Document:

EXHIBIT 4.1

THIS CONVERTIBLE PROMISSORY NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURSDICTION AND MAY NOT UNDER ANY CIRCUMSTANCES BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF (OTHER THAN AS MAY BE PERMITTED BY THIS
NOTE) EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, OR (ii) TO
THE EXTENT APPLICABLE, RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE
UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES) TOGETHER
WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS.

                        NATIONAL INVESTMENT MANAGERS INC.
                           CONVERTIBLE PROMISSORY NOTE

U.S. $870,000.00                                                  August 2, 2005
                                                              New York, New York

            The undersigned, National Investment Managers Inc., a Florida
corporation with offices at 830 Third Avenue, New York, New York 10022 (the
"Company"), promises to pay to Stephen H. Rosen (the "Holder"), at such place as
may be designated by the Company to the Holder, the principal sum of Eight
Hundred Seventy Thousand Dollars ($870,000.00), plus interest, in the manner and
on the terms set forth below.

      SECTION 1.  Principal and Interest.

            (a) Subject to the conversion rights set forth below, principal
under this Note shall be payable in two (2) equal successive annual installments
of Four Hundred Thirty Five Thousand Dollars ($435,000.00) each on July 31, 2006
and July 31, 2007 (the "Maturity Date"). This Note may be prepaid at any time or
from time to time without penalty or premium.

            (b) Interest on the principal amount hereof from time to time
outstanding shall accrue at a rate per annum equal to seven percent (7%),
computed on the basis of a 360-day year. Interest accrued on the principal
amount hereof from time to time outstanding shall be due and payable annually,
in arrears, together with payments of principal.

      Payments of principal and interest hereunder shall be subordinated in

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right of payment to the payment of all Senior Indebtedness, to the extent and in
the manner set forth in the agreements and instruments evidencing such Senior
Indebtedness, provided, however, that the foregoing subordination shall not
prohibit regularly scheduled payments of principal and interest to the Holder
hereunder for so long as the Company is not in default under the terms of such
Senior Indebtedness. "Senior Indebtedness" shall mean the principal of, premium,
if any, and interest on the Company's or any of the Company's subsidiaries'
indebtedness for money borrowed, whenever created, incurred or assumed by the
Company or any such subsidiary, as borrower, guarantor or otherwise, whether
currently outstanding or hereafter created. By its acceptance of this Note,
Holder agrees to execute and deliver any documentation requested by the Company
or any holder of Senior Indebtedness evidencing the foregoing subordination.

      SECTION 2.  Stock Purchase Agreement.

            This Note is issued pursuant to a Stock Purchase Agreement, dated
August __, 2005, by and among the Company, Stephen H. Rosen & Associates, Inc.,
Elizabeth Davies and the Holder (as amended at any time, the "Stock Purchase
Agreement"), and is intended to be afforded the benefits thereof. Capitalized
terms used but not otherwise defined herein shall have the meanings given such
terms in the Stock Purchase Agreement.

      SECTION 3.  Offset Rights.

            Amounts of principal and interest due and payable by the Company
hereunder are subject to offset, in direct order of maturity, on a pro rata
basis with amounts due under the Convertible Promissory Note, of even date
herewith, delivered by the Purchaser to Elizabeth Davies (the "Davies Note"), in
proportion to their respective original principal amounts (the "Sharing Ratio"),
as follows:

            (a) for indemnification claims made by the Company, on a
dollar-for-dollar basis, in accordance with the provisions of Section 10.6 of
the Stock Purchase Agreement, subject to the limitation in Section 10.8 of the
Stock Purchase Agreement with respect to Elizabeth Davies;

            (b) for failure of the Company's affiliate, Stephen H. Rosen
Associates, Inc. ("SHRA"), during the 12-month period commencing on the date
hereof (the "First Measurement Period"), to achieve EBITDA (as defined below) of
$540,000 (the "Minimum EBITDA"), as determined by the Company's accountants, in
which event the installments of principal and interest due and payable under
this Note on July 31, 2006 shall be reduced by an amount equal to the amount by
which the Minimum EBITDA exceeds the EBITDA of SHRA during the First Measurement
Period; and

            (c) for failure of SHRA, during the 12-month period following the
First Measurement Period (the "Second Measurement Period"), to achieve the
Minimum EBITDA, as determined by the Company's accountants, in which event the
installments of principal and interest due and payable under this Note on July
31, 2007 shall be reduced by an amount equal to the amount by which the Minimum
Amount exceeds the EBITDA of SHRA during the Second Measurement Period.

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            Notwithstanding the foregoing, (i) if the payments under this Note
are reduced due to an EBITDA shortfall for the First Measurement Period, such
reduced amount shall be reinstated at the end of the Second Measurement Period
if, and to the extent that, the combined EBITDA for the First Measurement Period
and the Second Measurement Periods equals or exceeds $1,080,000, and (ii) there
shall be no offset for any shortfall during the Second Measurement Period if and
to the extent that the combined EBITDA for the First Measurement Period and the
Second Measurement Period equals or exceeds $1,080,000.

