SUBSCRIPTION
        AGREEMENT

       

      SUBSCRIPTION
        AGREEMENT (this “Agreement”) made as of the last date set forth on the signature
        page hereof between National Investment Managers Inc., a Florida corporation
        (the “Company”), and the undersigned (the “Subscriber”).

       

      W
        I T N E
        S S E T H:

       

      WHEREAS,
        the Company is conducting a private offering (the “Offering”) consisting of up
        to 1,000,000 shares (the “Shares”) of Series C Cumulative Convertible Preferred
        Stock (“Preferred Stock”), pursuant to Section 4(2) of the Securities Act of
        1933, as amended (the “Securities Act”) and Rule 506 promulgated thereunder;
        and

       

      WHEREAS,
        the Subscriber desires to purchase that number of Shares set forth on the
        signature page hereof on the terms and conditions hereinafter set
        forth.

       

      NOW,
        THEREFORE, in consideration of the premises and the mutual representations
        and
        covenants hereinafter set forth, the parties hereto do hereby agree as
        follows:

       

      I.  SUBSCRIPTION
        FOR SHARES AND REPRESENTATIONS BY SUBSCRIBER

       

      1.1  Subject
        to the terms and conditions hereinafter set forth and in the Confidential
        Offering Memorandum dated October 17, 2005 (such memorandum, together with
        all
        amendments thereof and supplements and exhibits thereto, the “Memorandum”), the
        Subscriber hereby irrevocably subscribes for and agrees to purchase from
        the
        Company such number of Shares, and the Company agrees to sell to the Subscriber
        as is set forth on the signature page hereof, at a per share price equal
        to
        $6.00 per Share. The purchase price is payable by wire transfer of immediately
        available funds to:

       

      
        	 	Account Name:	Duncan Financial Group, Inc.	 
	 	Account #	123502393465	 
	 	Swift Code	CHASUS33	 
	 	ABA #	021000021	 
	 	Bank	JP Morgan Chase	 
	 	
                Address:

              	270 Park Avenue
                New
                  York, NY 10017

              	 


      

              

      1.2  The
        Subscriber recognizes that the purchase of the Shares involves a high degree
        of
        risk including, but not limited to, the following: (a) the Company has limited
        operating history and requires substantial funds in addition to the proceeds
        of
        the Offering; (b) an investment in the Company is highly speculative, and
        only
        investors who can afford the loss of their entire investment should consider
        investing in the Company and the Shares; (c) the Subscriber may not be able
        to
        liquidate its investment; (d) transferability of the Shares is extremely
        limited; (e) in the event of a disposition, the Subscriber could sustain
        the
        loss of its entire investment; (f) the Company has not paid any dividends
        since
        its inception and does not anticipate paying any dividends; and (g) the Company
        may issue additional securities in the future which have rights and preferences
        that are senior to those of the Preferred Stock. Without limiting the generality
        of the representations set forth in Section 1.5 below, the Subscriber represents
        that the Subscriber has carefully reviewed the section of the Memorandum
        captioned “Risk Factors.”

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      1.3  The
        Subscriber represents that the Subscriber is an “accredited investor” as such
        term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under
        the Securities Act, as indicated by the Subscriber’s responses to the questions
        contained in Article VII hereof, and that the Subscriber is able to bear
        the
        economic risk of an investment in the Shares.

       

      1.4  The
        Subscriber hereby acknowledges and represents that (a) the Subscriber has
        knowledge and experience in business and financial matters, prior investment
        experience, including investment in securities that are non-listed, unregistered
        and/or not traded on a national securities exchange nor on the National
        Association of Securities Dealers, Inc. (the “NASD”) automated quotation system
        (“NASDAQ”), or the Subscriber has employed the services of a “purchaser
        representative” (as defined in Rule 501 of Regulation D), attorney and/or
        accountant to read all of the documents furnished or made available by the
        Company both to the Subscriber and to all other prospective investors in
        the
        Shares to evaluate the merits and risks of such an investment on the
        Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature
        of this investment; and (c) the Subscriber is able to bear the economic risk
        that the Subscriber hereby assumes.

       

      1.5  The
        Subscriber hereby acknowledges receipt and careful review of this Agreement,
        the
        Memorandum (which includes the Risk Factors), including all exhibits thereto,
        and any documents which may have been made available upon request as reflected
        therein (collectively referred to as the “Offering Materials”) and hereby
        represents that the Subscriber has been furnished by the Company during the
        course of the Offering with all information regarding the Company, the terms
        and
        conditions of the Offering and any additional information that the Subscriber
        has requested or desired to know, and has been afforded the opportunity to
        ask
        questions of and receive answers from duly authorized officers or other
        representatives of the Company concerning the Company and the terms and
        conditions of the Offering.

       

      1.6 
(a)
        In
        making
        the decision to invest in the Shares the Subscriber has relied solely upon
        the
        information provided by the Company in the Offering Materials. To the extent
        necessary, the Subscriber has retained, at its own expense, and relied upon
        appropriate professional advice regarding the investment, tax and legal merits
        and consequences of this Agreement and the purchase of the Shares hereunder.
        The
        Subscriber disclaims reliance on any statements made or information provided
        by
        any person or entity in the course of Subscriber’s consideration of an
        investment in the Shares other than the Offering Materials. 

       

      (b) The
        Subscriber represents that (i) the Subscriber was contacted regarding the
        sale
        of the Shares by the Company (or an authorized agent or representative thereof)
        with whom the Subscriber had a prior substantial pre-existing relationship
        and
        (ii) no Shares were offered or sold to it by means of any form of general
        solicitation or general advertising, and in connection therewith, the Subscriber
        did not (A) receive or review any advertisement, article, notice or other
        communication published in a newspaper or magazine or similar media or broadcast
        over television or radio, whether closed circuit, or generally available;
        or (B)
        attend any seminar meeting or industry investor conference whose attendees
        were
        invited by any general solicitation or general advertising.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      1.7  The
        Subscriber hereby represents that the Subscriber, either by reason of the
        Subscriber’s business or financial experience or the business or financial
        experience of the Subscriber’s professional advisors (who are unaffiliated with
        and not compensated by the Company or any affiliate or selling agent of the
        Company, directly or indirectly), has the capacity to protect the Subscriber’s
        own interests in connection with the transaction contemplated
        hereby.

       

      1.8  The
        Subscriber hereby acknowledges that the Offering has not been reviewed by
        the
        United States Securities and Exchange Commission (the “SEC”) nor any state
        regulatory authority since the Offering is intended to be exempt from the
        registration requirements of Section 5 of the Securities Act, pursuant to
        Regulation D. The Subscriber understands that the Shares have not been
        registered under the Securities Act or under any state securities or “blue sky”
        laws and agrees not to sell, pledge, assign or otherwise transfer or dispose
        of
        the Shares unless they are registered under the Securities Act and under
        any
        applicable state securities or “blue sky” laws or unless an exemption from such
        registration is available.

       

      1.9  The
        Subscriber understands that the Shares have not been registered under the
        Securities Act by reason of a claimed exemption under the provisions of the
        Securities Act that depends, in part, upon the Subscriber’s investment
        intention. In this connection, the Subscriber hereby represents that the
        Subscriber is purchasing the Shares for the Subscriber’s own account for
        investment and not with a view toward the resale or distribution to others.
        The
        Subscriber, if an entity, further represents that it was not formed for the
        purpose of purchasing the Shares.

       

      1.10  The
        Subscriber understands that the common stock issuable upon conversion of
        the
        Preferred Stock (the “Common Shares”) is quoted on the OTC Bulletin Board and
        that there is a limited market for the Common Shares. The Subscriber understands
        that even if a public market develops for the Common Shares, Rule 144 (“Rule
        144”) promulgated under the Securities Act requires for non-affiliates, among
        other conditions, a one-year holding period prior to the resale (in limited
        amounts) of securities acquired in a non-public offering without having to
        satisfy the registration requirements under the Securities Act. The Subscriber
        understands and hereby acknowledges that the Company is under no obligation
        to
        register any of the Shares under the Securities Act or any state securities
        or
“blue sky” laws other than as set forth in Article V. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      1.11  The
        Subscriber consents to the placement of a legend on any certificate or other
        document evidencing the Shares and any shares of common stock issuable upon
        conversion of the Preferred Stock that such securities have not been registered
        under the Securities Act or any state securities or “blue sky” laws and setting
        forth or referring to the restrictions on transferability and sale thereof
        contained in this Agreement. The Subscriber is aware that the Company will
        make
        a notation in its appropriate records with respect to the restrictions on
        the
        transferability of such Shares. The legend to be placed on each certificate
        shall be in form substantially similar to the following:

       

      “THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
        SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE
        SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
        HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
        COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY
        HAS
        RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND
        ITS
        COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

       

      1.12  It
        is
        agreed that the Company, at its sole discretion, reserves the unrestricted
        right, without further documentation or agreement on the part of the Subscriber,
        to reject or limit any subscription, to accept subscriptions for fractional
        Shares and to close the Offering to the Subscriber at any time and that the
        Company will issue stop transfer instructions to its transfer agent with
        respect
        to such Shares.

       

      1.13  The
        Subscriber hereby represents that the address of the Subscriber furnished
        by
        Subscriber on the signature page hereof is the Subscriber’s principal residence
        if Subscriber is an individual or its principal business address if it is
        a
        corporation or other entity.

       

      1.14  The
        Subscriber represents that the Subscriber has full power and authority
        (corporate, statutory and otherwise) to execute and deliver this Agreement
        and
        to purchase the Shares. This Agreement constitutes the legal, valid and binding
        obligation of the Subscriber, enforceable against the Subscriber in accordance
        with its terms.

