, the written requests
of such Holders for inclusion in such Piggyback Registration, and (B) the
Company will use its best efforts in good faith to effect promptly the
registration of all such Registrable Securities. The Holders of Registrable
Securities shall be permitted to withdraw all or any part of the Registrable
Securities of such Holders from any Piggyback Registration at any time prior
to
the effective date of such Piggyback Registration unless such Holders of
Registrable Securities shall have entered into a written agreement with the
Company’s underwriters establishing the terms and conditions under which such
Holders would be obligated to sell such securities in such Piggyback
Registration. The Company will not be obligated or required to include any
Registrable Securities in any registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 of the Commission
is
applicable.
(b) Priority on Piggyback Registrations.
If a
Piggyback Registration is an underwritten registration, and the managing
underwriters shall give written advice to the Company of an Underwriters’
Maximum Number, then: (i) the Company shall be entitled to include in such
registration that number of securities which the Company proposes to offer
and
sell for its own account in such registration and which does not exceed the
Underwriters’ Maximum Number; (ii)
if
the Underwriters' Maximum Number exceeds the number of securities which the
Company proposes to offer and sell for its own account in such registration,
then the Company will be obligated and required to include in such registration
that number of Combined Registrable Securities requested by the Combined Holders
thereof to be included in such registration and which does not exceed such
excess and such Combined Registrable Securities shall be allocated pro rata
among
the Combined Holders thereof on the basis of the number of Combined Registrable
Securities requested to be included therein by each such Combined Holder; (iii)
if the Underwriters' Maximum Number exceeds the sum of the number of Registrable
Securities which the Company shall be required to include in such registration
pursuant to clause (ii) above and the number of securities which the Company
proposes to offer and sell for its own account in such registration,
then
the
Company may include in such registration that number of other securities which
persons shall have requested be included in such registration and which shall
not be greater than such excess.
(c) Selection of Underwriters.
In any
Piggyback Registration, the Company shall (unless the Company shall otherwise
agree) have the right to select the investment bankers and managing underwriters
in such registration.
4. Lockup Agreements.
(a) Restrictions on Public Sale by Holders of Registrable Securities.
Each
Holder of Registrable Securities, if the Company or the managing underwriters
so
request in connection with any underwritten registration of the Company’
securities, will not, without the prior written consent of the Company or such
underwriters, effect any public sale or other distribution of any equity
securities of the Company, including any sale pursuant to Rule 144, during
the
seven (7) days prior to, and during the one hundred eighty (180) day period
commencing on, the effective date of such underwritten registration, except
in
connection with such underwritten registration.
-6-
(b) Restrictions on Public Sale by the Company.
The
Company agrees not to effect any public sale or other distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such equity securities, during the period commencing on the seventh day
prior to, and ending on the one hundred eightieth (180th) day following, the
effective date of any underwritten Demand or Piggyback Registration, except
in
connection with any such underwritten registration and except for any offering
pursuant to an employee benefit plan and registered on Form S-8 (or any
successor form).