            No reduction of principal or interest due and payable under this
Note shall be made on account of an EBITDA shortfall if this Note is accelerated
due to an Event of Default under Section 5(d) hereof (termination of Holder's
employment without cause) or Section 5(e) hereof (SHRA's election not to renew
the Employment Agreement).

            If this Note is converted in whole or in part, and amounts to be
offset hereunder exceed remaining amounts due and payable, such excess shall be
paid by the Holder to the Company in cash no later than ten (10) business days
after the Company's demand therefor.

            Notwithstanding anything in this Note to the contrary, the Company
shall be afforded a grace period of ten (10) business days from the end of each
of the First Measurement Period and the Second Measurement Period, respectively,
to determine the amounts, if any, to be offset under this Section 3.

            For purposes of this Note, "EBITDA" means pre-tax income, plus
interest expense, plus depreciation and amortization expense, as determined by
the Company's certified public accountants, which determination shall be binding
on the parties. In determining EBITDA, salary expense attributable to Stephen H.
Rosen shall not exceed $100,000 during any 12-month period.

      SECTION 3A.  Increase in Note Principal.

            In the event that EBITDA for SHRA for the First Measurement Period
exceeds $660,000, an amount equal to thirty percent (30%) of such excess shall
be payable by the Company to the Holder and Davies as additional principal
(without interest) no later than thirty (30) days after the end of the First
Measurement Period, allocable to the Holder and Davies in accordance with the
Sharing Ratio.

            In the event that EBITDA for SHRA for the Second Measurement Period
exceeds $660,000, an amount equal to thirty percent (30%) of such excess shall
be payable by the Company to the Holder as additional principal (without
interest) no later than (30) days after the end of the Second Measurement
Period, allocable to the Holder and Davies in accordance with the Sharing Ratio.

      Notwithstanding the foregoing, if (i) the Holder is offered continued

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employment at the end of the one-year term of the Employment Agreement (as
defined below) and declines such offer, or (ii) the Holder resigns from his
employment with SHRA or is terminated for Cause (as defined in the Employment
Agreement) prior to the Maturity Date (a "Section 3A Termination Event"), then
any right to payment under this Section 3A shall terminate, and any payments
previously made by the Company under this Section 3A shall be repaid to the
Company upon demand therefor.

      Amounts payable under this Section 3A shall not be affected by any
conversion of all or any portion of this Note.

      SECTION 4.  Conversion.

            (a) Conversion Right. (i) Commencing on the date hereof, until the
close of business on July 31, 2007, the Holder shall have the right, from time
to time (the "Conversion Right") in its sole discretion, to convert all or a
portion of the outstanding principal amount and accrued and unpaid interest
then-outstanding hereunder into such number of shares ("Conversion Shares") of
the Common Stock, par value $0.001 per share, of the Company (the "Common
Stock"), as are determined by dividing (i) the sum of the principal and interest
to be converted by (ii) the Conversion Price (as defined below); provided,
however, that any conversion hereunder shall be in increments of principal and
interest of not less than Twenty-Five Thousand Dollars ($25,000) or the entire
remaining outstanding balance of this Note, whichever is less. Any portion of
the principal and interest hereunder that is so converted shall be deemed to be
converted in the direct order of maturity and applied against the earliest cash
payment(s) that would otherwise be due and payable hereunder.

            "Conversion Price" for any conversion hereunder shall be equal to
the Fair Market Value per share of the Common Stock as in effect on the
Determination Date.

            "Determination Date" shall mean the June 30 or December 31,
whichever is the most recent, preceding the date of exercise of the related
Conversion Right.

            "Fair Market Value" of a share of Common Stock as of the
"Determination Date shall mean:

            (i) If the Company's Common Stock is traded on the American Stock
Exchange or another national exchange or is quoted on the National or SmallCap
Market of The Nasdaq Stock Market, Inc.("Nasdaq"), then the volume-weighted
average sale price of the Common Stock for the five (5) trading days immediately
preceding the Determination Date, as officially reported.

            (ii) If the Company's Common Stock is not traded on the American
Stock Exchange or another national exchange or on the Nasdaq but is traded on
the NASD OTC Bulletin Board or the "pink sheets", then the volume-weighted
average sale price of the Common Stock for the five (5) trading days immediately

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preceding the Determination Date or, if no sales take place during such five (5)
trading day period, the average of the closing bid and asked prices thereof over
such five (5) trading day period, as officially reported.

            (iii) If the Company's Common Stock is not publicly traded, then as
determined in good faith by the Board of Directors of the Company.

