Common use of Subsequent Financings Clause in Contracts

Subsequent Financings. (a) So long as any of the Series B Shares remain outstanding, if, at any time after a Closing Date, the Company enters into any sale, exchange (or other type of distribution to) with any third party of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock (a “Subsequent Financing”) on terms more favorable than the terms governing the Series B Shares, then the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued in the Subsequent Financing), for the securities issued or to be issued in the Subsequent Financing. The Company covenants and agrees to promptly notify in writing the Purchasers of the terms and conditions of any such proposed Subsequent Financing. (b) For purposes of this Agreement, a Permitted Financing (as defined hereinafter) shall not be considered a Subsequent Financing. A "Permitted Financing" shall mean (i) securities issued (other than for cash) in connection with a merger, acquisition, or consolidation, (ii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a Closing Date (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement, (iii) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iv) Common Stock issued or the issuance or grants of options to purchase Common Stock pursuant to Company’s stock option plans and employee stock purchase plans approved by the Company’s board of directors, so long as such issuances in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (v) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vi) the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (vii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vi) above.

Subsequent Financings. For a period of two (a2) So long as any of years following the Series B Shares remain outstanding, if, at any time after a Closing Date, if the Company enters into any sale, exchange Subsequent Financing (or other type of distribution to) with any third party of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock (a “Subsequent Financing”as defined below) on terms more favorable than the terms governing the Series B SharesNotes and Warrants, then then, subject to applicable securities laws, the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate of Designation), Notes and Warrants together with accrued but unpaid dividends interest (which dividend payments interest shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued in the Subsequent Financing), ) for the securities issued or to be issued in the Subsequent Financing. The Company covenants and agrees to promptly notify in writing the Purchasers of the terms and conditions of any such proposed Subsequent Financing. . For purposes of this Agreement, a "Subsequent Financing" shall mean the Company's entry into any subsequent offer or sale to, or exchange with (b) or other type of distribution to), any third party, of Common Stock or any securities convertible, exercisable or exchangeable into Common Stock, including convertible and non-convertible debt securities (collectively, the "Financing Securities"), the primary purpose of which would be to obtain financing for the Company. For purposes of this Agreement, a Permitted Financing (as defined hereinafterbelow) shall not be considered a Subsequent Financing. A "Permitted Financing" shall mean (i1) securities shares of Common Stock to be issued (other than for cash) to strategic partners and/or in connection with a mergerstrategic merger or acquisition; (2) shares of Common Stock or the issuance of options to purchase shares of Common Stock to employees, acquisitionofficers, or consolidationdirectors, consultants and vendors in accordance with the Company's equity incentive policies; (ii3) the issuance of securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a the Closing Date Date; (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers4) or issued pursuant to this Agreement, (iii) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iv) Common Stock issued or the issuance of securities in a public offering; (5) the issuance of up to 100,000 warrants or grants of options to purchase Common Stock pursuant to Company’s stock option plans and employee stock purchase plans approved by the Company’s board of directors, so long as such issuances in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (v) securities issued pursuant to a bona fide firm underwritten public offering of in connection with debt financing for the Company’s securities, (vi) the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, ; and (vii6) the issuance of Common Stock upon securities in which the exercise or conversion proceeds received by the Company in connection with such issuance would be used to prepay the outstanding principal balance of any securities described in clauses (i) through (vi) abovethe Notes and all accrued interest thereon.

