Exhibit 4.1
STOCK PURCHASE AND REGISTRATION AGREEMENT
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This STOCK PURCHASE AND REGISTRATION AGREEMENT (this "AGREEMENT"), dated as
of November 7, 2003, by and among GENUS, INC., a corporation organized under the
laws of the State of California (the "COMPANY"), and the purchasers (the
"PURCHASERS") set forth on the execution pages hereof (the "EXECUTION PAGES").
WHEREAS:
A. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").
B. Each Purchaser desires to purchase, severally and not jointly,
subject to the terms and conditions stated in this Agreement, shares of the
Company's common stock, no par value (the "COMMON STOCK").
C. The Company has agreed to provide certain registration rights under
the Securities Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
1. CERTAIN DEFINITIONS.
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For purposes of this Agreement, the following terms shall have the meanings
ascribed to them as provided below:
"BUSINESS DAY" shall be each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which the banking institutions in the State of
California are authorized or obligated by law or executive order to close or be
closed.
"CLOSING PRICE" shall be $5.25.
"INVESTMENT AMOUNT" shall mean the dollar amount to be invested in the
Company at the Closing pursuant to this Agreement by a Purchaser, as set forth
on the Execution Page hereto executed by such Purchaser.
"MATERIAL ADVERSE EFFECT" shall mean any material adverse effect on (i) the
Shares, (ii) the ability of the Company to perform its obligations hereunder
(including the issuance of the Shares) or
(iii) the business, operations, properties or financial condition of the Company
and its subsidiaries, taken as a whole.
"PLACEMENT AGENT" shall mean Xxxxxxx Capital, Inc.
"PROSPECTUS" shall mean the prospectus included in a Resale Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such prospectus.
"REGISTRABLE SHARES" or "SHARES" shall mean each of the shares of Common
Stock issued or issuable pursuant to this Agreement or as a result of any stock
split, stock dividend, recapitalization exchange or similar event without regard
to any limitations on conversions or exercises, until the earlier of:
(i) the date on which such share has been effectively
registered under the Securities Act and disposed of in
accordance with the Resale Registration Statement;
(ii) the date on which such share is transferred in
compliance with Rule 144 under the Securities Act or
may be sold or transferred by a person who is not an
affiliate of the Company pursuant to Rule 144(k) under
the Securities Act (or any other similar provision then
in force); or
(iii) the date on which such share ceases to be outstanding
(whether as a result of redemption, repurchase and
cancellation or otherwise).
"TRADING DAY" shall mean a day during which trading in securities generally
occurs on the Nasdaq National Market or, if the Common Stock is not quoted on
the Nasdaq National Market, on the principal other national or regional
securities exchange on which the Common Stock then is listed or, if the Common
Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System, on the
principal other market on which the Common Stock is then traded; provided,
however, that "Trading Day" shall not include any day (an "excluded day") during
which trading in the Common Stock is suspended for more than three hours between
9:30 a.m. (New York time) and 4:00 p.m. (New York time).
2. PURCHASE AND SALE OF SHARES.
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a. Generally. Except as otherwise provided in this Section 2 and
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subject to the satisfaction (or waiver) of the conditions set forth in Section 7
and Section 8 below, each Purchaser shall purchase the number of Shares
determined as provided in this Section 2, and the Company shall issue and sell
such number of Shares to each Purchaser for such Purchaser's Investment Amount
as provided below. The Company's agreement with each of the Purchasers is a
separate agreement, and the sale of the Securities to each of the Purchasers is
a separate sale.
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b. Number of Closing Shares; Form of Payment; Closing Date.
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(i) On the Closing Date (as defined below), the Company shall sell
and each Purchaser shall buy the number of Shares as is equal to the quotient of
(A) such Purchaser's Investment Amount divided by (B) the Closing Price. On the
Closing Date, each Purchaser shall pay the Company an amount equal to such
Purchaser's Investment Amount.
(ii) On the Closing Date, each Purchaser shall pay its Investment
Amount by wire transfer to the Company, in accordance with the Company's written
wiring instructions against delivery of certificates representing the Shares
being purchased by such Purchaser, and the Company shall deliver such Shares
against delivery of such Purchaser's Investment Amount.
(iii) Subject to the satisfaction (or waiver) of the conditions
thereto set forth in Section 7 and Section 8 below, the date and time of the
sale of the Shares pursuant to this Agreement (the "CLOSING") shall be 10:00
a.m. California time on November 7, 2003 or such other date or time as the
Placement Agent and the Company may mutually agree ("CLOSING DATE"). The
Closing shall occur at the Palo Alto offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
("WSGR"), or at such other place as the Placement Agent and the Company may
otherwise mutually agree.
3. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES.
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Each Purchaser severally and not jointly represents and warrants to the
Company as follows:
a. Purchase for Own Account. The Purchaser is purchasing the Shares
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for the Purchaser's own account and not with a present view towards the
distribution thereof. The Purchaser understands that the Purchaser must bear
the economic risk of this investment indefinitely, unless the Shares are
registered pursuant to the Securities Act and any applicable state securities or
blue sky laws or an exemption from such registration is available, and that the
Company has no present intention of registering any such Shares other than as
contemplated by this Agreement. Notwithstanding anything in this Section 3(a)
to the contrary, by making the foregoing representation, the Purchaser does not
agree to hold the Shares for any minimum or other specific term and reserves the
right to dispose of the Shares at any time in accordance with or pursuant to a
registration statement or an exemption from registration under the Securities
Act and any applicable state securities laws.
b. Information. The Purchaser has been furnished all materials
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(excluding any material nonpublic information) relating to the business,
finances and operations of the Company and its subsidiaries and materials
relating to the offer and sale of the Shares that have been requested by the
Purchaser. The Purchaser has been afforded the opportunity to ask questions of
the Company and has received what the Purchaser believes to be satisfactory
answers to any inquiries. The Purchaser understands that its investment in the
Shares involves a high degree of risk. Neither such inquiries nor any other due
diligence investigation conducted by the Purchaser or its counsel or any of its
representatives shall modify, amend or affect the Purchaser's right to rely on
the Company's representations and warranties contained in Section 4 below.