5. Registration Procedures.
Whenever the Holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
will use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will as expeditiously as
possible:
(i) prepare
and file with the Commission a Registration Statement with respect to such
Registrable Securities and use its best efforts to cause such Registration
Statement to become effective (provided,
that
before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, the Company will use its best efforts to furnish to counsel
selected by the holders of Registrable Securities covered by such Registration
Statement, copies of all such documents proposed to be filed, which documents
will be subject to the timely review of such counsel and the Company will not
file any Registration Statement or amendment thereto or any Prospectus or any
supplement thereto, including documents incorporated by reference, to which
the
Holders of a majority of the Registrable Securities covered by such Registration
Statement shall reasonably object);
(ii) prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may
be
necessary to keep such Registration Statement effective until the earliest
to
occur of (a) the sale of all such Registrable Securities, or (b) the expiration
of the 180 day period following the effective date of the Registration
Statement; comply with the provisions of the Securities Act with respect to
the
disposition of all securities covered by such Registration Statement during
such
effective period in accordance with the intended methods of disposition by
the
sellers thereof set forth in such Registration Statement and cause the
Prospectus to be supplemented by any required prospectus supplement, and as
so
supplemented to be filed pursuant to Rule 424 under the Securities
Act;
-7-
(iii) upon
request, furnish to each seller of Registrable Securities such number of copies
of such Registration Statement, each amendment and supplement thereto, the
Prospectus included in such Registration Statement (including each preliminary
Prospectus and each Prospectus filed under Rule 424 of the Securities Act)
and
such other documents as each such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by each such
seller (it being understood that the Company consents to the use of the
Prospectus and any amendment or supplement thereto by such seller in connection
with the offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto);
(iv) use
its
best efforts to register or qualify such Registrable Securities under such
other
securities or blue sky laws of such jurisdictions as any seller reasonably
requests, use its best efforts to keep each such registration or qualification
effective, including through new filings, amendments or renewals, during the
period such Registration Statement is required to be kept effective, and do
any
and all other acts and things which may be reasonably necessary or advisable
to
enable such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller; provided
that the
Company will not be required (A) to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph (iv), (B) to subject itself to taxation in any such jurisdiction
or
(C) to consent to general service of process in any such
jurisdiction;
(v) notify
each seller of such Registrable Securities, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the Prospectus included in such
Registration Statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading, and, at the
request of any such seller, the Company will promptly prepare (and, when
completed, give notice to each seller of Registrable Securities) a supplement
or
amendment to such Prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such Prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading; provided
that
upon such notification by the Company, each seller of such Registrable
Securities will not offer or sell such Registrable Securities until the Company
has notified such seller that it has prepared a supplement or amendment to
such
Prospectus and delivered copies of such supplement or amendment to such
Seller;
(vi) cause
all
such Registrable Securities to be listed, prior to the date of the first sale
of
such Registrable Securities pursuant to such registration, on each securities
exchange on which similar securities issued by the Company are then listed
and,
if not so listed, to be listed with the National
Association of Securities Dealers automated quotation system
(“NASDAQ”);
(vii) provide
a
transfer agent and registrar for all such Registrable Securities not later
than
the effective date of such Registration Statement;
-8-
(viii) enter
into all such customary agreements (including underwriting agreements in
customary form) and take all such other actions as the holders of a majority
of
the Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split or a
combination of shares);
(ix) make
available for inspection on a confidential basis by any seller, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by any such seller or
underwriter (in each case after reasonable prior notice), all relevant financial
and other records, pertinent corporate documents and properties of the Company,
and cause the Company’s officers, directors, employees and independent
accountants to supply on a confidential basis all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement;
(x) permit
any holder of Registrable Securities which holder, in its sole and exclusive
judgment, might be deemed to be an underwriter or a controlling person of the
Company within the meaning of Section 15 of the Securities Act, to participate
in the preparation of such registration or comparable statement and to permit
the insertion therein of material, furnished to the Company in writing, which
in
the reasonable judgment of such holder and its counsel should be included,
provided that such material shall be furnished under such circumstances as
shall
cause it to be subject to the indemnification provisions provided pursuant
to
Section 8(b) hereof;
(xi) in
the
event of the issuance of any stop order suspending the effectiveness of a
Registration Statement, or of any order suspending or preventing the use of
any
related Prospectus or suspending the qualification of any Registrable Securities
included in such Registration Statement for sale in any jurisdiction, the
Company will use its best efforts promptly to obtain the withdrawal of such
order;
(xii) if
requested by the managing underwriter or underwriters or any holder of
Registrable Securities in connection with any sale pursuant to a Registration
Statement, promptly incorporate in a Prospectus supplement or post-effective
amendment such information relating to such underwriting as the managing
underwriter or underwriters or such holder reasonably requests to be included
therein, and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after being notified of the
