SECURITIES PURCHASE AGREEMENT
SECURITIES
PURCHASE AGREEMENT
(the
“Agreement”),
dated
as of ______________ ___, 2007, by and among National Investment Managers Inc.
(f/k/a Fast Xxxxx Racing Stables, Inc.), a Florida corporation (the
‘Company’),
and
the buyers set out on Schedule
A
hereto
(each a “Buyer”
and
together, the “Buyers”).
WHEREAS:
A. The
Company and Buyers are executing and delivering this Agreement in reliance
upon
the exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “1933
Act”),
and
Rule 506 of Regulation D (“Regulation
D”)
as
promulgated by the United States Securities and Exchange Commission (the
“SEC”)
under
the 1933 Act; and
B. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, the number of shares of Common Stock,
par
value $0.01 per share, of the Company (“Common
Stock”),
set
forth in Section
1
below.
NOW,
THEREFORE,
the
Company and each Buyer hereby agree as follows:
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1.
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PURCHASE
AND SALE OF COMMON STOCK.
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(a) Purchase
of Common Stock.
The
Company agrees to issue and sell to each Buyer, and each Buyer agrees to
purchase from the Company on the Closing Date (as defined below), such number
of
shares of Common Stock set forth opposite such Buyer’s name on Schedule
A
(the
“Common
Shares”).
(b) Purchase
Price.
The
purchase price for the Common Shares to be purchased by the Buyers at the
Closing shall be $0.50
per
share
(the “Purchase
Price”).
(c) Closing
Date.
The
purchase and sale of the Common Shares (the “Closing”)
shall
take place at 10:00 a.m., New York City Time, on the date hereof (the
“Closing
Date”)
(or
such other date and time as is mutually agreed to by the Company and each
Buyer).
(d) Form
of Payment.
On the
Closing Date, (i) each Buyer shall pay the Purchase Price to the Company for
the
Common Shares to be issued and sold to such Buyer at the Closing, by wire
transfer of immediately available funds in accordance with the Company's written
wire instructions, and (ii) the Company shall deliver to each Buyer (A) one
or more stock certificates, free and clear of all restrictive and other legends
(except as expressly provided in Section 2(f) hereof), evidencing the number
of
Common Shares such Buyer is purchasing, duly executed on behalf of the Company
and registered in the name of such Buyer.
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BUYER'S
REPRESENTATIONS AND WARRANTIES.
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Each
Buyer represents and warrants that:
(a) No
Public Sale or Distribution.
Buyer
is acquiring the Common Shares in the ordinary course of business for its own
account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof, except pursuant to sales registered or
exempted under the 1933 Act and Buyer does not have a present arrangement to
effect any distribution of the Common Shares to or through any person or entity;
provided,
however,
that by
making the representations herein, Buyer does not agree to hold any of the
Common Shares for any minimum or other specific term and reserves the right
to
dispose of the Common Shares at any time in accordance with or pursuant to
a
registration statement or an exemption under the 1933 Act.
(b) Accredited
Investor Status.
Buyer
is an "accredited investor" as that term is defined in Rule 501(a) of Regulation
D.
(c) Reliance
on Exemptions.
Buyer
understands that the Common Shares are being offered and sold to it in reliance
on specific exemptions from the registration requirements of United States
federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Buyer set
forth herein in order to determine the availability of such exemptions and
the
eligibility of Buyer to acquire the Common Shares.
(d) Information.
Buyer
and its advisors, if any, have been furnished with all materials relating to
the
business, finances and operations of the Company and materials relating to
the
offer and sale of the Common Shares which have been requested by Buyer. Buyer
and its advisors, if any, have been afforded the opportunity to ask questions
of
the Company. Neither such inquiries nor any other due diligence investigations
conducted by Buyer or its advisors, if any, or its representatives shall modify,
amend or affect Buyer’s right to rely on the Company's representations and
warranties contained herein. Buyer understands that its investment in the Common
Shares involves a high degree of risk and is able to afford a complete loss
of
such investment. Buyer has sought such accounting, legal and tax advice as
it
has considered necessary to make an informed investment decision with respect
to
its acquisition of the Common Shares.
(e) Transfer
or Resale.