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c. Governmental Review. The Purchaser understands that no United
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States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Shares.
d. Authorization; Enforcement. The Purchaser has the requisite power
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and authority to enter into and perform its obligations under this Agreement and
to purchase the Shares in accordance with the terms hereof. This Agreement has
been duly and validly authorized, executed and delivered on behalf of the
Purchaser and is a valid and binding agreement of the Purchaser enforceable
against the Purchaser in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
e. Transfer or Resale. The Purchaser understands that (i) except as
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provided in Section 5 of this Agreement, the Shares have not been and are not
being registered under the Securities Act or any state securities laws, and may
not be transferred unless (a) subsequently registered thereunder, or (b) the
Purchaser shall have delivered to the Company an opinion of counsel reasonably
acceptable to the Company (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the Shares to be sold or transferred may be sold or transferred under an
exemption from such registration, and (ii) neither the Company nor any other
person is under any obligation to register such Shares under the Securities Act
or any state securities laws or to comply with the terms and conditions of any
exemption thereunder, in each case, other than pursuant to this Agreement.
f. Legends. The Purchaser understands that, until the end of the
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holding period under Rule 144(k) of the Securities Act (or any successor
provision) with respect to the Shares, any stock certificate representing the
Shares shall bear a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY
NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER
APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR
TRANSFERRED UNDER AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.
The legend set forth above shall be removed and the Company shall within
three (3) Trading Days issue the Shares without such legend to the holder of the
Shares upon which it is stamped, (i) if such Shares have been resold or
transferred pursuant to the registration statement contemplated by Section 5 of
this Agreement and the registration statement was effective at the time of such
transfer, (ii) if, in connection with a sale transaction, such holder provides
the Company with an opinion of counsel reasonably acceptable to the Company to
the effect that a
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public sale, assignment, pledge or transfer of the Shares may be made without
registration under the Securities Act, or (iii) upon expiration of the two-year
period under Rule 144(k) of the Securities Act (or any successor rule). The
Company shall not require such opinion of counsel for the sale of Shares in
accordance with Rule 144 of the Securities Act, provided that the seller
provides such representations that the Company shall reasonably request
confirming compliance with the requirements of Rule 144.
Such Purchaser understands that, in the event Rule 144(k) as promulgated
under the Securities Act (or any successor rule) is amended to change the
two-year period under Rule 144(k) (or the corresponding period under any
successor rule), (i) each reference in Section 3(f) of this Agreement to "two
(2) years" or the "two-year period" shall be deemed for all purposes of this
Agreement to be references to such changed period, and (ii) all corresponding
references in the Shares shall be deemed for all purposes to be references to
the changed period, provided that such changes shall not become effective if
they are otherwise prohibited by, or would otherwise cause a violation of, the
then-applicable federal securities laws.
g. Investor Status. The Purchaser is an "accredited investor" within
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the meaning of Rule 501 Regulation D under the Securities Act. In the normal
course of its business, it invests in or purchases securities similar to the
Shares and it has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of purchasing the
Shares.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to each Purchaser as follows:
a. Organization and Qualification. Each of the Company and its
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subsidiaries is a corporation duly organized and existing under the laws of the
jurisdiction in which it is incorporated, and has the requisite corporate power
to own its properties and to carry on its business as now being conducted. Each
of the Company and its subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which the nature
of the business conducted by it makes such qualification necessary and where the
failure so to qualify would have a Material Adverse Effect.
b. Authorization; Enforcement. (i) The Company has the requisite
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corporate power and authority to enter into and perform its obligations under
this Agreement, to issue and sell the Shares in accordance with the terms
hereof; (ii) the execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby
(including, without limitation, the reservation for issuance and issuance of the
Shares) have been duly authorized by the Company's Board of Directors and no
further consent or authorization of the Company, its Board of Directors or its
shareholders is required; (iii) this Agreement has been duly executed and
delivered by the Company; and (iv) this Agreement constitutes a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
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c. Capitalization. The capitalization of the Company and each of its
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subsidiaries as of the date hereof is set forth on Schedule 4(c), including the
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authorized capital stock, the number of shares issued and outstanding, the
number of shares issuable and reserved for issuance pursuant to the Company's
stock option plans, the number of shares issuable and reserved for issuance
pursuant to securities exercisable for, or convertible into or exchangeable for
any shares of capital stock. All of such outstanding shares of the Company's
capital stock have been, or upon issuance will be, validly issued, fully paid
and nonassessable. Except as set forth on Schedule 4(c), no shares of capital
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stock of the Company (including the Shares) or any of the subsidiaries are
subject to preemptive rights or any other similar rights of the shareholders of
the Company or any liens or encumbrances. Except for the Shares and as
disclosed in Schedule 4(c), as of the date of this Agreement, (i) there are no
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outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever to which the Company or any of the
subsidiaries is a party relating to the issuance by the Company or any of its
subsidiaries of securities or rights convertible into or exercisable or
exchangeable for, any shares of capital stock of the Company or any of its
subsidiaries, or arrangements by which the Company or any of its subsidiaries is
or may become bound to issue additional shares of capital stock of the Company
or such subsidiaries, and (ii) there are no agreements or arrangements under
which the Company or any of its subsidiaries is obligated to register the sale
of any of its or their securities under the Securities Act (except as
contemplated by this Agreement). Except as set forth on Schedule 4(c), there
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are no securities or instruments containing antidilution or similar provisions
that may be triggered by the issuance of the Shares in accordance with the terms
of this Agreement and the holders of the securities and instruments listed on
such Schedule 4(c) have waived any rights they may have under such antidilution
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or similar provisions in connection with the issuance of the Shares in
accordance with the terms of this Agreement. The Company has made available to
each Purchaser true and correct copies of the Company's Articles of
Incorporation as in effect on the date hereof ("ARTICLES OF INCORPORATION"), the
Company's By-laws as in effect on the date hereof (the "BY-LAWS") and all other
instruments and agreements governing securities convertible into or exercisable
or exchangeable for capital stock of the Company, except for stock options
granted under any benefit plan of the Company.