            (b) Reclassification, Etc. In case of (i) any reclassification,
reorganization, split, subdivision, change or conversion of securities of the
class issuable upon conversion of the outstanding principal amount and accrued
and unpaid interest then-outstanding hereunder (other than a change in par
value, or from par value to no par value), or (ii) any consolidation of the
Company with or into another entity (other than a merger or consolidation with
another entity in which the Company is the acquiring and the surviving entity
and that does not result in any reclassification or change of outstanding
securities issuable upon the conversion of the outstanding principal amount and
accrued and unpaid interest then-outstanding hereunder), or (iii) any sale of
all or substantially all the assets of the Company, then the Company, or such
successor or purchasing entity, as the case may be, shall duly execute and
deliver to the Holder a new Note or a supplement hereto (in form and substance
reasonably satisfactory to the Holder of this Note), so that the Holder shall
have the right to receive, at a total purchase price not to exceed the
outstanding principal amount and accrued and unpaid interest then-outstanding
hereunder, and in lieu of the shares of Common Stock theretofore issuable upon
the conversion of such outstanding principal amount and accrued and unpaid
interest then-outstanding hereunder, the kind and amount of shares of stock and
other securities, money and property receivable upon such reclassification,
reorganization, change, merger, consolidation or conversion by a holder of the
number of shares of Common Stock then issuable under this Note. Such new Note
shall provide for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 4. The provisions of
this Section 4(b) shall similarly attach to successive reclassifications,
reorganizations, changes, mergers, consolidations, transfers or conversions.

            (c) No Impairment. The Company will not, by amendment of its
certificate of incorporation or bylaws or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder against impairment. This provision shall not restrict the Company
from amending and/or restating its Certificate of Incorporation in accordance
with applicable law.

            (d) Fractional Shares. At the Company's election, the Company may
either (i) issue fractional shares of Common Stock in connection with the
exercise of a Conversion Right hereunder, or (ii) in lieu of issuing such
fractional shares, make a cash payment therefor based on the Conversion Price
then in effect.

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      SECTION 5.  Events of Default.

            The occurrence of any of the following events shall constitute an
event of default (an "Event of Default"):

            (a) a default in the payment of the principal amount of this Note,
and continuance of such default or breach for a period of five business days
thereafter;

            (b) a default in the payment of any accrued and unpaid interest on
this Note, and continuance of such default or breach for a period of five
business days thereafter;

            (c) (i) the entry of a decree or order by a court having
jurisdiction adjudging the Company bankrupt or insolvent, or approving a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company, under United States bankruptcy or insolvency law, as now
or hereafter constituted, and the continuance of any such decree or order
unstayed and in effect for a period of 120 days; (ii) the commencement by the
Company of a voluntary case under United States bankruptcy law, as now or
hereafter constituted, or the consent by the Company to the institution of
bankruptcy or insolvency proceedings against it; (iii) the appointment of a
receiver, liquidator, assignee, trustee, or similar official of the Company or
of any substantial part of its property that is not discharged within 120 days;
(vi) the making by the Company of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in furtherance
of any such action;

            (d) the termination of Rosen's employment with SHRA by SHRA without
Cause, as defined in the employment agreement between SHRA and the Holder dated
the date hereof (the "Employment Agreement"); or

            (e) SHRA's election not to renew the Employment Agreement upon the
expiration of the original one-year term thereof.

      SECTION 6.  Remedies in the Event of Default.

            (a) In the case of any Event of Default by the Company, the Holder,
may in its sole discretion, demand that the aggregate amount of principal
outstanding hereunder and accrued and unpaid interest thereon shall, in addition
to all other rights and remedies of the Holder hereunder and under applicable
law, be and become immediately due and payable upon written notice delivered by
the Holder to the Company. Notwithstanding the preceding sentence, the rights of
the Holder as set forth in Section 4 hereunder shall survive any such
acceleration to the extent set forth in this paragraph. If the Holder shall
accelerate and receive cash payment of the aggregate amount of principal
outstanding hereunder and all accrued and unpaid interest thereon and then
elects to exercise the Conversion Right within thirty (30) days after receipt of
such payment, the Holder shall pay the Company for shares of Common Stock issued
under such Conversion Right.

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<PAGE>

            (b) The Company hereby waives demand and presentment for payment,
notice of nonpayment, protest and notice of protest, diligence, filing suit, and
all other notice and promises to pay the Holder its costs of collection of all
amounts due hereunder, including reasonable attorneys' fees.

            (c) In the case of any Event of Default or breach of this Note by
the Company, this Note shall continue to bear interest after such default or
breach at the interest rate otherwise in effect hereunder plus 3% per annum (but
in any event not in excess of the maximum rate of interest permitted by
applicable law). The Company shall reimburse the Holder for costs of collection,
including reasonable attorneys' fees, following an Event of Default.

      SECTION 7. Voting Rights.

            This Note shall not entitle the holder hereof to any voting rights
or other rights as a stockholder of the Company prior to the conversion of this
Note.

      SECTION 8. Representations of the Holder - Securities Law Matters.

            By its acceptance of this Note, the Holder represents and warrants
to the Company that:

            (a) The Holder has been given access to full and complete
information regarding the Company and has met with representatives of the
Company concerning the terms and conditions of this Note and the Conversion
Shares (collectively, the "Securities") and the business and operations of the
Company, and understands that there is no assurance as to the future performance
of the Company.

            (b) The Holder is aware that the Securities are a speculative
investment that involves a high degree of risk The Holder has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Securities and has obtained, in its
judgment, sufficient information from the Company to evaluate the merits and
risks of an investment in the Company.

