VOTING AGREEMENT
Exhibit
99.2
THIS
VOTING AGREEMENT (this "Agreement") is made as of November 24, 2010
by and between National Investment Managers Inc., a Florida corporation (the
"Company"), and each of the holders of Preferred and Common Stock of
the Company (the "Consenting Holders") that has signed a counterpart of this
Agreement on a signature page hereto.
RECITALS
WHEREAS, except where the
context otherwise indicates, the capitalized terms used in this Agreement shall
have the respective meanings set forth in Section 1 below;
WHEREAS, the Company is
considering strategic alternatives for the recapitalization of the Company,
including refinancing its debt, raising equity capital and/or a sale (the
"Sale") of the Company to a third party;
WHEREAS, the Company believes
that the purchase price that a potential buyer would be willing to pay for the
Company in a Sale may be less than an amount sufficient to pay the full
Liquidation Preferences of all Series of Preferred Stock plus an amount for the
holders of the Common Stock;
WHEREAS, a Sale by means of a
merger of the Company or a sale of substantially all of its assets would require
the approval of the holders of each Series of Preferred Stock voting
as separate classes, as well as Preferred and Common Stock voting as a single
class;
WHEREAS, the Company therefore
believes that, in order to pursue a Sale as a potential Strategic Alternative,
it is important for the Company to obtain advance assurance that, if an
agreement for a Sale can be reached (a) shares of each series of Preferred Stock
sufficient to approve such Sale will be voted in its favor and (b) sufficient
Available Sale Proceeds will be allocated to the holders of the Common Stock to
induce them to vote in favor of such Sale;
WHEREAS, the holders of
1,200,000 shares of Series A Preferred (the "Settling A Holders") have agreed,
in the Settlement and Voting Agreement attached hereto as Exhibit 1, to vote in
favor of a Sale that would encompass the terms of an Approved Sale;
and
WHEREAS, the Company is hereby
requesting other holders of Preferred Stock and Common Stock to likewise agree
in advance to vote their shares of Preferred and Common Stock in favor of an
Approved Sale.
NOW, THEREFORE, in
consideration of the agreements of the parties herein, and other good and
valuable consideration, the parties hereto agree as follows:
1
Exhibit
99.2
SECTION
1. Definitions
As used herein, the following terms
have the following meanings.
1.1 "Affiliate" means, as to
any Person, any other Person that, directly or indirectly, controls, is
controlled by or is under common control with such Person, is a director or
officer of such Person, or, with respect to an individual, is a spouse, lineal
ancestor or descendant of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting stock, by
contract or otherwise.
1.2. "Approved Sale" means a
purchase by a third-party of all or substantially all of the Company's business
and assets for cash consideration, by means of merger, sale of stock or assets,
or a combination thereof, pursuant to an agreement or agreements that provide
for Available Sale Proceeds of not less than $8 million that will be
distributed, to the extent sufficient therefor, as follows:
(a) First,
the holders of the Series A Preferred will receive its Stated Value of $.50 per
share (the "Series A Consideration"); and
(b) Second,
the holders of the Common Stock will receive 12% of the Available Sale Proceeds
remaining after payment of the Series A Consideration; and the 88% balance of
such remaining Available Sale Proceeds (the "Junior Preferred Consideration"),
to the extent sufficient therefor, shall be distributed to the holders of the
Junior Preferred Stock..
(c) The
Junior Preferred Consideration shall be distributed among the respective Series
of Junior Preferred Stock as follows:
(i) 25.77% to the holders of the Series
B Preferred;
(ii) 28.83 % to the Holders of the
Series C Preferred;
(iii) 26.49% to the holders of the
Series D Preferred; and
(iv) 18.91% to the holder of the Series
E Preferred.
Within
each such Series, the distribution shall be ratable in accordance with the
number of shares of such Series held by each holder thereof. Solely
for purposes of this paragraph (c), the Settling C Holders shall be deemed to
own the C Settlement Shares in addition to the Series C Preferred shares
actually owned by them. The foregoing percentages in this paragraph
(c) were based on a relative weighting of the stated values and accrued
dividends attributable to each Series of Junior Preferred Stock, as illustrated
in Exhibit 2 hereto.
2
Exhibit
99.2
An
illustration of the allocation of Available Sale Proceeds under various
scenarios is attached hereto as Exhibit 3.