Subsequent Financings. (ai) So long as any For a period of one (1) year following the effective date of the Series B registration statement providing for the resale of the Conversion Shares remain outstanding, if, at any time after a Closing Dateand the Warrant Shares, the Company enters into covenants and agrees to promptly notify (in no event later than twenty (20) days after making or accepting an applicable offer) in writing (a "Rights Notice") the Purchasers of the terms and conditions of any saleproposed offer or sale to, or exchange with (or other type of distribution to) with any third party (a "Subsequent Financing"), of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock (a “Stock. The Rights Notice shall describe, in reasonable detail, the proposed Subsequent Financing”) on terms more favorable than , the terms governing the Series B Shares, then the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate names and investment amounts of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued all investors participating in the Subsequent Financing), for the securities issued or to be issued in proposed closing date of the Subsequent Financing. The Company covenants , which shall be within ninety (90) calendar days from the date of the Rights Notice, and agrees to promptly notify in writing the Purchasers all of the terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith. The Rights Notice shall provide each Purchaser an option (the "Rights Option") during the ten (10) Trading Days following delivery of the Rights Notice (the "Option Period") to inform the Company whether such Purchaser will purchase up to its pro rata portion of all or a portion of the securities being offered in such Subsequent Financing on the same, absolute terms and conditions as contemplated by such Subsequent Financing. For purposes of this Section, all references to "pro rata" means, for any Purchaser electing to participate in such Subsequent Financing, the percentage obtained by dividing (x) the number of Conversion Shares and Warrant Shares underlying the Units purchased by such Purchaser at the Closing by (y) the total number of all of the shares of common stock issued and outstanding on a fully diluted basis, on the Closing Date. Delivery of any such Rights Notice constitutes a representation and warranty by the Company that there are no other material terms and conditions, arrangements, agreements or otherwise except for those disclosed in the Rights Notice, to provide additional compensation to any party participating in any proposed Subsequent Financing, including, but not limited to, additional compensation based on changes in the Purchase Price or any type of reset or adjustment of a purchase or conversion price or to issue additional securities at any time after the closing date of a Subsequent Financing. If the Company does not receive notice of exercise of the Rights Option from the Purchasers within the Option Period, the Company shall have the right to close the Subsequent Financing on the scheduled closing date with a third party; provided that all of the material terms and conditions of the closing are the same as those provided to the Purchasers in the Rights Notice. If the closing of the proposed Subsequent Financing does not occur within thirty (30) days of the scheduled closing date, any closing of the contemplated Subsequent Financing or any other Subsequent Financing shall be subject to all of the provisions of this Section 3.1(l)(i), including, without limitation, the delivery of a new Rights Notice. The provisions of this Section 3.1(l)(i) shall not apply to issuances of securities in a Permitted Financing. (bii) For purposes of this Agreement, a Permitted Financing (as defined hereinafter) shall not be considered a Subsequent Financing. A "Permitted Financing" shall mean (i) securities issued (other than for cash) in connection with a merger, acquisition, or consolidation, (ii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a Closing Date the date of this Agreement or issued pursuant to this Agreement (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement), (iii) securities issued as compensation to consultants, advisors, suppliers or third-party service providers in connection with the provision of goods or services (including without limitation placement agent and investor relations services), and securities issued in connection with bona fide strategic license agreements or other partnering or contracting arrangements so long as such issuances are not for the purpose of raising capital, (iv) Common Stock issued or the issuance or grants of options to purchase Common Stock pursuant to the Company’s 's stock option plans and employee stock purchase plans approved by plans, (v) the Company’s board payment of directors, so long as such issuances dividends on the Preferred Shares in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (v) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vi) any warrants issued to the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or moreagent and finders (and their respective designees) and Purchaser designees for the transactions contemplated by this Agreement and, (vii) the payment of liquidated damages securities issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to the Registration Rights Agreement dated February 17a debt financing, 2004 between the Company and the parties listed therein, and (vii) the issuance of Common Stock upon the exercise equipment leasing or conversion of any securities described in clauses (i) through (vi) abovereal property leasing transaction.

Subsequent Financings. (a) So Other than in connection with a Permitted Financing (defined below), for so long as any of the Series B Shares Notes remain outstanding, ifeach Investor shall have the right, at any time after a Closing Datebut not the obligation, to participate in each subsequent financing that involves the sale of securities of the Company enters into any sale, exchange (or other type of distribution to) with any third party of Common Stock or any debt of its subsidiary and results in gross proceeds (net of any underwriting or equity placement fees) to the Company or any of its subsidiaries either (i) in excess of $1,000,000, with respect to an individual sale of securities, or (ii) in excess of $15,000,000 in the aggregate with prior sales of securities convertibleof the Company or any of its subsidiaries since the Closing Date (excluding Permitted Financings) (each such financing, exercisable or exchangeable into Common Stock (a “Subsequent Financing”). Any such participation by the Investor in a Subsequent Financing shall be on a pro rata basis, based upon such Investor’s aggregate investment amounts in the Company’s securities (on a fully diluted basis assuming the conversion