SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                                January 25, 2002
           -----------------------------------------------------------
                                (Date of Report)

                                   GENUS, INC.
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          California                  000-17139            94-2790804
- -------------------------------------------------------------------------------
   (State or other jurisdiction     (Commission        (IRS Employer
       of incorporation)            File Number)     Identification No.)


        1139  Karlstad  Drive
        Sunnyvale, CA                                        94089
 ----------------------------------------------      -------------------
    (Address of principal executive offices)              (Zip Code)


Registrant's  telephone  number,  including  area  code:    (408) 747-7120
                                                            --------------

                                       N/A
          -------------------------------------------------------------
          (Former name or former address, if changed since last report)

Item  5.     Other  Events

     On  January  25,  2002,  the  Registrant  completed  a $8.7 million private
placement  of  shares  of  common  stock  and  warrants.  In connection with the
private  placement,  the  Registrant  issued approximately 3.8 million shares of
common  stock  and  warrants  to purchase up to approximately 581,005 additional
shares  of  common  stock.  The purchase price of $2.25 per share was based on a
discount  to  the  trailing  five-day average closing bid price and the warrants
have an exercise price of $3.23 per share.   The Registrant has agreed to file a
registration  statement  covering the resale of these shares and shares issuable
upon  exercise  of  the  warrants.

      The foregoing matters are further described in the press release issued by
the Registrant on January 25, 2002, a copy of which is filed herewith as Exhibit
99.1  and  incorporated  herein  by  reference.

Item 7.  Financial  Statements  and  Exhibits

     (c)  Exhibits

          99.1 Press  release  of  Genus,  Inc.  dated  January  25,  2002.

          99.2 Securities Purchase Agreement dated as of January 17, 2002 by and
               between  Genus,  Inc.  and  each  of  the  undersigned Investors.

          99.3 Form  of Genus, Inc. Stock Purchase Warrant issued to each of the
               Investors.

          99.4 Form  of Genus, Inc. Registration Rights Agreement issued to each
               of  the  Investors.

          99.5 Form  of  Genus,  Inc. Amendment to Registration Rights Agreement
               issued  to  each  of  the  Investors.



<PAGE>

                                   SIGNATURES

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
Registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  hereunto  duly  authorized.

Date:  January  25,  2002                    GENUS,  INC.


                                             By:   /s/  Shum  Mukherjee
                                             -----------------------------
                                             Shum  Mukherjee
                                             Chief Financial Officer



<PAGE>
                                INDEX TO EXHIBITS

Exhibits

99.1 Press  release  of  Genus,  Inc.  dated  January  25,  2002.

99.2 Common Stock and Warrant Purchase Agreement dated as of January 17, 2002 by
     and  between  Genus,  Inc.  and  each  of  the  undersigned  Investors.

99.3 Form of Genus, Inc. Stock Purchase Warrant issued to each of the Investors.

99.4 Form  of  Genus,  Inc.  Registration Rights Agreement issued to each of the
     Investors.

99.5 Form  of  Genus,  Inc. Amendment to Registration Rights Agreement issued to
     each  of  the  Investors.



<PAGE>

COMPANY  CONTACT:                                  PRESS  CONTACT:
Shum  Mukherjee                                    Dave  Richardson
Genus,  Inc.                                       Positio
Tel:  (408)  747-7140 Ext. 1311                    Tel: (650) 815 1006 Ext.  108
Email:  smukherjee@genus.com                       Email: dave@positiopr.com
       -----------



                        GENUS COMPLETES PRIVATE PLACEMENT


SUNNYVALE,  CALIF.-JANUARY  25, 2002- Genus, Inc. (Nasdaq:  GGNS) announced that
it  has completed a private placement of approximately 3.8 million shares of its
common  stock.  The purchase price for the shares was based on a discount to the
trailing  five-day  average  closing  bid price.  In connection with the private
placement,  the  company  also  issued  warrants  to purchase up to 581 thousand
additional  shares.  The  offering  resulted  in  gross proceeds to the company,
prior  to  the  exercise  of  the  warrants, of approximately $8.7 million.  The
warrants  have  a  five-year  term.

The  company  stated that it expects to use the net proceeds of the offering for
working  capital  and general corporate purposes.  Hoefer & Arnett, Incorporated
acted  as  the  placement agent to Genus for this private placement and Cardinal
Capital  acted  as  a  sales  agent.

This  press  release does not constitute an offer to sell or the solicitation of
an  offer to buy any security.  The shares and warrants have not been registered
under the Securities Act of 1933 or applicable state securities laws and may not
be offered or sold in the United States absent registration under the Securities
Act  and  applicable  state  securities  laws  or  an  applicable exemption from
registration  requirements.  Genus  has  agreed to file a registration statement
covering  the  resale of the shares and the shares issuable upon exercise of the
warrants.


FORWARD  LOOKING  STATEMENT
Except for the historical information contained herein, the matters set forth in
this  press release, including the expected use of proceeds of the offering, are
forward-looking statements within the meaning of the "safe harbor" provisions of
the  Private  Securities  Litigation  Reform Act of 1995.  These forward-looking
statements  are subject to risks and uncertainties that may cause actual results
to  differ  materially,  including  the  effect  of the offering on Genus' share
price, changing customer requirements, and the effects of technological advances
and  competition.  For a discussion of additional factors that may cause results
to  differ,  see Genus' SEC reports, including its Quarterly Report on Form 10-Q
for  the  quarter  ended  September  30,  2001  and Form 10-K for the year ended
December  31,  2000.  These forward-looking statements speak only as of the date
hereof.  Genus  disclaims  any  intent  or  obligation  to  update  these
forward-looking  statements.


<PAGE>
                                       19



     SECURITIES  PURCHASE  AGREEMENT
     -------------------------------

     SECURITIES  PURCHASE  AGREEMENT (this "AGREEMENT"), dated as of January 17,
2002,  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 Rule 506 and 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, (i) shares of the
Company's  common stock, no par value (the "COMMON STOCK"), and (ii) warrants in
the  form  attached  hereto  as  Exhibit  A  (including  any  warrants issued in
                                 ----------
replacement  thereof,  the  "WARRANTS"), to acquire shares of Common Stock.  The
shares  of  Common  Stock issuable upon exercise of or otherwise pursuant to the
Warrants  are  referred  to  herein  as  the  "WARRANT  SHARES."

     C.     Contemporaneous  with  the execution and delivery of this Agreement,
the  parties hereto are executing and delivering a Registration Rights Agreement
in  the form attached hereto as Exhibit B (the "REGISTRATION RIGHTS AGREEMENT"),
                                ---------
pursuant  to which 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.
     --------------------

     For purposes of this Agreement, the following terms shall have the meanings
ascribed  to  them  as  provided  below:

     "BUSINESS  DAY"  means  any  day  except Saturday, Sunday and any day which
shall  be a legal holiday or a day on which banking institutions in the State of
New  York  or  California  are authorized or required by law or other government
action  to  close.