d. Issuance of Shares. The Shares are duly authorized and when issued
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and paid for in accordance with the terms hereof, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances
(other than those imposed through acts or omissions of the Purchaser thereof),
and will not be subject to preemptive rights or other similar rights of
shareholders of the Company and will not impose personal liability upon the
holder thereof.
e. No Conflicts. The execution, delivery and performance of this
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Agreement by the Company, and the consummation by the Company of the
transactions contemplated hereby (including, without limitation, the reservation
for issuance and issuance of the Shares) will not (i) conflict with or result in
a violation of the Articles of Incorporation or By-laws or (ii) conflict with,
or constitute a default (or an event which, with notice or lapse of time or
both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of any agreement, indenture
or instrument to which the Company or any of its subsidiaries is a party, or
result in a violation of any law, rule, regulation, order, judgment or decree
(assuming the accuracy of the representations and warranties of the Purchasers)
of the United States federal and state securities
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laws and regulations applicable to the Company or any of its subsidiaries or by
which any property or asset of the Company or any of its subsidiaries is bound
or affected (except, with respect to clause (ii), for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). Neither
the Company nor any of its subsidiaries is in violation of its Articles of
Incorporation, By-laws and other organizational documents and neither the
Company nor any of its subsidiaries is in default (and no event has occurred
which, with notice or lapse of time or both, would put the Company or any of its
subsidiaries in default) under, nor has there occurred any event giving others
(with notice or lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its subsidiaries is a party, except for actual or possible
violations, defaults or rights as would not, individually or in the aggregate,
have a Material Adverse Effect. The businesses of the Company and its
subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental entity, except for actual or possible violations,
if any, the sanctions for which either singly or in the aggregate would not have
a Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required under the Securities Act and any applicable state securities
laws, the Company is not required to obtain any consent, approval, authorization
or order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self regulatory agency in order for it to execute,
deliver or perform any of its obligations under this Agreement in accordance
with the terms hereof. The Company is not in violation of the listing
requirements of The Nasdaq Stock Market and does not reasonably anticipate that
the Common Stock will be delisted by The Nasdaq Stock Market in the foreseeable
future based on its rules as currently in effect.
f. SEC Documents; Financial Statements. Since January 1, 2002, the
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Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and has filed all
registration statements and other documents required to be filed by it with the
SEC pursuant to the Securities Act (all of the foregoing filed prior to the date
hereof, and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein, being hereinafter
referred to as the "SEC DOCUMENTS"). The Company has made available to each
Purchaser true and complete copies of the SEC Documents, except for the exhibits
and schedules thereto and the documents incorporated therein. As of their
respective dates, the SEC Documents complied as to form with the requirements of
the Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any statements made in any such SEC Documents that are or were
required to be updated or amended under applicable law have been so updated or
amended. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form with applicable accounting
requirements and the published rules and regulations of the SEC applicable with
respect thereto. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise indicated
in such financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may not
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include footnotes or may be condensed or summary statements) and fairly present
the consolidated financial position of the Company and its subsidiaries as of
the dates thereof and the results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal and
recurring year-end audit adjustments). Except as set forth in the SEC Documents,
the Company has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to the date
of such SEC Documents and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in such SEC Documents, which
liabilities and obligations referred to in clauses (i) and (ii), individually or
in the aggregate, would not have a Material Adverse Effect.
g. Absence of Certain Changes. Except as disclosed in the SEC
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Documents, since January 1, 2003, there has been no change or development which
individually or in the aggregate has had or could have a Material Adverse
Effect.
h. Absence of Litigation. Except as disclosed in Schedule 4(h) or the
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SEC Documents, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company, or any of its subsidiaries, or any of their
directors or officers in their capacities as such which would have a Material
Adverse Effect.
i. Intellectual Property. The Company and each of its subsidiaries
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owns or is licensed to use all patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, permits, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) and other similar rights and proprietary knowledge (collectively,
"INTANGIBLES") necessary for the conduct of its business as now being conducted
and as proposed to be conducted. Other than as disclosed in the Company's SEC
Documents, neither the Company nor any of its subsidiaries has received written
notice that it is infringing upon or in conflict with any third party
Intangibles. Other than as disclosed in the Company's SEC Documents, neither
the Company nor any of its subsidiaries has entered into any consent,
indemnification, forbearance to xxx or settlement agreements with respect to the
validity of the Company's or such subsidiary's ownership or right to use its
Intangibles. The Intangibles are valid and enforceable, and no registration
relating thereto has lapsed, expired or been abandoned or canceled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and in good standing. The Company has complied with its
contractual obligations relating to the protection of the Intangibles used
pursuant to licenses. To the Company's knowledge, no person is infringing on or
violating the Intangibles owned or used by the Company.
j. Acknowledgment Regarding the Purchasers' Purchase of the Shares.
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The Company acknowledges and agrees that no Purchaser is acting as a financial
advisor or is acting as a fiduciary of the Company (or in any similar capacity)
with respect to this Agreement or the transactions contemplated hereby, and the
relationship between the Company and the Purchasers is "arms length" and that
any statement made by any Purchaser or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation
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and is merely incidental to such Purchaser's purchase of Shares and has not been
relied upon by the Company, its officers or directors in any way. The Company
further represents to the Purchaser that the Company's decision to enter into
this Agreement has been based solely on an independent evaluation by the Company
and its representatives.
k. No Brokers. Except for the Placement Agent, the Company has not
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engaged any person to which or to whom brokerage commissions, finder's fees,
financial advisory fees or similar payments are or will become due in connection
with this Agreement or the transactions contemplated hereby.
l. Tax Status. The Company and each of its subsidiaries has made or
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filed all material federal, state and local income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company or the applicable subsidiary has
set aside on its books provisions adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provisions adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no material unpaid taxes claimed to be due by the
taxing authority of any jurisdiction. The Company has not executed a waiver
with respect to any statute of limitations relating to the assessment or
collection of any federal, state or local tax. None of the Company's tax
returns have been or is being audited by any taxing authority.