matters incorporated in such Prospectus supplement or post-effective
amendment;
-9-
(xiii) cooperate
with the holders of Registrable Securities and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be sold under such registration, and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or such holders may
request;
(xiv) use
its
best efforts to cause the Registrable Securities to be registered with or
approved by such other governmental agencies or authorities within the United
States and having jurisdiction over the Company as may reasonably be necessary
to enable the seller or sellers thereof or the underwriter or underwriters,
if
any, to consummate the disposition of such Registrable Securities;
(xv) use
its
best efforts to obtain:
(A) at
the
time of effectiveness of each registration, a “comfort letter” from the
Company’s independent certified public accountants covering such matters of the
type customarily covered by “cold comfort letters” as the Holders of a majority
of the Registrable Securities covered by such registration and the underwriters
reasonably request; and
(B) at
the
time of any underwritten sale pursuant to a Registration Statement, a
“bring-down comfort letter”, dated as of the date of such sale, from the
Company’s independent certified public accountants covering such matters of the
type customarily covered by comfort letters as the Holders of a majority of
the
Registrable Securities covered by such Registration Statement and the
underwriters reasonably request;
(xvi) use
its
best efforts to obtain, at the time of effectiveness of each Piggyback
Registration and at the time of any sale pursuant to each registration, an
opinion or opinions, favorable in form and scope to the Holders of a majority
of
the Registrable Securities covered by such registration, from counsel to the
Company in customary form; and
(xvii) otherwise
comply with all applicable rules and regulations of the Commission, and make
generally available to its security holders (as contemplated by Section 11(a)
under the Securities Act) an earnings statement satisfying the provisions of
Rule 158 under the Securities Act no later than ninety (90) days after the
end
of the twelve month period beginning with the first month of the Company’s first
fiscal quarter commencing after the effective date of the Registration
Statement, which statement shall cover said twelve month period.
6. Cooperation by Prospective Sellers,
Etc.
(a) Each
prospective seller of Registrable Securities will furnish to the Company in
writing such information as the Company may reasonably require from such seller,
and otherwise reasonably cooperate with the Company in connection with any
Registration Statement with respect to such Registrable Securities.
-10-
(b) The
failure of any prospective seller of Registrable Securities to furnish any
information or documents in accordance with any provision contained in this
Agreement shall not affect the obligations of the Company under this Agreement
to any remaining sellers who furnish such information and documents unless
in
the reasonable opinion of counsel to the Company or the underwriters, such
failure impairs or may impair the viability of the offering or the legality
of
the Registration Statement or the underlying offering.
(c) The
Holders of Registrable Securities included in any Registration Statement will
not (until further notice) effect sales thereof after receipt of telegraphic
or
written notice from the Company to suspend sales to permit the Company to
correct or update such Registration Statement or Prospectus; but the obligations
of the Company with respect to maintaining any Registration Statement current
and effective shall be extended by a period of days equal to the period such
suspension is in effect.
(d) At
the
end of any period during which the Company is obligated to keep any Registration
Statement current and effective as provided by Section 5 hereof (and any
extensions thereof required by the preceding paragraph (c) of this Section
6),
the Holders of Registrable Securities included in such Registration Statement
shall discontinue sales of shares pursuant to such Registration Statement upon
receipt of notice from the Company of its intention to remove from registration
the shares covered by such Registration Statement which remain unsold, and
such
Holders shall notify the Company of the number of shares registered which remain
unsold promptly after receipt of such notice from the Company.
(e) Notwithstanding
any other provision herein to the contrary, no Holder of Registrable Securities
which constitute warrants or options shall be required to exercise such warrants
or options in connection with any registration until the actual sale of the
shares of Common Stock issuable upon exercise of such warrants or options.
The
Company shall enter into such agreements and shall otherwise cooperate with
the
Holders of Registrable Securities in order to ensure that such Holders are
not
required to exercise any warrants or options prior to the date of the actual
sale of the shares of Common Stock issuable upon exercise of such warrants
or
options.
-11-
7. Registration Expenses.
(a) All
costs
and expenses incurred or sustained in connection with or arising out of each
registration pursuant to Sections 2 and 3 hereof, including, without limitation,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with the blue sky qualification
of
Registrable Securities), printing expenses, messenger, telephone and delivery
expenses, fees and disbursements of counsel for the Company, reasonable fees
and
disbursements of one counsel representing the Holders of Registrable Securities,
such counsel to be selected by the Holders of a majority of the Registrable
Securities to be included in such registration, fees and disbursements of all
independent certified public accountants (including the expenses relating to
the
preparation and delivery of any special audit or “cold comfort” letters required
by or incident to such registration), and fees and disbursements of underwriters
(excluding discounts and commissions), the reasonable fees and expenses of
any
special experts retained by the Company of its own initiative or at the request
of the managing underwriters in connection with such registration, and fees
and
expenses of all (if any) other persons retained by the Company (all such costs
and expenses being herein called, collectively, the “Registration Expenses”),
will
be borne and paid by the Company. The Company will, in any case, pay its
internal expenses (including, without limitation, all salaries and expenses
of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, and the fees and expenses incurred in connection with
the
listing of the securities to be registered on each securities exchange on which
similar securities of the Company are then listed.