and exercise of the Notes, the Warrants and any other outstanding securities of the Company, though without giving effect to the Subsequent Financing). (b) on terms more favorable than The Company shall deliver to the terms governing Investor at least 10 calendar days prior to entering into a definitive agreement for a Subsequent Financing, a written notice of its intention to effect a Subsequent Financing and the Series B Shares, then the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount details of such Subsequent Financing (a “Pre-Financing Notice”). A Pre-Financing Notice shall constitute “Material nonpublic information” (as defined in the Certificate Company’s Xxxxxxx Xxxxxxx Policy) and the Investor shall enter into a confidentiality agreement on customary terms prior to the receipt of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities any Pre-Financing Notice and/or agree to be issued subject to a special blackout period under the Company’s Xxxxxxx Xxxxxxx Policy. (c) Any Pre-Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person with whom such Subsequent Financing is proposed to be effected, and shall include, as an attachment thereto, a term sheet or similar document relating thereto. If the Investor elects to participate in the Subsequent Financing), for the securities issued closing of such Subsequent Financing shall be as mutually agreed between the parties participating in such Subsequent Financing. If by 6:30 p.m. (Mountain Time) on the fifth calendar day after the Investor has received the Pre-Financing Notice, the Investor fails to notify the Company of its election to participate or elects to be issued participate in an amount that is less than the total amount of the Subsequent Financing. The , then the Company covenants and agrees to promptly notify in writing may effect the Purchasers remaining portion of such Subsequent Financing on the terms and conditions of any such proposed Subsequent Financingwith the Persons set forth in the Pre-Financing Notice. (bd) For purposes The Company must provide the Purchaser with a second Pre-Financing Notice, and the Investor will again have the right of participation set forth above in this AgreementSection, a Permitted if the Subsequent Financing subject to the initial Pre-Financing Notice is not consummated for any reason on the terms set forth in such Pre-Financing Notice within 60 calendar days after the date of the initial Pre-Financing Notice. (as defined hereinaftere) Notwithstanding the foregoing, Section 8(a) shall not be considered apply in respect to the issuance of the following (each, a Subsequent Financing. A "“Permitted Financing" shall mean ”): (i) securities shares of common stock or common stock options, warrants or other rights to purchase common stock issued (other than for cash) in connection with a mergerto employees, acquisitionofficers, directors or consolidationconsultants of the Company pursuant to any stock, option, equity incentive or similar plan duly adopted by the Board of Directors of the Company or shares of common stock issued upon exercise of any option or warrant or conversion of any convertible security issued pursuant to any stock, option, equity incentive or similar plan duly adopted by the Board of Directors of the Company, (ii) securities issued pursuant to upon the conversion or exercise of convertible or exercisable conversion of any securities issued or outstanding on or prior to a Closing Date (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement, (iii) common stock issued upon the exercise or conversion of options, warrants, preferred stock or convertible debt instruments issued and outstanding on the date of this Agreement; provided that, (A) such securities have not been amended since the date of this Agreement to increase the number of such securities or underlying common stock or (B) to decrease the exercise or conversion price of any such security (except in the case of (A) and (B) pursuant to any anti-dilution or price reset provisions or otherwise that are in effect as of the date hereof), (iv) securities issued pursuant to acquisitions or strategic transactions, provided that (x) any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in connection a business synergistic with bona fide strategic license agreements the business of the Company and in which the Company receives benefits in addition to the investment of funds, (y) shall not include, for the avoidance of doubt, an issuance or other partnering arrangements so long as such issuances are not transaction in which the Company is issuing securities primarily for the purpose of raising capital, capital or to an entity whose primary business is investing in securities and (ivz) Common Stock issued provided that the Company will own more than fifty percent (50%) of the voting power of such business entity or the issuance or grants business segment of options to purchase Common Stock pursuant to Company’s stock option plans such entity and employee stock purchase plans approved by shall not result in a change in control of the Company’s board of directors, so long as such issuances in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (v) securities issued pursuant to that certain Purchase Agreement (as it may be amended, supplemented or otherwise modified from time to time) by and among the Company, Nuburu Subsidiary, Inc. (f/k/a bona fide firm underwritten public offering Nuburu, Inc.) and Lincoln Park Capital Fund, LLC, dated as of August 5, 2022 that results in gross proceeds that do not exceed $15,000,000 in the aggregate with prior sales of securities of the Company’s securitiesCompany or any of its subsidiaries since the Closing Date (excluding Permitted Financings, other than those pursuant to this clause (v)), (vi) any offering of Notes and Warrants in the Company’s private placement Closing or the Second Closing in accordance with the terms of up to $5,000,000 of Common Stock at a price per share of $0.50 or morethis Agreement, (vii) the payment any offering of liquidated damages Series A preferred stock pursuant to the Registration Rights that certain Preferred Stock Sale Option Agreement dated February 17, 2004 by and between the Company and the other parties listed thereinthereto dated as of August 5, 2022 (as it may be amended, supplemented or otherwise modified from time to time), and (viiix) with the issuance prior written consent of Common Stock upon the exercise Requisite Holders, a loan that is secured by the intellectual property of the Company or conversion of any securities described in clauses (i) through (vi) aboveits subsidiaries. Notwithstanding anything contained herein to the contrary, although the Company shall be entitled to complete a Permitted Financing, all Permitted Financings shall rank junior to the Notes.