m. No General Solicitation. Neither the Company nor any person
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participating on the Company's behalf in the transactions contemplated hereby
has conducted any "general solicitation" or "general advertising" as such terms
are used in Regulation D, with respect to any of the Shares being offered
hereby.
n. Securities Laws. Neither the Company, nor any of its affiliates,
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nor any person acting on its or their behalf, has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security
under circumstances that would require registration of the Shares being offered
hereby under the Securities Act or cause this offering of Shares to be
integrated with any prior offering of securities of the Company for purposes of
the Securities Act. Assuming the truth and accuracy of the representations and
warranties of the Purchasers set forth in Section 3 of this Agreement, the
Purchasers will not be statutory underwriters within the meaning of Section
2(a)(11) of the Securities Act.
o. Form S-3 Eligibility. The Company is currently eligible to register
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the resale of its Common Stock on a registration statement on Form S-3 under the
Securities Act. There exist no facts or circumstances (including without
limitation any required approvals or waivers of any circumstances that may delay
or prevent the obtaining of accountant's consents) that would prohibit or delay
the preparation and filing of a registration statement on Form S-3 with respect
to the Registrable Shares.
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p. Disclosure. The Company confirms that neither it nor any other
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person acting on its behalf has provided any of the Purchasers or its agents or
counsel with any information that constitutes or might constitute material
non-public information (other than information necessary to consummate the
transaction contemplated by this Agreement). The Company understands and
confirms that the Purchasers shall be relying on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided
to the Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Schedules to this Agreement, furnished by or
on behalf of the Company are true and correct and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
q. Internal Accounting Controls. The Company maintains a system of
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internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
r. Insurance. The Company will continue to be insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are commensurate with similarly situated companies engaged in
businesses similar to those of the Company.
s. Regulatory Permits. The Company possess all material certificates,
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authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as currently conducted (the "Permits"), and the Company has not received any
written notice of proceedings relating to the revocation or modification of any
such Permit.
5. REGISTRATION OF SHARES.
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a. The Company shall:
(i) as promptly as practicable, but not later than 30 days after
the earliest date of original issuance of any of the Shares
(the " Filing Deadline"), cause to be filed with the SEC a
registration statement on Form S-3 pursuant to Rule 415
under the Securities Act (the "Resale Registration
Statement"), which Resale Registration Statement shall
provide for the offer and sale of all Registrable Shares
held by Purchasers that have provided the information
required pursuant to the terms of Section 5(b) hereof;
(ii) use its reasonable best efforts to cause the Resale
Registration Statement
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to be declared effective by the SEC as promptly as
practicable, but not later than 60 days after the filing of
the Resale Registration Statement with the SEC or, in the
event of a review by the SEC, 120 days; and
(iii) use its reasonable best efforts to keep the Resale
Registration Statement continuously effective, supplemented
and amended subject to the provisions of Section 5(d) hereof
(subject to the right of the Company to suspend the use of
the Resale Registration Statement by delivery of a
Suspension Notice in accordance with Section 5(d) hereof) to
the extent necessary to ensure that it (A) is available for
resales of Registrable Shares by the Purchasers to the
benefit of this Agreement and (B) conforms with the
requirements of this Agreement and the Securities Act and
the rules and regulations of the SEC promulgated thereunder
as announced from time to time, for a period (the
"Effectiveness Period") ending two (2) years from the date
the Resale Registration Statement is declared effective by
the SEC.
b. The Company hereby agrees to pay damages to each Purchaser in an
amount equal to 1.0% of such Purchaser's Investment Amount for each consecutive
thirty (30) day period following (i) the Filing Deadline (in the event the
Company fails to file the Resale Registration Statement on or before that date)
and (ii) the date upon which the Company receives comments from the SEC relating
to the Resale Registration Statement (in the event the Company fails to respond
to any such SEC comments within thirty (30) days of its receipt of such
comments); provided, however, that no damages shall be payable pursuant to this
-------- -------
Section 5(b) after such date that the Resale Registration Statement is filed
with the SEC or such date that the Company responds to any SEC comments to the
Resale Registration Statement.
c. No Purchaser may include any of its Registrable Shares in the Resale
Registration Statement pursuant to this Agreement unless such Purchaser
furnishes to the Company in writing, prior to or on the 10th Business Day after
such Purchaser's receipt from the Company of the Purchaser Questionnaire (such
applicable deadline, the "Questionnaire Deadline"), such information regarding
the Purchaser and the distribution of Registrable Shares as the Company may
reasonably request for use in connection with the Resale Registration Statement
or Prospectus or preliminary Prospectus included therein and in any application
to be filed with or under state securities laws (the form of which request is
attached as Appendix A hereto regarding the sale of the Shares to the Purchasers
----------
and is referred to herein as the "Purchaser Questionnaire"). In connection with
all requests for information from the Purchasers with respect to inclusion of
Registrable Shares in the Resale Registration Statement, the Company shall
notify such Purchasers of the requirements set forth in the preceding sentence.
The Company agrees and undertakes that (i) it shall distribute a Purchaser
Questionnaire no later than 10 Business Days prior to the initial effectiveness
of the Resale Registration Statement to each Purchaser and (ii) upon the request
of any Purchaser made prior to 9:00 a.m., California time, on the second
Business Day before the initial effectiveness of the Resale Registration
Statement, the Company shall also distribute a Purchaser Questionnaire to such
Purchaser at the address set forth in any request by such Purchaser. Purchasers
that do not complete the Purchaser
11
Questionnaire and timely deliver it to the Company shall not be named as selling
security holders in the Prospectus or preliminary Prospectus included in the
Resale Registration Statement and therefore shall not be permitted to sell any
Registrable Shares pursuant to the Resale Registration Statement.
