LEASE OBLIGATIONS NOT TO EXCEED THE PRINCIPAL
AMOUNT OF $400,000 IN THE AGGREGATE AT ANY ONE TIME OUTSTANDING.
5.17.
PRE-EMPTIVE RIGHTS.
(A)
EXCEPT AS SET FORTH IN SECTION 5.17(C)
HEREOF, IF GENAISSANCE PROPOSES TO ISSUE OR SELL ANY SHARES OF ITS CAPITAL STOCK
OR RIGHTS, OPTIONS OR WARRANTS TO PURCHASE SHARES OF ITS CAPITAL STOCK
(COLLECTIVELY, THE "OFFERED SECURITIES"), GENAISSANCE SHALL FIRST GIVE TO THE
PURCHASERS A NOTICE SETTING FORTH IN REASONABLE DETAIL THE PRICE AND OTHER TERMS
ON WHICH SUCH OFFERED SECURITIES ARE PROPOSED TO BE ISSUED OR SOLD, THE TERMS OF
SUCH OFFERED SECURITIES AND THE AMOUNT THEREOF PROPOSED TO BE ISSUED OR SOLD.
THE PURCHASERS SHALL THEREAFTER HAVE THE PRE-EMPTIVE RIGHT, UPON WRITTEN NOTICE
GIVEN TO GENAISSANCE NO LATER THAN TWENTY (20) DAYS AFTER RECEIPT OF
GENAISSANCE'S NOTICE, TO PURCHASE THE NUMBER OF SUCH OFFERED SECURITIES SET
FORTH IN SUCH PURCHASER'S NOTICE TO GENAISSANCE (BUT IN NO EVENT MORE THAN SUCH
PURCHASER'S PROPORTIONATE SHARE THEREOF, AS OF THE DATE OF GENAISSANCE'S
NOTICE), FOR THE PRICE AND OTHER TERMS SET FORTH IN GENAISSANCE'S NOTICE.
IN
THE EVENT ANY OF THE PURCHASERS EXERCISE THEIR PRE-EMPTIVE RIGHTS PURSUANT TO
THIS SECTION 5.17, THE CLOSING OF THE PURCHASE AND SALE OF THE OFFERED
SECURITIES TO ANY SUCH PURCHASERS SHALL TAKE PLACE ON SUCH DATE, NO LESS THAN
TEN (10) AND NO MORE THAN THIRTY (30) DAYS AFTER THE EXPIRATION OF THE 20-DAY
PERIOD REFERRED TO ABOVE, AS GENAISSANCE MAY DETERMINE; PROVIDED, THAT
GENAISSANCE SHALL GIVE THE PURCHASING PURCHASERS PROMPT PRIOR NOTICE OF SUCH
DATE.
(B)
FROM THE EXPIRATION OF THE 20-DAY PERIOD
FIRST REFERRED TO IN SECTION 5.17(A) AND FOR A PERIOD OF NINETY (90) DAYS
THEREAFTER, GENAISSANCE MAY OFFER, ISSUE AND SELL TO ANY PERSON, OFFERED
SECURITIES HAVING THE TERMS SET FORTH IN GENAISSANCE'S NOTICE RELATING TO SUCH
OFFERED SECURITIES FOR A PRICE AND ON OTHER TERMS NO LESS FAVORABLE TO
GENAISSANCE, AND INCLUDING NO LESS CASH, THAN THOSE SET FORTH IN SUCH NOTICE
(WITHOUT DEDUCTION FOR REASONABLE UNDERWRITING, SALES AGENCY AND SIMILAR FEES
PAYABLE IN CONNECTION THEREWITH); PROVIDED, FURTHER, THAT GENAISSANCE MAY NOT
ISSUE, GRANT OR SELL OFFERED SECURITIES IN AN AMOUNT GREATER THAN THE AMOUNT SET
FORTH IN SUCH NOTICE MINUS THE AMOUNT PURCHASED OR COMMITTED TO BE PURCHASED BY
THE PURCHASERS UPON EXERCISE OF THEIR PRE-EMPTIVE RIGHTS.
(c)
The provisions of Section 5.17(a) shall not
apply to (i) issuances to employees, officers, directors and consultants of
Genaissance of options to acquire Common Stock, restricted stock or other stock
awards pursuant to any stock option or restricted stock plan currently existing
or as amended or approved hereafter by the Board of Directors of Genaissance;
(ii) the issuance of Common Stock upon exercise of any of the stock options
specified in clause (i) above; (iii) the issuance of any shares of Common Stock
upon exercise of the Warrants; (iv) the issuance of any shares of Common Stock
or other securities of Genaissance upon conversion or exchange of any of the
outstanding shares of Genaissance's Series A Preferred Stock or