(b) The
Company will not bear the cost of nor pay for any stock transfer taxes imposed
in respect of the transfer of any Registrable Securities to any purchaser
thereof by any Holder of Registrable Securities in connection with any
registration of Registrable Securities pursuant to this Agreement.
(c) To
the
extent that Registration Expenses incident to any registration are, under the
terms of this Agreement, not required to be paid by the Company, each Holder
of
Registrable Securities included in such registration will pay all Registration
Expenses which are clearly solely attributable to the registration of such
Holder’s Registrable Securities so included in such registration, and all other
Registration Expenses not so attributable to one Holder will be borne and paid
by all sellers of securities included in such registration in proportion to
the
number of securities so included by each such seller.
8. Indemnification.
(a) Indemnification by the Company.
The
Company will indemnify each Holder requesting or joining in a registration
and
each underwriter of the securities so registered, the officers, directors and
partners of each such Person and each Person who controls any thereof (within
the meaning of the Securities Act) against any and all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on
any
untrue statement (or alleged untrue statement) of any material fact contained
in
any Prospectus, offering circular or other document incident to any
registration, qualification or compliance (or in any related Registration
Statement, notification or the like) or any omission (or alleged omission)
to
state therein any material fact required to be stated therein or necessary
to
make the statements therein not misleading, or any violation by the Company
of
any rule or regulation promulgated under the Securities Act applicable to the
Company and relating to any action or inaction required of the Company in
connection with any such registration, qualification or compliance, and the
Company will reimburse each such Holder, underwriter, officer, director, partner
and controlling person for any legal and any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage,
liability or action; provided,
however,
that
the Company will not be liable in any such case to the extent that any such
claim, loss, damage or liability arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company
in
an instrument duly executed by such Holder, underwriter, officer, director,
partner or controlling person and stated to be specifically for use in such
Prospectus, offering circular or other document.
-12-
(b) Indemnification by Each Holder.
Each
Holder requesting or joining in a registration will indemnify each underwriter
of the securities so registered, the Company and its officers and directors
and
each person, if any, who controls any thereof (within the meaning of the
Securities Act) and their respective successors in title and assigns against
any
and all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement)
of
any material fact contained in any Prospectus, offering circular or other
document incident to any registration, qualification or compliance (or in any
related Registration Statement, notification or the like) or any omission (or
alleged omission) to state therein any material fact required to be stated
therein or necessary to make the statement therein not misleading, and such
Holder will reimburse each underwriter, the Company and each other person
indemnified pursuant to this paragraph (b) for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action; provided,
however,
that
this paragraph (b) shall apply only if (and only to the extent that) such
statement or omission was made in reliance upon written information furnished
to
such underwriter or the Company in an instrument duly executed by such Holder
and stated to be specifically for use in such Prospectus, offering circular
or
other document (or related Registration Statement, notification or the like)
or
any amendment or supplement thereto; and, provided further,
that
each Holder’s liability hereunder with respect to any particular registration
shall be limited to an amount equal to the net proceeds received by such Holder
from the Registrable Securities sold by such Holder in such
registration.
(c) Indemnification Proceedings.