       

      1.15  If
        the
        Subscriber is a corporation, partnership, limited liability company, trust,
        employee benefit plan, individual retirement account, Keogh Plan, or other
        tax-exempt entity, it is authorized and qualified to invest in the Company
        and
        the person signing this Agreement on behalf of such entity has been duly
        authorized by such entity to do so.

       

      1.16  The
        Subscriber acknowledges that if he or she is a Registered Representative
        of an
        NASD member firm, he or she must give such firm the notice required by the
        NASD’s Rules of Fair Practice, receipt of which must be acknowledged by such
        firm in Section 7.4 below.

       

      1.17  The
        Subscriber acknowledges that at such time, if ever, as the Shares are registered
        (as such term is defined in Article V hereof), sales of the Shares will be
        subject to state securities laws.

       

      1.18  (a)     
        The
        Subscriber agrees not to issue any public statement with respect to the
        Subscriber’s investment or proposed investment in the Company or the terms of
        any agreement or covenant between them and the Company without the Company’s
        prior written consent, except such disclosures as may be required under
        applicable law or under any applicable order, rule or regulation.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (b)  The
        Company agrees not to disclose the names, addresses or any other information
        about the Subscribers, except as required by law; provided, that the Company
        may
        use the name of the Subscriber for any offering or in any registration statement
        filed pursuant to Article V in which the Subscriber’s shares are
        included.

       

      1.19  The
        Subscriber agrees to hold the Company and its directors, officers, employees,
        affiliates, controlling persons and agents and their respective heirs,
        representatives, successors and assigns harmless and to indemnify them against
        all liabilities, costs and expenses incurred by them as a result of (a) any
        sale
        or distribution of the Shares by the Subscriber in violation of the Securities
        Act or any applicable state securities or “blue sky” laws; or (b) any false
        representation or warranty or any breach or failure by the Subscriber to
        comply
        with any covenant made by the Subscriber in this Agreement (including the
        Confidential Investor Questionnaire contained in Article VII herein) or any
        other document furnished by the Subscriber to any of the foregoing in connection
        with this transaction.

       

      


      II.  REPRESENTATIONS
        BY AND COVENANTS OF THE COMPANY

       

      The
        Company hereby represents and warrants to the Subscriber that:

       

      2.1  Organization,
        Good Standing and Qualification.
        The
        Company is a corporation duly organized, validly existing and in good standing
        under the laws of the State of Florida and has full corporate power and
        authority to conduct its business.

       

      2.2  Capitalization
        and Voting Rights.
        The
        authorized, issued and outstanding capital stock of the Company is as set
        forth
        in the Company’s reports filed with the Securities and Exchange Commission
        pursuant to the Securities Exchange Act of 1934 (the “34 Act Reports”) and all
        issued and outstanding shares of the Company are validly issued, fully paid
        and
        nonassessable. Except as set forth in the Offering Materials, there are no
        outstanding options, warrants, agreements, convertible securities, preemptive
        rights or other rights to subscribe for or to purchase any shares of capital
        stock of the Company. Except as set forth in the Offering Materials and as
        otherwise required by law, there are no restrictions upon the voting or transfer
        of any of the shares of capital stock of the Company pursuant to the Company’s
        Articles of Incorporation (the “Articles of Incorporation”), Bylaws or other
        governing documents or any agreement or other instruments to which the Company
        is a party or by which the Company is bound.

       

      2.3  Authorization;
        Enforceability.
        The
        Company has all corporate right, power and authority to enter into this
        Agreement and to consummate the transactions contemplated hereby. All corporate
        action on the part of the Company, its directors and stockholders necessary
        for
        the (a) authorization execution, delivery and performance of this Agreement
        by
        the Company; and (b) authorization, sale, issuance and delivery of the Shares
        contemplated hereby and the performance of the Company’s obligations hereunder
        has been taken. This Agreement has been duly executed and delivered by the
        Company and constitutes a legal, valid and binding obligation of the Company,
        enforceable against the Company in accordance with its terms, subject to
        laws of
        general application relating to bankruptcy, insolvency and the relief of
        debtors
        and rules of law governing specific performance, injunctive relief or other
        equitable remedies, and to limitations of public policy. The Shares, when
        issued
        and fully paid for in accordance with the terms of this Agreement, will be
        validly issued, fully paid and nonassessable. The issuance and sale of the
        Shares contemplated hereby will not give rise to any preemptive rights or
        rights
        of first refusal on behalf of any person which have not been waived in
        connection with this offering.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      2.4  No
        Conflict; Governmental Consents.

       

      (a)  The
        execution and delivery by the Company of this Agreement and the consummation
        of
        the transactions contemplated hereby will not result in the violation of
        any
        material law, statute, rule, regulation, order, writ, injunction, judgment
        or
        decree of any court or governmental authority to or by which the Company
        is
        bound, or of any provision of the Articles of Incorporation or Bylaws of
        the
        Company, and will not conflict with, or result in a material breach or violation
        of, any of the terms or provisions of, or constitute (with due notice or
        lapse
        of time or both) a default under, any lease, loan agreement, mortgage, security
        agreement, trust indenture or other agreement or instrument to which the
        Company
        is a party or by which it is bound or to which any of its properties or assets
        is subject, nor result in the creation or imposition of any lien upon any
        of the
        properties or assets of the Company.

       

      (b)  No
        consent, approval, authorization or other order of any governmental authority
        is
        required to be obtained by the Company in connection with the authorization,
        execution and delivery of this Agreement or with the authorization, issue
        and
        sale of the Shares, except such filings as may be required to be made with
        the
        SEC, NASD, NASDAQ and with any state or foreign blue sky or securities
        regulatory authority.

       

      2.5  Licenses.
        Except
        as otherwise set forth in the 34 Act Reports, the Company has sufficient
        licenses, permits and other governmental authorizations currently required
        for
        the conduct of its business or ownership of properties and is in all material
        respects in compliance therewith.

       

      2.6  Litigation.
        Except
        as set forth in the 34 Act Reports, the Company knows of no pending or
        threatened legal or governmental proceedings against the Company which could
        materially adversely affect the business, property, financial condition or
        operations of the Company or which materially and adversely questions the
        validity of this Agreement or any agreements related to the transactions
        contemplated hereby or the right of the Company to enter into any of such
        agreements, or to consummate the transactions contemplated hereby or thereby.
        The Company is not a party or subject to the provisions of any order, writ,
        injunction, judgment or decree of any court or government agency or
        instrumentality which could materially adversely affect the business, property,
        financial condition or operations of the Company. There is no action, suit,
        proceeding or investigation by the Company currently pending in any court
        or
        before any arbitrator or that the Company intends to initiate.

       

      2.7  Disclosure.
        The
        information set forth in the Offering Materials as of the date hereof contains
        no untrue statement of a material fact nor omits to state a material fact
        necessary in order to make the statements contained therein, in light of
        the
        circumstances under which they were made, not misleading.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      2.8  Investment
        Company.
        The
        Company is not an “investment company” within the meaning of such term under the
        Investment Company Act of 1940, as amended, and the rules and regulations
        of the
        SEC thereunder.

       

      2.9  Brokers.
        Neither
        the Company nor any of the Company's officers, directors, employees or
        stockholders has employed or engaged any broker or finder in connection with
        the
        transactions contemplated by this Agreement and no fee or other compensation
        is
        or will be due and owing to any broker, finder, underwriter, placement agent
        or
        similar person in connection with the transactions contemplated by this
        Agreement. The Company is not party to any agreement, arrangement or
        understanding whereby any person has an exclusive right to raise funds and/or
        place or purchase any debt or equity securities for or on behalf of the
        Company.

       

      2.10  Intellectual
        Property; Employees.

       

      (a)  To
        the
        best of its knowledge, the Company owns or possesses sufficient legal rights
        to
        all patents, trademarks, service marks, trade names, copyrights, trade secrets,
        licenses, information and other proprietary rights and processes necessary
        for
        its business as now conducted and as presently proposed to be conducted,
        without
        any known infringement of the rights of others. Except as disclosed in the
        Memorandum, there are no material outstanding options, licenses or agreements
        of
        any kind relating to the foregoing proprietary rights, nor is the Company
        bound
        by or a party to any material options, licenses or agreements of any kind
        with
        respect to the patents, trademarks, service marks, trade names, copyrights,
        trade secrets, licenses, information and other proprietary rights and processes
        of any other person or entity other than such licenses or agreements arising
        from the purchase of “off the shelf” or standard products. The Company has not
        received any written communications alleging that the Company has violated
        or,
        by conducting its business as presently proposed to be conducted, would violate
        any of the patents, trademarks, service marks, trade names, copyrights or
        trade
        secrets or other proprietary rights of any other person or entity. 

       

      (b)  Except
        as
        disclosed in the 34 Act Reports, the Company is not aware that any of its
        employees is obligated under any contract (including licenses, covenants
        or
        commitments of any nature) or other agreement, or subject to any judgment,
        decree or order of any court or administrative agency, that would interfere
        with
        their duties to the Company or that would conflict with the Company’s business
        as presently conducted. 

       

      (c)  Neither
        the execution nor delivery of this Agreement, nor the carrying on of the
        Company’s business by the employees of the Company, nor the conduct of the
        Company’s business as presently conducted, will, to the Company’s knowledge,
        conflict with or result in a breach of the terms, conditions or provisions
        of,
        or constitute a default under, any contract, covenant or instrument under
        which
        any employee is now obligated.