Notwithstanding the foregoing, upon request from a Purchaser that did not return
a Purchaser Questionnaire on a timely basis because it was a subsequent
transferee of Registrable Shares after the Company distributed the Purchaser
Questionnaire, (i) the Company shall distribute a Purchaser Questionnaire to
such Purchaser at the address set forth in the request and (ii) upon receipt of
a properly completed Purchaser Questionnaire from such Purchaser, the Company
shall use its reasonable efforts to name such Purchaser as a selling security
holder by means of an amendment or, if permitted by the SEC, by means of a
Prospectus supplement to the Resale Registration Statement. Each Purchaser as to
which the Resale Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make information previously furnished to the Company by such Purchaser not
materially misleading.
d. In connection with the Resale Registration Statement, the Company
shall use its reasonable best efforts to effect such registration to permit the
sale of the Registrable Shares, and pursuant thereto, shall prepare and file
with the SEC a Resale Registration Statement relating to the registration of the
Registrable Shares on Form S-3. The Company represents and warrants that it
currently meets the requirements for use of Form S-3 for registration of the
resale of the Registrable Shares, and has no actual knowledge of any facts which
would reasonably cause the Company to fail to meet such requirements.
In connection with the Resale Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of
Registrable Shares, the Company shall:
(i) Subject to any notice by the Company of the existence of any
fact or event of the kind described in Section 5(e) and the Company's
right to invoke a Suspension Period in the manner described in this
Section 5(d)(i), use commercially reasonable efforts to keep the
Resale Registration Statement continuously effective during the
Effectiveness Period; upon the occurrence of any event that would
cause the Resale Registration Statement or the Prospectus contained
therein to (A) contain a material misstatement or omission or (B) not
be effective and usable for resale of Registrable Shares during the
Effectiveness Period, unless a Suspension Period is then in effect,
the Company shall file promptly an appropriate amendment to the Resale
Registration Statement, a supplement to the Prospectus or a report
filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or
(B), use commercially reasonable efforts to cause such amendment to be
declared effective and the Resale Registration Statement and the
related Prospectus to become usable for their intended purposes as
soon as practicable thereafter. Notwithstanding the foregoing, the
Company may suspend the effectiveness of the Resale Registration
Statement by written notice to the Purchasers for a period not to
exceed an aggregate of 60 days in any 360-day
12
period (each such period, a "Suspension Period"); provided that the
Company shall promptly notify each Purchaser in writing of the date on
which the Suspension Period will begin and the date on which the
Suspension Period ends and no single Suspension Period shall exceed 30
days.
(ii) Prepare and file with the SEC such amendments and
post-effective amendments to the Resale Registration Statement as may
be necessary to keep the Resale Registration Statement effective
during the Effectiveness Period; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (it being understood
that the Company shall not be required to file a Prospectus supplement
pursuant to Rule 424(b) with respect to any Purchaser that failed to
submit their Purchaser Questionnaire by the Questionnaire Deadline)
under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Securities Act in a timely
manner; and comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Shares covered by the
Resale Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in the Resale Registration Statement or a
supplement to the Prospectus.
e. Each Purchaser agrees that, upon receipt of any notice (a
"Suspension Notice") from the Company of the existence of any fact or the
happening of any event, during the Effectiveness Period, that makes any
statement of a material fact made in the Resale Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated by
reference therein untrue, or that requires the making of any additions to or
changes in the Resale Registration Statement or the Prospectus in order to make
the statements therein not misleading, such Purchaser shall discontinue
disposition of Registrable Shares pursuant to the Resale Registration Statement
and any use of the associated Prospectus until:
(i) such Purchaser has received copies of the supplemented or
amended Prospectus contemplated by Section 5(d) hereof; or
(ii) such Purchaser is advised in writing by the Company that the
use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are part of or incorporated by
reference in the Prospectus.
Each Purchaser agrees to keep the receipt of a Suspension Notice and its
contents confidential. If so directed by the Company, each Purchaser will
deliver to the Company all copies, other than permanent file copies then in such
Purchaser's possession, of the Prospectus covering such Registrable Shares that
was current at the time of receipt of such Suspension Notice.
13
The Company agrees that the Suspension Notice shall not include any
material non-public information other than such information necessary to inform
the Purchasers that a Suspension Period has been implemented.
f. All expenses incident to the Company's performance of or compliance
with Section 5 of this Agreement shall be borne by the Company regardless of
whether a Resale Registration Statement becomes effective, including, without
limitation:
(i) all registration and filing fees and expenses;
(ii) all fees and expenses of compliance with federal and state
securities laws;
(iii) all expenses of printing (including printing of Prospectuses
and certificates for the Common Stock) and the Company's expenses for
messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel to the Company and all
transfer agent fees;
(v) all application and filing fees in connection with listing (or
authorizing for quotation) the Common Stock on a national securities
exchange or automated quotation system pursuant to the requirements
hereof; and
(vi) all fees and disbursements of independent certified public
accountants of the Company.
Each Purchaser shall bear all costs associated with selling commissions,
discounts and expenses of any financial or legal advisors engaged to review the
Resale Registration Statement.
The Company shall permit the Purchasers and their legal counsel to review
and comment upon the Resale Registration Statement at least two Business Days
prior to their filing with the SEC, and not file any document in a form to which
Purchasers reasonably object in a timely manner.
6. COVENANTS.
---------
a. Satisfaction of Conditions. The parties shall use their best
----------------------------
efforts to satisfy in a timely manner each of the conditions set forth in
Section 7 and Section 8 of this Agreement.
b. Form D; Blue Sky Laws. The Company agrees to file a Form D with
-------------------------
respect to the Shares as required under Regulation D and to provide a copy
thereof to each Purchaser promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Shares for sale to the Purchasers pursuant
to this Agreement under applicable securities or "blue sky" laws of the states
of the United
14
States or obtain exemption therefrom, and shall provide evidence of any such
action so taken to each Purchaser on or prior to the Closing Date.
c. Reporting Status. So long as a Purchaser beneficially owns any
-----------------
Shares or has the right to acquire any Shares pursuant to this Agreement, the
Company shall timely file all reports required to be filed with the SEC pursuant
to the Exchange Act, and shall not terminate its status as an issuer required to
file reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination.
d. Use of Proceeds. The Company shall use the net proceeds from the
-----------------
sale of the Shares for general business purposes, but in no event shall the
Company use such net proceeds to repurchase any outstanding securities of the
Company.