1.3. "Available Sale
Proceeds" means the aggregate net proceeds from an Approved Sale available for
distribution or payment to the Company's shareholders after payment of
outstanding debt and other liabilities that are not assumed by the Buyer in the
case of a sale of assets or that are required to be paid out of the merger
consideration in the case of a merger, including payment of the
Note.
1.4 "Certificate of
Designation" means, with respect to any Series of Preferred Stock, the
Certificate of Designation of Preferences, Rights and Limitations, or, in the
case of the Series A, the Articles of Amendment to the Articles of
Incorporation, that set(s) forth the rights and preferences of such Series of
Preferred Stock.
1.5 "C Settlement Shares"
means 83,333 shares of Series C Preferred (having $499,998 of aggregate Stated
Value but without any rights to accrued and unpaid dividends) that are deemed to
be owned by the Settling C Holders only for purposes of allocating the Junior
Preferred Priority Amount pursuant to Section 1.2(b)(1).
1.6 "Common
Stock" means the common stock, $.001 per share, of the Company.
1.7 "Junior
Preferred Consideration" is defined in Section 1.2.
1.8 "Junior Preferred Stock"
means the Series B, C, D and E Preferred.
1.9 "Lawsuit"
means the lawsuit filed by the Settling C Holders against the Company in 2010 in
the Supreme Court of the State of New York, County of New York (Index No.
650494/2010.
1.10 "Liquidation
Preference" means, with respect to any Series of Preferred Stock, the amount per
share that the Certificate of Designation for such Series provides the holders
of such Series will be entitled to receive upon any liquidation, dissolution or
winding-up of the Company before any payment shall be made to the holders of any
Common Stock or other securities stated to be junior to such
Series.
1.11 "Note" means the
$440,000 subordinated promissory note of the Company issued to a Settling A
Holder in settlement of the lawsuit referred to in Exhibit 1
hereto.
1.12 "Person" means an
individual, partnership, corporation, limited liability company, limited
partnership, joint stock company, trust, unincorporated association, joint
venture, or any other entity.
1.13 "Preferred
Stock" means, collectively, the following Series of Preferred Stock of the
Company:
(a) the
Series A 12% Cumulative Convertible Preferred Stock (the "Series A Preferred"),
of which 2,420,000 shares are outstanding at the date hereof, having (i) a
Stated Value of $.50 per share and (ii) a Liquidation Preference equal to two
times the Stated Value Per Share plus declared and unpaid
dividends;
3
Exhibit
99.2
(b) the
Series B Cumulative Convertible Preferred Stock of the Company (the "Series B
Preferred"), of which 3,615,000 shares are outstanding at the date hereof,
having (i) a Stated Value of $1.00 per share and (ii) a
Liquidation Preference equal to two times the original purchase price per share
plus any accrued and unpaid dividends thereon;
(c) the
Series C Cumulative Convertible Preferred Stock (the "Series C Preferred"), of
which 633,334 shares are outstanding at the date hereof, having (i) a Stated
Value of $6.00 per share and (ii) a Liquidation Preference equal to two times
the original purchase price per share plus any accrued and unpaid dividends
thereon;
(d) the
Series D Cumulative Convertible Preferred Stock (the "Series D Preferred"), of
which 400,987 shares are outstanding at the date hereof, having (i) a
Stated Value of $10.00 per share and (ii) a Liquidation Preference
equal to two times the original purchase price per share plus any accrued and
unpaid dividends thereon; and
(e) 29,350
shares of Series E 12% Cumulative Convertible Preferred Stock (the "Series E
Preferred"), of which 29,350 shares are outstanding at the date hereof, having
(i) a Stated Value of $100.00 per share and (ii) a Liquidation
Preference equal to two times the original purchase price per share plus any
accrued and unpaid dividends thereon.
1.14 "Released
Parties" means the Company and its officers, directors, employees, attorneys,
successors, predecessors, agents, subsidiaries, representatives, heirs, assigns,
administrators, executors, or any other Affiliate of the Company.
1.15 "Releasing
Parties" means the Settling C Holders, individually and collectively, on its
behalf and on behalf of their respective attorneys, successors, predecessors,
agents, subsidiaries, representatives, heirs, assigns, administrators,
executors, or any other Person or entity Affiliated with either of the Settling
C Holders.
1.16 "Sale
Payment" means the payment of the Available Sale Proceeds to the holders of
Preferred and Common Stock in an Approved Sale.