"CLOSING  PRICE" shall mean for the Common Stock as of any date, the closing bid
price  of  such  security  on the principal United States securities exchange or
trading  market  on  which  such security is listed or traded as reported by the
Research  Service  of  Nasdaq  Trading  and  Market  Services  (or  a comparable
reporting  service of national reputation selected by the Purchasers as provided
in Section 8(n) hereof, and reasonably acceptable to the Company if the Research
Service  of Nasdaq Trading and Market Services is not then reporting closing bid
prices  of  such  security) (collectively, "NTMS"), or if the foregoing does not
apply,  the  last  reported  sale price of such security in the over-the-counter
market  on  the electronic bulletin board for such security as reported by NTMS,
or,  if  no sale price is reported for such security by NTMS, the average of the
bid  prices  of  any  market  makers  for such security as reported in the "pink
sheets"  by  Pink  Sheets LLC (formerly the National Quotation Bureau, Inc.), in
each  case  for  such  date  or,  if such date was not a Trading Day (as defined
below) for such security, on the next preceding day which was a Trading Day.  If
the Closing Price cannot be calculated for a share of Common Stock on any of the
foregoing  bases,  the  Closing  Price of such security shall be the fair market
value  as  determined  by an investment banking firm selected by the Company and
reasonably  acceptable to the Purchasers, with the costs of such appraisal to be
borne  by  the  Company.

     "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.

"MARKET  PRICE"  shall  mean,  with  respect  to  any date of determination, the
Closing  Price  on  the  Trading  Day  immediately  preceding  such  date  of
determination, appropriately adjusted to reflect any stock dividend, stock split
or  similar  transaction  during  either  such  relevant  period.

     "MATERIAL  ADVERSE  EFFECT"  means any one or more material adverse effects
which,  individually  or  in  the  aggregate: (i) adversely affect the legality,
validity or enforceability of any Transaction Document, (ii) have or result in a
material  adverse  effect  on  the  results  of  operations,  assets, prospects,
business  or  condition  (financial  or  otherwise)  of  the  Company  and  the
Subsidiaries,  taken as a whole, or (iii) adversely impair the Company's ability
to  perform  fully  on  a  timely  basis  its  obligations under any Transaction
Document  (it  being  understood  that  any  of (i), (ii) or (iii), constitute a
"Material  Adverse  Effect").
    ----------------------

"PLACEMENT  AGENT"  shall  mean  Hoefer  &  Arnett,  Inc.

     "PRO  RATA  PERCENTAGE"  shall  mean,  with  respect  to  any  Purchaser, a
percentage  computed  by  dividing  such  Purchaser's  Investment  Amount by the
aggregate  Investment  Amounts  of  all  Purchasers.

     "SECURITIES"  shall  mean  the Shares, the Warrants and the Warrant Shares.

     "SHARES"  means  the  shares  of  Common Stock to be issued and sold by the
Company  and  purchased  by  the  Purchasers  at  the  Closing.

"TRADING  DAY"  shall  mean  a  Business  Day on which at least 10,000 shares of
Common  Stock  are  traded on the principal United States securities exchange or
trading  market  on which such security is listed or traded as reported by NTMS.

"TRANSACTION DOCUMENTS" means this Agreement, the Registration Rights Agreement,
the  Transfer  Agent  Instructions (attached as Exhibit C hereto), and the Stock
                                                ---------
Purchase  Warrant  (and  the  exhibits  and  schedules  thereto).

2.     PURCHASE  AND  SALE  OF  SHARES  AND  WARRANTS.
       ----------------------------------------------

     a.     Generally.  Except  as  otherwise  provided  in  this  Section 2 and
            ---------
subject to the satisfaction (or waiver) of the conditions set forth in Section 6
and  Section  7  below,  each  Purchaser shall purchase the number of Shares and
Warrants  determined  as provided in this Section 2, and the Company shall issue
and  sell  such  number  of  Shares  and  Warrants  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.

     b.     Number  of  Closing  Shares  and  Warrants; Form of Payment; Closing
            --------------------------------------------------------------------
Date.

     i.     On  the  Closing Date (as defined below), the Company shall sell and
each Purchaser shall buy (A) the number of Shares as is equal to the quotient of
(I)  such  Purchaser's  Investment Amount divided by (II) $2.25 and (B) Warrants
exercisable for a number of shares of Common Stock equal to 15% of the number of
Shares  referred to in subclause (A) above.  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 and duly
executed  Warrants  being  purchased  by  such  Purchaser, and the Company shall
deliver such Shares and Warrants against delivery of such Purchaser's Investment
Amount.

     iii.     Subject  to the satisfaction (or waiver) of the conditions thereto
set forth in Section 6 and Section 7 below, the date and time of the sale of the
Shares  and  the  Warrants  pursuant  to this Agreement (the "CLOSING") shall be
10:00 a.m. California time on January 17, 2002 or such other date or time as the
Purchasers  and  the  Company  may mutually agree ("CLOSING DATE").  The Closing
shall  occur  at  the  Palo  Alto  offices  of  Wilson Sonsini Goodrich & Rosati
("WSGR"),  or  at  such  other  place as the Placement Agent and the Company may
otherwise  mutually  agree.

3.   THE  PURCHASER'S  REPRESENTATIONS  AND  WARRANTIES.
     --------------------------------------------------

     Each  Purchaser,  severally and not jointly, represents and warrants to the
Company  as  to  itself  and  for  no  other  Purchaser  as  follows:

     a.     Purchase  for  Own  Account.  Such  Purchaser  is  purchasing  the
            ---------------------------
Securities for such  Purchaser's own account and not with a present view towards
the  distribution  thereof.  Such Purchaser understands that such Purchaser must
bear  the  economic  risk of this investment indefinitely, unless the Securities
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 Securities
other  than  as  contemplated  by  the  Registration  Rights  Agreement.
Notwithstanding  anything  in  this  Section 3(a) to the contrary, by making the
foregoing  representation,  such Purchaser does not agree to hold the Securities
for  any minimum or other specific term and reserves the right to dispose of the
Securities  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.  Purchaser has no agreement or understanding,
directly  or  indirectly,  with any person to distribute any of the Sercurities.

     b.     Information.  Such  Purchaser  has  been  furnished  all  materials
            -----------
(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 Securities that have been requested by
such  Purchaser.  Such  Purchaser  has  been  afforded  the  opportunity  to ask
questions  of  the  Company  and has received what such Purchaser believes to be
satisfactory answers to any such inquiries.  Such Purchaser understands that its
investment  in  the  Securities  involves  a  high degree of risk.  Neither such
inquiries  nor any other due diligence investigation conducted by such Purchaser
or  its counsel or any of its representatives shall modify, amend or affect such
Purchaser's  right  to  rely  on  the  Company's  representations and warranties
contained  in  Section  4  below.

     c.     Governmental  Review.  Such  Purchaser  understands  that  no United
            --------------------
States  federal  or  state agency or any other government or governmental agency
has  passed  upon  or  made any recommendation or endorsement of the Securities.

     d.     Authorization;  Enforcement.  Such Purchaser has the requisite power
            ---------------------------
and authority to enter into and perform its obligations under this Agreement and
to  purchase  the  Shares  and the Warrants in accordance with the terms hereof.
This  Agreement  has been duly and validly authorized, executed and delivered on
behalf  of such Purchaser and is a valid and binding agreement of such Purchaser
enforceable  against  such  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.  Such Purchaser understands that (i) except as
            --------------------
provided in the Registration Rights Agreement and this Agreement, the Securities
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) such 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 Securities 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
Securities  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  the  Registration  Rights  Agreement.