       

      (d)  To
        the
        Company’s knowledge, no employee of the Company, nor any consultant with whom
        the Company has contracted, is in violation of any term of any employment
        contract, proprietary information agreement or any other agreement relating
        to
        the right of any such individual to be employed by, or to contract with,
        the
        Company because of the nature of the business conducted by the Company; and
        to
        the Company’s knowledge the continued employment by the Company of its present
        employees, and the performance of the Company’s contracts with its independent
        contractors, will not result in any such violation. The Company has not received
        any written notice alleging that any such violation has occurred. Except
        as
        described in the Memorandum, no employee of the Company has been granted
        the
        right to continued employment by the Company or to any compensation following
        termination of employment with the Company except for any of the same which
        would not have a material adverse effect on the business of the Company.
        The
        Company is not aware that any officer, key employee or group of employees
        intends to terminate his, her or their employment with the Company, nor does
        the
        Company have a present intention to terminate the employment of any officer,
        key
        employee or group of employees.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      2.11  Title
        to Properties and Assets; Liens, Etc.
        Except
        as described in the 34 Act Reports, the Company has good and marketable title
        to
        its properties and assets, including the properties and assets reflected
        in the
        most recent balance sheet included in the Company’s financial statements, and
        good title to its leasehold estates, in each case subject to no mortgage,
        pledge, lien, lease, encumbrance or charge, other than (a) those resulting
        from
        taxes which have not yet become delinquent; (b) liens and encumbrances which
        do
        not materially detract from the value of the property subject thereto or
        materially impair the operations of the Company; and (c) those that have
        otherwise arisen in the ordinary course of business. The Company is in
        compliance with all material terms of each lease to which it is a party or
        is
        otherwise bound.

       

      2.12  Obligations
        to Related Parties.
        Except
        (i) as described in the 34 Act Reports, and (ii) the lease for our office
        premises and the M&A agreement entered with Duncan Capital, which is owned
        by Michael Crow, a shareholder of the Company, there are no obligations of
        the
        Company to officers, directors, stockholders, or employees of the Company
        other
        than (a) for payment of salary or other compensation for services rendered,
        (b)
        reimbursement for reasonable expenses incurred on behalf of the Company and
        (c)
        for other standard employee benefits made generally available to all employees
        (including stock option agreements outstanding under any stock option plan
        approved by the Board of Directors of the Company). Except as may be disclosed
        in the Memorandum, the Company is not a guarantor or indemnitor of any
        indebtedness of any other person, firm or corporation.

       

      2.13  Subsidiaries.
        The
        Company has no direct or indirect Subsidiaries other than as specified in
        the
        SEC Reports. The Company owns, directly or indirectly, all of the capital
        stock
        of each Subsidiary free and clear of any and all liens, and all the issued
        and
        outstanding shares of capital stock of each Subsidiary are validly issued
        and
        are fully paid, non-assessable and free of preemptive and similar
        rights.

       

      2.14  SEC
        Reports; Financial Statements.
        The
        Company has filed all reports required to be filed by it under the Securities
        Act and Securities Exchange Act of 1934 (the “Exchange Act”), including pursuant
        to Section 13(a) or 15(d) thereof, for the twelve months preceding the date
        hereof (or such shorter period as the Company was required by law to file
        such
        reports) (the foregoing materials being collectively referred to herein as
        the
        "SEC Reports" and, together with the Schedules to this Agreement (if any),
        the
        "Disclosure Materials") on a timely basis or has timely filed a valid extension
        of such time of filing and has filed any such SEC Reports prior to the
        expiration of any such extension. As of their respective dates, the SEC Reports
        complied in all material respects with the requirements of the Securities
        Act
        and the Exchange Act and the rules and regulations of the SEC promulgated
        thereunder, and none of the SEC Reports, when filed, 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 light
        of
        the circumstances under which they were made, not misleading. The financial
        statements of the Company included in the SEC Reports comply in all material
        respects with applicable accounting requirements and the rules and regulations
        of the SEC with respect thereto as in effect at the time of filing. Such
        financial statements have been prepared in accordance with generally accepted
        accounting principles applied on a consistent basis during the periods involved,
        except as may be otherwise specified in such financial statements or the
        notes
        thereto, and fairly present in all material respects the financial position
        of
        the Company and its consolidated Subsidiaries as of and for the dates thereof
        and the results of operations and cash flows for the periods then ended,
        subject, in the case of unaudited statements, to normal, immaterial, year-end
        audit adjustments. 

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      2.15      Press
        Releases.
        The
        press releases disseminated by the Company during the twelve months preceding
        the date of this Agreement taken as a whole do not contain any untrue statement
        of a material fact or omit to state a material fact required to be stated
        therein or necessary in order to make the statements therein, in light of
        the
        circumstances under which they were made and when made, not
        misleading.

       

      2.16    
        Material
        Changes.
        Since
        the date of the latest audited financial statements included within the SEC
        Reports, except as specifically disclosed in the SEC Reports, (i) there has
        been
        no event, occurrence or development that has had or that could reasonably
        be
        expected to result in a material adverse effect, (ii) the Company has not
        incurred any liabilities (contingent or otherwise) other than (A) trade
        payables, accrued expenses and other liabilities incurred in the ordinary
        course
        of business consistent with past practice and (B) liabilities not required
        to be
        reflected in the Company's financial statements pursuant to generally accepted
        accounting principles or required to be disclosed in filings made with the
        SEC,
        (iii) the Company has not altered its method of accounting or the identity
        of
        its auditors, (iv) the Company has not declared or made any dividend or
        distribution of cash or other property to its stockholders or purchased,
        redeemed or made any agreements to purchase or redeem any shares of its capital
        stock, and (v) the Company has not issued any equity securities to any officer,
        director or affiliate, except pursuant to existing Company stock option plans.
        The Company does not have pending before the SEC any request for confidential
        treatment of information.

       

      2.17    
        Labor
        Relations.
        No
        material labor dispute exists or, to the knowledge of the Company, is imminent
        with respect to any of the employees of the Company.

       

      2.18   
        Compliance.
        The
        Company is in compliance with all effective requirements of the Sarbanes-Oxley
        Act of 2002, as amended, and the rules and regulations thereunder, that are
        applicable to it, except where such noncompliance could not have or reasonably
        be expected to result in a material adverse effect.

       

      2.19   
        Insurance.
        The
        Company and the Subsidiaries are insured by insurers of recognized financial
        responsibility against such losses and risks and in such amounts as are prudent
        and customary in the businesses in which the Company and the Subsidiaries
        are
        engaged. The Company has no reason to believe that it will not be able to
        renew
        its and the Subsidiaries’ existing insurance coverage as and when such coverage
        expires or to obtain similar coverage from similar insurers as may be necessary
        to continue its business on terms consistent with market for the Company’s and
        such Subsidiaries’ respective lines of business.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      2.20   
        Internal
        Accounting Controls.
        The
        Company and the Subsidiaries maintain a system of internal accounting controls
        sufficient to provide reasonable assurance that (i) transactions are executed
        in
        accordance with management's general or specific authorizations, (ii)
        transactions are recorded as necessary to permit preparation of financial
        statements in conformity with generally accepted accounting principles and
        to
        maintain asset accountability, (iii) access to assets is permitted only in
        accordance with management's general or specific authorization, and (iv)
        the
        recorded accountability for assets is compared with the existing assets at
        reasonable intervals and appropriate action is taken with respect to any
        differences. The Company has established disclosure controls and procedures
        (as
        defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
        designed such disclosure controls and procedures to ensure that material
        information relating to the Company, including its Subsidiaries, is made
        known
        to the certifying officers by others within those entities, particularly
        during
        the period in which the Company’s Form 10-K or 10-Q, as the case may be, is
        being prepared. The Company's certifying officers have evaluated the
        effectiveness of the Company's controls and procedures in accordance with
        Item
        307 of Regulation S-K under the Exchange Act for the Company’s most recently
        ended fiscal quarter or fiscal year-end (such date, the "Evaluation Date").
        The
        Company presented in its most recently filed Form 10-K or Form 10-Q the
        conclusions of the certifying officers about the effectiveness of the disclosure
        controls and procedures based on their evaluations as of the Evaluation Date.
        Since the Evaluation Date, there have been no significant changes in the
        Company’s internal controls (as such term is defined in Item 308(c) of
        Regulation S-K under the Exchange Act) or, to the Company's knowledge, in
        other
        factors that could significantly affect the Company's internal
        controls.

       

      2.21   
        Solvency.
        Based
        on the financial condition of the Company as of the closing date (and assuming
        that the closing shall have occurred), (i) the Company's fair saleable value
        of
        its assets exceeds the amount that will be required to be paid on or in respect
        of the Company's existing debts and other liabilities (including known
        contingent liabilities) as they mature, (ii) the Company's assets do not
        constitute unreasonably small capital to carry on its business for the current
        fiscal year as now conducted and as proposed to be conducted including its
        capital needs taking into account the particular capital requirements of
        the
        business conducted by the Company, and projected capital requirements and
        capital availability thereof, and (iii) the current cash flow of the Company,
        together with the proceeds the Company would receive, were it to liquidate
        all
        of its assets, after taking into account all anticipated uses of the cash,
        would
        be sufficient to pay all amounts on or in respect of its debt when such amounts
        are required to be paid. The Company does not intend to incur debts beyond
        its
        ability to pay such debts as they mature (taking into account the timing
        and
        amounts of cash to be payable on or in respect of its debt).

       

      2.22   
        Certain
        Registration Matters.
        Assuming the accuracy of the Subscribers’ representations and warranties, no
        registration under the Securities Act is required for the offer and sale
        of the
        Shares by the Company to the Subscribers under the Agreement. The Company
        is
        eligible to register the resale of its common stock issuable upon conversion
        of
        the Preferred Stock for resale by the Subscribers under Form SB-2 promulgated
        under the Securities Act. 