Each
party entitled to indemnification pursuant to this Section 8 (the “Indemnified Party”)
shall
give notice to the party required to provide indemnification pursuant to this
Section 8 (the “Indemnifying Party”)
promptly after such Indemnified Party acquires actual knowledge of any claim
as
to which indemnity may be sought, and shall permit the Indemnifying Party (at
its expense) to assume the defense of any claim or any litigation resulting
therefrom; provided
that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be reasonably acceptable to the Indemnified Party, and
the
Indemnified Party may participate in such defense at such party’s expense; and
provided,
further,
that
the failure by any Indemnified Party to give notice as provided in this
paragraph (c) shall not relieve the Indemnifying Party of its obligations under
this Section 8 except to the extent that the failure results in a failure of
actual notice to the Indemnifying Party and such Indemnifying Party is damaged
solely as a result of the failure to give notice. No Indemnifying Party, in
the
defense of any such claim or litigation, shall, except with the consent of
each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation, and no Indemnified Party shall consent
to entry of any judgment or settle such claim or litigation without the prior
written consent of the Indemnifying Party so long as the Indemnifying Party
has
acknowledged in writing its obligation to indemnify each Indemnified Party
pursuant to this Agreement and such Indemnifying Party is in compliance with
all
of its obligations hereunder to indemnify the Indemnified Party for all amounts
in connection with such claim or litigation. The Indemnifying Party shall not
unreasonably withhold, condition or delay its consent to the entry of any such
judgment or settlement. The reimbursement required by this Section 8 shall
be
made by periodic payments during the course of the investigation or defense,
as
and when bills are received or expenses incurred.
-13-
9. Contribution in Lieu of Indemnification.
If the
indemnification provided for in Section 8 hereof is unavailable to a party
that
would have been an Indemnified Party under any such section in respect of any
losses, claims, damages or liabilities (or actions in respect thereof) referred
to therein, then each party that would have been an Indemnifying Party
thereunder shall, in lieu of indemnifying such Indemnified Party, contribute
to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and such Indemnified Party on the other in connection
with
the statements or omissions which resulted in such losses, claims, damages
or
liabilities (or actions in respect thereof). The relative fault 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 Indemnifying Party or
such Indemnified Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and each Holder of Registrable Securities agree that it would not
be
just and equitable if contribution pursuant to this Section 9 were determined
by
pro-rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to above in this Section 9. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in
this
Section 9 shall include any legal or other expenses reasonably incurred by
such
Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding any provision of this Section 9 to the contrary,
(a)
no Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation and (b) each Holder’s
liability hereunder with respect to any particular registration shall be limited
to an amount equal to the net proceeds received by such Holder from the
Registrable Securities sold by such Holder in such registration.
10. Rule 144 Requirements;
Form S-3.
The
Company will make every effort in good faith to take all steps necessary to
ensure that the Company will be eligible to register securities on Form S-3
(or
any comparable form adopted by the Commission), and to make publicly available
and available to the Holders of Registrable Securities, pursuant to Rule 144
or
Rule 144A of the Commission under the Securities Act, such information as shall
be necessary to enable the Holders of Registrable Securities to make sales
of
Registrable Securities pursuant to such Rules. The Company will furnish to
any
Holder of Registrable Securities, upon request made by such Holder at any time
after the undertaking of the Company in the preceding sentence shall have first
become effective, a written statement signed by the Company, addressed to such
Holder, describing briefly the action the Company has taken or proposes to
take
to comply with the current public information requirements of Rule 144 and
Rule
144A. The Company will, at the request of any Holder of Registrable Securities,
upon receipt from such Holder of a certificate certifying (i) that such Holder
has held such Registrable Securities for a period of not less than two (2)
consecutive years (or if not for at least two (2) consecutive years, for at
least one (1) year so long as the Holder is able to dispose of all of the
Holder's then Registrable Securities without restriction under Rule 144), (ii)
that such Holder has not been an affiliate (as defined in Rule 144) of the
Company for more than the ninety (90) preceding days, and (iii) as to such
other
matters as may be appropriate in accordance with such Rule, including an opinion
of such Holder’s counsel reasonably satisfactory to the Company, remove from the
stock certificates representing such Registrable Securities that portion of
any
restrictive legend which relates to the registration provisions of the
Securities Act.
-14-
11. Participation in Underwritten Registrations.
No
Person may participate in any underwritten registration pursuant to this
Agreement unless such Person (a) agrees to sell such Person’s securities on the
basis provided in any underwriting arrangements approved by the persons
entitled, under the provisions hereof, to approve such arrangements, and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required by the terms
of
such underwriting arrangements. Any Holder of Registrable Securities to be
included in any underwritten registration shall be entitled at any time to
withdraw such Registrable Securities from such registration prior to its
effective date in the event that such Holder shall disapprove of any of the
terms of the related underwriting agreement.