     f.     Investor  Status.  Purchaser  is an "ACCREDITED INVESTOR" within 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 Securities
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 Securities.
Such  Purchaser  has  not  been  formed  solely for the purpose of acquiring the
Securities.  Such  Purchaser  is not a registered broker-dealer under Section 15
of  the  Exchange  Act.

     g.   Representation  by  Non-United States Persons. If a Purchaser is not a
          -----------------------------------------------
United  States  person,  such  Person  hereby  represents that such Purchaser is
satisfied as to the full observance of the laws of such Purchaser's jurisdiction
in connection with any invitation to subscribe for the Shares and Warrant Shares
or  any  use  of the Transaction Documents, including (i) the legal requirements
within  such  Purchaser's jurisdiction for the purchase of such securities, (ii)
any  foreign  exchange  restrictions  applicable  to  such  purchase,  (iii) any
governmental  or other consents that may need to be obtained and (iv) the income
tax  and  other  tax consequences, if any, that may be relevant to the purchase,
holding,  redemption,  sale  or  transfer  of such securities.  Such Purchaser's
subscription  and  payment  for,  and  such  Purchaser's  continued  beneficial
ownership  of,  the  Shares  and  Warrant Shares will not violate any applicable
securities  or  other  laws  of  such  Purchaser's  jurisdiction.

     4.     REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.
            --------------------------------------------------

     The  Company  represents  and  warrants  to  each  Purchaser  as  follows:

     a.     Organization  and  Qualification.  Each  of  the  Company  and  its
            --------------------------------
subsidiaries  is  a  corporation  duly  organized, in good standing, and validly
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. Schedule 4(a) sets forth the Company's jurisdiction of
                          -------------
incorporation  and  the  name  of  each  of  the  Company's subsidiaries and its
jurisdiction  of incorporation.  Neither the Company nor any of its subsidiaries
is  in  violation  of  any provision of its organizational or charter documents.

b.     Authorization;  Enforcement.  (i) The Company has the requisite corporate
       ---------------------------
power  and  authority  to  enter  into  and  perform  its  obligations under the
Transaction  Documents,  to  issue  and  sell  the  Shares  and  the Warrants in
accordance  with  the terms hereof and to issue the Warrant Shares upon exercise
of  the  Warrants  in  accordance  with  the  terms  of  the  Warrants; (ii) the
execution,  delivery and performance of the Transaction Documents by the Company
and  the  consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Shares  and  the  issuance  of the Warrants and the reservation for issuance and
issuance of the Warrant 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, and,
upon  execution and delivery by the Company and the other parties thereto to the
extent  required  of  the  Registration  Rights Agreement and the Warrants, such
agreements  will  constitute,  valid  and  binding  obligations  of  the Company
enforceable  against  the  Company  in  accordance  with their respective 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).

c.     Capitalization.  The  capitalization  of  the  Company  and  each  of its
       --------------
subsidiaries  as of the date hereof is set forth on Schedule 4(c), including the
                                                    -------------
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
                                             -------------
stock of the Company (including the Shares and the Warrant 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
Securities  and as disclosed in Schedule 4(c), as of the date of this Agreement,
                                -------------
(i)  there  are no 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 for the
Registration Rights Agreement).  Except as set forth on Schedule 4(c), there are
                                                        -------------
no  securities or instruments containing antidilution or similar provisions that
may  be triggered by the issuance of the Securities in accordance with the terms
of  this  Agreement,  the  Warrants or the Registration Rights 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 or similar provisions in
connection  with  the issuance of the Securities in accordance with the terms of
this  Agreement, the Warrants or the Registration Rights 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  Securities.  The  Shares  are duly authorized and when
            ------------------------
issued 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 any
Purchaser), 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.  The  Warrant  Shares  are  duly  authorized  and  reserved for
issuance,  and,  upon  exercise  of  the  Warrants  in accordance with the terms
thereof, will be validly issued, fully paid and non-assessable and free from all
taxes  and liens, claims and encumbrances (other than those imposed through acts
or  omissions of any Purchaser), 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
            -------------
Agreement,  the  Registration  Rights Agreement and the Warrants by the Company,
and  the consummation by the Company of the transactions contemplated hereby and
thereby  (including,  without  limitation,  the  reservation  for  issuance  and
issuance  of the Shares and the Warrant Shares and the issuance of the Warrants)
will  not  (i)  conflict  with  or  result  in  a  violation  of the Articles of
Incorporation  or  By-laws  (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 (including (assuming the accuracy of the
representations  and  warranties of the Purchasers set forth in Section 3(a) and
3(f)  hereof)  the  United  States  federal  and  state  securities  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), or (iii)
result  in  a  violation of any law, rule, regulation, order, judgment or decree
(including  federal  and state securities laws and regulations and the rules and
regulations of the Nasdaq Stock Market) or by which any property or asset of the
Company  or  any  of  its  subsidiaries  is  bound  or  affected.
     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 (including without limitation the issuance and sale of the
Shares  and  Warrants  as  provided  hereby),  the  Warrants  (including without
limitation  the  issuance  of  the  Warrant  Shares)  or the Registration Rights
Agreement,  in  each  case  in accordance with the terms hereof or thereof.  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 (and
interpretations  thereof)  as  currently  in  effect.

     f.     SEC  Documents;  Financial  Statements.  Since  January 1, 2000, the
            --------------------------------------
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  herein 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 in all material respects 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 in all material respects 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
include  footnotes or may be condensed or summary statements) and fairly present
in  all material respects 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
            -----------------------------
Documents  and  the Schedules hereto, since December 31, 2001, there has been no
change  or  development  which individually or in the aggregate has had or could
have  a  Material Adverse Effect or which adverse change or developments affects
or  challenges  the  legality  or  enforceability  of  any  of  the  Transaction
Documents.

     h.     Absence  of Litigation.  Except as disclosed in Schedule 5(h) or the
            ----------------------
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
            ----------------------
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.  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.  Neither the Company nor any of its
subsidiaries  has  entered into any consent, indemnification, forbearance to sue
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.   Environment.  Except as disclosed in the SEC Documents (i) there is no
          -----------
environmental  liability,  nor  factors likely to give rise to any environmental
liability,  affecting  any  of  the  properties  of  the  Company  or any of its
subsidiaries  that,  individually  or  in  the  aggregate, would have a Material
Adverse  Effect  and  (ii)  neither  the Company nor any of the subsidiaries has
violated  any  environmental  law  applicable to it now or previously in effect,
other  than  such  violations  or  infringements  that,  individually  or in the
aggregate,  have  not  had  and  will  not  have  a  Material  Adverse  Effect.


     k.     Title.  The  Company  and each of its subsidiaries has good title in
            -----
fee simple to all real property and good title to all personal property owned by
it  which is material to its business, free and clear of all liens, encumbrances
and  defects  except  for  such  defects  in  title that, individually or in the
aggregate,  could  not  have  a  Material Adverse Effect.  Any real property and
facilities  held  under lease by the Company or any of its subsidiaries are held
by the Company or such subsidiary under valid, subsisting and enforceable leases
with  such  exceptions  which  have not had and will not have a Material Adverse
Effect.