e. Listing. On the Closing Date, the Company shall have applied for
-------
the listing of the Shares, in each case, upon each national securities exchange
and automated quotation system, if any, upon which shares of Common Stock are
then listed or quoted and shall maintain, so long as any other shares of Common
Stock shall be so listed, such listing of all Shares from time to time issuable
hereunder. The Company shall use its reasonable best efforts to include its
shares of Common Stock in The Nasdaq Stock Market at the earliest practical date
and, in any event, by the date the first registration statement covering the
resale of the Shares is declared effective by the SEC and will comply in all
respects with the Company's reporting, filing and other obligations under the
bylaws or rules of The Nasdaq Stock Market.
f. No Integrated Offerings. The Company shall not make any offers or
--------------------------
sales of any security (other than the Shares) under circumstances that would
require registration of the Shares being offered or sold hereunder under the
Securities Act or cause this offering of Shares to be integrated with any other
offering of securities by the Company for any purposes, including for purposes
of any shareholder approval provision applicable to the Company or its
securities.
g. Securities Laws Disclosure; Publicity. The Company shall issue a
-------------------------------------
press release reasonably acceptable to the Purchasers disclosing the
transactions contemplated hereby and file a Current Report on Form 8-K
disclosing the material terms of the transactions contemplated hereby. In
addition, the Company will make such other filings and notices in the manner and
time required by the SEC and the trading market on which the Shares are listed.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the
SEC (other than the Resale Registration Statement and any exhibits to filings
made in respect of this transaction in accordance with periodic filing
requirements under the Exchange Act) or any regulatory agency or trading market,
without the prior written consent of such Purchaser, except to the extent such
disclosure is required by law or trading market regulations, in which case the
Company shall provide the Purchaser with prior notice of such disclosure.
15
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
----------------------------------------------
The obligation of the Company hereunder to issue and sell Shares to a
Purchaser at the Closing hereunder is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions thereto; provided,
--------
however, that these conditions are for the Company's sole benefit and may be
-------
waived by the Company at any time in its sole discretion.
a. The applicable Purchaser shall have executed the signature page to
this Agreement and delivered the same to the Company.
b. The applicable Purchaser shall have delivered such Purchaser's
Investment Amount in accordance with Section 2(b) above.
c. The representations and warranties of the applicable Purchaser shall
be true and correct as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which representations and warranties shall be true and
correct as of such date), and the applicable Purchaser shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the applicable Purchaser at or prior to the Closing Date.
d. No statute, rule, regulation, executive order, decree, ruling,
injunction, action, proceeding or interpretation shall have been enacted,
entered, promulgated, endorsed or adopted by any court or governmental authority
of competent jurisdiction or any self-regulatory organization, or the staff of
any thereof, having authority over the matters contemplated hereby which
questions the validity of, or challenges or prohibits the consummation of, any
of the transactions contemplated by this Agreement.
8. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE.
-----------------------------------------------------
The obligation of each Purchaser hereunder to purchase Shares to be
purchased by it hereunder is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
--------
conditions are for such Purchaser's sole benefit and may be waived by such
Purchaser at any time in such Purchaser's sole discretion:
a. The Company shall have executed the signature pages to this
Agreement and delivered the same to the Purchaser.
b. The trading in the Company's Common Stock shall not have been
suspended or be under threat of suspension by the SEC or any governing body of
The Nasdaq Stock Market.
c. The representations and warranties of the Company shall be true and
correct as of the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date, which representations and warranties shall be true and correct as of such
date) and the Company shall have performed, satisfied and complied in all
material
16
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date. The Purchaser shall have received a certificate, executed
on behalf of the Company by its Chief Financial Officer, dated as of the Closing
Date, to the foregoing effect and attaching true and correct copies of the
resolutions adopted by the Company's Board of Directors authorizing the
execution, delivery and performance by the Company of its obligations under this
Agreement.
d. No statute, rule, regulation, executive order, decree, ruling,
injunction, action, proceeding or interpretation shall have been enacted,
entered, promulgated, endorsed or adopted by any court or governmental authority
of competent jurisdiction or any self-regulatory organization, or the staff of
any thereof, having authority over the matters contemplated hereby which
questions the validity of, or challenges or prohibits the consummation of, any
of the transactions contemplated by this Agreement.
e. As of the Closing Date, there shall not have occurred any Material
Adverse Effect.
f. The Company shall have provided advance notice to The Nasdaq Stock
Market of the issuance of the Shares if so required by the rules applicable
thereto.
g. The Purchaser shall have received an opinion of the Company's
counsel, dated as of the Closing Date.
9. GOVERNING LAW MISCELLANEOUS.
-----------------------------
a. Governing Law; Jurisdiction. This Agreement shall be governed by
-----------------------------
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. Each of the
parties irrevocably consents to the nonexclusive jurisdiction of the United
States federal courts and the state courts located in the State of New York in
any suit or proceeding based on or arising under this Agreement and irrevocably
agrees that all claims in respect of such suit or proceeding may be determined
in such courts. Each of the parties, irrevocably waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding. Each of the
parties further agrees that service of process upon such party mailed by first
class mail to the address set forth in Section 9(f) shall be deemed in every
respect effective service of process upon such party in any such suit or
proceeding. Nothing herein shall affect the right of any Purchaser to serve
process in any other manner permitted by law. Each of the parties, agrees that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or in any
other lawful manner.
b. Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause
17
the manually executed Execution Page(s) hereof to be physically delivered to the
other party within five (5) days of the execution hereof.
c. Headings. The headings of this Agreement are for convenience of
--------
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid
------------
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments; Waiver. This Agreement and the
---------------------------------------
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Purchasers
make any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the Company and, by the Purchasers as
provided in Section 9(l) hereof. Any waiver by the Purchasers, on the one hand,
or the Company, on the other hand, of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision of or any breach of any other provision of this
Agreement. The failure of the Purchasers, on the one hand, or the Company, on
the other hand to insist upon strict adherence to any term of this Agreement on
one or more occasions shall not be considered a waiver or deprive that party of
the right thereafter to insist upon strict adherence to that term or any other
term of this Agreement.
f. Notices. Any notices required or permitted to be given under the
-------
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. The addresses
for such communications shall be:
If to the Company:
Genus, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xx. Xxxx Mukherjee
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
18
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxxxx, Esq.