12. Miscellaneous.
(a) No Inconsistent Agreements.
Except
as set forth on Schedule
1.B
hereto,
the Company has not previously entered into any agreement with respect to its
Common Stock granting registration rights senior to the registration rights
granted to the Holders hereunder. The Company will not on or after the date
of
this Agreement enter into any agreement with respect to its securities which
grants demand registration rights to anyone or which is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless such amendment, modification,
supplement, waiver or consent is approved in writing by (i) the Company and
(ii)
the Holders of at least 50.1% of the Registrable Securities then outstanding,
provided,
that
each Holder may waive any provision hereof with respect to himself, herself
or
itself, as applicable, at any time; provided further
that any
modification, amendment or waiver that would adversely affect any Holders in
a
manner materially different from any other Holders (solely with respect to
such
Holder’s status as a Holder under this Agreement) shall require the written
consent or approval of such adversely affected Holders.
-15-
(c) Registrable Securities Held by the Company.
Whenever the consent or approval of Holders of Registrable Securities is
required pursuant to this Agreement, Registrable Securities held by the Company
shall not be counted in determining whether such consent or approval was duly
and properly given by such Holders.
(d) Term.
This
Agreement shall terminate on the date on which, as to each Registrable Security,
an exemption from registration is available under Rule 144(k) of the
Commission.
(e) Remedies.
In the
event of a breach by the Company of its obligations under this Agreement, each
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of
its
rights under this Agreement. The Company agrees that monetary damages would
not
be adequate compensation for any loss incurred by reason of a breach by it
of
any of the provisions of this Agreement and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be
adequate.
(f) Notices.
Any
notice provided for in this Agreement will be in writing and will be deemed
properly delivered if either personally delivered or sent by written
telecommunication, overnight courier or mailed certified or registered mail,
return receipt requested, postage prepaid to the recipient (a) if to Woodside
IV, Woodside QP or Xxxxxx, at the address listed for such Person in the stock
records of the Company, with a copy to Xxxxxxx Xxxxxxx, Esq., Xxxxxxx XxXxxxxxx
LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, (b) if to any other
Holder, at the address listed for such Holder in the stock records of the
Company, and (f) if to the Company, at 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx,
Xxxx 00000, to the attention of the President, with a copy to Xxxxxxx Xxxxxxxxx,
Esq., Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, 00 Xxxxxxxx, 00xx
Xx., Xxx
Xxxx, Xxx Xxxx 00000;
and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 12(f). Any such notice shall be effective (A)
if
delivered personally or by telecopy, when received, (B) if sent by overnight
courier, when receipted for, and (C) if mailed, when received.
(g) Successors and Assigns.
This
Agreement and the rights of any Holder hereunder may be assigned to, and shall
inure to the benefit of, any Person to whom such Holder transfers Registrable
Securities, provided
that
such transfer is made in compliance with the provisions of the Purchase
Agreement and the transferee agrees to be bound by all of the terms and
conditions of this Agreement by executing and delivering to the Company an
Instrument of Accession.
(h) Counterparts.
This
Agreement may be executed in two or more counterparts and by the parties hereto
in separate 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
instrument.
-16-
(i) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
constitute a part of this Agreement, nor shall they affect their meaning,
construction or effect.
(j) Governing Law.
The
validity, performance, construction and effect of this Agreement shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without giving effect to principles of conflicts
of law.
(k) Severability.
In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(l) Entire Agreement.
This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein, with respect to the registration
rights granted by the Company with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
[Balance
of Page Intentionally Left Blank]
-17-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
an instrument under seal as of the date first written above.