Subsequent Financings. (a) So long as any of the Series B A Shares remain outstanding, if, at any time after a Closing Date, the Company enters into any sale, exchange (or other type of distribution to) with any third party of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock (a “Subsequent Financing”) on terms more favorable than the terms governing the Series B A Shares, then the Purchasers in their sole discretion may exchange the Series B A Shares, valued at their Liquidation Preference Amount (as defined in the Certificate of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued in the Subsequent Financing), for the securities issued or to be issued in the Subsequent Financing. The Company covenants and agrees to promptly notify in writing the Purchasers of the terms and conditions of any such proposed Subsequent Financing. (b) For purposes of this Agreement, a Permitted Financing (as defined hereinafter) shall not be considered a Subsequent Financing. A "Permitted Financing" shall mean (i) securities issued (other than for cash) in connection with a merger, acquisition, or consolidation, (ii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a Closing Date (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement, the Note Exchange Agreement or the Note Amendment, (iii) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iv) Common Stock issued or the issuance or grants of options to purchase Common Stock pursuant to Company’s stock option plans and employee stock purchase plans approved by the Company’s board of directors, so long as such issuances in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1September 21, 20102007, (v) any warrants issued to the financial advisor and/or their designees for the transactions contemplated by this Agreement and the Note Exchange Agreement, (vi) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vi) the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (viiviii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vivii) above.

Subsequent Financings. (a) So long as For purposes of this Agreement, a "Subsequent Financing" shall mean any of the Series B Shares remain outstandingoffer or sale to, if, at any time after a Closing Date, the Company enters into any sale, or exchange with (or other type of distribution to) with any third party of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock (a “Subsequent Financing”) on terms more favorable than the terms governing the Series B SharesStock, then the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued in the Subsequent Financing), for the securities issued or to be issued in the Subsequent Financingincluding convertible debt securities. The Company covenants and agrees to promptly notify in writing the Purchasers of the terms and conditions of any such proposed Subsequent Financing. (b) For purposes of this Agreement, a Permitted Financing (as defined hereinafter) shall not be considered a Subsequent Financing. A "Permitted Financing" shall mean (i) securities issued (other than for cash) in connection with pursuant to a merger, acquisition, or consolidationbona fide firm underwritten public offering of the Company's securities, (ii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a the Initial Closing Date or issued pursuant to this Agreement (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement), (iii) the Warrant Stock, (iv) securities issued (other than for cash) in connection with an acquisition of the Company, (v) any warrants issued to the placement agent for the transactions contemplated by this Agreement or in connection with other financial services rendered to the Company, (vi) securities issued in connection with bona fide strategic license agreements or and other partnering arrangements so long as such issuances are not for the purpose of raising capital, (ivvii) the issuance of Common Stock issued or the issuance or grants of options to purchase Common Stock pursuant to the Company’s 's stock option plans and employee stock purchase plans outstanding on the Initial Closing Date and which have been approved by the Company’s board 's Board of directorsDirectors, so long as such issuances and (viii) the payment of any principal in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (v) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vi) the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (vii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vi) aboveNotes.