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      2.23   
        Listing
        and Maintenance Requirements.
        Except
        as specified in the SEC Reports, the Company has not, in the two years preceding
        the date hereof, received notice from any trading market to the effect that
        the
        Company is not in compliance with the listing or maintenance requirements
        thereof. The Company is, and has no reason to believe that it will not in
        the
        foreseeable future continue to be, in compliance with the listing and
        maintenance requirements for continued listing of the common stock on the
        trading market on which the common stock is currently listed or quoted. The
        issuance and sale of the Shares under the Agreement does not contravene the
        rules and regulations of the trading market on which the common stock is
        currently listed or quoted, and no approval of the shareholders of the Company
        thereunder is required for the Company to issue and deliver to the Subscribers
        the Shares contemplated by this Agreement.

       

      2.24  
        Application
        of Takeover Protections.
        The
        Company has taken all necessary action, if any, in order to render inapplicable
        any control share acquisition, business combination, poison pill (including
        any
        distribution under a rights agreement) or other similar anti-takeover provision
        under the Company's Certificate of Incorporation (or similar charter documents)
        or the laws of its state of incorporation that is or could become applicable
        to
        the Subscribers as a result of the Subscribers and the Company fulfilling
        their
        obligations or exercising their rights under this Agreement, including, without
        limitation, the Company's issuance of the Shares and the Subscribers' ownership
        of the Shares.

       

      2.25  
        No
        Additional Agreements.
        The
        Company does not have any agreement or understanding with any Subscribers
        with
        respect to the transactions contemplated by this Agreement other than as
        specified in this Agreement.

       

      III.  TERMS
        OF SUBSCRIPTION

       

      3.1  All
        funds
        shall be submitted directly to the Company’s account identified in Section 1.1
        hereof. 

       

      3.2  Certificates
        representing the Series C Cumulative Convertible Preferred Stock purchased
        by
        the Subscriber pursuant to this Agreement will be prepared for delivery to
        the
        Subscriber within 10 business days following the closing at which such purchase
        takes place. The Subscriber hereby authorizes and directs the Company to
        deliver
        the certificates representing the Series C Cumulative Convertible Preferred
        Stock purchased by the Subscriber pursuant to this Agreement directly to
        the
        Subscriber’s residential or business address indicated on the signature page
        hereto. 

       

      IV.  CONDITIONS
        TO OBLIGATIONS OF THE SUBSCRIBERS

       

      4.1  The
        Subscriber’s obligation to purchase the Shares at the closing at which such
        purchase is to be consummated is subject to the fulfillment on or prior to
        such
        closing of the following conditions, which conditions may be waived at the
        option of each Subscriber to the extent permitted by law:

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (a)  Covenants.
        All
        covenants, agreements and conditions contained in this Agreement to be performed
        by the Company on or prior to the date of such closing shall have been performed
        or complied with in all material respects.

       

      (b)  No
        Legal Order Pending.
        There
        shall not then be in effect any legal or other order enjoining or restraining
        the transactions contemplated by this Agreement.

       

      (c)  No
        Law
        Prohibiting or Restricting Such Sale.
        There
        shall not be in effect any law, rule or regulation prohibiting or restricting
        such sale or requiring any consent or approval of any person, which shall
        not
        have been obtained, to issue the Shares (except as otherwise provided in
        this
        Agreement).

       

      (d)    
        Adverse
        Changes.
        Since
        the date of execution of this Agreement, no event or series of events shall
        have
        occurred that reasonably could have or result in a material adverse
        effect.

       

      (e)    
        No
        Suspensions of Trading in Common Stock; Listing.
        Trading
        in the common stock shall not have been suspended by the SEC or any trading
        market (except for any suspensions of trading of not more than one trading
        day
        solely to permit dissemination of material information regarding the Company)
        at
        any time since the date of execution of this Agreement, and the common stock
        shall have been at all times since such date listed for trading on a trading
        market.

       

      (f)      
        Legal
        Opinion.
        Counsel
        to the Company shall issue a legal opinion to the Subscribers in a form
        acceptable to the Subscribers.

      


      V.  REGISTRATION
        RIGHTS

       

      5.1  Definitions.
        As used
        in this Agreement, the following terms shall have the following
        meanings.

       

      (a)  The
        term
“Holder” shall mean any person owning or having the right to acquire Registrable
        Securities or any permitted transferee of a Holder.

       

      (b)  The
        terms
“register,”“registered” and “registration” refer to a registration effected by
        preparing and filing a registration statement or similar document in compliance
        with the Securities Act, and the declaration or order of effectiveness of
        such
        registration statement or document.

       

      (c)  The
        term
“Registrable Securities” shall mean the common shares of stock issuable upon
        conversion of the Preferred Stock, the common shares issued or issuable in
        connection with a Semi-Annual Dividend for a period of three years and any
        securities issued or issuable upon any stock split, dividend or other
        distribution, recapitalization or similar event, or any conversion price
        adjustment with respect to the Preferred Stock; provided, however, that
        securities shall only be treated as Registrable Securities if and only for
        so
        long as they (A) have not been disposed of pursuant to a registration statement
        declared effective by the SEC; (B) have not been sold in a transaction exempt
        from the registration and prospectus delivery requirements of the Securities
        Act
        so that all transfer restrictions and restrictive legends with respect thereto
        are removed upon the consummation of such sale; (C) are held by a Holder
        or a
        permitted transferee of a Holder pursuant to Section 5.11; and (D) may not
        be
        disposed of under Rule 144(k) under the Securities Act without restriction.
        

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      5.2       
        Mandatory
        Registration.

      


      The
        Company shall prepare, and, within sixty (60) days following the final closing
        of this offering (the “Filing
        Date”),
        will
        file with the SEC a registration statement on Form S-3 (or, if Form S-3 is
        not
        then available, on such form of registration statement as is then available
        to
        effect a registration of the Registrable Securities) covering the resale
        of the
        Registrable Securities. The Company shall use its best efforts to obtain
        effectiveness of the registration statement as soon as practicable. If the
        registration statement covering the Registrable Securities required to be
        filed
        by the Company pursuant to this Section 5.2 hereof is not filed by the Filing
        Date or declared effective by the SEC on or prior to one hundred twenty (120)
        days from the Filing Date, then the Company will make payments to the
        Subscribers in such amounts and at such times as shall be determined pursuant
        to
        this Section 5.2 as partial relief for the damages to the Subscribers by
        reason
        of any such delay in or reduction of their ability to sell the Registrable
        Securities (which remedy shall not be exclusive of any other remedies available
        at law or in equity). The Company shall pay to each holder of the Preferred
        Stock or Registrable Securities an amount equal to the then outstanding Stated
        Value of the Preferred Stock, as defined in the Certificate of Designation
        (“Outstanding Stated Value”), multiplied by the Applicable Percentage (as
        defined below) times the number of months (prorated for partial months) after
        the Filing Date or the end of the aforementioned one hundred twenty (120)
        day
        period and prior to the date the registration statement is declared effective
        by
        the SEC, provided, however, that there shall be excluded from such period
        any
        delays which are solely attributable to changes required by the Subscribers
        in
        the registration statement with respect to information relating to the
        Subscribers, including, without limitation, changes to the plan of distribution.
        The term “Applicable Percentage” means one hundredth (.01). (For example, if the
        registration statement becomes effective one (1) month after the end of such
        one
        hundred twenty (120) day period, the Company would pay $2,500 for each $250,000
        of Outstanding Stated Value. If thereafter, sales could not be made pursuant
        to
        the registration statement for an additional period of one (1) month, the
        Company would pay an additional $2,500 for each $250,000 of Outstanding Stated
        Value.) Such amounts shall be paid in cash or, at the Company’s option, in
        shares of Common Stock. In the event that the Company elects to issue shares
        of
        Common Stock, such shares shall be determined by dividing the penalty amount
        by
        98% of the volume-weighted average price of the common stock for the 20 trading
        days immediately prior to the dividend date (the “Dividend
        VWAP”);
        provided, however, if we are unable to determine the Dividend VWAP, then
        such
        payment shall be determined by dividing the penalty amount by the average
        of the
        three highest closing bid prices during the 20 trading days immediately
        preceding the penalty date.

      


      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      5.3  Piggyback
        Registration.

       

      (a)  The
        Company agrees that if, at any time, and from time to time, after the closing,
        the Board of Directors of the Company (the “Board”) shall authorize the filing
        of a registration statement under the Securities Act (other than a registration
        statement on Form S-8, Form S-4 or any other form that does not include
        substantially the same information as would be required in a form for the
        general registration of securities) in connection with the proposed offer
        of any
        of its securities by it or any of its stockholders, the Company shall: (A)
        promptly notify each Holder that such registration statement will be filed
        and
        that the Registrable Securities then held by such Holder will be included
        in
        such registration statement at such Holder’s request; (B) cause such
        registration statement to cover all of such Registrable Securities issued
        to
        such Holder for which such Holder requests inclusion; (C) use best efforts
        to
        cause such registration statement to become effective as soon as practicable;
        and (D) take all other reasonable action necessary under any federal or state
        law or regulation of any governmental authority to permit all such Registrable
        Securities that have been issued to such Holder to be sold or otherwise disposed
        of, and will maintain such compliance with each such federal and state law
        and
        regulation of any governmental authority for the period necessary for such
        Holder to promptly effect the proposed sale or other disposition.