Buyer
understands that: (i) the Common Shares have not been and are not being
registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) Buyer shall have delivered to the Company an opinion
of counsel, in a form reasonably acceptable to the Company, to the effect that
such Common Shares to be sold, assigned or transferred may be sold, assigned
or
transferred pursuant to an exemption from such registration, or (C) Buyer
provides the Company with reasonable assurance that such Common Shares can
be
sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act, as amended, (or a successor rule thereto) (collectively,
“Rule
144”);
(ii)
any sale of the Common Shares made in reliance on Rule 144 may be made only
in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Common Shares under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 0000 Xxx) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of
the
SEC thereunder; and (iii) neither the Company nor any other person is under
any
obligation to register the Common Shares under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder. Notwithstanding the foregoing, the Common Shares may be pledged
in
connection with a bona fide margin account or other loan secured by the Common
Shares and such pledge of Common Shares shall not be deemed to be a transfer,
sale or assignment of the Common Shares hereunder, and no Buyer effecting a
pledge of Common Shares shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or any other Transaction Document, including, without limitation, this Section
2(e); provided, that in order to make any sale, transfer or assignment of Common
Shares, Buyer and its pledgee makes such disposition in accordance with or
pursuant to a registration statement or an exemption under the 1933
Act.
(f) Legends.
Buyer
understands that the certificates or other instruments representing the Common
Shares shall bear any legend as required by the "blue sky" laws of any state
and
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
THE
SECURITIES.
(g) Validity;
Enforcement.
This
Agreement has been duly and validly authorized, executed and delivered on behalf
of Buyer and shall constitute the legal, valid and binding obligations of Buyer
enforceable against Buyer in accordance with its terms, except as such
enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(h) No
Conflicts.
The
execution, delivery and performance by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby and thereby will
not (i) result in a violation of the organizational documents of Buyer or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights
of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which Buyer is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to Buyer, except in the case
of
clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations
which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of Buyer to perform its
obligations hereunder.
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3.
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
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The
Company represents and warrants to each Buyer that:
(a) Organization
and Qualification.
The
Company is a corporation duly organized and validly existing in good standing
under the laws of Florida, and has the requisite corporate power and
authorization to own its properties and to carry on its business as now being
conducted. The Company is duly qualified as a foreign corporation to do business
and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. As used in this
Agreement, “Material
Adverse Effect”
means
any material adverse effect on the business, properties, assets, operations,
results of operations, condition (financial or otherwise) or prospects of the
Company or on the transactions contemplated hereby or on the authority or
ability of the Company to perform its obligations under this Agreement.
(b) Authorization;
Enforcement; Validity.
The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and to issue the Common Shares
in
accordance with the terms hereof and thereof. The execution and delivery of
the
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, including, without limitation, the issuance of the Common
Shares, have been duly authorized by the Company’s Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders. This Agreement has been duly executed and
delivered by the Company, and constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by general principles
of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies.
(c) Issuance
of Common Shares.
(i) The
Common Shares are duly authorized and, upon issuance in accordance with the
terms hereof, shall be validly issued and free from all taxes, liens and charges
with respect to the issue thereof and shall be fully paid and nonassessable
with
the holder being entitled to all rights accorded to a holder of Common Stock.
The issuance by the Company of the Common Shares is exempt from registration
under the 1933 Act.
(ii) As
of the
date hereof, the authorized capital stock of the Company, as of the date hereof
consists of 110,000,000 shares, of which 100,000,000 are shares of Common Stock,
par value $0.001 per share, 28,006,793 shares of which are issued and
outstanding, and 10,000,000 are shares of preferred stock, par value $0.001
per
share of which 8,207,184 shares of preferred stock are issued and outstanding.
The Company hereby agrees to provide to each Buyer immediately prior to the
issuance of the Common Shares to such Buyer an update to the representation
set
forth in this Section 3(c)(ii) giving effect to the issuance of such Common
Shares.
(d) No
Integrated Offering.
Neither
the Company, nor any of its subsidiaries or affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or
sales of any security or solicited any offers to buy any security under
circumstances that would cause the offering of the Common
Shares pursuant to this Agreement to be integrated with prior offerings by
the Company for purposes of the Securities Act which would prevent the Company
from selling the Common Shares pursuant to Rule 506 under the Securities
Act, or any applicable exchange-related stockholder approval provisions, nor
will the Company or any of its affiliates or subsidiaries take any action
or steps that would cause the offering of the Common Shares to be
integrated with other offerings.