              (c) The Holder understands that, although the Company's common
stock currently trades on the OTC Bulletin Board, the Securities have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or the securities laws of certain states in reliance on specific exemptions from
registration, and acknowledges that the Company is relying on the Holder's
representations herein for the purpose of determining whether this transaction
meets the requirements of the exemptions afforded by the Securities Act and
certain state securities laws. The Holder acknowledges that there is no
assurance that the Company will file any registration statement for the
Securities, that such registration statement, if filed, will be declared
effective or, if declared effective, that the Company will be able to keep it
effective until the Holder sells the securities registered thereon. The Holder
is purchasing the Securities for its own account for investment and not with a
view to, or for sale in connection with, any subsequent distribution of the

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<PAGE>

Securities, nor with any present intention of selling or otherwise disposing of
all or any part of the Securities. The Holder acknowledges and agrees that the
purchase of the Securities is a long-term investment, and that the Holder may
have to bear the economic risk of investment for an indefinite period of time
because the Securities have not been registered under the Securities Act and may
never be registered, and cannot be resold, pledged, assigned or otherwise
disposed of unless they are subsequently registered under the Securities Act and
under applicable securities laws of certain states, or an exemption from such
registration, including an exemption under Rule 144 of the 1933 Act, is
available. The Holder acknowledges and understands that the Company is under no
obligation to register the Securities or to assist the Holder in complying with
any exemption from such registration under the Securities Act or any state
securities laws.

      SECTION 9.  Miscellaneous.

            (a) This Note is not assignable by the Holder without the Company's
prior written consent, which may be withheld by the Company in its sole
discretion. This Note and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
(including, with respect to Holder, his estate and personal representative(s)
upon his death) and permitted assigns.

            (b) All notices, demands and requests of any kind to be delivered to
any party in connection with this Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered or if sent by
nationally-recognized overnight courier or by registered or certified airmail,
return receipt requested and postage prepaid, addressed as follows:

                        (i) if to the Company:

                        National Investment Managers Inc.
                        830 Third Avenue
                        New York, NY 10022
                        Fax No.: 212 581 7010
                        Attention:  Richard E. Stierwalt

                        with a copy to:

                        Cohen Tauber Spievack & Wagner LLP
                        420 Lexington Avenue
                        Suite 2400
                        New York, NY 10170

                        Attention: Adam Stein, Esq.

                        (ii) if to the Holder, to:

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<PAGE>

                        Stephen H. Rosen
                        426 Queensboro Lane
                        Haddonfield, NJ  08033

                        with a copy to:

                        Fox Rothschild LLP
                        2000 Market Street
                        Philadelphia, PA 19103-3291

                        Attention: Mark L. Silow, Esq.

            Each party, by written notice given to the other in accordance with
this Section, may change the address to which notices, other communication or
documents are to be sent to such party. All notices, other communications or
documents shall be deemed to have been duly given when received. Any such notice
or communication shall be deemed to have been effectively given (i) in the case
of personal delivery, on the date of such delivery, (ii) in the case of
nationally-recognized overnight courier, on the second business day after the
date when sent and (iii) in the case of mailing, on the fifth business day
following that day on which the piece of mail containing such communication is
posted. Notice hereunder may be given on behalf of the parties by their
respective attorneys.

            (c) This Note may not be modified or amended, or any of the
provisions hereof waived, except by written agreement of the Company and the
Holder.

            (d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to any choice or
conflict or law provision or rule.

            (e) This Note may be executed in counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute one note. The Note may be signed and
delivered to the other party by a facsimile transmission; such transmission
shall be deemed a valid signature.

            (f) Each of the parties shall be responsible for its own costs and
expenses incurred in connection with the transactions contemplated hereby.

                            [SIGNATURE PAGE FOLLOWS]

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            IN WITNESS WHEREOF, the Company and the Holder have executed this
Note on the date first above written.

                                    NATIONAL INVESTMENT MANAGERS INC.

                                    By:___________________________

                                    ---------------------------
                                         STEPHEN H. ROSEN

                   [SIGNATURE PAGE - ROSEN CONVERTIBLE PROMISSORY NOTE]

<PAGE>

                                    EXHIBIT A

                     NOTICE OF ELECTION TO EXERCISE CONVERSION RIGHT

Date: ___________, 200_

To:   National Investment Managers Inc.

From: Stephen H. Rosen

Re:   Exercise of the Conversion Right

      Pursuant to the terms of the Convertible Promissory Note (the "Note")
issued by National Investment Managers Inc. (the "Company") to Stephen H. Rosen
(the "Holder"), dated _________ __, 2005, specifically Section 4 thereof, the
Holder hereby notifies the Company of its intention to exercise its right of
conversion.

      In accordance with Section 4(a) of the Note, any portion of the principal
and interest of the Note hereby converted shall be deemed to be converted in the
direct order of maturity and applied against the earliest cash payment(s) that
would otherwise be due and payable under the Note.