If to the Purchaser, to the address set forth under the Purchaser's name on the
Execution Page hereto executed by such Purchaser, with a copy to:
Xxxxxxx Capital, Inc.
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxx Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
Each party hereto may from time to time change its address or facsimile number
for notices under this Section 9 by giving at least ten (10) days' prior written
notice of such changed address or facsimile number, in the case of the
Purchasers to the Company, and in the case of the Company to all of the
Purchasers.
g. Successors and Assigns. This Agreement shall be binding upon and
------------------------
inure to the benefit of the parties and their successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchasers.
h. Third Party Beneficiaries. This Agreement is intended for the
---------------------------
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by any other person.
i. Survival. The representations and warranties of the Company and the
--------
agreements and covenants of the Company shall survive the Closing
notwithstanding any due diligence investigation conducted by or on behalf of the
Purchasers. Moreover, none of the representations and warranties made by the
Company herein shall act as a waiver of any rights or remedies a Purchaser may
have under applicable federal or state securities laws. The Company agrees to
indemnify and hold harmless each Purchaser and each of such Purchaser's
officers, directors, employees, partners, members, agents and affiliates for
loss or damage relating to the Shares purchased hereunder arising as a result of
or related to any breach by the Company of any of its representations or
covenants set forth herein.
j. Further Assurances. Each party shall do and perform, or cause to be
------------------
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
k. Equitable Relief. Each party acknowledges that a breach by it of
-----------------
its obligations hereunder will cause irreparable harm to the other parties by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, each party acknowledges that the remedy at law for
19
a breach of its obligations hereunder will be inadequate and agrees, in the
event of a breach or threatened breach by such party of the provisions of this
Agreement, that the other parties shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.
l. Determinations. Except as otherwise expressly provided herein, all
--------------
consents, approvals and other determinations to be made by the Purchasers
pursuant to this Agreement and all waivers and amendments to or of any
provisions in this Agreement prior to the Closing Date to be binding upon a
Purchaser shall be made by such Purchaser and except as otherwise expressly
provided herein, all consents, approvals and other determinations (other than
amendments to the terms and provisions of this Agreement) to be made by the
Purchasers pursuant to this Agreement and all waivers and amendments to or of
any provisions in this Agreement after the Closing Date shall be made by
Purchasers (excluding Purchasers who are affiliates of the Company) that have
invested more than fifty percent (50%) of the aggregate Investment Amounts
invested by all Purchasers (excluding Purchasers who are affiliates of the
Company).
m. Independent Nature of Investors' Obligations and Rights. The
-------------------------------------------------------------
obligations of each Purchaser are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible for the performance
of obligations of any other Purchaser under this Agreement. Nothing contained
herein, and no action taken by any Purchaser hereunder shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement. Each Purchaser shall be entitled
to independently protect and enforce its rights, including without limitation
the rights arising out of this Agreement and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
COMPANY:
GENUS, INC.
By:
-------------------------------
Shum Mukherjee
Chief Financial Officer
THE PURCHASER:
[____________________________]
By:_____________________________
Name:___________________________
Title:__________________________
Investment Amount: $____________
Residence: ____________________
________________________________
Address:
________________________________
________________________________
Telephone No.: ( )___________
Telecopy No.: ( )___________
Attention:______________________
with copies of all notices to:
________________________________
________________________________
________________________________
________________________________
Telephone No.: ( ) _________
Telecopy No.: ( ) _________
Attention: ____________________
APPENDIX A
__________, 2003
GENUS, INC.
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial Purchaser of shares of common stock, no par
value per share (the "Shares" or "Registrable Shares"), of Genus, Inc. ("Genus"
or "Registrant"), issued or issuable pursuant to that certain Stock Purchase and
Registration Agreement dated November 7, 2003 (the "Purchase Agreement")
understands that the Registrant has filed or intends to file with the Securities
and Exchange Commission (the "Commission") a registration statement on Form S-3
(the "Resale Registration Statement") for the registration and resale under Rule
415 of the Securities Act of 1933, as amended (the "Securities Act" ), of the
Shares, in accordance with the terms of the Purchase Agreement.
Each capitalized term not otherwise defined herein shall have the meaning
ascribed thereto in the Purchase Agreement. Each beneficial owner of
Registrable Shares is entitled to the benefits of the Purchase Agreement. In
order to sell or otherwise dispose of any Registrable Shares pursuant to the
Resale Registration Statement, a beneficial owner of Registrable Shares
generally will be required to be named as a selling securityholder in the
related prospectus, deliver a prospectus to purchasers of Registrable Shares and
be bound by those provisions of the Purchase Agreement applicable to such
beneficial owner. Beneficial owners that do not complete this Notice and
Questionnaire and deliver it to Genus within 10 Business Days of the date of
this Notice and Questionnaire as provided below will not be named as selling
securityholders in the prospectus and therefore will not be permitted to sell
any Registrable Shares pursuant to the Resale Registration Statement.
Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Resale Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus at the time of effectiveness. BENEFICIAL OWNERS THAT DO NOT
COMPLETE THIS NOTICE AND QUESTIONNAIRE AND TIMELY DELIVER IT TO GENUS SHALL NOT
BE NAMED AS SELLING SECURITYHOLDERS IN THE PROSPECTUS INCLUDED IN THE RESALE
REGISTRATION STATEMENT AND THEREFORE SHALL NOT BE PERMITTED TO SELL ANY
REGISTRABLE SHARES PURSUANT TO THE RESALE REGISTRATION STATEMENT.
Certain legal consequences arise from being named as a selling
securityholder in the Resale Registration Statement and the related prospectus.
Accordingly, Purchasers and beneficial owners of Registrable Shares are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Resale Registration
Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Shares hereby gives notice to Genus of its intention to sell or
otherwise dispose of Registrable Shares beneficially owned by it and listed
below in Item 3 (unless otherwise specified under Item 3) pursuant to the Resale
Registration Statement. The undersigned, by signing and returning this Notice
and Questionnaire, understands that it will be bound by the terms and conditions
of this Notice and Questionnaire and the Purchase Agreement.