     l.     Insurance.  The Company and its subsidiaries maintain such insurance
            ---------
relating  to  their business, operations, assets, key-employees and officers and
directors  as  is  appropriate to their business, assets and operations, in such
amounts and against such risks as are customarily carried and insured against by
owners  of  comparable  businesses,  assets  and  operations, and such insurance
coverages  will  be  continued  in  full  force  and effect to and including the
Closing  Date  other  than  those  insurance  coverages  in respect of which the
failure to continue in full force and effect could not reasonably be expected to
have  a  Material  Adverse  Effect.

     m.     Acknowledgment Regarding the Purchasers' Purchase of the Securities.
            -------------------------------------------------------------------
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 and is merely incidental to such Purchaser's purchase
of  Securities  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.

     n.     No  Brokers.  Except  for  the  Placement Agent, the Company has not
            -----------
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.  The Purchasers
shall  have no obligation with respect to any fees or with respect to any claims
made  by  or  on behalf of other persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this
Agreement.

     o.     Tax  Status.  The  Company  and each of its subsidiaries has made or
            -----------
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.

     p.     No  General  Solicitation.  Neither  the  Company  nor  any  person
            -------------------------
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 Securities being offered
hereby.

     q.     Securities  Laws.  Neither  the  Company, nor any of its affiliates,
            ----------------
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 Securities being
offered  hereby under the Securities Act or cause this offering of Securities 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(a) and 3(f) of this
Agreement,  the  offer,  sale and delivery of the Shares and Warrants as well as
the issuance of Warrant Shares upon exercise of the Warrants will be exempt from
the  registration requirements of Section 5 of the Securities Act.  Assuming the
truth  and  accuracy of the representations and warranties of the Purchasers set
forth  in  Section  3(a)  and 3(f) of this Agreement, the Purchasers will not be
statutory  underwriters  within the meaning of Section 2(a) 11 of the Securities
Act.

     r.     Form S-3 Eligibility.  The Company is currently eligible to register
            --------------------
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 Securities (as defined in the Registration Rights Agreement).

     s.     Disclosure.  All  information  relating to or concerning the Company
            ----------
and  its  subsidiaries  set forth in this Agreement or provided to any Purchaser
pursuant  to  Section  3(b)  hereof  and  otherwise  in  connection  with  the
transactions  contemplated  hereby  is true and correct in all material respects
and the Company has not omitted to state any material fact necessary in order to
make  the statements made herein or therein, in light of the circumstances under
which  they were made, not misleading.  No event or circumstance has occurred or
exists  with  respect  to  the  Company or its subsidiaries or their businesses,
properties,  operations,  prospects  or financial conditions, which has not been
publicly  disclosed  but,  under  applicable  law,  rule or regulation, would be
required to be disclosed by the Company in a registration statement filed on the
date  hereof  by  the Company under the Securities Act with respect to a primary
issuance  of  the  Company's  securities.  The  Company  has  not  disclosed  or
provided,  and  without  such  Purchaser's  consent  thereto, will not hereafter
disclose  or  provide  to  any  Purchaser,  any  material non-public information

5.     COVENANTS.
       ---------

     a.     Form  D;  Blue  Sky  Laws.  The Company agrees to file a Form D with
            -------------------------
respect  to  the Securities 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 Securities for sale to such Purchasers
pursuant to this Agreement under applicable securities or "blue sky" laws of the
states  of  the  United  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.

     b.     Reporting  Status.  So  long  as  a  Purchaser beneficially owns any
            -----------------
Securities  or  has  the  right  to  acquire  any  Securities  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.

     c.     Use  of  Proceeds.  The  Company shall use the net proceeds from the
            -----------------
sale of the Shares and the Warrants for the purposes set forth on Schedule 5(c),
                                                                  -------------
but  in  no  event  shall  the  Company  use such net proceeds to repurchase any
outstanding  securities  of  the  Company.

     d.     Financial  Information.  For  a  period of three (3) years following
            ----------------------
the  Closing,  the  Company agrees to send to each Purchaser (i) within ten days
after  the  filing  with  the SEC, to the extent not available through the SEC's
EDGAR system, a copy of its Annual Report on Form 10-K, its Quarterly Reports on
Form  10-Q, its proxy and information statements and any Current Reports on Form
8-K  and  (ii) within one day after release, copies of all press releases issued
by  the  Company  or  any  of  its  subsidiaries,  if  any.

     e.     Reservation  of Shares.  The Company has and shall at all times have
            ----------------------
authorized  and  reserved  for  the  purpose  of issuance a sufficient number of
shares  of Common Stock to provide for the issuance of the Shares as provided in
Section  2 hereof, and the full exercise of the Warrants and the issuance of the
Warrant  Shares  in connection therewith and as otherwise required hereby and by
the Warrants.  The Company shall not reduce the number of shares of Common Stock
reserved  for  issuance under this Agreement (except as a result of the issuance
of  the  Shares  hereunder), the Warrants (except as a result of the issuance of
the Warrant Shares upon the exercise of the Warrants) or the Registration Rights
Agreement,  without  the  consent  of  the  Purchasers.

     f.     Listing.  On  the  Closing  Date, the Company shall have applied for
            -------
the  listing  of the Shares and Warrant 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  and all Warrant Shares from time to time issuable
upon  exercise  of  the  Warrants.  The  Company  shall  use its best efforts to
include the Shares and Warrant Shares 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 Securities and
Exchange  Commission  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.

     g.     Additional  Equity  Capital.   The  Company  agrees  that during the
            ---------------------------
period  beginning on the date hereof and ending on the date which is one hundred
eighty  (180) days following the Closing Date and for the ninety (90) day period
following  any  Automatic  Mandatory  Exercise  Date  under  any Warrant (each a
"LOCK-UP  PERIOD"),  the  Company will not, without the prior written consent of
the  Purchasers or their designees, contract with any party to obtain additional
financing  in  which  any  equity or equity-linked securities or convertible are
issued  (including  any  debt  financing  with  an equity component) (an "EQUITY
FINANCING")  at  a  price per share or an exercise or conversion price per share
less  than  $2.25  pursuant  to  any  offering  exempt  from  the  registration
requirements of the Securities Act which grants any registration rights and such
registration  rights  may be exercised within one year of the Closing Date.  The
Company will not conduct any Equity Financing during the period beginning on the
Closing  Date  and ending one hundred eighty (180) days following the expiration
of  a  Lock-Up  Period unless it shall have first delivered to the Purchaser, at
least  ten  (10)  Business  Days  prior to the closing of such Equity Financing,
written notice describing the proposed Equity Financing, including the terms and
conditions  thereof, and providing the Purchasers and their affiliates an option
during  the  ten  (10)  Business  Day period following receipt of such notice to
purchase  any  or all of the securities being offered in the Equity Financing on
the  same  terms as contemplated by such Equity Financing.  Such option shall be
exercised  by  each  applicable  Purchaser  giving written notice to the Company
within  such  period  of  its agreement to buy a specified amount of the offered
securities.  Closing  of  such sale shall be contemporaneous with the closing of
the offering with investors other than the Purchasers (or, if there are no other
such  investors,  on a date specified by the Company), provided that the Company
shall  provide  written  notice  to  each applicable Purchaser at least five (5)
Business  Days prior to any such closing.  To the extent that the Purchasers, in
the  aggregate,  elect  to purchase more than all of such securities, the amount
that  each  Purchaser  shall be entitled to purchase shall be pro rated based on
the  Purchaser's  Pro  Rata Percentage.  Each Purchaser can buy its own pro-rata
amount  unless  a  Purchaser no longer owns Securities in which event its amount
shall  be  allocated  pro rata among the Purchaser still holding Securities.  To
the  extent  that  the  terms of an additional Equity Financing are changed in a
manner  that  is  at  least  partially  favorable  to prospective investors, the
Company  shall  notify  the  Purchasers  of  all  changes  in such terms and the
Purchasers  shall  have  another ten (10) Business Day option to purchase on the
revised  terms  and  otherwise  in  accordance  with the provisions hereof.  The
limitations  referred  to  in  this  Section  5(i)  shall  not  apply to (i) any
transaction  involving  issuances  of  securities  as consideration in a merger,
consolidation  or  acquisition  of  assets,  or in connection with any strategic
partnership, collaboration or joint venture (the primary purpose of which is not
to raise equity capital), or as consideration for the acquisition of a business,
product  or  license by the Company, (ii) the issuance of securities pursuant to
widely  distributed  underwritten  public  offering,  (iii)  the  issuance  of
securities  upon  exercise  or  conversion of the Company's options, warrants or
other  convertible  securities outstanding as of the date hereof as set forth in
Schedule  4(c),  or  (iv)  the  grant  of additional options or warrants, or the
- ---------------
issuance  of  additional  securities,  under  any  duly authorized Company stock
 ----
option, stock purchase or restricted stock plan for the benefit of the Company's
- -----
employees,  consultants  or  directors.