Subsequent Financings. (a) So For so long as any portion of the Series B Shares remain Exchange Note issued to Platinum (the “Platinum Notes”) remains outstanding, if, at any time after a Closing Date, the Company enters into covenants and agrees to promptly notify (in no event later than five (5) days after making or receiving an applicable offer) Platinum in writing (a “Rights Notice”) of the terms and conditions of any saleproposed offer or sale to, or exchange with (or other type of distribution to) with any third party (a “Subsequent Financing”), of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock Stock, including convertible debt securities (a collectively, the “Financing Securities”). The Rights Notice shall describe, in reasonable detail, the proposed Subsequent Financing”) on terms more favorable than , the terms governing the Series B Shares, then the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate names and investment amounts of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued all investors participating in the Subsequent Financing), for the securities issued or to be issued in proposed closing date of the Subsequent Financing. The Company covenants , which shall be within ten (10) calendar days from the date of the Rights Notice, and agrees to promptly notify in writing the Purchasers all of the terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith. The Rights Notice shall provide Platinum an option (the “Rights Option”) during the three (3) Trading Days following delivery of the Rights Notice (the “Option Period”) to inform the Company whether Platinum will purchase up to such dollar amount of securities in such Subsequent Financing as is equal to the outstanding amount of the Platinum Note on the same, absolute terms and conditions as contemplated by such Subsequent Financing. “Trading Day” means any day during which the principal exchange on which the Common Stock is traded shall be open for trading. Delivery of any such Rights Notice constitutes a representation and warranty by the Company that there are no other material terms and conditions, arrangements, agreements or otherwise except for those disclosed in the Rights Notice, to provide additional compensation to any party participating in any proposed Subsequent Financing. (b) , including, but not limited to, additional compensation based on changes in the Purchase Price or any type of reset or adjustment of a purchase or conversion price or to issue additional securities at any time after the closing date of a Subsequent Financing. If the Company does not receive notice of exercise of the Rights Option from Platinum within the Option Period, the Company shall have the right to close the Subsequent Financing on or prior to the scheduled closing date with a third party; provided that all of the material terms and conditions of the closing are substantially the same as those provided to Platinum in the Rights Notice. If the closing of the proposed Subsequent Financing does not occur on or prior to that date, any closing of the contemplated Subsequent Financing or any other Subsequent Financing shall be subject to all of the provisions of this Section 3.14, including, without limitation, the delivery of a new Rights Notice. The provisions of this Section 3.14 shall not apply to issuances of securities in a Permitted Issuance. For purposes of this Agreement, a Permitted Financing Issuance (as defined hereinafter) shall not be considered a Subsequent Financing. A "Permitted Financing" shall mean (i) securities issued (other than for cash) in connection with a merger, acquisition, or consolidation, (ii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a Closing Date (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement, (iii) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iv) Common Stock issued or the issuance or grants of options to purchase Common Stock pursuant to Company’s stock option plans and employee stock purchase plans approved by the Company’s board of directors, so long as such issuances in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (v) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vi) the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (vii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vi) above.

Subsequent Financings. (a) So long as any During the period commencing on the Closing Date and ending on the date that is sixty (60) days following the effective date of the Series B Registration Statement (the “Blackout Period”) providing for the resale of the Conversion Shares remain outstanding, if, at any time after a Closing Dateand the Warrant Shares, the Company enters covenants and agrees that it will not enter into any salesubsequent offer or sale to, or exchange with (or other type of distribution to) with ), any third party (a “Subsequent Financing”), of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock (a “Subsequent Financing”) on terms more favorable than the terms governing the Series B SharesStock, then the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued in the Subsequent Financing), for the securities issued or to be issued in the Subsequent Financingincluding convertible debt securities. The Company covenants and agrees to promptly notify in writing the Purchasers of the terms and conditions of any such proposed Subsequent Financing. (b) For purposes of this Agreement, a Permitted Financing (as defined hereinafter) shall not be considered a Subsequent Financing. A "“Permitted Financing" ” shall mean any transaction involving (i) securities issued (other than for cash) in connection with a merger, acquisition, or consolidation, (ii) securities issued pursuant to a bona fide firm underwritten public offering with a nationally recognized underwriter of the Company’s securities in excess of $15,000,000, (iii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a Closing Date (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) date hereof or issued pursuant to this Agreement, (iiiiv) the shares of Common Stock issuable upon the exercise of Warrants, (v) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the purpose of raising capital, (ivvi) Common Stock issued or the issuance or grants of options to purchase Common Stock granted or issued pursuant to the Company’s stock option plans and employee stock purchase plans approved as they now exist, (vii) any warrants issued to the placement agent and its designees for the transactions contemplated by this Agreement, and (viii) the Company’s board payment of directors, so long as such issuances any principal and accrued interest in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (v) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vi) the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (vii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vi) aboveNotes.