      Principal to be converted into Common Stock: $ ____________________

      Accrued and unpaid interest to be converted into Common Stock:
$______________

                                    Sincerely,

                                    ---------------------------
                                    Stephen H. RosenEXHIBIT 4.2

THIS CONVERTIBLE PROMISSORY NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURSDICTION AND MAY NOT UNDER ANY CIRCUMSTANCES BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF (OTHER THAN AS MAY BE PERMITTED BY THIS
NOTE) EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, OR (ii) TO
THE EXTENT APPLICABLE, RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE
UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES) TOGETHER
WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS.

                        NATIONAL INVESTMENT MANAGERS INC.
                           CONVERTIBLE PROMISSORY NOTE

U.S. $30,000.00                                                   August 2, 2005
                                                              New York, New York

            The undersigned, National Investment Managers Inc., a Florida
corporation with offices at 830 Third Avenue, New York, New York 10022 (the
"Company"), promises to pay to Elizabeth Davies (the "Holder"), at such place as
may be designated by the Company to the Holder, the principal sum of Thirty
Thousand Dollars ($30,000.00), plus interest, in the manner and on the terms set
forth below.

      SECTION 1.  Principal and Interest.

            (a) Subject to the conversion rights set forth below, principal
under this Note shall be payable in two (2) equal successive annual installments
of Fifteen Thousand Dollars ($15,000.00) each on July 31, 2006 and July 31, 2007
(the "Maturity Date"). This Note may be prepaid at any time or from time to time
without penalty or premium.

            (b) Interest on the principal amount hereof from time to time
outstanding shall accrue at a rate per annum equal to seven percent (7%),
computed on the basis of a 360-day year. Interest accrued on the principal
amount hereof from time to time outstanding shall be due and payable annually,
in arrears, together with payments of principal.

      Payments of principal and interest hereunder shall be subordinated in

<PAGE>

right of payment to the payment of all Senior Indebtedness, to the extent and in
the manner set forth in the agreements and instruments evidencing such Senior
Indebtedness, provided, however, that the foregoing subordination shall not
prohibit regularly scheduled payments of principal and interest to the Holder
hereunder for so long as the Company is not in default under the terms of such
Senior Indebtedness. "Senior Indebtedness" shall mean the principal of, premium,
if any, and interest on the Company's or any of the Company's subsidiaries'
indebtedness for money borrowed, whenever created, incurred or assumed by the
Company or any such subsidiary, as borrower, guarantor or otherwise, whether
currently outstanding or hereafter created. By its acceptance of this Note,
Holder agrees to execute and deliver any documentation requested by the Company
or any holder of Senior Indebtedness evidencing the foregoing subordination.

      SECTION 2.  Stock Purchase Agreement.

            This Note is issued pursuant to a Stock Purchase Agreement, dated
August __, 2005, by and among the Company, Stephen H. Rosen & Associates, Inc.,
Stephen H. Rosen ("Rosen") and the Holder (as amended at any time, the "Stock
Purchase Agreement"), and is intended to be afforded the benefits thereof.
Capitalized terms used but not otherwise defined herein shall have the meanings
given such terms in the Stock Purchase Agreement.

      SECTION 3.  Offset Rights.

            Amounts of principal and interest due and payable by the Company
hereunder are subject to offset, in direct order of maturity, on a pro rata
basis with amounts due under the Convertible Promissory Note, of even date
herewith, delivered by the Purchaser to Stephen H. Rosen (the "Rosen Note"), in
proportion to their respective original principal amounts (the "Sharing Ratio"),
as follows:

            (a) for indemnification claims made by the Company, on a
dollar-for-dollar basis, in accordance with the provisions of Section 10.6 of
the Stock Purchase Agreement, subject to the limitation in Section 10.8 of the
Stock Purchase Agreement with respect to the Holder;

            (b) for failure of the Company's affiliate, Stephen H. Rosen
Associates, Inc. ("SHRA"), during the 12-month period commencing on the date
hereof (the "First Measurement Period"), to achieve EBITDA (as defined below) of
$540,000 (the "Minimum EBITDA"), as determined by the Company's accountants, in
which event the installments of principal and interest due and payable under
this Note on July 31, 2006 shall be reduced by an amount equal to the amount by
which the Minimum EBITDA exceeds the EBITDA of SHRA during the First Measurement
Period; and

            (c) for failure of SHRA, during the 12-month period following the
First Measurement Period (the "Second Measurement Period"), to achieve the
Minimum EBITDA, as determined by the Company's accountants, in which event the
installments of principal and interest due and payable under this Note on July
31, 2007 shall be reduced by an amount equal to the amount by which the Minimum
Amount exceeds the EBITDA of SHRA during the Second Measurement Period.

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<PAGE>

            Notwithstanding the foregoing, (i) if the payments under this Note
are reduced due to an EBITDA shortfall for the First Measurement Period, such
reduced amount shall be reinstated at the end of the Second Measurement Period
if, and to the extent that, the combined EBITDA for the First Measurement Period
and the Second Measurement Periods equals or exceeds $1,080,000, and (ii) there
shall be no offset for any shortfall during the Second Measurement Period if and
to the extent that the combined EBITDA for the First Measurement Period and the
Second Measurement Period equals or exceeds $1,080,000.