       

      (b)  Notwithstanding
        any other provision of this Section 5.3, the Company may at any time, abandon
        or
        delay any registration commenced by the Company. In the event of such an
        abandonment by the Company, the Company shall not be required to continue
        registration of shares requested by the Holder for inclusion, the Holder
        shall
        retain the right to request inclusion of shares as set forth above and the
        withdrawn registration shall not be deemed to be a registration request for
        the
        purposes of Section 5.3(c) below.

       

      (c)  Each
        Holder shall have the right to request inclusion of any of its Registrable
        Securities in a registration statement as described in this Section 5.3,
        up to
        three times.

       

      5.4  Registration
        Procedures.
        Whenever required under this Article V to include Registrable Securities
        in a
        Company registration statement, the Company shall, as expeditiously as
        reasonably possible:

       

      (a)  Use
        best
        efforts to (i) cause such registration statement to become effective, and
        (ii)
        cause such registration statement to remain effective until the earliest
        to
        occur of (A) such date as the sellers of Registrable Securities (the “Selling
        Holders”) have completed the distribution described in the registration
        statement and (B) such time that all of such Registrable Securities are no
        longer, by reason of Rule 144(k) under the Securities Act, required to be
        registered for the sale thereof by such Holders. The Company will also use
        its
        best efforts to, during the period that such registration statement is required
        to be maintained hereunder, file such post-effective amendments and supplements
        thereto as may be required by the Securities Act and the rules and regulations
        thereunder or otherwise to ensure that the registration statement does not
        contain any untrue statement of material fact or omit to state a fact required
        to be stated therein or necessary to make the statements contained therein,
        in
        light of the circumstances under which they are made, not misleading; provided,
        however, that if applicable rules under the Securities Act governing the
        obligation to file a post-effective amendment permits, in lieu of filing
        a
        post-effective amendment that (i) includes any prospectus required by Section
        10(a)(3) of the Securities Act or (ii) reflects facts or events representing
        a
        material or fundamental change in the information set forth in the registration
        statement, the Company may incorporate by reference information required
        to be
        included in (i) and (ii) above to the extent such information is contained
        in
        periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act
        in
        the registration statement. 

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (b)  Prepare
        and file with the SEC such amendments and supplements to such registration
        statement, and the prospectus used in connection with such registration
        statement, as may be necessary to comply with the provisions of the Securities
        Act with respect to the disposition of all securities covered by such
        registration statement.

       

      (c)  Make
        available for inspection upon reasonable notice during the Company’s regular
        business hours by each Selling Holder, any underwriter participating in any
        distribution pursuant to such registration statement, and any attorney,
        accountant or other agent retained by such Selling Holder or underwriter,
        all
        financial and other records, pertinent corporate documents and properties
        of the
        Company, and cause the Company’s officers, directors and employees to supply all
        information reasonably requested by any such Selling Holder, underwriter,
        attorney, accountant or agent in connection with such registration
        statement.

       

      (d)  Furnish
        to the Selling Holders such numbers of copies of a final prospectus, in
        conformity with the requirements of the Securities Act, and such other documents
        as they may reasonably request in order to facilitate the disposition of
        Registrable Securities owned by them.

       

      (e)  Use
        best
        efforts to register and qualify the securities covered by such registration
        statement under such other federal or state securities laws of such
        jurisdictions as shall be reasonably requested by the Selling Holders; provided,
        however, that the Company shall not be required in connection therewith or
        as a
        condition thereto to qualify to do business or to file a general consent
        to
        service of process in any such states or jurisdictions, unless the Company
        is
        already subject to service in such jurisdiction and except as may be required
        by
        the Securities Act.

       

      (f)  In
        the
        event of any underwritten public offering, enter into and perform its
        obligations under an underwriting agreement, in usual and customary form,
        with
        the managing underwriter of such offering. Each Selling Holder participating
        in
        such underwriting shall also enter into and perform its obligations under
        such
        an agreement.

       

      (g)  Notify
        each Holder of Registrable Securities covered by such registration statement,
        at
        any time when a prospectus relating thereto is required to be delivered under
        the Securities Act within one (1) business day of receipt, (i) when the
        registration statement or any post-effective amendment and supplement thereto
        has become effective; (ii) of the issuance by the SEC of any stop order or
        the
        initiation of proceedings for that purpose (in which event the Company shall
        make every effort to obtain the withdrawal of any order suspending effectiveness
        of the registration statement at the earliest possible time or prevent the
        entry
        thereof); (iii) of the receipt by the Company of any notification with respect
        to the suspension of the qualification of the Registrable Securities for
        sale in
        any jurisdiction or the initiation of any proceeding for such purpose; and
        (iv)
        of the happening of any event as a result of which the prospectus included
        in
        such registration statement, as then in effect, includes an untrue statement
        of
        a material fact or omits to state a material fact required to be stated therein
        or necessary to make the statements therein not misleading in the light of
        the
        circumstances then existing.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (h)  Cause
        all
        such Registrable Securities registered hereunder to be listed on each securities
        exchange or quotation service on which similar securities issued by the Company
        are then listed or quoted or, if no such similar securities are listed or
        quoted
        on a securities exchange or quotation service, apply for qualification and
        use
        best efforts to qualify such Registrable Securities for inclusion on the
        New
        York Stock Exchange, American Stock Exchange or listing on a quotation system
        of
        the National Association of Securities Dealers, Inc.

       

      (i)  Cooperate
        with the Selling Holders and the managing underwriters, if any, to facilitate
        the timely preparation and delivery of certificates representing the Registrable
        Securities to be sold, which certificates will not bear any restrictive legends;
        and enable such Registrable Securities to be in such denominations and
        registered in such names as the managing underwriters, if any, shall request
        at
        least five business days prior to any sale of the Registrable Securities
        to the
        underwriters.

       

      (j)  In
        connection with an underwritten offering, cause the officers of the Company
        to
        provide reasonable assistance in the preparation of, any “road show”
        presentation to potential investors as the managing underwriter may determine.
        

       

      (k)  Comply
        with all applicable rules and regulations of the SEC and make generally
        available to its security holders earning statements satisfying the provisions
        of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
        rule promulgated under the Securities Act) no later than 50 calendar days
        after
        the end of any 3-month period (or 105 calendar days after the end of any
        12-month period if such period is a fiscal year) (i) commencing at the end
        of
        any fiscal quarter in which Registrable Securities are sold to underwriters
        in a
        firm commitment or best efforts underwritten offering, and (ii) if not sold
        to
        underwriters in such an offering, commencing on the first day of the first
        fiscal quarter of the Company, after the effective date of a registration
        statement, which statements shall cover said period.

       

      (l)  If
        the
        offering is underwritten and at the request of any Selling Holder, use its
        best
        efforts to furnish on the date that Registrable Securities are delivered
        to the
        underwriters for sale pursuant to such registration: (i) opinions dated such
        date of counsel representing the Company for the purposes of such registration,
        addressed to the underwriters and the transfer agent for the Registrable
        Securities so delivered, respectively, to the effect that such registration
        statement has become effective under the Securities Act and such Registrable
        Securities are freely tradable, and covering such other matters as are
        customarily covered in opinions of issuer’s counsel delivered to underwriters
        and transfer agents in underwritten public offerings and (ii) a letter dated
        such date from the independent public accountants who have certified the
        financial statements of the Company included in the registration statement
        or
        the prospectus, covering such matters as are customarily covered in accountants’
        letters delivered to underwriters in underwritten public offerings.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

       5.5  Furnish
        Information.
        It
        shall be a condition precedent to the obligation of the Company to take any
        action pursuant to this Article V with respect to the Registrable Securities
        of
        any Selling Holder that such Holder shall furnish to the Company such
        information regarding the Holder, the Registrable Securities held by the
        Holder,
        and the intended method of disposition of such securities as shall be reasonably
        required by the Company to effect the registration of such Holder’s Registrable
        Securities.

       

      5.6  Registration
        Expenses.
        The
        Company shall bear and pay all Registration Expenses incurred in connection
        with
        any registration, filing or qualification of Registrable Securities with
        respect
        to registrations pursuant to Section V for each Holder, but excluding
        underwriting discounts and commissions relating to Registrable Securities
        and
        excluding any professional fees or costs of accounting, financial or legal
        advisors to any of the Holders.

       

      5.7  Underwriting
        Requirements.
        In
        connection with any offering involving an underwriting of shares of the
        Company’s capital stock, the Company shall not be required under Section 5.3 to
        include any of the Holders’ Registrable Securities in such underwriting unless
        they accept the terms of the underwriting as agreed upon between the Company
        and
        the underwriters selected by it (or by other persons entitled to select the
        underwriters), and then only in such quantity as the underwriters determine
        in
        their sole discretion will not jeopardize the success of the offering by
        the
        Company. If the total amount of securities, including Registrable Securities,
        requested by stockholders to be included in such offering exceeds the amount
        of
        securities sold other than by the Company that the underwriters determine
        in
        their sole discretion is compatible with the success of the offering, then
        the
        Company shall be required to include in the offering only that number of
        such
        securities, including Registrable Securities, which the underwriters determine
        in their sole discretion will not jeopardize the success of the offering
        (the
        securities so included to be apportioned pro rata among the selling stockholders
        according to the total amount of securities entitled to be included therein
        owned by each selling stockholder or in such other proportions as shall mutually
        be agreed to by such selling stockholders). For purposes of the preceding
        parenthetical concerning apportionment, for any selling stockholder who is
        a
        holder of Registrable Securities and is a partnership or corporation, the
        partners, retired partners and stockholders of such holder, or the estates
        and
        family members of any such partners and retired partners and any trusts for
        the
        benefit of any of the foregoing persons shall be deemed to be a single “selling
        stockholder,” and any pro-rata reduction with respect to such “selling
        stockholder” shall be based upon the aggregate amount of shares carrying
        registration rights owned by all entities and individuals included in such
        “selling stockholder,” as defined in this sentence.