     h.     No  Integrated  Offerings.  The Company shall not make any offers or
            --------------------------
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
Securities  Act  or  cause this offering of Securities 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.

i.     Legends.  Each  Purchaser  understands  that  the Shares and the Warrants
       -------
and, until such time as the Shares and Warrant Shares have been registered under
the  Securities  Act  as  contemplated  by  the Registration Rights Agreement or
otherwise  may be sold by the Purchaser under Rule 144, the certificates for the
Shares  and  Warrant  Shares  may bear a restrictive legend in substantially the
following  form:

NEITHER  THESE  SECURITIES  NOR  THE  SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE  HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE  SECURITIES  COMMISSION  OF  ANY  STATE  IN  RELIANCE UPON AN EXEMPTION FROM
REGISTRATION  UNDER  THE  SECURITIES  ACT  OF  1933, AS AMENDED (THE "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY  NOT  BE  OFFERED  OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  SECURITIES ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION  FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF  WHICH  SHALL  BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE  SHARES  MAY  BE  PLEDGED  IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT  OR  OTHER  LOAN  SECURED  BY  SUCH  SHARES.

     Securities  may  only  be  disposed of in compliance with state and federal
securities  laws.  In  connection with any transfer of the Securities other than
pursuant to an effective registration statement, to the Company, to an affiliate
of  a  Purchaser who is an "accredited investor" as defined in Rule 501(a) under
the  Securities  Act  or in connection with a pledge as contemplated pursuant to
the  terms  hereof, the Company may require the transferor thereof to provide to
the  Company  an  opinion  of  counsel  selected by the transferor, the form and
substance  of  which opinion shall be reasonably satisfactory to the Company, to
the  effect that such transfer does not require registration of such transferred
Securities  under  the  Securities  Act.  As  a  condition of transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement and
shall  have  the rights of a Purchaser under this Agreement and the Registration
Rights  Agreement.

     The  Company acknowledges and agrees that a Purchaser may from time to time
pledge  pursuant to a bona fide margin agreement or grant a security interest in
some  or  all  of  the  Securities  and,  if  required  under  the terms of such
arrangement, such Purchaser may transfer pledged or secured or Securities to the
pledgees  or secured parties.  Such a pledge or transfer would not be subject to
approval  of  the  Company and no legal opinion of the pledgee, secured party or
pledgor  shall be required in connection therewith.  Further, no notice shall be
required  of  such  pledge.  At the appropriate Purchaser's expense, the Company
will  execute  and deliver such reasonable documentation as a pledgee or secured
party  of  Securities  may  reasonably  request  in  connection with a pledge or
transfer  of the Securities including the preparation and filing of any required
prospectus  supplement  under  Rule  424(b)(3)  of  the  Securities Act or other
applicable  provision  of  the Securities Act to appropriately amend the list of
Selling  Stockholders  thereunder.

     Certificates  evidencing  Shares  and  Warrant Shares shall not contain any
legend  (including  the  legend  set  forth  herein):  (i)  while a registration
statement  (including  the  Registration  Statement) covering the resale of such
security  is  effective  under the Securities Act, or (ii) following any sale of
such  Shares  or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or
Warrant  Shares  are eligible for sale under Rule 144(k), or (iv) if such legend
is  not  required under applicable requirements of the Securities Act (including
judicial  interpretations  and  pronouncements  issued  by  the  Staff  of  the
Commission).  The Company shall cause its counsel to issue the legal opinion and
transfer  agent  instructions  to  the  Company's transfer agent on the date the
Registration Statement is declared effective by the SEC. The Company agrees that
following  the date the Registration Statement is declared effective by the SEC,
or  at  such  time as such legend is no longer required under this Section 5, it
will,  no later than three Trading Days following the delivery by a Purchaser to
the Company or the Company's transfer agent of a certificate representing Shares
or  Warrant  Shares  issued  with  a  restrictive legend, deliver or cause to be
delivered  to  such  Purchaser a certificate representing such Shares or Warrant
Shares that is free from all restrictive and other legends.  The Company may not
make  any  notation on its records or give instructions to any transfer agent of
the Company that enlarge the restrictions on transfer set forth in this Section.

6.     CONDITIONS  TO  THE  COMPANY'S  OBLIGATION  TO  SELL.
       ----------------------------------------------------

     The  obligation  of  the  Company  hereunder  to  issue and sell Shares and
Warrants 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 the Registration Rights 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.

7.     CONDITIONS  TO  EACH  PURCHASER'S  OBLIGATION  TO  PURCHASE  SHARES  AND
       ------------------------------------------------------------------------
WARRANTS.
- ---------

     The  obligation of each Purchaser hereunder to purchase Shares and Warrants
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  the Registration Rights Agreement, and delivered the same to the
Purchaser.

     b.     The  Company  shall  have  delivered  to the Purchaser duly executed
certificates  representing  the  number  of Shares and duly executed Warrants as
provided  in  Section  2(b)  above.

     c.     The  Shares  shall  be  authorized for quotation on The Nasdaq Stock
Market  and  trading  in  the  Common Stock or The Nasdaq Stock Market generally
shall not have been suspended or be under threat of suspension by the SEC or any
governing  body  of  The  Nasdaq  Stock  Market.

     d.     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 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,  the  Warrants  and  the  Registration  Rights  Agreement.

     e.   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.

     f.     The  Purchaser  shall  have  received  an  opinion  of the Company's
counsel,  dated  as  of  the  Closing Date, relating to the matters set forth in
Exhibit  C  attached  hereto.
- ---------

     g.     From  the  date  of  this  Agreement through the Closing Date, there
shall  not  have  occurred  any  Material  Adverse  Effect.

     h.     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.