            No reduction of principal or interest due and payable under this
Note shall be made on account of an EBITDA shortfall if the Rosen Note is
accelerated due to an Event of Default under Section 5(d) of the Rosen Note
(termination of Rosen's without cause) or Section 5(e) of the Rosen Note (SHRA's
election not to renew the employment agreement between SHRA and Rosen dated the
date hereof (the "Employment Agreement").

            If this Note is converted in whole or in part, and amounts to be
offset hereunder exceed remaining amounts due and payable, such excess shall be
paid by the Holder to the Company in cash no later than ten (10) business days
after the Company's demand therefor.

            Notwithstanding anything in this Note to the contrary, the Company
shall be afforded a grace period of ten (10) business days from the end of each
of the First Measurement Period and the Second Measurement Period, respectively,
to determine the amounts, if any, to be offset under this Section 3.

            For purposes of this Note, "EBITDA" means pre-tax income, plus
interest expense, plus depreciation and amortization expense, as determined by
the Company's certified public accountants, which determination shall be binding
on the parties. In determining EBITDA, salary expense attributable to Stephen H.
Rosen shall not exceed $100,000 during any 12-month period.

      SECTION 3A.  Increase in Note Principal.

            In the event that EBITDA for SHRA for the First Measurement Period
exceeds $660,000, an amount equal to thirty percent (30%) of such excess shall
be payable by the Company to the Holder and Rosen as additional principal
(without interest) no later than thirty (30) days after the end of the First
Measurement Period, allocable to the Holder and Rosen in accordance with the
Sharing Ratio.

            In the event that EBITDA for SHRA for the Second Measurement Period
exceeds $660,000, an amount equal to thirty percent (30%) of such excess shall
be payable by the Company to the Holder and Rosen as additional principal
(without interest) no later than (30) days after the end of the Second
Measurement Period, allocable to the Holder and Rosen in accordance with the
Sharing Ratio.

      Notwithstanding the foregoing, if (i) Rosen is offered continued
employment at the end of the one-year term of the Employment Agreement and

                                       3
<PAGE>

declines such offer, or (ii) Rosen resigns from his employment with SHRA or is
terminated for Cause (as defined in the Employment Agreement) prior to the
Maturity Date (a "Section 3A Termination Event"), then any right to payment
under this Section 3A shall terminate, and any payments previously made by the
Company under this Section 3A shall be repaid to the Company upon demand
therefor.

      Amounts payable under this Section 3A shall not be affected by any
conversion of all or any portion of this Note.

      SECTION 4.  Conversion.

            (a) Conversion Right. (i) Commencing on the date hereof, until the
close of business on July 31, 2007, the Holder shall have the right, from time
to time (the "Conversion Right") in its sole discretion, to convert all or a
portion of the outstanding principal amount and accrued and unpaid interest
then-outstanding hereunder into such number of shares ("Conversion Shares") of
the Common Stock, par value $0.001 per share, of the Company (the "Common
Stock"), as are determined by dividing (i) the sum of the principal and interest
to be converted by (ii) the Conversion Price (as defined below); provided,
however, that any conversion hereunder shall be in increments of principal and
interest of not less than Twenty-Five Thousand Dollars ($25,000) or the entire
remaining outstanding balance of this Note, whichever is less. Any portion of
the principal and interest hereunder that is so converted shall be deemed to be
converted in the direct order of maturity and applied against the earliest cash
payment(s) that would otherwise be due and payable hereunder.

            "Conversion Price" for any conversion hereunder shall be equal to
the Fair Market Value per share of the Common Stock as in effect on the
Determination Date.

            "Determination Date" shall mean the June 30 or December 31,
whichever is the most recent, preceding the date of exercise of the related
Conversion Right.

            "Fair Market Value" of a share of Common Stock as of the
"Determination Date shall mean:

            (i) If the Company's Common Stock is traded on the American Stock
Exchange or another national exchange or is quoted on the National or SmallCap
Market of The Nasdaq Stock Market, Inc.("Nasdaq"), then the volume-weighted
average sale price of the Common Stock for the five (5) trading days immediately
preceding the Determination Date, as officially reported.

            (ii) If the Company's Common Stock is not traded on the American
Stock Exchange or another national exchange or on the Nasdaq but is traded on
the NASD OTC Bulletin Board or the "pink sheets", then the volume-weighted
average sale price of the Common Stock for the five (5) trading days immediately
preceding the Determination Date or, if no sales take place during such five (5)
trading day period, the average of the closing bid and asked prices thereof over
such five (5) trading day period, as officially reported.

                                       4
<PAGE>

            (iii) If the Company's Common Stock is not publicly traded, then as
determined in good faith by the Board of Directors of the Company.