       

      5.8  Delay
        of Registration.
        No
        Holder shall have any right to obtain or seek an injunction restraining or
        otherwise delaying any such registration as the result of any controversy
        that
        might arise with respect to the interpretation or implementation of this
        Article. 

       

      5.9  Indemnification.
        In the
        event that any Registrable Securities are included in a registration statement
        under this Article V:

       

      (a)  To
        the
        extent permitted by law, the Company will indemnify and hold harmless each
        Holder, any underwriter (as defined in the Securities Act) for such Holder
        and
        each person, if any, who controls such Holder or underwriter within the meaning
        of the Securities Act or the Exchange Act, against any losses, claims, damages,
        or liabilities (joint or several) to which they may become subject under
        the
        Securities Act, or the Exchange Act, insofar as such losses, claims, damages,
        or
        liabilities (or actions in respect thereof) arise out of or are based upon
        any
        of the following statements, omissions or violations (collectively a
“Violation”): (i) any untrue statement of a material fact contained in such
        registration statement, including any preliminary prospectus or final prospectus
        contained therein or any amendments or supplements thereto, (ii) the omission
        to
        state therein a material fact required to be stated therein, or necessary
        to
        make the statements therein not misleading, or (iii) any violation by the
        Company of the Securities Act, the Exchange Act, or any rule or regulation
        promulgated under the Securities Act, or the Exchange Act, and the Company
        will
        pay to each such Holder, underwriter or controlling person, as incurred,
        any
        legal or other expenses reasonably incurred by them in connection with
        investigating or defending any such loss, claim, damage, liability, or action;
        provided, however, that the indemnity agreement contained in this Section
        5.9(a)
        shall not apply to amounts paid in settlement of any such loss, claim, damage,
        liability, or action if such settlement is effected without the consent of
        the
        Company (which consent shall not be unreasonably withheld), nor shall the
        Company be liable in any such case for any such loss, claim, damage, liability,
        or action to the extent that it arises out of or is based upon a Violation
        which
        occurs in reliance upon and in conformity with written information furnished
        expressly for use in connection with such registration by any such Holder,
        underwriter or controlling person.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (b)  To
        the
        extent permitted by law, each Selling Holder will indemnify and hold harmless
        the Company, each of its directors, each of its officers, each person, if
        any,
        who controls the Company within the meaning of the Securities Act, any
        underwriter, any other Holder selling securities in such registration statement
        and any controlling person of any such underwriter or other Holder, against
        any
        losses, claims, damages, or liabilities (joint or several) to which any of
        the
        foregoing persons may become subject, under the Securities Act, or the Exchange
        Act, insofar as such losses, claims, damages, or liabilities (or actions
        in
        respect thereto) arise out of or are based upon any Violation, in each case
        to
        the extent (and only to the extent) that such Violation occurs in reliance
        upon
        and in conformity with written information furnished by such Holder expressly
        for use in connection with such registration; and each such Holder will pay,
        as
        incurred, any legal or other expenses reasonably incurred by any person intended
        to be indemnified pursuant to this Section 5.9(b), in connection with
        investigating or defending any such loss, claim, damage, liability, or action;
        provided,
        however,
        that
        the indemnity agreement contained in this Section 5.9(b) shall not apply
        to
        amounts paid in settlement of any such loss, claim, damage, liability or
        action
        if such settlement is effected without the consent of the Holder, which consent
        shall not be unreasonably withheld.

       

      (c)  Promptly
        after receipt by an indemnified party under this Section 5.9 of notice of
        the
        commencement of any action (including any governmental action), such indemnified
        party shall, if a claim in respect thereof is to be made against any
        indemnifying party under this Section 5.9, deliver to the indemnifying party
        a
        written notice of the commencement thereof and the indemnifying party shall
        have
        the right to participate in, and, to the extent the indemnifying party so
        desires, jointly with any other indemnifying party similarly notified, to
        assume
        the defense thereof with counsel selected by the indemnifying party and approved
        by the indemnified party (whose approval shall not be unreasonably withheld);
        provided, however, that an indemnified party (together with all other
        indemnified parties which may be represented without conflict by one counsel)
        shall have the right to retain one separate counsel, with the fees and expenses
        to be paid by the indemnifying party, if representation of such indemnified
        party by the counsel retained by the indemnifying party would be inappropriate
        due to actual or potential differing interests between such indemnified party
        and any other party represented by such counsel in such proceeding. The failure
        to deliver written notice to the indemnifying party within a reasonable time
        of
        the commencement of any such action, if prejudicial to its ability to defend
        such action, shall relieve such indemnifying party of any liability to the
        indemnified party under this Section 5.9, but the omission so to deliver
        written
        notice to the indemnifying party will not relieve it of any liability that
        it
        may have to any indemnified party otherwise than under this Section
        5.9.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (d)  If
        the
        indemnification provided for in this Section 5.9 is held by a court of competent
        jurisdiction to be unavailable to an indemnified party with respect to any
        loss,
        liability, claim, damage, or expense referred to therein, then the indemnifying
        party, in lieu of indemnifying such indemnified party hereunder, shall
        contribute to the amount paid or payable by such indemnified party as a result
        of such loss, liability, claim, damage, or expense in such proportion as
        is
        appropriate to reflect the relative fault of the indemnifying party on the
        one
        hand and of the indemnified party on the other in connection with the statements
        or omissions that resulted in such loss, liability, claim, damage, or expense
        as
        well as any other relevant equitable considerations. The relative fault of
        the
        indemnifying party and of the indemnified party shall be determined by reference
        to, among other things, whether the untrue or alleged untrue statement of
        a
        material fact or the alleged omission to state a material fact relates to
        information supplied by the indemnifying party or by the indemnified party
        and
        the parties’ relative intent, knowledge, access to information, and opportunity
        to correct or prevent such statement or omission.

       

      (e)  Notwithstanding
        the foregoing, to the extent that the provisions on indemnification and
        contribution contained in an underwriting agreement entered into in connection
        with an underwritten public offering are in conflict with the foregoing
        provisions, the provisions in such underwriting agreement shall
        control.

       

      (f)  The
        obligations of the Company and Holders under this Section 5.9 shall survive
        the
        completion of the Offering.

       

      5.10  Reports
        Under Securities Exchange Act of 1934.
        With a
        view to making available to the Holders the benefits of Rule 144 and any
        other
        rule or regulation of the SEC that may at any time permit a Holder to sell
        securities of the Company to the public without registration or pursuant
        to a
        registration on Form S-3 (or other applicable form), the Company agrees
        to:

       

      (a)  file
        with
        the SEC all reports and other documents required of the Company under the
        Securities Act and the Exchange Act; and

       

      (b)  furnish
        to any Holder, so long as the Holder owns any Registrable Securities, forthwith
        upon request (i) a copy of the most recent annual or quarterly report of
        the
        Company and such other reports and documents so filed by the Company, and
        (ii)
        such other information as may be reasonably requested in availing any Holder
        of
        any rule or regulation of the SEC which permits the selling of any such
        securities without registration or pursuant to such form.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      5.11  Permitted
        Transferees.
        The
        rights to cause the Company to register Registrable Securities granted to
        the
        Holders by the Company under this Article V may be assigned in full by a
        Holder
        in connection with a transfer by such Holder of its Registrable Securities
        if:
        (a) such Holder gives prior written notice to the Company; (b) such
        transferee agrees to comply with the terms and provisions of this Agreement;
        (c) such transfer is otherwise in compliance with this Agreement;
        and
        (d) such transfer is otherwise effected in accordance with applicable
        securities laws. 

       

      5.12  Termination
        of Registration Rights
        The
        right of any Holder to request inclusion in any registration pursuant to
        Section
        V shall terminate if all shares of Registrable Securities held by such Holder
        may immediately be sold under Rule 144(k).

       

      
        	VI.  	
                MISCELLANEOUS

              


      

       

      6.1  Any
        notice or other communication given hereunder shall be deemed sufficient
        if in
        writing and sent by registered or certified mail, return receipt requested,
        or
delivered
        by hand against written receipt therefor, addressed as follows:

       

      if
        to the
        Company, to it at:

      National
        Investment Managers Inc.

      830
        Third
        Avenue, 14th
        Floor

      New
        York,
        New York 10022 

      Attn:
        Leonard A. Neuhaus, CFO

      


      With
        a
        copy to (which shall not constitute notice):

      


      Sichenzia
        Ross Friedman Ference LLP

      1065
        Avenue of the Americas

      New
        York,
        NY 10018

      Attn:
        Gregory Sichenzia, Esq.

      


      if
        to the
        Subscriber, to the Subscriber’s address indicated on the signature page of this
        Agreement.

       

      Notices
        shall be deemed to have been given or delivered on the date of
        receipt.

       

      6.2  Except
        as
        otherwise provided herein, this Agreement shall not be changed, modified
        or
        amended except by a writing signed by the parties to be charged, and this
        Agreement
        may not
        be discharged except by performance in accordance with its terms or by a
        writing
        signed by the party to be charged.

       

      6.3  Subject
        to the provisions of Section 5.11, this Agreement shall be binding upon and
        inure to the benefit of the parties hereto and to their respective heirs,
        legal
        representatives, successors and assigns. This Agreement sets forth the entire
        agreement and understanding between the parties as to the subject matter
        hereof
        and merges and supersedes all prior discussions, agreements and understandings
        of any and every nature among them.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      6.4  Upon
        the
        execution and delivery of this Agreement by the Subscriber, this Agreement
        shall
        become a binding obligation of the Subscriber with respect to the purchase
        of
        Shares as herein provided, subject, however, to the right hereby reserved
        by the
        Company to enter into the same agreements with other subscribers and to add
        and/or delete other persons as subscribers. 