     8.     GOVERNING  LAW  MISCELLANEOUS.
            -----------------------------

     a.     Governing  Law;  Jurisdiction.  All  questions  concerning  the
            -----------------------------
construction,  validity,  enforcement and interpretation of this Agreement shall
be  governed  by and construed and enforced in accordance with the internal laws
of  the  State of New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all proceedings concerning the interpretations,
enforcement  and  defense of the transactions contemplated by this Agreement and
any  other  Transaction Documents (whether brought against a party hereto or its
respective  affiliates,  directors, officers, shareholders, employees or agents)
shall  be  commenced  exclusively in the state and federal courts sitting in the
City  of  New  York, Borough of Manhattan.  Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the  City  of New York, Borough of Manhattan for the adjudication of any dispute
hereunder  or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of the any of the
Transaction  Documents), and hereby irrevocably waives, and agrees not to assert
in  any  proceeding,  any  claim  that  it  is  not  personally  subject  to the
jurisdiction  of  any  such court, that such proceeding is improper.  Each party
hereto  hereby  irrevocably  waives  personal service of process and consents to
process  being  served  in  any  such  proceeding  by mailing a copy thereof via
registered  or  certified mail or overnight delivery (with evidence of delivery)
to  such  party  at the address in effect for notices to it under this Agreement
and  agrees  that  such  service shall constitute good and sufficient service of
process  and  notice thereof.  Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. Each party
hereto  hereby irrevocably waives, to the fullest extent permitted by applicable
law,  any  and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby. If either
party  shall  commence  a  proceeding to enforce any provisions of a Transaction
Document,  then  the  prevailing party in such proceeding shall be reimbursed by
the  other  party  for  its attorneys fees and other costs and expenses incurred
with  the  investigation,  preparation  and  prosecution  of  such  proceeding.

     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 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 8(n) 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.
     1139  Karlstad  Drive
     Sunnyvale,  CA  94089
     Telephone  No.:  (408)  747-7140  (x1311)
     Facsimile  No.:  (408)  747-7198
     Attention:  Mr.  Shum  Mukherjee

     With  a  copy  to:

      Wilson  Sonsini  Goodrich  &  Rosati
      650  Page  Mill  Road
     Palo  Alto,  CA  94304
     Telephone  No.:  (650)  493-9300
     Facsimile  No.:   (650)  493-6811
     Attention:  Mark  Casillas,  Esq.

     If to the Purchaser, to the address set forth under the Purchaser's name on
the  Execution  Page  hereto  executed  by  such  Purchaser.

Each  party  hereto may from time to time change its address or facsimile number
for notices under this Section 8 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  Securities 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, including advancement of expenses as they are
incurred.

     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.     Joint  Participation  in Drafting.  Each party to this Agreement has
            ---------------------------------
participated in the negotiation and drafting of this Agreement, the Registration
Rights Agreement and the Warrants. As such, the language used herein and therein
shall be deemed to be the language chosen by the parties hereto to express their
mutual  intent,  and  no rule of strict construction will be applied against any
party  to  this  Agreement,  the  Registration Rights Agreement or the Warrants.

     l.     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 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.

     m.   Independent  Nature  of  Purchasers'  Obligations  and  Rights.  The
          --------------------------------------------------------
obligations of each Purchaser under any Transaction Document are several and not
joint  with  the  obligations  of any other Purchaser, and no Purchaser shall be
responsible  in  any  way  for  the  performance of the obligations of any other
Purchaser  under  any  Transaction  Document. Nothing contained herein or in any
Transaction  Document,  and  no  action taken by any Purchaser pursuant thereto,
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 the Transaction Document. Each
Purchaser  shall  be  entitled  to independently protect and enforce its rights,
including  without limitation the rights arising out of this Agreement or out of
the  other  Transaction  Documents,  and it shall not be necessary for any other
Purchaser  to  be  joined  as  an  additional  party  in any proceeding for such
purpose.


     n.     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), except Sections 2, 5, and 8 which require consent and approval of each
Purchaser  to  be  binding  on  that  Purchaser.

     [REMAINDER  OF  PAGE  INTENTIONALLY  LEFT  BLANK]

<PAGE>

                                        3


     EXHIBIT  A
     TO  SECURITIES  PURCHASE  AGREEMENT
     -----------------------------------


VOID  AFTER  5:00  P.M.,  CALIFORNIA  TIME,
ON  JANUARY  17,  2007


THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR  THE SECURITIES
COMMISSION  OF  ANY  STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY  NOT  BE  OFFERED  OR  SOLD  EXCEPT  PURSUANT  TO  AN EFFECTIVE REGISTRATION
STATEMENT  UNDER  THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR  IN  A  TRANSACTION  NOT  SUBJECT  TO,  THE  REGISTRATION REQUIREMENTS OF THE
SECURITIES  ACT  AND  IN  ACCORDANCE  WITH  APPLICABLE  STATE SECURITIES LAWS AS
EVIDENCED  BY  A  LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE  OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SHARES
MAY  BE  PLEDGED  IN  CONNECTION  WITH  A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED  BY  SUCH  SHARES.
Date:  January  17,  2002

     GENUS,  INC.
     STOCK  PURCHASE  WARRANT

     THIS  CERTIFIES  THAT,  for  value  received,  __________________  or  its
registered  assigns  (the "Holder"), is entitled to purchase from GENUS, INC., a
corporation organized under the laws of the State of California (the "COMPANY"),
at  any  time  or  from  time  to  time during the period specified in Section 2
hereof,  _______  fully  paid  and  nonassessable shares of the Company's common
stock,  no  par  value (the "COMMON STOCK"), at an exercise price per share (the
"EXERCISE  PRICE")  of  $3.23.  The number of shares of Common Stock purchasable
hereunder  (the  "WARRANT  SHARES")  and  the  Exercise  Price  are  subject  to
adjustment  as  provided  in  Section  5 hereof.  The term "WARRANTS" means this
Warrant  and  the  other Warrants of the Company issued pursuant to that certain
Securities  Purchase  Agreement,  dated as of January 17, 2002, by and among the
Company  and  the  other  signatories  thereto  (the  "SECURITIES  PURCHASE
AGREEMENT").  Terms  used  and  not  defined  herein  that  are  defined  in the
Securities  Purchase  Agreement  shall  have the meaning ascribed to them in the
Securities  Purchase  Agreement.

