Common use of Series D Preferred Stock Clause in Contracts

Series D Preferred Stock. The Buyer irrevocably agrees to purchase up to $4,800,000, and the Company irrevocably agrees to sell the Buyer up to $2,400,000 of Series D Preferred Stock (the "Series D Preferred Stock") in a series of tranches, commencing thirty (30) days after the Effective Date of the Registration Statement contemplated by the Registration Rights Agreement attached hereto as ANNEX IV (the "Effective Date"). Buyer's obligation to purchase the Series D Preferred Stock on each Additional Closing Date (which shall occur not less than thirty (30 ) calendar days apart), shall be contingent upon the satisfaction of the following conditions: (a) The Company shall give the Buyer five (5) days prior written notice; (b) The Series D Preferred Stock issued in each tranche shall be not less than $200,000 nor in excess of $400,000 principal amount; (c) On each Additional Closing Date; (i) the Registration Statement required to be filed under the Registration Rights Agreement, is effective; (ii) The representations and warranties contained in Section 3 shall be true and correct in all material respects; (iii) The average daily trading volume for the previous thirty (30) trading days must exceed $100,000; (iv) The average daily share price of the common stock for the ten trading days prior thereto, must exceed 60% of the price per share on the Closing Date of the Series C Preferred Stock, or on the immediately preceding Additional Closing Date as applicable; and (d) In the event that (x) the Company does not exercise its option to require the Buyer to purchase at least $2,400,000 of Series D Preferred Stock, or (y) the Buyer does not purchase at least $2,400,000 of Series D Preferred Stock because (A) the Buyer in its discretion, refuses to purchase such amount because of the failure to satisfy the conditions set forth in Paragraph 4i(c)(iii) or Paragraph 4i(c)(iv) hereof, or (B) the Buyer's obligation to purchase is suspended under Paragraph 4g(i)(a), the Company will, not later than thirteen (13) months after the Effective Date issue to the Buyer an additional 300,000 Warrants upon the terms and conditions of Paragraph 4(h) hereof. (e) Notwithstanding anything to the contrary contained herein, in the event the Buyer does not purchase a tranche, or at least $200,000 of a tranche, of Series D Preferred Stock because the conditions preceded in Paragraph 4(i)(c)(iii) or (c)(iv) have not been met, the Company may offer to sell a tranche not exceeding $400,000 of such Series D Preferred Stock to a third party, free of any other restrictions, provided however, that such refusal by Buyer shall not be deemed a waiver of the right by Buyer to purchase subsequent tranches, or its entitlement to the Warrants in Paragraph 4(i)(d).

Series D Preferred Stock. The Buyer irrevocably agrees Hillhaven shall issue to purchase up to $4,800,000NME, and NME ------------------------ shall purchase from Hillhaven, shares (representing $120 million) of a newly created Series D Preferred Stock. Such Series D Preferred Stock shall (a) be non-voting; (b) be redeemable by Hillhaven at any time for cash; (c) be redeemed by Hillhaven at any time at NME's request to fund NME's exercise of all, but not less than all, of the Company irrevocably agrees to sell Warrants; (d) shall be redeemed by Hillhaven at NME's request at any time following the Buyer up to $2,400,000 occurrence of a "Designated Event" (as defined in the Promissory Note) unless such Designated Event occurs on account of a transfer by NME of any of its equity interest in Hillhaven; and (e) provide for dividends "payable-in-kind" in Series D Preferred Stock ("PIK"), at the "Series D Preferred Stock"rates (compounded annually) of: 6.5% from the date of issuance through August 31, 1994; 5.5% from September 1, 1994 through August 31, 1995; 4.5% from September 1, 1995 through August 31, 1996; and 4% thereafter; provided, however, that dividends there for shall -------- ------- be paid quarterly in a series of tranches, cash commencing thirty (30) days after on the Effective Date of the Registration Statement contemplated by the Registration Rights Agreement attached hereto as ANNEX IV earlier to occur (the "Effective Conversion Date"). Buyer) of (i) the sixth anniversary of the closing of the Bank Financing (as defined below) or (ii) three months after the stated initial maturity of the Bank Financing; provided further, -------- ------- however, that upon NME's obligation exercise of all, but not less than all, of ------- the Warrants, the rate in effect at such time shall be fixed as the rate applicable to purchase the remaining Series D Preferred Stock on each Additional Closing Date (which shall occur not less than thirty (30 including PIK dividends) calendar days apart)thereafter; provided further, shall be contingent upon the satisfaction of the following conditions: (a) The Company shall give the Buyer five (5) days prior written notice; (b) The Series D Preferred Stock issued in each tranche shall be not less than $200,000 nor in excess of $400,000 principal amount; (c) On each Additional Closing Date; (i) the Registration Statement required to be filed under the Registration Rights Agreementhowever, is effective; (ii) The representations and warranties contained in Section 3 shall be true and correct in all material respects; (iii) The average daily trading volume for the previous thirty (30) trading days must exceed $100,000; (iv) The average daily share price of the common stock for the ten trading days prior thereto, must exceed 60% of the price per share on the Closing Date of the Series C Preferred Stock, or on the immediately preceding Additional Closing Date as applicable; and (d) In the event that (x) the Company does not exercise its option to require the Buyer to purchase at least $2,400,000 of Series D Preferred Stock, or (y) the Buyer does not purchase at least $2,400,000 of Series D Preferred Stock because (A) the Buyer in its discretion, refuses to purchase such amount because of the failure to satisfy the conditions set forth in Paragraph 4i(c)(iii) or Paragraph 4i(c)(iv) hereof, or (B) the Buyer's obligation to purchase is suspended under Paragraph 4g(i)(a), the Company will, not later than thirteen (13) months after the Effective Date issue to the Buyer an additional 300,000 Warrants upon the terms and conditions of Paragraph 4(h) hereof. (e) Notwithstanding anything to the contrary contained herein, in the event -------- ------- ------- that NME has not exercised all of the Buyer does not purchase a tranche, or at least $200,000 of a tranche, of Series D Preferred Stock because Warrants by the conditions preceded in Paragraph 4(i)(c)(iii) or (c)(iv) have not been metConversion Date, the Company may offer annual dividend payable on and after the Conversion Date shall be paid in cash up to sell a tranche not exceeding $400,000 of such Series D Preferred Stock to a third party5,745,000, free of and then any other restrictions, provided however, that such refusal by Buyer remainder shall not be deemed a waiver of the right by Buyer to purchase subsequent tranches, or its entitlement to the Warrants paid in Paragraph 4(i)(d)PIK preferred stock.