Subsequent Financings. (a) So long as any a Purchaser owns at least ten percent (10%) of the Series B total number of Preferred Shares remain outstanding, if, at any time after a Closing Datesuch Purchaser purchased on the date of this Agreement (an “Eligible Purchaser”), the Company enters into covenants and agrees to promptly notify in writing (a “Rights Notice”) the Eligible Purchasers of the terms and conditions of any saleproposed offer or sale to, or exchange with (or other type of distribution to) with any third party (a “Subsequent Financing”), of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock Stock; provided, however, prior to delivering to each Eligible Purchaser a Rights Notice, the Company shall first deliver to each Eligible Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”) within three (3) Business Days of receiving an applicable offer, which Pre-Notice shall ask such Eligible Purchaser if it wants to review the details of such financing. Upon the request of an Eligible Purchaser, and only upon a “request by such Eligible Purchaser within three (3) Business Days of receipt of a Pre-Notice, the Company shall promptly, but no later than two (2) Business Days after such request, deliver a Rights Notice to such Eligible Purchaser. The Rights Notice shall describe, in reasonable detail, the proposed Subsequent Financing”) on terms more favorable than , the terms governing the Series B Shares, then the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate names and investment amounts of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued all investors participating in the Subsequent FinancingFinancing (if known), for the securities issued or to be issued in proposed closing date of the Subsequent Financing. The Company covenants , which shall be no earlier than ten (10) Business Days from the date of the Rights Notice, and agrees to promptly notify in writing the Purchasers all of the terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith. The Rights Notice shall provide each Eligible Purchaser an option (the “Rights Option”) during the ten (10) Business Days following delivery of the Rights Notice (the “Option Period”) to inform the Company whether such Eligible Purchaser will purchase up to its pro rata portion of all or a portion of the securities being offered in such Subsequent Financing on the same, absolute terms and conditions as contemplated by such Subsequent Financing, provided that, the amount of such purchase shall not exceed such Eligible Purchaser’s Purchase Price hereunder except as allowed by the following sentence. If any Eligible Purchaser elects not to participate in such Subsequent Financing, the other Eligible Purchasers may participate on a pro-rata basis so long as such participation in the aggregate does not exceed the total Purchase Price hereunder. For purposes of this Section, all references to “pro rata” means, for any Eligible Purchaser electing to participate in such Subsequent Financing, the percentage obtained by dividing (x) the number of Preferred Shares purchased by such Eligible Purchaser at the Closing by (y) the total number of all of the Preferred Shares purchased by all of the participating Eligible Purchasers at the Closing. Delivery of any such Rights Notice constitutes a representation and warranty by the Company that there are no other material terms and conditions, arrangements, agreements or otherwise except for those disclosed in the Rights Notice, to provide additional compensation to any party participating in any proposed Subsequent Financing, including, but not limited to, additional compensation based on changes in the Purchase Price or any type of reset or adjustment of a purchase or conversion price or to issue additional securities at any time after the closing date of a Subsequent Financing. If the Company does not receive notice of exercise of the Rights Option from any or all of Eligible Purchasers within the Option Period, the Company shall have the right to close the Subsequent Financing on the scheduled closing date set forth in the Rights Notice (or within sixty (60) days thereafter) without the participation of any or all of such Eligible Purchasers; provided that, all of the material terms and conditions of the closing are the same as those provided to the Eligible Purchasers in the Rights Notice. If the closing of the proposed Subsequent Financing does not occur on the scheduled closing date set forth in the Rights Notice (or within sixty (60) days thereafter), any closing of the contemplated Subsequent Financing or any other Subsequent Financing shall be subject to all of the provisions of this Section 3.23(a), including, without limitation, the delivery of a new Rights Notice. The provisions of this Section 3.23(a) shall not apply to issuances of securities in a Permitted Financing. (b) For purposes of this Agreement, a Permitted Financing (as defined hereinafter) shall not be considered a Subsequent Financing. A "“Permitted Financing" ” shall mean (i) securities issued (other than for cash) in connection with pursuant to a bona fide acquisition of another business entity or business segment of any such entity by the Company pursuant to a merger, acquisition, purchase of substantially all the assets or consolidation, any type of reorganization (each an “Acquisition”) provided that (A) the Company will own more than fifty percent (50%) of the voting power of such business entity or business segment of such entity and (B) such Acquisition is approved by the Company’s Board of Directors; (ii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a Closing Date the date of this Agreement or issued pursuant to this Agreement (so long as the terms governing the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement, ); (iii) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the primary purpose of raising capital, ; (iv) Common Stock issued or the issuance or grants of options to purchase Common Stock Stock, in each case, at no less than the then-applicable fair market value, pursuant to equity incentive plans that are adopted by the Company’s stock option plans Board of Directors; (v) securities issued to any placement agent and employee stock purchase plans its respective designees for the transactions contemplated by this Agreement; (vi) securities issued at no less than the then-applicable fair market value to advisors or consultants (including, without limitation, financial advisors and investor relations firms) in connection with any engagement letter or consulting agreement, provided that any such issuance is approved by the Company’s board Board of directors, so long as such issuances in the aggregate do not exceed the number of shares of Common Stock Directors; (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (vvii) securities issued pursuant to a bona fide firm underwritten public offering financial institutions or lessors in connection with reasonable commercial credit arrangements, equipment financings or similar transactions, provided that any such issue is approved by the Company’s Board of Directors; (viii) securities issued to vendors or customers or to other persons in similar commercial situations as the Company, provided that any such issue is approved by the Company’s Board of Directors; and (ix) securities issued in connection with any recapitalization of the Company’s securities, (vi) the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (vii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vi) above.

Subsequent Financings. (a) So For so long as any Notes remain outstanding and until the second anniversary of the Series B Shares remain outstandingClosing, if, at any time after a Closing Dateif later), the Company enters into Issuer covenants and agrees to promptly notify (in no event later than five (5) business days after making or receiving an applicable offer) in writing (a “Rights Notice”) the Investors of the terms and conditions of any saleproposed offer or sale to, or exchange with (or other type of distribution to) with any third party (a “Subsequent Financing”), of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock Stock, including convertible debt securities (a collectively, the “Financing Securities”). The Rights Notice shall describe, in reasonable detail, the proposed Subsequent Financing”) on terms more favorable than , the terms governing the Series B Shares, then the Purchasers in their sole discretion may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate proposed closing date of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued in the Subsequent Financing), which shall be within thirty (30) calendar days from the date of the Rights Notice, and all of the material terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith. The Rights Notice shall provide each Investor an option (the “Rights Option”) during the ten (10) Trading Days following delivery of the Rights Notice (the “Option Period”) to inform the Issuer whether such Investor will purchase up to such Investor’s pro rata share of the securities in such Subsequent Financing in accordance with such terms and conditions. If any Investor elects not to participate in such Subsequent Financing, the other Investors may take up all or any portion of such Investor’s pro rata share so long as the participation in the aggregate of all Investors does not exceed the aggregate pro rata shares of all Investors. For purposes of this Section, all references to “pro rata” means, for any Investor electing to participate in such Subsequent Financing, the securities issued percentage obtained by dividing (x) the principal amount of the Notes purchased by such Investor at the Closing by (y) the total principal amount of all of the Notes purchased by all of the Investors at the Closing. Delivery of any Rights Notice constitutes a representation and warranty by the Issuer that there are no other material terms and conditions, arrangements, agreements or to be issued otherwise except for those disclosed in the Rights Notice, including to provide additional compensation to any party participating in any proposed Subsequent Financing, any type of reset or adjustment of a purchase or conversion price or any agreement to issue additional securities at any time after the closing date of a Subsequent Financing. The Company covenants and agrees to promptly notify in writing If the Purchasers Issuer does not receive notice of exercise of the Rights Option from the Investors within the Option Period, the Issuer shall have the right to close the Subsequent Financing with a third party; provided that all of the material terms and conditions of any such the closing are substantially the same as those provided to the Investors in the Rights Notice. If the closing of the proposed Subsequent Financing does not occur within 30 days from the end of the Option Period, any closing of the contemplated Subsequent Financing shall be subject to all of the provisions of this Section 3.16(a), including, without limitation, the delivery of a new Rights Notice. The provisions of this Section 3.16(a) shall not apply to issuances of securities in a Permitted Financing. (b) For purposes of this Agreement, a Permitted Financing (as defined hereinafter) shall not be considered a Subsequent Financing. A "“Permitted Financing" ” shall mean (i1) issuances of shares of Common Stock or options to employees, officers, directors or consultants of the Issuer pursuant to any stock or option plan duly adopted by a majority of the independent, non-employee members of the Board of Directors of the Issuer or a majority of the members of a committee of independent, non-employee directors established for such purpose; (2) issuances of securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities (other than for cash) in connection with a merger, acquisition, or consolidation, including the Notes and Warrants issued to the Investors pursuant to this Agreement); and (ii3) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the conversion independent, disinterested directors, but not including a transaction with an entity whose primary business is investing in securities or exercise of convertible or exercisable securities issued or outstanding on or prior to a Closing Date (so long as transaction the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement, (iii) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the primary purpose of raising which is to raise capital, (iv) Common Stock issued or the issuance or grants of options to purchase Common Stock pursuant to Company’s stock option plans and employee stock purchase plans approved by the Company’s board of directors, so long as such issuances in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such number of shares of Common Stock) issuable pursuant to such plans as they existed on March 1, 2010, (v) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vi) the Company’s private placement of up to $5,000,000 of Common Stock at a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (vii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vi) above.

Subsequent Financings. (a) So long as any During the term of the Series B Shares remain outstandingthis Agreement, if, at any time after a Closing Date, the Company enters into any sale, exchange (or other type Issuer will notify Purchaser of distribution to) with any third party of Common Stock or any debt or all offerings for equity securities convertible, exercisable or exchangeable into Common Stock (a “Subsequent Financing”) on terms more favorable than the terms governing the Series B Shares, then the Purchasers in their sole discretion financing which it may exchange the Series B Shares, valued at their Liquidation Preference Amount (as defined in the Certificate of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued in the Subsequent Financing)undertake. Equity financings shall, for the securities issued or to be issued in the Subsequent Financing. The Company covenants and agrees to promptly notify in writing the Purchasers of the terms and conditions of any such proposed Subsequent Financing. (b) For purposes of this Agreement, a Permitted Financing (be defined as defined hereinafter) shall not be considered a Subsequent Financing. A "Permitted Financing" shall mean cash received by Issuer from the sale of Issuer's common stock, $0.03 par value, or such other equity security or other security convertible into shares of Issuer's common stock as it may offer from time to time, for cash, specifically excluding (i) securities issued (other than for cash) in connection with a mergershares of Common Stock or Common Stock Equivalents to consultants, acquisitionemployees, officers, or consolidationdirectors of the Company, as compensation for their services to the Company or any of its direct or indirect Subsidiaries pursuant to arrangements approved by the Board of Directors of the Company and consistent with past practice, (ii) securities issued the issuance of the Securities pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to a Closing Date (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement8% Convertible Notes and related warrants transaction documents, (iii) securities shares of Common Stock issued and sold in a firm commitment underwritten public offering (which shall not include an equity line of credit, shelf takedown, or similar financing arrangement) resulting in net proceeds to the Company of in excess of $15,000,000, (iv) up to 250,000 shares of Common Stock or Common Stock Equivalents issuable in connection with an equipment financing by Vencore Solutions LLC, (v) issuance of shares of Common Stock to Logisticorp, Inc., and Southwest Resource Preservation, Inc., or their successors and assigns, based upon the issuance and conversion of outstanding convertible debentures, with the issuance of said Common Stock not to exceed 700,000 shares, (vi) shares of Common Stock issued as consideration for the acquisition of another company or business in which the shareholders of the Company do not have an ownership interest, which acquisition has been approved by the Board of Directors of the Company, (vii) shares of Common Stock issued in connection with Anti-Dilution Entitlements or New Entitlements (each as defined in the Amendment to Securities Purchase Agreement dated on or about the date hereof), or (viii) shares of Common Stock or Common Stock Equivalents issued in connection with Strategic Transactions, which shall be defined as a transaction or relationship in which the Company issues shares of Common Stock or other securities of the Company to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. Strategic Transaction includes bona fide strategic license agreements equipment or other partnering arrangements so long as real property leases, sale and leaseback, or licensing agreements, provided that such issuances are transaction is approved by the Board of Directors of the Company and is not for the purpose of raising capital. .i. Issuer will grant Purchaser the right of first refusal to participate in any such subsequent equity financings on the same key terms and conditions, (iv) Common Stock issued which shall include the dollar investment amount or the issuance or grants of options to purchase Common Stock pursuant to Company’s stock option plans and employee stock purchase plans approved by the Company’s board of directors, so long as such issuances in the aggregate do not exceed the number of shares of Common Stock (or options to purchase such be purchased, pricing, number of shares warrants and their terms, if any, registration rights and fees, as applicable to the subject offer. Purchaser shall inform Issuer of Common Stockits decision to participate in any subsequent equity financing within two business days of notice from Issuer. Such right shall terminate on the later of (a) issuable pursuant to such plans as they existed on March 1, 2010, 31 December 2005 or (v) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vib) the Company’s private placement of up to $5,000,000 of Common Stock at last date on which a price per share of $0.50 or more, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (vii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vi) aboveNote is outstanding under this Agreement.