Upon any sale of Registrable Shares pursuant to the Resale Registration
Statement, the undersigned will be required to deliver to Genus the Notice of
Transfer (completed and signed) set forth in Exhibit 1 attached hereto and
---------
hereby undertakes to do so.
The undersigned hereby provides the following information to Genus and
represents and warrants that such information is accurate and complete:
QUESTIONNAIRE
1. (a) Full Legal Name of Selling Securityholder:
---------------------------------------------------------------------------
(b) Full Legal Name of Registered Purchaser (if not the same as (a) above)
through which Registrable Shares listed in Item 3 below are held:
---------------------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not the same
as (b) above) through which Registrable Shares listed in Item 3 below
are held:
---------------------------------------------------------------------------
2. Address for Notices to Selling Securityholder:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Telephone:_________________________________________________________________
Fax:_______________________________________________________________________
Contact Person:____________________________________________________________
3. Beneficial Ownership of Registrable Shares:
(a) Type and Principal Amount of Registrable Shares beneficially owned:
---------------------------------------------------------------------------
24
(b) CUSIP No(s). of such Registrable Shares beneficially owned:
---------------------------------------------------------------------------
4. Beneficial Ownership of other securities of Genus owned by Selling
Securityholder:
Except as set forth below in this Item 4, the undersigned is not the
beneficial or registered owner of any securities of Genus other than the
Registrable Shares listed above in Item 3.
(a)Type and Amount of other securities beneficially owned by the Selling
Securityholder:
___________________________________________________________________________
___________________________________________________________________________
(b)CUSIP No(s). of such other securities beneficially owned:
___________________________________________________________________________
___________________________________________________________________________
5. Relationships with Genus:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (5% or more)
has held any position or office or has had any other material relationship
with Genus (or its predecessors or affiliates) during the past three years.
State any exceptions here:_________________________________________________
___________________________________________________________________________
6. Plan of Distribution:
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Registrable Shares listed above in Item
3 pursuant to the Resale Registration Statement only as follows (if at
all): Such Registrable Shares may be sold from time to time directly by the
undersigned or, alternatively, through underwriters, broker-dealers or
agents. If the Registrable Shares are sold through underwriters or
broker-dealers, the Selling Securityholder will be responsible for
underwriting discounts or commissions or agent's commissions. Such
Registrable Shares may be sold in one or more transactions at fixed prices,
at prevailing market prices at the time of sale, at varying prices
determined at the time of sale, or at negotiated prices. Such sales may be
effected in transactions (which may involve block transactions) (i) on any
national securities exchange or quotation service on which the Registrable
Shares may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions
25
otherwise than on such exchanges or services or in the over-the-counter
market, (iv) in ordinary brokers' transactions, (v) in purchasers by
brokers, dealers or underwriters as principal and resale by the Selling
Securityholders for their own accounts pursuant to this prospectus, (vi)
"at the risk of the market," to or through market makers, or into an
existing market the Registrable Shares, (vii) in other ways not involving
market makers or established trading markets, including direct sales to
purchasers or sales effected through agents, (viii) through transactions in
swaps or other derivatives (whether exchange-listed or otherwise), (ix) to
cover short sales or (x) through the writing of options. In connection with
sales of the Registrable Shares or otherwise, the undersigned may enter
into hedging transactions with broker-dealers, which may in turn engage in
short sales of the Registrable Shares in the course of hedging positions
they assume. The undersigned may also sell Registrable Shares short and
deliver Registrable Shares to close out short positions, or loan or pledge
Registrable Shares to broker-dealers that in turn may sell such securities.
State any exceptions here:_________________________________________________
___________________________________________________________________________
Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Shares without the prior written
agreement of Genus.
The undersigned acknowledges that it understands its obligation to comply
with the provisions of the Exchange Act and the rules thereunder relating to
stock manipulation, particularly Regulation M thereunder (or any successor rules
or regulations), in connection with any offering of Registrable Shares pursuant
to the Purchase Agreement. The undersigned agrees that neither it nor any
person acting on its behalf will engage in any transaction in violation of such
provisions.
In accordance with the undersigned's obligation under the Purchase
Agreement, the undersigned agrees to promptly notify Genus of any inaccuracies
or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Resale Registration Statement remains
effective. All notices hereunder and pursuant to the Purchase Agreement shall
be made in writing at the address set forth below.
In the event that the undersigned transfers all or any portion of the
Registrable Shares listed in Item 3 above after the date on which such
information is provided to Genus, the undersigned agrees to notify the
transferee(s) at the time of transfer of its rights and obligations under this
Notice and Questionnaire and the Purchase Agreement.
By signing below, the undersigned consents to the disclosure of the
information contained herein in, its answers to Items 1 through 6 above and the
inclusion of such information in the Resale Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by Genus in connection with the preparation or amendment of the
Resale Registration Statement and the related prospectus.
26
Once this Notice and Questionnaire is executed by the undersigned and
received by Genus, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the respective successors,
heirs, personal representatives, and assigns of Genus and the undersigned with
respect to the Registrable Shares beneficially owned by the undersigned and
listed in Item 3 above. This Agreement shall be governed in all respects by the
laws of the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Date:__________________________________ _____________________________________
Beneficial Owner
By:__________________________________
Name:________________________________
Title:_______________________________
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE TO GENUS, INC. AT:
Genus, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Shum Mukherjee, CFO
___________________
27
EXHIBIT 1
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Phone:(000) 000-0000
Fax: (000) 000-0000
RE: GENUS, INC. (THE "COMPANY") COMMON STOCK TRANSFER
Dear Sirs:
Please be advised that __________ has transferred ___________ shares of the
Company's Common Stock pursuant to the Registration Statement on Form S-3 (File
No.___-______) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or Common Stock is named as a selling securityholder in the Prospectus dated
__________, 2003 or in amendments or supplements thereto, and that the number of
shares of Common Stock transferred are all/a portion (please circle as
appropriate) of the Common Stock listed for resale in such Prospectus as amended
or supplemented opposite such owner's name.
Very truly yours,
__________________________________
(Name)
By:_______________________________
(Authorized Signature)
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