This  Warrant  is  subject  to  the  following terms, provisions and conditions:

1.     Manner  of  Exercise;  Issuance  of  Certificates;  Payment  for  Shares.
       ------------------------------------------------------------------------
Subject to the provisions hereof, including, without limitation, the limitations
     contained in Sections 8 and 12 hereof, this Warrant may be exercised at any
time  during  the  Exercise  Period  (as defined below) by the Holder hereof, in
whole  or  in  part, by the surrender of this Warrant, together with a completed
exercise  agreement  in  the form attached hereto (the "EXERCISE AGREEMENT"), to
the  Company  by  5  p.m.  California  time on any Business Day at the Company's
principal executive offices (or such other office or agency of the Company as it
may  designate  by  notice  to  the  Holder  hereof) and upon (i) payment to the
Company in cash, by certified or official bank check or by wire transfer for the
account  of the Company, of the applicable Exercise Price for the Warrant Shares
specified  in  the Exercise Agreement or (ii) delivery to the Company of written
notice of an election to effect a Cashless Exercise (as defined in Section 13(c)
hereof) for the Warrant Shares specified in the Exercise Agreement.  The Warrant
Shares  so  purchased  shall be deemed to be issued to the Holder hereof or such
Holder's  designee,  as  the  record  owner  of  such shares, as of the close of
business  on  the date on which this Warrant shall have been surrendered and the
completed  Exercise  Agreement  shall have been delivered and payment shall have
been  made  for such shares as set forth above or, if such day is not a Business
Day,  on  the  next  succeeding  Business Day.  The Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall  be  delivered  to the Holder hereof within a reasonable time, in any case
not  exceeding  three  Business  Days  after  this  Warrant  shall  have been so
exercised  (the  "DELIVERY  PERIOD").  If  the  Company's  transfer  agent  is
participating  in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer  program, and so long as the certificates therefor do not bear a legend
and  the Holder is not obligated to return such certificate for the placement of
a  legend  thereon, the Company shall cause its transfer agent to electronically
transmit  the Warrant Shares so purchased to the Holder by crediting the account
of  the  Holder  or  its  nominee  with DTC through its Deposit Withdrawal Agent
Commission  system  ("DTC TRANSFER").  If the aforementioned conditions to a DTC
Transfer  are  not  satisfied,  the Company shall deliver to the Holder physical
certificates  representing the Warrant Shares so purchased.  Further, the Holder
may  instruct  the  Company  to  deliver  to  the  Holder  physical certificates
representing  the  Warrant Shares so purchased in lieu of delivering such shares
by  way  of  DTC  Transfer.  Any  certificates  so  delivered  shall  be in such
denominations as may be requested by the Holder, shall be registered in the name
of  Holder  or such other name as shall be designated by such holder and, unless
otherwise  required  by  the  Securities  Purchase Agreement, shall not bear any
restrictive  legend.  If  this  Warrant  shall have been exercised only in part,
then, unless this Warrant has expired, the Company shall, at its expense, at the
time  of  delivery  of  such  certificates,  deliver to the Holder a new Warrant
representing  the  number of shares with respect to which this Warrant shall not
then  have  been  exercised.

     If by the thirteenth Trading Day after exercise of this Warrant the Company
fails  to  deliver  the required number of Warrant Shares in the manner required
pursuant  to this Section 1, and if after such thirteenth Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver  in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder  anticipated  receiving upon such exercise, then the Company shall pay in
cash  to  the  Holder  the amount by which (x) the Holder's total purchase price
(including  brokerage  commissions,  if  any)  for the shares of Common Stock so
purchased  exceeds  (y)  the  amount  obtained  by multiplying (A) the number of
Warrant  Shares  that  the  Company  was  required  to  deliver to the Holder in
connection with the exercise at issue by (B) the closing bid price of the Common
Stock  at the time of the obligation giving rise to such purchase obligation and
deliver  to the Holder the number of shares of Common Stock that would have been
issued  had  the  Company  timely  complied  with  its  exercise  and  delivery
obligations  hereunder;  provided,  however,  the Company shall only render such
payment  in  the  event  the Holder can provide reasonable evidence of an actual
loss  in  that  amount.

     If  by  the third Trading Day after a date of exercise the Company fails to
deliver the required number of Warrant Shares in the manner required pursuant to
Section  1,  then  the  Holder  will  have  the  right to rescind such exercise.
The Company's obligations to issue and deliver Warrant Shares in accordance with
the  terms  hereof are absolute and unconditional, irrespective of any action or
inaction  by  the Holder to enforce the same, any waiver or consent with respect
to  any provision hereof, the recovery of any judgment against any Person or any
action  to enforce the same, or any setoff, counterclaim, recoupment, limitation
or  termination,  or  any  breach  or  alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of
law  by  the  Holder  or  any  other  Person,  and  irrespective  of  any  other
circumstance  which  might otherwise limit such obligation of the Company to the
Holder  in connection with the issuance of Warrant Shares.  Nothing herein shall
limit  a  Holder's right to pursue any other remedies available to it hereunder,
at  law  or  in  equity  including,  without  limitation,  a  decree of specific
performance  and/or  injunctive  relief with respect to the Company's failure to
timely deliver certificates representing shares of Common Stock upon exercise of
the  Warrant  as  required  pursuant  to  the  terms  hereof.

2.     Period of Exercise.  Except as set forth in Section 3 below, this Warrant
       ------------------
     may  be  exercised  at  any  time or from time to time (an "EXERCISE DATE")
during  the  period (the "EXERCISE PERIOD") beginning on (a) the date hereof and
ending (b) at 5:00 p.m., California time, on the fifth annual anniversary of the
date  of  original  issuance  hereof.

3.     Mandatory  Exercise.  On  any  Notification  Date (as defined below), the
       --------------------
Company  may  request  that the Holder exercise this Warrant in whole but not in
part  (the "MANDATORY EXERCISE") within twenty (20) Business Days after the date
of  the  Mandatory  Exercise  Notice  (as defined below) by delivering a written
notice  to  the  Holder  at such address as set forth in the Securities Purchase
Agreement  (the  "MANDATORY  EXERCISE  NOTICE").  The  Mandatory Exercise Notice
shall  set  forth  the  Exercise Price and the Closing Price for each of the ten
(10)  consecutive Trading Days immediately preceding the date of the delivery of
the  Mandatory Exercise Notice and shall state that this Warrant be exercised in
conformity  with  this  Section  3 within twenty (20) Business Days.  Within ten
(10)  calendar  days of receipt of a Mandatory Exercise Notice, the Holder shall
deliver  a  written  notice to the Company (the "PARTICIPATION NOTICE"), stating
whether  or not the Holder agrees to participate in such Mandatory Exercise.  If
the  Holder states in its Participation Notice that it elects not to participate
in  the  Mandatory  Exercise,  then  (i)  the Holder shall forfeit such Holder's
rights, title and interest under this Warrant, (ii) this Warrant shall be deemed
     terminated and (iii) the Holder shall deliver to the Company within two (2)
Business  Days  of  the  date of such Holder's Participation Notice this Warrant
marked  "cancelled."  If  the  Holder states in its Participation Notice that it
elects  to  participate  in  the  Mandatory  Exercise  or if the Holder fails to
deliver  a Participation Notice within the time period specified in this Section
3,  then  this  Warrant  shall  be deemed to be exercised on a cashless or "net"
exercise  basis  without  any  further  action  on the part of the Holder hereof
pursuant  to  this  Section 3 for all of the Warrant Shares that can be obtained
pursuant to such exercise on the twentieth (20th) Business Day after the receipt
of  the  Mandatory  Exercise  Notice  (the "AUTOMATIC MANDATORY EXERCISE DATE"),
unless  prior  to noon California time on the Automatic Mandatory Exercise Date,
the  Holder  shall have exercised this Warrant in whole, but not in part, in the
manner  set  forth  in  Section  1  hereof.  Notwithstanding  the  foregoing, no
Mandatory Exercise may occur unless: (a) at all times from the Notification Date
through  the Automatic Mandatory Exercise Date a Registration Statement covering
all  Registrable  Securities  (as  those  terms  are  defined  in  that  certain
Registration  Rights  Agreement  dated January 17, 2002 by and among the company
and the other signatories thereto (the "REGISTRATION RIGHTS AGREEMENT")): (i) is
effective  as  to  all  Warrant  Shares,  (ii) does not require any amendment or
supplement  and  and  (iii)  discloses  directly  or  through  incorporation  by
reference all material facts relating to Company and the Registrable Securities,
(b)  the  Company  has no reason to believe that, during the period beginning on
the  Notification Date and ending ninety (90) days after the Automatic Mandatory
Exercise  Date (the "INITIAL SELLING PERIOD"), there will be any need to suspend
sales pursuant to the Registration Statement as a result of the need to amend or
supplement  the  Registration  Statement or otherwise; (c) the Company covenants
not  to  take  any  action  during the Initial Selling Period that is reasonably
likely  to  result in the suspension of sales during the Initial Selling Period;
(d)  the  Company  is  listed  on  Nasdaq; and (e) the Mandatory Exercise Notice
contains  (i)  a  certification  from  the Company's chief executive officer and
chief financial officer as to the matters set forth in the immediately preceding
subclause  (a)  (as  of  the  Notification Date; provided that the Company shall
immediately  notify  the  Holder  if such certification is no longer true at any
time  on  or  prior to the Automatic Mandatory Exercise Date) and subclause (b);
and  (ii)  the  covenant  of  the Company set forth in the immediately preceding
subclause  (c).  For purposes of this Section 3, "NOTIFICATION  DATE" shall mean
any  Business  Day  during  the  Exercise  Period but after the Trigger Date (as
defined  below)  which  Business  Day  is  immediately  preceded  by  ten  (10)
consecutive  Trading  Days  on  each of which the Closing Price was greater than
200%  of  the  Exercise  Price  ;  and  "TRIGGER  DATE"  shall mean the date the
Registration  Statement  covering all Registrable Securities (as those terms are
defined  in  the  Registration  Rights  Agreement)  is declared effective by the
Securities  and  Exchange  Commission.

