LAURUS MASTER FUND, LTD.
c/o Laurus Capital Management, LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
May 30, 2006
National Investment Managers Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx
Re: Restricted Account: Account Number - 000-000-0000
Account Name: National Investment Managers Inc., maintained at North Fork
Bank (the "Restricted Account").
Reference is made to (i) that certain Securities Purchase Agreement, dated
as of May 30_, 2006 (as amended, modified or supplemented from time to time, the
"Purchase Agreement"), by and between National Investment Managers Inc., a
Florida corporation (the "Company"), and Laurus Master Fund, Ltd. (the
"Purchaser") and (ii) that certain Restricted Account Agreement, dated as of May
30, 2006 (as amended, modified or supplemented from time to time, the
"Restricted Account Agreement"), by and among the Company, Laurus and North Fork
Bank (the "Bank"). Capitalized terms used but not defined herein shall have the
meanings ascribed them in the Purchase Agreement or the Restricted Account
Agreement, as applicable. Pursuant to Section 3.2 of the Purchase Agreement, the
Purchaser is required to place $7,000,000 in the Restricted Account, and,
subject to the provisions of this letter, the Purchase Agreement and any Related
Agreement, maintain such amount in the Restricted Account in accordance with the
terms of this Agreement, the Restricted Account Agreement and the Note as
security for the performance of the Company's obligations to the Purchaser.
The Purchaser and the Company desire to clarify certain aspects regarding
the use of funds contained in the Restricted Account. The Company and/or a
Subsidiary of the Company intends to acquire (each, an "Acquisition") equity
interests of other entities or persons (each, an "Acquired Entity"). In
connection with certain Acquisitions, for good consideration, the receipt and
sufficiency of which is here acknowledged, the Company and the Purchaser agree
that, so long as (i) no Event of Default (as defined in the Note) then exists or
results from any such release, and (ii) the Company has provided the Purchaser
with (a) financial statements and calculations satisfactory to the Purchaser
setting forth the Acquired Entity Consolidated EBITDA (as defined below) for the
most recently ended fiscal year and (b) unaudited financial statements and
calculations satisfactory to the Purchaser setting forth the Acquired Entity
Consolidated EBITDA for all months that have elapsed since the end of the last
fiscal year, the Purchaser shall direct the Bank, pursuant to a Release Notice
(as defined in the Restricted Account Agreement), to wire an amount of funds
determined in the Purchaser's sole discretion from the Restricted Account to
such bank account as the Company may direct the Purchaser in writing.
Notwithstanding the foregoing, in no event shall Laurus release funds from the
Restricted Account unless and until the Company has provided the Purchaser with
evidence that it has definitive documentation (the "Equity Documents") to
consummate an equity raise of at least three and a half million dollars
($3,500,000), or such lesser amount as is proportionate to the cash portion of
the purchase price for each such Acquisition (an "Equity Transaction"), and the
terms and conditions of such Equity Documents are acceptable to Laurus in its
sole discretion. For the purposes of this letter agreement, "Acquired Entity
Consolidated EBITDA" shall mean, with respect to any Acquired Entity or Acquired
Entities, taken on a consolidated basis, net income before giving effect to
interest, taxes, depreciation and amortization, as adjusted to account for
normalized seller compensation and seller expenses; provided that the
calculation of Acquired Entity Consolidated EBITDA shall be reviewed by the
Company's auditors and be satisfactory to the Purchaser in all respects. The
Purchaser shall not be under any obligation to release any amounts pursuant to
this paragraph and the release of such amounts shall be in the Purchaser's sole
and absolute discretion.
The Purchaser agrees to provide the Company with notice
regarding any instructions given by the Purchaser to the Bank with respect to
the Restricted Account. This letter may not be amended or waived except by an
instrument in writing signed by the Company and the Purchaser. This letter may
be executed in any number of counterparts, each of which shall be an original
and all of which, when taken together, shall constitute one agreement. Delivery
of an executed signature page of this letter by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof or thereof, as
the case may be. This letter shall be governed by, and construed in accordance
with, the laws of the State of New York. This letter sets forth the entire
agreement between the parties hereto as to the matters set forth herein and
supersede all prior communications, written or oral, with respect to the matters
herein.
If the foregoing meets with your approval please signify your acceptance
of the terms hereof by signing below.
Signed,
LAURUS MASTER FUND, LTD.
By:____________________
Name:
Title:
Agreed and Accepted this 30th day of May, 2006.
NATIONAL INVESTMENT MANAGERS INC.
By:_____________________
Name:
Title:
