With everything you've posted (including the comments) it sounds like the company is trying to make you and your partners believe they wont be able to pay the $2M within 12 months in order to get you to agree to the deal. You're under the impression that you'll make a cool $6M and that's what their betting on. In all honesty I think they have the money all ready. Probably more too. You mentioned they where on the verge of making a deal with another company right? Who's to say the other company didn't demand $4M+ up front and the whole reason they're bailing is because they can get it from you for $2M?

I know it's depressing to hear but you really need to think about it and do some financial research on the company. Get legal advice. Don't be forced into signing anything just because the company is "short on time". Remember they want YOUR product. If they want it bad enough they'll stick around for a few weeks. Hell they may even offer more money.

Best of luck!