       

      6.5  NOTWITHSTANDING
        THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO,
        THE
        PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE
        CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
        YORK
        WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT
        A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES
        ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE COURTS STATE OF NEW YORK
        IN
        AND FOR THE COUNTY OF NEW YORK OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY,
        AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT
        TO THE
        JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE. 

       

      6.6  In
        order
        to discourage frivolous claims the parties agree that unless a claimant in
        any
        proceeding arising out of this Agreement succeeds in establishing his claim
        and
        recovering a judgment against another party (regardless of whether such claimant
        succeeds against one of the other parties to the action), then the other
        party
        shall be entitled to recover from such claimant all of its/their reasonable
        legal costs and expenses relating to such proceeding and/or incurred in
        preparation therefor.

       

      6.7  The
        holding of any provision of this Agreement to be invalid or unenforceable
        by a
        court of competent jurisdiction shall not affect any other provision of this
        Agreement, which shall remain in full force and effect. If any provision
        of this
        Agreement shall be declared by a court of competent jurisdiction to be invalid,
        illegal or incapable of being enforced in whole or in part, such provision
        shall
        be interpreted so as to remain enforceable to the maximum extent permissible
        consistent with applicable law and the remaining conditions and provisions
        or
        portions thereof shall nevertheless remain in full force and effect and
        enforceable to the extent they are valid, legal and enforceable, and no
        provisions shall be deemed dependent upon any other covenant or provision
        unless
        so expressed herein.

       

      6.8  It
        is
        agreed that a waiver by either party of a breach of any provision of this
        Agreement shall not operate, or be construed, as a waiver of any subsequent
        breach by that same party.

       

      6.9  The
        Company agrees to execute and deliver all such further documents, agreements
        and
        instruments and take such other and further action as may be necessary or
        appropriate to carry out the purposes and intent of this Agreement.

       

      6.10  This
        Agreement may be executed in two or more counterparts each of which shall
        be
        deemed an original, but all of which shall together constitute one and the
        same
        instrument.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      6.11  Nothing
        in this Agreement shall create or be deemed to create any rights in any person
        or entity not a party to this Agreement, except for the holders of Registrable
        Securities.

       

      6.12     
        Integration.
        The
        Company shall not, and shall use its best efforts to ensure that no affiliate
        of
        the Company shall, sell, offer for sale or solicit offers to buy or otherwise
        negotiate in respect of any security (as defined in Section 2 of the Securities
        Act) that would be integrated with the offer or sale of the Shares in a manner
        that would require the registration under the Securities Act of the sale
        of the
        Shares to the Subscribers, or that would be integrated with the offer or
        sale of
        the Shares for purposes of the rules and regulations of any trading market
        in a
        manner that would require stockholder approval of the sale of the securities
        to
        the Subscribers.

       

      6.13     
        Listing
        of Securities.
        The
        Company agrees, (i) if the Company applies to have the common stock traded
        on
        any other trading market, it will include in such application the Shares,
        and
        will take such other action as is necessary or desirable to cause the Shares
        to
        be listed on such other trading market as promptly as possible, and (ii)
        it will
        take all action reasonably necessary to continue the listing and trading
        of its
        common stock on a trading market and will comply in all material respects
        with
        the Company’s reporting, filing and other obligations under the bylaws or rules
        of the trading market.

       

      6.14     
        Reservation
        of Shares.
        The
        Company shall maintain a reserve from its duly authorized shares of common
        stock
        to comply with its conversion obligations under the Shares. If on any date
        the
        Company would be, if notice of conversion were to be delivered on such date,
        precluded from issuing the number of shares of common stock, as the case
        may be,
        issuable upon conversion in full of the Shares (in each case, without regard
        to
        any conversion or exercise caps or other limitation thereunder), due to the
        unavailability of a sufficient number of authorized but unissued or reserved
        shares of common stock, then the Board of Directors of the Company shall
        promptly prepare and mail to the stockholders of the Company proxy materials
        or
        other applicable materials requesting authorization to amend the Company’s
        certificate of incorporation or other organizational document to increase
        the
        number of shares of common stock which the Company is authorized to issue
        so as
        to provide enough shares for issuance of the shares of common stock issuable
        upon conversion of the Shares. In connection therewith, the Board of Directors
        shall (a) adopt proper resolutions authorizing such increase, (b) recommend
        to
        and otherwise use its best efforts to promptly and duly obtain stockholder
        approval (including the hiring of a nationally recognized proxy solicitor
        firm)
        to carry out such resolutions (and hold a special meeting of the stockholders
        as
        soon as practicable, but in any event not later than the 60th
        day
        after delivery of the proxy or other applicable materials relating to such
        meeting) and (c) within five business days of obtaining such stockholder
        authorization, file an appropriate amendment to the Company’s certificate of
        incorporation or other organizational document to evidence such
        increase.

       

      6.15      
        Conversion
        Procedures.
        The
        form of Notice of Conversion included in the Certificate of Designation of
        Preferences, Rights and Limitations of the Shares (the “Certificate of
        Designation”) sets forth the totality of the procedures required by the
        Subscribers in order to convert the Shares. The Company shall honor conversions
        of Shares and shall deliver common stock in accordance with the terms,
        conditions and time periods set forth in this Agreement and the Certificate
        of
        Designation.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      6.16      
        Rescission
        and Withdrawal Right.
        Notwithstanding anything to the contrary contained in (and without limiting
        any
        similar provisions of) this Agreement, whenever any Subscriber exercises
        a
        right, election, demand or option under this Agreement and the Company does
        not
        timely perform its related obligations within the periods therein provided,
        then
        such Subscriber may rescind or withdraw, in its sole discretion from time
        to
        time upon written notice to the Company, any relevant notice, demand or election
        in whole or in part without prejudice to its future actions and
        rights.

       

      6.17       
        Replacement
        of Securities.
        If any
        certificate or instrument evidencing any Shares is mutilated, lost, stolen
        or
        destroyed, the Company shall issue or cause to be issued in exchange and
        substitution for and upon cancellation thereof, or in lieu of and substitution
        therefor, a new certificate or instrument, but only upon receipt of evidence
        reasonably satisfactory to the Company of such loss, theft or destruction
        and
        customary and reasonable indemnity, if requested. The applicants for a new
        certificate or instrument under such circumstances shall also pay any reasonable
        third-party costs associated with the issuance of such replacement Shares.
        If a
        replacement certificate or instrument evidencing any Shares is requested
        due to
        a mutilation thereof, the Company may require delivery of such mutilated
        certificate or instrument as a condition precedent to any issuance of a
        replacement.

       

      6.18       
        Remedies.
        In
        addition to being entitled to exercise all rights provided herein or granted
        by
        law, including recovery of damages, each of the Subscribers and the Company
        will
        be entitled to specific performance under this Agreement. The parties agree
        that
        monetary damages may not be adequate compensation for any loss incurred by
        reason of any breach of obligations described in the foregoing sentence and
        hereby agrees to waive in any action for specific performance of any such
        obligation the defense that a remedy at law would be adequate.

       

      6.19       
        Independent
        Nature of Subscribers' Obligations and Rights.
        The
        obligations of each Subscriber under this Agreement are several and not joint
        with the obligations of any other Subscriber, and no Subscriber shall be
        responsible in any way for the performance of the obligations of any other
        Subscriber under this Agreement. The decision of each Subscriber to purchase
        Shares pursuant to this Agreement has been made by such Subscriber independently
        of any other Subscriber. Nothing contained herein, and no action taken by
        any
        Subscriber pursuant thereto, shall be deemed to constitute the Subscribers
        as a
        partnership, an association, a joint venture or any other kind of entity,
        or
        create a presumption that the Subscribers are in any way acting in concert
        or as
        a group with respect to such obligations or the transactions contemplated
        herein. Each Subscriber acknowledges that no other Subscriber has acted as
        agent
        for such Subscriber in connection with making its investment hereunder and
        that
        no Subscriber will be acting as agent of such Subscriber in connection with
        monitoring its investment in the Shares or enforcing its rights under this
        Agreement. Each Subscriber shall be entitled to independently protect and
        enforce its rights, including without limitation the rights arising out of
        this
        Agreement, and it shall not be necessary for any other Subscriber to be joined
        as an additional party in any proceeding for such purpose. The Company
        acknowledges that each of the Subscribers has been provided with this same
        Agreement for the purpose of closing a transaction with multiple Subscribers
        and
        not because it was required or requested to do so by any
        Subscriber.

      


      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      6.20       
        Subsequent
        Registrations.
        Other
        than pursuant to the registration statement filed in connection with the
        transactions contemplated by this Agreement, prior to the date that such
        registration statement is declared effective by the SEC, the Company may
        not
        file any registration statement (other than on Form S-8) with the SEC with
        respect to any securities of the Company.

      


      6.21       
        Right
        of First Refusal.
        Until
        twelve (12) months after the Closing Date, the Subscribers shall be given
        not
        less than five (5) business days prior written notice of any proposed private
        sale by the Company of its Common Stock or other securities or debt obligations,
        except in connection with (i)
        employee stock options or compensation plans, (ii) as full or partial
        consideration in connection with any merger, consolidation or purchase of
        substantially all of the securities or assets of any corporation or other
        entity, (iii) any sale of its securities through a registered broker dealer
        or
        placement agent or (iv) as has been described in the 34 Act Reports or other
        written information filed or delivered prior to the closing date (collectively
        “Excepted Issuances”).
        The
        Subscribers who exercise their rights pursuant to this Section 6.21 shall
        have
        the right during the five (5) business days following receipt of the notice
        to
        purchase up to an amount that will allow such Subscribers to maintain their
        ownership percentage in the Company of such offered Common Stock, debt or
        other
        securities in accordance with the terms and conditions set forth in the notice
        of sale in the same proportion as their portion of the Purchase Price bears
        to
        the total Purchase Price. In the event such terms and conditions are modified
        during the notice period, the Purchasers shall be given prompt notice of
        such
        modification and shall have the right during the five (5) business days
        following the notice of modification, whichever is longer, to exercise such
        right. 

