AND ITS SUBSIDIARIES ("CASH BURN") SHALL NOT EXCEED
$1,700,000, IN THE AGGREGATE, DURING SUCH PERIOD.
AFTER SEPTEMBER 30, 2007, THE
CASH BURN SHALL NOT EXCEED $1 MILLION (THE "CASH BURN RATE CAP") DURING ANY
CALENDAR MONTH (THE "FUTURE CASH BURN PERIOD"); PROVIDED, HOWEVER, CASH
EXPENDITURES FUNDED WITH THE PROCEEDS OF GRANTS, AWARDS, FOUNDATION SUPPORT,
RESEARCH COLLABORATIONS, OR STRATEGIC INVESTMENT BY JOINT VENTURE PARTNERS IN
SPECIFIC PROGRAMS OR PRODUCTS UNDER DEVELOPMENT BY THE COMPANY SHALL NOT BE
INCLUDED WHEN CALCULATING THE CASH BURN RATE CAP. PRIOR TO ISSUING ANY SINGLE
CASH EXPENDITURE GREATER THAN $500,000 DURING THE FUTURE CASH BURN PERIOD, THE
COMPANY MUST RECEIVE APPROVAL FROM THE PURCHASERS HOLDING A MAJORITY OF THE THEN
OUTSTANDING SECURITIES. TO RECEIVE SUCH APPROVAL, THE COMPANY SHALL PROVIDE
PRIOR WRITTEN NOTICE TO EACH PURCHASER (THE "CASH BURN NOTICE") AND SUCH CASH
BURN NOTICE SHALL BE LIMITED TO THE REQUEST FOR SUCH SINGLE CASH EXPENDITURE AND
PROVIDE EACH PURCHASER THE OPTION TO RECEIVE ADDITIONAL INFORMATION ABOUT SUCH
CASH EXPENDITURE BUT SHALL NOT SET FORTH THE PURPOSE OF SUCH CASH EXPENDITURE.
EACH PURCHASER SHALL HAVE 5 TRADING DAYS (THE "CASH BURN NOTICE PERIOD") FROM
RECEIPT OF THE CASH BURN NOTICE TO NOTIFY THE COMPANY, IN WRITING, WHETHER THE
COMPANY SHALL PROVIDE SUCH ADDITIONAL INFORMATION ABOUT THE CASH EXPENDITURE;
PROVIDED, HOWEVER, THAT IF SUCH PURCHASER DOES NOT NOTIFY THE COMPANY DURING THE
CASH BURN NOTICE PERIOD, SUCH PURCHASER IS DEEMED TO HAVE WAIVED THE NOTICE AND
APPROVED SUCH SINGLE CASH EXPENDITURE.
WITHIN 5 TRADING DAYS OF THE REQUEST OF
ANY PURCHASER, AND SUBJECT TO SUCH PURCHASER ENTERING INTO A REASONABLE AND
CUSTOMARY CONFIDENTIALITY AGREEMENT IF SUCH INFORMATION IS MATERIAL NON-PUBLIC
INFORMATION (ANY SUCH INFORMATION THAT IS CALCULATED DURING ANY PERIOD FOR WHICH
FINANCIAL STATEMENTS ARE PUBLICLY FILED WITH THE COMMISSION SHALL NOT BE DEEMED
MATERIAL, NON-PUBLIC INFORMATION AND THE COMPANY SHALL ENSURE THAT ANY PERIODIC
REPORTS FILED WITH THE COMMISSION ADEQUATELY PUBLICIZE SUCH INFORMATION), THE
COMPANY SHALL DELIVER TO SUCH INVESTOR A CONSOLIDATED STATEMENT OF CASH FLOW FOR
ANY PRIOR PERIODS REQUESTED BY SUCH PURCHASER.
ARTICLE V
MISCELLANEOUS
5.1
TERMINATION.
THIS AGREEMENT MAY BE
TERMINATED BY ANY PURCHASER, AS TO SUCH PURCHASER'S OBLIGATIONS HEREUNDER ONLY
AND WITHOUT ANY EFFECT WHATSOEVER ON THE OBLIGATIONS
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BETWEEN THE COMPANY AND THE OTHER PURCHASERS, BY WRITTEN NOTICE TO THE OTHER
PARTIES, IF THE CLOSING HAS NOT BEEN CONSUMMATED ON OR BEFORE AUGUST 31, 2007;
PROVIDED, HOWEVER, THAT NO SUCH TERMINATION WILL AFFECT THE RIGHT OF ANY PARTY
TO SUE FOR ANY BREACH BY THE OTHER PARTY (OR PARTIES).
5.2
FEES AND EXPENSES.
AT THE CLOSING, THE
COMPANY HAS AGREED TO REIMBURSE BRISTOL INVESTMENT FUND, LTD. ("BRISTOL") THE
NON-ACCOUNTABLE SUM OF $25,000, FOR ITS OUT-OF-POCKET LEGAL FEES AND EXPENSES,
$5,000 OF WHICH HAS BEEN PAID PRIOR TO THE CLOSING. ACCORDINGLY, IN LIEU OF THE
FOREGOING PAYMENTS, THE AGGREGATE AMOUNT THAT BRISTOL IS TO PAY FOR THE
SECURITIES AT THE CLOSING SHALL BE REDUCED BY $20,000 IN LIEU THEREOF.
THE
COMPANY SHALL DELIVER, PRIOR TO THE CLOSING, A COMPLETED AND EXECUTED