            (b) Reclassification, Etc. In case of (i) any reclassification,
reorganization, split, subdivision, change or conversion of securities of the
class issuable upon conversion of the outstanding principal amount and accrued
and unpaid interest then-outstanding hereunder (other than a change in par
value, or from par value to no par value), or (ii) any consolidation of the
Company with or into another entity (other than a merger or consolidation with
another entity in which the Company is the acquiring and the surviving entity
and that does not result in any reclassification or change of outstanding
securities issuable upon the conversion of the outstanding principal amount and
accrued and unpaid interest then-outstanding hereunder), or (iii) any sale of
all or substantially all the assets of the Company, then the Company, or such
successor or purchasing entity, as the case may be, shall duly execute and
deliver to the Holder a new Note or a supplement hereto (in form and substance
reasonably satisfactory to the Holder of this Note), so that the Holder shall
have the right to receive, at a total purchase price not to exceed the
outstanding principal amount and accrued and unpaid interest then-outstanding
hereunder, and in lieu of the shares of Common Stock theretofore issuable upon
the conversion of such outstanding principal amount and accrued and unpaid
interest then-outstanding hereunder, the kind and amount of shares of stock and
other securities, money and property receivable upon such reclassification,
reorganization, change, merger, consolidation or conversion by a holder of the
number of shares of Common Stock then issuable under this Note. Such new Note
shall provide for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 4. The provisions of
this Section 4(b) shall similarly attach to successive reclassifications,
reorganizations, changes, mergers, consolidations, transfers or conversions.

            (c) No Impairment. The Company will not, by amendment of its
certificate of incorporation or bylaws or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder against impairment. This provision shall not restrict the Company
from amending and/or restating its Certificate of Incorporation in accordance
with applicable law.

            (d) Fractional Shares. At the Company's election, the Company may
either (i) issue fractional shares of Common Stock in connection with the
exercise of a Conversion Right hereunder, or (ii) in lieu of issuing such
fractional shares, make a cash payment therefor based on the Conversion Price
then in effect.

      SECTION 5.  Events of Default.

            The occurrence of any of the following events shall constitute an

                                       5
<PAGE>

event of default (an "Event of Default"):

            (a) a default in the payment of the principal amount of this Note,
and continuance of such default or breach for a period of five business days
thereafter;

            (b) a default in the payment of any accrued and unpaid interest on
this Note, and continuance of such default or breach for a period of five
business days thereafter; or

            (c) (i) the entry of a decree or order by a court having
jurisdiction adjudging the Company bankrupt or insolvent, or approving a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company, under United States bankruptcy or insolvency law, as now
or hereafter constituted, and the continuance of any such decree or order
unstayed and in effect for a period of 120 days; (ii) the commencement by the
Company of a voluntary case under United States bankruptcy law, as now or
hereafter constituted, or the consent by the Company to the institution of
bankruptcy or insolvency proceedings against it; (iii) the appointment of a
receiver, liquidator, assignee, trustee, or similar official of the Company or
of any substantial part of its property that is not discharged within 120 days;
(vi) the making by the Company of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in furtherance
of any such action.

      SECTION 6.  Remedies in the Event of Default.

            (a) In the case of any Event of Default by the Company, the Holder,
may in its sole discretion, demand that the aggregate amount of principal
outstanding hereunder and accrued and unpaid interest thereon shall, in addition
to all other rights and remedies of the Holder hereunder and under applicable
law, be and become immediately due and payable upon written notice delivered by
the Holder to the Company. Notwithstanding the preceding sentence, the rights of
the Holder as set forth in Section 4 hereunder shall survive any such
acceleration to the extent set forth in this paragraph. If the Holder shall
accelerate and receive cash payment of the aggregate amount of principal
outstanding hereunder and all accrued and unpaid interest thereon and then
elects to exercise the Conversion Right within thirty (30) days after receipt of
such payment, the Holder shall pay the Company for shares of Common Stock issued
under such Conversion Right.

            (b) The Company hereby waives demand and presentment for payment,
notice of nonpayment, protest and notice of protest, diligence, filing suit, and
all other notice and promises to pay the Holder its costs of collection of all
amounts due hereunder, including reasonable attorneys' fees.

            (c) In the case of any Event of Default or breach of this Note by
the Company, this Note shall continue to bear interest after such default or
breach at the interest rate otherwise in effect hereunder plus 3% per annum (but
in any event not in excess of the maximum rate of interest permitted by

                                       6
<PAGE>

applicable law). The Company shall reimburse the Holder for costs of collection,
including reasonable attorneys' fees, following an Event of Default.

      SECTION 7. Voting Rights.

            This Note shall not entitle the holder hereof to any voting rights
or other rights as a stockholder of the Company prior to the conversion of this
Note.

      SECTION 8. Representations of the Holder - Securities Law Matters.

            By its acceptance of this Note, the Holder represents and warrants
to the Company that:

            (a) The Holder has been given access to full and complete
information regarding the Company and has met with representatives of the
Company concerning the terms and conditions of this Note and the Conversion
Shares (collectively, the "Securities") and the business and operations of the
Company, and understands that there is no assurance as to the future performance
of the Company.

            (b) The Holder is aware that the Securities are a speculative
investment that involves a high degree of risk The Holder has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Securities and has obtained, in its
judgment, sufficient information from the Company to evaluate the merits and
risks of an investment in the Company.