       

      VII.  CONFIDENTIAL
        INVESTOR QUESTIONNAIRE

       

      7.1  The
        Subscriber represents and warrants that he, she or it comes within one category
        marked below, and that for any category marked, he, she or it has truthfully
        set
        forth, where applicable, the factual basis or reason the Subscriber comes
        within
        that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
        CONFIDENTIAL. The undersigned agrees to furnish any additional information
        which
        the Company deems necessary in order to verify the answers set forth
        below.

       

      Category
        A -

      The
        undersigned is an individual (not a partnership, corporation, etc.) whose
        individual net worth, or joint net worth with his or her spouse, presently
        exceeds $1,000,000.

      


      Explanation.
        In calculating net worth you may include equity in personal property and
        real
        estate, including your principal residence, cash, short-term investments,
        stock
        and securities. Equity in personal property and real estate should be based
        on
        the fair market value of such property less debt secured by such
        property.

      


      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      Category
        B -

      The
        undersigned is an individual (not a partnership, corporation, etc.) who had
        an
        income in excess of $200,000 in each of the two most recent years, or joint
        income with his or her spouse in excess of $300,000 in each of those years
        (in
        each case including foreign income, tax exempt income and full amount of
        capital
        gains and losses but excluding any income of other family members and any
        unrealized capital appreciation) and has a reasonable expectation of reaching
        the same income level in the current year.

      


      Category
        C -

      The
        undersigned is a director or executive officer of the Company which is issuing
        and selling the Shares.

      


      Category
        D -

      The
        undersigned is a bank; a savings and loan association; insurance company;
        registered investment company; registered business development company; licensed
        small business investment company (“SBIC”); or employee benefit plan within the
        meaning of Title 1 of ERISA and (a) the investment decision is made by a
        plan
        fiduciary which is either a bank, savings and loan association, insurance
        company or registered investment advisor, or (b) the plan has total assets
        in
        excess of $5,000,000 or (c) is a self directed plan with investment decisions
        made solely by persons that are accredited investors. (describe
        entity)

       

      


      Category
        E -

      The
        undersigned is a private business development company as defined in section
        202(a)(22) of the Investment Advisors Act of 1940. (describe entity)


       

      


       

      Category
        F -

      The
        undersigned is either a corporation, partnership, Massachusetts business
        trust,
        or non-profit organization within the meaning of Section 501(c)(3) of the
        Internal Revenue Code, in each case not formed for the specific purpose of
        acquiring the Shares and with total assets in excess of $5,000,000. (describe
        entity)

       

      Category
        G -

      The
        undersigned is a trust with total assets in excess of $5,000,000, not formed
        for
        the specific purpose of acquiring the Shares, where the purchase is directed
        by
        a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the
        Act.

       

      


      Category
        H -

      The
        undersigned is an entity (other than a trust) in which all of the equity
        owners
        are “accredited investors” within one or more of the above categories. If
        relying upon this Category alone, each equity owner must complete a separate
        copy of this Agreement. (describe entity)

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      Category
        I -

      The
        undersigned is not within any of the categories above and is therefore not
        an
        accredited investor.

       

      The
        undersigned agrees that the undersigned will notify the Company at any time
        on
        or prior to the closing in the event that the representations and warranties
        in
        this Agreement shall cease to be true, accurate and complete.

       

      7.2  SUITABILITY
        (please
        answer each question)

       

      (a) For
        an
        individual Subscriber, please describe your current employment, including
        the
        company by which you are employed and its principal business:

       

      (b) For
        an
        individual Subscriber, please describe any college or graduate degrees held
        by
        you:

       

      (c) For
        all
        Subscribers, please list types of prior investments:

       

      (d) For
        all
        Subscribers, please state whether you have participated in other private
        placements
        before:

       

      YES_______   NO_______

       

      (e) If
        your
        answer to question (d) above was “YES”, please indicate frequency of such prior
        participation in private
        placements
        of:

       

      
        	 	 	
                 

                Public

                Companies

              	 	
                 

                Private

                Companies

              	 	
                Public
                  or Private Companies

                with
                  no, or insignificant, 

                assets
                  and operations

              	 
	
                Frequently

              	 	 	 	 	 	 	 	 	 	 
	
                Occasionally

              	 	 	 	 	 	 	 	 	 	 
	
                Never

              	 	 	 	 	 	 	 	 	 	 


      

      


      (f) For
        individual Subscribers, do you expect your current level of income to
        significantly decrease in the foreseeable future:

       

      YES_______   NO_______

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      (g) For
        trust, corporate, partnership and other institutional Subscribers, do you
        expect
        your total assets to significantly decrease in the foreseeable future:


       

      YES_______   NO_______

       

      (h) For
        all
        Subscribers, do you have any other investments or contingent liabilities
        which
        you reasonably anticipate could cause you to need sudden cash requirements
        in
        excess of cash readily available to you: 

       

      YES_______   NO_______

       

      (i) For
        all
        Subscribers, are you familiar with the risk aspects and the non-liquidity
        of
        investments such as the securities for which you seek to subscribe?

       

      YES_______   NO_______

       

      (j) For
        all
        Subscribers, do you understand that there is no guarantee of financial return
        on
        this investment and that you run the risk of losing your entire
        investment?

       

      YES_______   NO_______

       

      7.3  MANNER
        IN WHICH TITLE IS TO BE HELD.
        (circle
        one)

       

      (a) Individual
        Ownership

      (b) CommSharey
        Property

      (c) Joint
        Tenant with Right of 

      Survivorship
        (both parties

      must
        sign)

      (d) Partnership*

      (e) Tenants
        in Common

      (f) Company*

      (g) Trust*

      (h) Other*

      *If
        Securities are being subscribed for by an entity, the attached Certificate
        of
        Signatory must also be completed.

       

      7.4  NASD
        AFFILIATION.

       

      Are
        you
        affiliated or associated with an NASD member firm (please check
        one):

      Yes
        _________  No
        __________

       

      If
        Yes,
        please describe:

      _____________________________________________________________________________________

      _____________________________________________________________________________________

      _____________________________________________________________________________________

      
 

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      *If
        Subscriber is a Registered Representative with an NASD member firm, have
        the
        following acknowledgment signed by the appropriate party:

       

      The
        undersigned NASD member firm acknowledges receipt of the notice required
        by
        Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

       

      _________________________________

      Name
        of
        NASD Member Firm

      


      By:
        ______________________________

           
        Authorized Officer

      


      Date:
        ____________________________

      


      7.5  The
        undersigned is informed of the significance to the Company of the foregoing
        representations and answers contained in the Confidential Investor Questionnaire
        contained in this Article VII and such answers have been provided under the
        assumption that the Company will rely on them.

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]


       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

          NUMBER
        OF
        SHARES _________ X $6.00 = $_________ (the “Purchase
        Price”) 

      


      


      
        
          	 	 	 
	 Signature	 	Signature (if purchasing
                  jointly)
	 	 	 
	 	 	 
	Name Typed or Printed 	 	Name Typed or Printed
	 	 	 
	 	 	 
	Title (if Subscriber is an Entity)	 	Title (if Subscriber is an
                  Entity)
	 	 	 
	 	 	 
	Entity Name (if applicable)	 	Entity Name (if applicable)
	 	 	 
	 	 	 
	Address	 	Address
	 	 	 
	 	 	 
	City, State and Zip Code	 	City, State and Zip Code
	 	 	 
	 	 	 
	Telephone-Business	 	Telephone-Business
	 	 	 
	 	 	 
	Telephone-Residence	 	Telephone-Residence
	 	 	 
	 	 	 
	Facsimile-Business	 	Facsimile-Business
	 	 	 
	 	 	 
	Facsimile-Residence	 	Facsimile-Residence
	 	 	 
	 	 	 
	Tax ID # or Social Security # 	 	Tax ID # or Social Security # 
	 	 	 


        

         

        
          
            	Name
                    in
                    which securities should be issued:	 


          



      

      Dated:    
        ,
        2005

      


      This
        Subscription Agreement is agreed to and accepted as of
        ________________ ,
        2005.

       

       

      
        	 	 	 
	 	NATIONAL
                INVESTMENT MANAGERS INC.
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                
                  

                

                Richard E. Stierwalt

                Chief Executive
                  Officer

              


      

       

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      CERTIFICATE
        OF SIGNATORY

      


      (To
        be
        completed if Securities are

      being
        subscribed for by an entity)

      


      


      I,
        ____________________________, am the ____________________________ of
        __________________________________________ (the “Entity”).

      


      I
        certify
        that I am empowered and duly authorized by the Entity to execute and carry
        out
        the terms of the Subscription Agreement and to purchase and hold the shares
        of
        Series C Cumulative Preferred Stock, and certify further that the Subscription
        Agreement has been duly and validly executed on behalf of the Entity and
        constitutes a legal and binding obligation of the Entity.

      


      IN
        WITNESS WHEREOF, I have set my hand this ________ day of _________________,
        200_

       

      
        
          	 	 	 
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                  

                


        



      30