1.17 "Settling
C Holders" shall mean CCM Master Qualified Fund Ltd. and CCM SPV II LLC, which
together own 583,334 shares of Series C Preferred.
1.18 "Stated
Value" means, with respect to any Series of Preferred Stock, the amount set
forth in the Certificate of Designation for such Series as the Stated Value of a
share.
4
Exhibit
99.2
SECTION
2. Voting Agreement
2.1. Each
Consenting Holder agrees (a) to vote the Preferred and Common Stock owned by it
in favor of an Approved Sale at any meeting of shareholders of the Company
called for the purpose of voting on such Approved Sale, (b) if so requested by
the Company, (i) to execute and deliver to the Person(s) designated by the
Company a proxy, in a form provided by the Company, to vote such shares in favor
of such Approved Sale at such meeting and/or (ii) to execute and deliver to the
Company a written consent, in a form provided by the Company, to the adoption of
a resolution or resolutions of, or other action by, shareholders of the Company
approving such Approved Sale and related matters and (c) not to revoke or modify
any such proxy or written consent except as requested by the
Company. Such agreement to vote, or execute and deliver a proxy or
consent, as the case may be, shall apply to any action to be taken by
shareholders of the Company with respect to such Approved Sale, including, but
not limited to, (i) any vote of any Series of Preferred Stock as a separate
class and any vote of the Preferred and Common Stock as a single class, (ii) any
vote on a proposed amendment of the Company's Articles of Incorporation or the
Certificate of Designation for a Series of Preferred Stock aligning the rights
of such Series with the consideration provided to the holders of such Series in
an Approved Sale and (iii) any vote on a proposed dissolution of the Company
following an Approved Sale that takes the form of a sale of
assets. Notwithstanding the foregoing, the agreements in this Section
2.1 shall only apply to an Approved Sale approved by the Board of Directors of
the Company , and each Consenting Holder agrees to vote its shares of Preferred
Stock against, not give a proxy or consent in favor of, or tender such shares in
connection with, any Sale not recommended to shareholders of the Company by the
Board of Directors of the Company.
2.2. Each
Consenting Holder represents and warrants that it has full legal power and
authority to vote the shares of Preferred and Common Stock listed as being owned
by it on the signature pages of this Agreement and does not, and none of its/his
Affiliates nor any funds managed by it or any such Affiliate does, own or have
the power to vote any other shares of Preferred Stock or Common Stock of the
Company. Each Consenting Holder agrees that its obligations under
this Section 2, including the voting obligations, shall apply to any shares of
Common Stock owned by it at the date hereof and to any additional shares of
Preferred Stock or Common Stock that it or any such fund or Affiliate acquires
or become entitles to vote after the date hereof.
2.3 Each Consenting Holder
agrees not to sell or otherwise transfer any of its shares of Preferred Stock or
Common Stock unless the buyer or other transferee contemporaneously executes and
delivers to the Company an instrument satisfactory to the Company by which such
buyer or other transferee agrees to be bound by, observe and perform all of the
provisions and obligations of a Consenting Holder contained in this
Agreement.
2.4. Each Consenting Holder
agrees that its rights in connection with a consummated Approved Sale will be
limited to the right to receive the consideration provided for the holders of
the Preferred and Common Stock in an Approved Sale, waives any claims to
payments in respect of accrued and unpaid dividends or Liquidation Preference
related to their shares of Preferred Stock and consents to the issuance of the
Note referred to in Exhibit 1 hereto.
2.5. The obligations of the
Consenting Holders under this Section 2 shall expire on March 31,
2011.
5
Exhibit
99.2
SECTION
3. Settlement with Settling C Holders
3.1. The
Settling C Holders hereby accept the incremental dollar amount allocated to the
Settling C Shares in the formula set forth in Section 1.2(c) of this Agreement
as complete and final settlement, satisfaction, compromise and release of any
and all claims against the Company, including all claims that were or could have
been asserted in the Lawsuit. Subject to the Sale Payment being made
and effective as of the date of the Sale Payment, each of the Releasing Parties
hereby irrevocably and unconditionally releases, acquits and forever discharges
the Released Parties from any claims of any nature whatsoever, past or present,
pending or not pending, known or unknown, foreseen or unforeseen, which such
Releasing Party now has, owns, or holds or claims to have, own or hold or which
at anytime prior to the date of the Sale Payment has owned or held or has
claimed to have had, owned or held against any of the Released
Parties.