|
By:
/s/Xxxxxx Xxxx
|
|||
|
Name:
Xxxxxx Xxxx
|
|||
|
Title:
CEO
|
|||
|
WOODSIDE
CAPITAL PARTNERS IV, LLC
|
|||
|
By: Woodside
Opportunity Partners, LLC, its Manager
|
|||
|
By: Woodside
Capital Management, LLC, its Manager
|
|||
|
By:
|
/s/Xxxxxx
Xxxxx
|
||
|
Name:
Xxxxxx Xxxxx
|
|||
|
Title:
Executive Vice President
|
|||
|
WOODSIDE
CAPITAL PARTNERS IV QP, LLC
|
|||
|
By:
Woodside Opportunity Partners, LLC, its Manager
|
|||
|
By: Woodside
Capital Management, LLC, its Manager
|
|||
|
By:
|
/s/Xxxxxx
Xxxxx
|
||
|
Name:
Xxxxxx Xxxxx
|
|||
|
Title:
Executive Vice President
|
|||
| XXXXXX COMMERCIAL PAPER INC. | |||
| By: |
/s/Xxxxxx
Xxxxx
|
||
|
Name:
Xxxxxx Xxxxx
|
|||
|
Title:
Chief Credit Officer
|
|||
SCHEDULE 1.A
TO REGISTRATION
RIGHTS AGREEMENT
Instrument of Accession
Reference
is made to that certain Registration Rights Agreement dated as of November
[__],
2007, a copy of which is attached hereto (as amended and in effect from time
to
time, the “Registration
Rights Agreement”),
among
National Investment Managers Inc., a Florida corporation (the “Company”),
and
the Holders (as defined therein).
The
undersigned, _____________________, [in order to become] [is] the owner or
holder of ______ shares of the Common Stock, $0.001 par value per share (the
“Shares”)
of the
Company [and] hereby agrees that by [his/her/its] execution hereof the
undersigned is a Holder party to the Registration Rights Agreement and that
[he/she/it] is subject to all of the restrictions and conditions applicable
to
Holders set forth in such Registration Rights Agreement, and all of the Shares
[purchased by the undersigned in connection herewith] [owned by the undersigned
as of the date hereof] (and any and all shares of stock of the Company issued
in
respect thereof) are subject to all the restrictions and conditions applicable
to Registrable Securities as set forth in the Registration Rights Agreement.
This Instrument of Accession shall take effect and shall become a part of said
Registration Rights Agreement immediately upon acceptance thereof by the
Company.
Executed
as of the date set forth below under the laws of the State of
Delaware.
|
Signature:
|
|||||
|
Address:
|
|||||
|
Date:
|
|||||
|
Accepted:
|
|||||
|
By:
|
|||||
| Date: | |||||
TO REGISTRATION
RIGHTS AGREEMENT
Except
as
set forth below, the Company has not previously entered into any agreement
with
respect to its Common Stock granting registration rights senior to the
registration rights granted to the Holders pursuant to the Agreement
hereto:
|
Registration
Rights - Schedule 1B
|
||||||||||||||||
|
Common
|
Pfd (CSE)
|
Warrants
|
Total # of Shares
|
Type of Right
|
||||||||||||
|
Series
A (included common)
|
9,540,000
|
2,420,000
|
1,910,000
|
13,870,000
|
PB
|
|||||||||||
|
Series
B
|
-
|
7,430,000
|
7,430,000
|
PB
|
||||||||||||
|
Series
C
|
9,250,008
|
9,250,008
|
PB,
Mandatory
|
|||||||||||||
|
Series
D
|
8,190,000
|
4,095,000
|
12,285,000
|
PB,
Mandatory
|
||||||||||||
|
Series
E
|
5,870,000
|
2,935,000
|
8,805,000
|
PB,
Mandatory
|
||||||||||||
|
Laurus
Master Trust
|
7,108,434
|
2,159,331
|
9,267,765
|
PB
|
||||||||||||
|
Total
issued in financings
|
16,648,434
|
33,160,008
|
11,099,331
|
60,907,773
|
||||||||||||
|
Valley
Forge Enterprises Ltd.
|
4,150,000
|
4,150,000
|
PB
|
|||||||||||||
|
The
Pension Alliance
|
1,088,710
|
1,088,710
|
PB
|
|||||||||||||
|
Pentec
Inc
|
403,225
|
403,225
|
PB
|
|||||||||||||
|
Lamco
Co's
|
3,000,000
|
3,000,000
|
PB,
Demand
|
|||||||||||||
|
Total
issued in acquisitions
|
8,641,935
|
-
|
-
|
8,641,935
|
||||||||||||
|
Total
all shares
|
25,290,369
|
33,160,008
|
11,099,331
|
69,549,708
|
||||||||||||