(e) No
Conflicts.
The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Common Shares) will not
(i)
result in a violation of the Certificate of Incorporation (as defined below)
or
Bylaws (as defined below) of the Company or (ii) conflict with, or constitute
a
default (or an event which with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which the Company is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected.
(f) Consents.
The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other person in order for it to
execute, deliver or perform any of its obligations under or contemplated by
the
Agreement in accordance with the terms hereof.
(g) Acknowledgment
Regarding Buyer’s Purchase of Common Shares.
The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of arm’s length purchaser with respect to the Agreement and the transactions
contemplated hereby and thereby and that Buyer is not (i) an officer or director
of the Company, (ii) an “affiliate” of the Company (as defined in Rule 144) or
(iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of
the Common Stock (as defined for purposes of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the “1934
Act”)).
(h) No
General Solicitation; Placement Agent's Fees.
Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of
the
Common Shares. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for
persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby.
(i) SEC
Documents; Financial Statements.
During
the two years prior to the date hereof, the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the 1934 Act (all
of the foregoing filed prior to the date hereof or prior to the date of the
Closing, and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC
Documents”).
As of
their respective dates, the SEC Documents complied in all material respects
with
the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in
the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with
respect thereto. Such financial statements have been prepared in accordance
with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case
of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyer which is not
included in the SEC Documents, including, without limitation, information
referred to in Section 2(d) of this Agreement, contains any untrue statement
of
a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstance under which they are
or
were made, not misleading.
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4.
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MISCELLANEOUS.
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(a) Governing
Law; Jurisdiction; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan for
the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that
the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to
such
party at the address for such notices to it under this Agreement and agrees
that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) Counterparts.
This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
(c) Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(d) Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(e) Entire
Agreement; Amendments.
This
Agreement supersedes all other prior oral or written agreements between the
Buyer, the Company, their affiliates and persons acting on their behalf with
respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision
of
this Agreement may be amended other than by an instrument in writing signed
by
the Company and each Buyer. No provision hereof may be waived other than by
an
instrument in writing signed by the party against whom enforcement is
sought.
(f) Notices.
Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with an overnight courier service,
in
each case properly addressed to the party to receive the same. The addresses
and
facsimile numbers for such communications shall be:
If
to the
Company:
National
Investment Managers, Inc.
000
Xxxxx
Xxxxx Xxxxx, Xxxxx 000
Xxxxxx,
Xxxx 00000
Attention: Chief
Financial Officer
Facsimile:
If to any Buyer:
c/o
Valens Capital Management, LLC
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Portfolio Services
or
to
such other address and/or facsimile number and/or to the attention of such
other
person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.
(g) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns, including any purchasers of the Common
Shares. The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Buyer, including by merger
or consolidation. Each Buyer may assign some or all of its rights hereunder
without the consent of the Company, in which event such assignee shall be deemed
to be a Buyer hereunder with respect to such assigned rights.
(h) No
Third Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
(i) Survival.
The
representations and warranties of the Company and each Buyer contained in
Sections 2 and 3 and the agreements and covenants set forth in this Section
4
shall survive the Closing and the delivery of Common Shares.
(j) Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
IN
WITNESS WHEREOF,
each
Buyer and the Company have executed this Securities Purchase Agreement as of
the
date first written above.
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NATIONAL
INVESTMENT MANAGERS, INC.
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/s/
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Name:
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Title:
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VALENS
U.S. SPV I, LLC
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By: Valens Capital Management, LLC, its investment manager
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By:
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/s/
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Name:
Xxx Xxxxx
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Title:
Authorized Signatory
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VALENS
OFFSHORE SPV I, LTD.
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By: Valens Capital Management, LLC, its investment manager
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By:
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/s/
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Name:
Xxx Xxxxx
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Title:
Authorized Signatory
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SCHEDULE
A
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Buyers
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Purchase Price
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Number of Common Shares
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||||
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Valens
U.S. SPV I, LLC, a Delaware limited liability
company
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$
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1,530,000
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3,060,000
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Valens
Offshore SPV I, Ltd., a Cayman Islands company
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$
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1,470,000
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2,940,000
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