3.2. Promptly
after the date of the Sale Payment, the Settling C Holders shall dismiss, with
prejudice, all claims and causes of action against the Company in the
Lawsuit. Prior to the date fixed for closing an Approved Sale, the
Settling C Holders shall deliver signed motion papers and other documents
sufficient to effectuate such dismissal to a third party
reasonably acceptable to the Company, with irrevocable instructions to
cause them to be filed with the court in which the Lawsuit is pending as soon as
practicable after the Sale Payment is made.
3.3. Nothing
in the Agreement shall be deemed to be or be construed to be an admission of
liability by the parties and any such liability is expressly
denied.
3.4. Nothing
in this Section shall be construed to release the Company or Consenting Holders
from their obligations under this Agreement.
3.5. Notwithstanding
the above, the Settling C Holders assert that the penalties as alleged in the
Lawsuit and as delineated in the Settling C Holders’ Complaint continue to
accrue up to and including the Sale, and thereafter, in the event that a Sale is
not consummated.
3.6. The
obligations of the Settling C Holders under this Section 3 shall expire on March
31, 2011 if no Sale occurs by that date and the Settling C Holders shall be free
to prosecute their lawsuit in that event, including, but not limited to, the
accrued penalties as described in the Lawsuit up to that date and
thereafter.
SECTION
4. General
4.1. This
Agreement reflects the entire agreement of the parties on the matters set forth
herein and supersedes all prior negotiations, understandings, and agreements
between or among the parties. This agreement may only be modified or
changed by a writing duly executed by the parties and may not be orally
modified, changed or altered in any way.
4.2. This
Agreement shall in all respects be interpreted, enforced and governed under the
laws of the State of Ohio.
6
Exhibit
99.2
4.3. All
notices and other communications required or permitted by this Agreement shall
be in writing and will be effective, and any applicable time period shall
commence, when (a) delivered to the following address by hand or by a nationally
recognized overnight courier service (costs prepaid) addressed to the following
address or (b) transmitted electronically to the following facsimile numbers or
e-mail addresses, in each case marked to the attention of the Person (by name or
title) designated below (or to such other address, facsimile number, e-mail
address, or Person as a party may designate by notice to the other
parties):
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The
Company:
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National
Investment Managers, Inc.
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000
Xxxxx Xxxxx Xxxxx, Xxxxx 000
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|
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Xxxxxx,
XX 00000
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|
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Attention: Xxxxxx
Xxxx
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|
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E-mail
address: xxxxx@xxxx.xxx
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with
a copy to:
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Xxxxxxxx
& Shohl LLP
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000
X. Xxxxx Xxxxxx, Xxxxx 0000
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|
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Xxxxxxxxxx,
Xxxx 00000
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|
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Attention:
Xxx Xxxxxx Xxxxx, Esq.
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Fax
no. (000) 000-0000
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|
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Email
address:
xxx.xxxxx@xxxxxxx.xxx
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Consenting
Holders:
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The
respective names and addresses set forth in the stockholder lists
maintained by the Company.
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4.4. This
Agreement may be executed in counterparts with the same force and effect as if a
single original had been executed by all of the parties hereto. This
Agreement constitutes a separate agreement between the Company and each
Consenting Holder who has executed this Agreement and is enforceable against
each such Consenting Holder irrespective of whether any other holder of
Preferred or Common Stock has executed this Agreement.
[Signature
Pages to Follow]
7
Exhibit
99.2
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the
date set forth above.