            (c) The Holder understands that, although the Company's common stock
currently trades on the OTC Bulletin Board, the Securities have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or the securities laws of certain states in reliance on specific exemptions from
registration, and acknowledges that the Company is relying on the Holder's
representations herein for the purpose of determining whether this transaction
meets the requirements of the exemptions afforded by the Securities Act and
certain state securities laws. The Holder acknowledges that there is no
assurance that the Company will file any registration statement for the
Securities, that such registration statement, if filed, will be declared
effective or, if declared effective, that the Company will be able to keep it
effective until the Holder sells the securities registered thereon. The Holder
is purchasing the Securities for its own account for investment and not with a
view to, or for sale in connection with, any subsequent distribution of the
Securities, nor with any present intention of selling or otherwise disposing of
all or any part of the Securities. The Holder acknowledges and agrees that the
purchase of the Securities is a long-term investment, and that the Holder may
have to bear the economic risk of investment for an indefinite period of time
because the Securities have not been registered under the Securities Act and may
never be registered, and cannot be resold, pledged, assigned or otherwise
disposed of unless they are subsequently registered under the Securities Act and
under applicable securities laws of certain states, or an exemption from such
registration, including an exemption under Rule 144 of the 1933 Act, is
available. The Holder acknowledges and understands that the Company is under no
obligation to register the Securities or to assist the Holder in complying with
any exemption from such registration under the Securities Act or any state
securities laws.

                                       7
<PAGE>

      SECTION 9.  Miscellaneous.

            (a) This Note is not assignable by the Holder without the Company's
prior written consent, which may be withheld by the Company in its sole
discretion. This Note and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
(including, with respect to Holder, his estate and personal representative(s)
upon his death) and permitted assigns.

            (b) All notices, demands and requests of any kind to be delivered to
any party in connection with this Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered or if sent by
nationally-recognized overnight courier or by registered or certified airmail,
return receipt requested and postage prepaid, addressed as follows:

                        (i) if to the Company:

                        National Investment Managers Inc.
                        830 Third Avenue
                        New York, NY 10022
                        Fax No.: 212 581 7010
                        Attention: Richard E. Stierwalt

                        with a copy to:

                        Cohen Tauber Spievack & Wagner LLP
                        420 Lexington Avenue
                        Suite 2400
                        New York, NY 10170

                        Attention: Adam Stein, Esq.

                        (ii) if to the Holder, to:

                        Elizabeth Davies
                        2 Tenby Court
                        Westampton, NJ 08060

                        with a copy to:

                        Fox Rothschild LLP
                        2000 Market Street
                        Philadelphia, PA 19103-3291

                        Attention: Mark L. Silow, Esq.

                                       8
<PAGE>

            Each party, by written notice given to the other in accordance with
this Section, may change the address to which notices, other communication or
documents are to be sent to such party. All notices, other communications or
documents shall be deemed to have been duly given when received. Any such notice
or communication shall be deemed to have been effectively given (i) in the case
of personal delivery, on the date of such delivery, (ii) in the case of
nationally-recognized overnight courier, on the second business day after the
date when sent and (iii) in the case of mailing, on the fifth business day
following that day on which the piece of mail containing such communication is
posted. Notice hereunder may be given on behalf of the parties by their
respective attorneys.

            (c) This Note may not be modified or amended, or any of the
provisions hereof waived, except by written agreement of the Company and the
Holder.

            (d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to any choice or
conflict or law provision or rule.

            (e) This Note may be executed in counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute one note. The Note may be signed and
delivered to the other party by a facsimile transmission; such transmission
shall be deemed a valid signature.

            (f) Each of the parties shall be responsible for its own costs and
expenses incurred in connection with the transactions contemplated hereby.

                            [SIGNATURE PAGE FOLLOWS]

                                       9
<PAGE>

            IN WITNESS WHEREOF, the Company and the Holder have executed this
Note on the date first above written.

                                    NATIONAL INVESTMENT MANAGERS INC.

                                    By:___________________________

                                    ---------------------------
                                         ELIZABETH DAVIES

            [SIGNATURE PAGE - DAVIES CONVERTIBLE PROMISSORY NOTE]

<PAGE>

                                    EXHIBIT A

               NOTICE OF ELECTION TO EXERCISE CONVERSION RIGHT

Date: ___________, 200_

To:   National Investment Managers Inc.

From: Elizabeth Davies

Re:   Exercise of the Conversion Right

------------------------------------------------------------------------------

      Pursuant to the terms of the Convertible Promissory Note (the "Note")
issued by National Investment Managers Inc. (the "Company") to Elizabeth Davies
(the "Holder"), dated _________ __, 2005, specifically Section 4 thereof, the
Holder hereby notifies the Company of its intention to exercise its right of
conversion.

      In accordance with Section 4(a) of the Note, any portion of the principal
and interest of the Note hereby converted shall be deemed to be converted in the
direct order of maturity and applied against the earliest cash payment(s) that
would otherwise be due and payable under the Note.

      Principal to be converted into Common Stock: $ ____________________

      Accrued and unpaid interest to be converted into Common Stock:
$___________________

                                   Sincerely,

                                   ---------------------------
                                   Elizabeth Davies

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