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By:
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/s/ Xxxxxx X. Xxxx
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Dated: November
24, 2010
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Name:
Xxxxxx X. Xxxx
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|||
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Title:
Chief Executive Officer
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8
Exhibit
99.2
[Signatures
of Consenting Shareholders]
9
Exhibit
99.2
EXHIBIT
1
Settlement
and Voting Agreement
10
Exhibit
99.2
EXHIBIT
2
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Junior
Preferred Original Investment (Stated Value):
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||||||||
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Preferred
Series B
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$ | 3,615,000 | 25.17 | % | ||||
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Preferred
Series C †
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$ | 3,800,004 | 26.46 | % | ||||
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Preferred
Series D
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$ | 4,009,870 | 27.92 | % | ||||
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Preferred
Series E
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$ | 2,935,000 | 20.44 | % | ||||
| 14,359,874 | 100.00 | % | ||||||
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Junior
Preferred Accrued Dividends (as of December 31, 2010):
|
||||||||
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Preferred
Series B
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$ | 2,288,673 | ||||||
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Preferred
Series C
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$ | 2,305,336 | ||||||
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Preferred
Series D
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$ | 2,058,284 | ||||||
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Preferred
Series E
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$ | 1,396,783 | ||||||
| 8,049,076 | ||||||||
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Preferred
Series B
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25.77 | % | ||||||
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Preferred
Series C (including Stated Value of C Settlement Shares)
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28.83 | % | ||||||
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Preferred
Series D
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26.49 | % | ||||||
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Preferred
Series E
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18.91 | % | ||||||
| 100.00 | % | |||||||
†
= Does not include $500,000 in Stated Value in C Settlement
Shares
11
Exhibit
99.2
EXHIBIT
3
FOR
ILLUSTRATIVE PURPOSES ONLY. NOT INDICATIVE OF ANY OFFERS OR RANGE OF
OFFERS.
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Available
Sale Proceeds
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$ | 10,000,000 | $ | 12,000,000 | $ | 14,000,000 | $ | 16,000,000 | ||||||||
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Preferred
Series A Stated Value
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||||||||||||||||
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Total $
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$ | 1,210,000 | $ | 1,210,000 | $ | 1,210,000 | $ | 1,210,000 | ||||||||
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Per Series A
Share
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$ | 0.50 | $ | 0.50 | $ | 0.50 | $ | 0.50 | ||||||||
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Per Common Stock Equivalent1
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$ | 0.50 | $ | 0.50 | $ | 0.50 | $ | 0.50 | ||||||||
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Net
Available for Distribution
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$ | 8,790,000 | $ | 10,790,000 | $ | 12,790,000 | $ | 14,790,000 | ||||||||
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Common
Allocation (12%)
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$ | 1,054,800 | $ | 1,294,800 | $ | 1,534,800 | $ | 1,774,800 | ||||||||
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Per Common Share2
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$ | 0.025 | $ | 0.031 | $ | 0.037 | $ | 0.043 | ||||||||
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Junior
Preferred Allocation (88%)
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$ | 7,735,200 | $ | 9,495,200 | $ | 11,255,200 | $ | 13,015,200 | ||||||||
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Junior
Preferred Priority Amount (allocated per Exhibit 3)
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||||||||||||||||
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Series
B: Total
$
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$ | 1,993,361 | $ | 2,446,913 | $ | 2,900,465 | $ | 3,354,017 | ||||||||
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Per Series B
Share
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$ | 0.55 | $ | 0.68 | $ | 0.80 | $ | 0.93 | ||||||||
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Per Common Stock Equivalent1
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$ | 0.28 | $ | 0.34 | $ | 0.40 | $ | 0.46 | ||||||||
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Series
C: Total
$
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$ | 2,230,058 | $ | 2,737,466 | $ | 3,244,874 | $ | 3,752,282 | ||||||||
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Per Series C Share3
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$ | 3.11 | $ | 3.82 | $ | 4.53 | $ | 5.24 | ||||||||
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Per Common Stock Equivalent1
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$ | 0.26 | $ | 0.32 | $ | 0.38 | $ | 0.44 | ||||||||
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Series
D: Total
$
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$ | 2,049,054 | $ | 2,515,278 | $ | 2,981,502 | $ | 3,447,726 | ||||||||
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Per Series D
Share
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$ | 5.11 | $ | 6.27 | $ | 7.44 | $ | 8.60 | ||||||||
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Per Common Stock Equivalent1
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$ | 0.26 | $ | 0.31 | $ | 0.37 | $ | 0.43 | ||||||||
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Series
E: Total
$
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$ | 1,462,726 | $ | 1,795,542 | $ | 2,128,358 | $ | 2,461,174 | ||||||||
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Per Series E
Share
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$ | 49,84 | $ | 61.18 | $ | 72.52 | $ | 83.86 | ||||||||
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Per Common Stock Equivalent1
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$ | 0.25 | $ | 0.31 | $ | 0.36 | $ | 0.42 | ||||||||
| $ | 7,735,200 | $ | 9,495,200 | $ | 11,255,200 | $ | 13,015,200 |
1
= Each Preferred Stock is convertible into Common Stock at its Stated Value
divided by $0.50
2
= There were 41,476,929 Common shares outstanding at 9/30/10
3
= Includes Preferred C Settlement Shares
12