4.     Certain  Agreements  of  the  Company.  The  Company hereby covenants and
       -------------------------------------
agrees  as  follows:

(a)     Shares  to  be  Fully  Paid.  All  Warrant Shares will, upon issuance in
        ---------------------------
accordance  with  the  terms  of this Warrant, be validly issued, fully paid and
nonassessable  and  free  from  all  taxes,  liens,  claims  and  encumbrances.

(b)     Reservation of Shares.  During the Exercise Period, the Company shall at
        ---------------------
all  times  have  authorized,  and  reserved  for  the  purpose of issuance upon
exercise  of  this  Warrant,  a  suf-ficient number of shares of Common Stock to
provide  for  the exercise in full of this Warrant (without giving effect to the
limitations  on  exercise  set  forth  in  Section  12  hereof).

(c)     Listing.  The  Company  has  secured the listing of the shares of Common
        -------
Stock  issuable upon exercise of or otherwise pursuant to this Warrant upon each
national  securities  exchange or automated quotation system, if any, upon which
shares  of  Common  Stock  are then listed or become listed (subject to official
notice of issuance upon exercise of this Warrant) and shall maintain, so long as
any  other shares of Common Stock shall be so listed, such listing of all shares
of  Common  Stock  from  time to time issuable upon the exercise of or otherwise
pursuant  to  this  Warrant;  and  the  Company  shall  so list on each national
securities exchange or automated quotation system, as the case may be, and shall
maintain  such  listing  of,  any  other  shares of capital stock of the Company
issuable  upon  the  exercise of or otherwise pursuant to this Warrant if and so
long as any shares of the same class shall be listed on such national securities
exchange  or  automated  quotation  system.

(d)     Certain  Actions  Prohibited.  The Company will not, by amendment of its
        ----------------------------
charter  or  through  any  re-organi-zation,  transfer of assets, consolidation,
mer-ger,  dissolution,  issuance  or  sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed by it hereunder, but will at all times in good faith
assist  in  the  carrying  out  of  all the provisions of this Warrant.  Without
limiting  the generality of the foregoing, the Company (i) will not increase the
par  value  of  any  shares of Common Stock receivable upon the exercise of this
Warrant  above  the  Exercise  Price then in effect, and (ii) will take all such
actions as may be necessary or appropriate in order that the Company may validly
and  legally  issue fully paid and nonassessable shares of Common Stock upon the
exercise  of  this  Warrant.

(e)     Successors  and  Assigns.  This  Warrant will be binding upon any entity
        ------------------------
succeeding  to  the  Company  by merger, consolidation, or acquisition of all or
substantially  all  of  the  Company's  assets.

(f)     Blue  Sky Laws.  The Company shall, on or before the date of issuance of
        --------------
any  Warrant Shares, take such actions as the Company shall reasonably determine
are  necessary  to  qualify  the Warrant Shares for, or obtain exemption for the
Warrant  Shares for, sale to the Holder of this Warrant upon the exercise hereof
under  applicable  securities  or  "blue  sky"  laws of the states of the United
States,  and shall provide evidence of any such action so taken to the Holder of
this  Warrant  prior to such date; provided, however, that the Company shall not
be  required  to  qualify  as a foreign corporation or file a general consent to
service  of  process  in  any  such  jurisdiction.

5.     Antidilution  Provisions.  During the Exercise Period, the Exercise Price
       ------------------------
and  the  number  of  Warrant Shares issuable upon the exercise of the Warrants,
shall  be subject to adjustment from time to time as provided in this Section 5.
     In  the  event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up or down
to  the  nearest  cent;  provided that, in no event shall the Exercise Price per
share  be  reduced  below  $.01.

(a)     Subdivision or Combination of Common Stock.  If the Company, at any time
        ------------------------------------------
     during the Exercise Period, subdivides (by any stock split, stock dividend,
recapitalization,  reorganization,  reclassification or otherwise) its shares of
Common Stock into a greater number of shares, then, after the date of record for
effecting  such  subdivision,  the Exercise Price in effect immediately prior to
such  subdivision  will be proportionately reduced.  If the Company, at any time
during  the Exercise Period, combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
smaller  number  of  shares,  then,  after the date of record for effecting such
combination,  the Exercise Price in effect immediately prior to such combination
will  be  proportionately increased.  Upon each adjustment of the Exercise Price
pursuant  to the provisions of this Section 5(a), the number of shares of Common
Stock  issuable upon exercise of this Warrant shall be increased or decreased to
equal  the  quotient  obtained  by  dividing (i) the product of (A) the Exercise
Price  in  effect  immediately  prior  to such adjustment, multiplied by (B) the
number  of  shares  of  Common  Stock  issuable  upon  exercise  of this Warrant
immediately  prior  to  such  adjustment,  by (ii) the adjusted Exercise Price .

(b)     Pro  Rata Distributions.  If the Company, at any time while this Warrant
        -----------------------
is  outstanding, distributes to all holders of Common Stock (i) evidences of its
indebtedness,  (ii)  any  security  (other  than  a distribution of Common Stock
covered  by  the preceding paragraph), (iii) rights or warrants to subscribe for
or  purchase  any  security, or (iv) any other asset (in each case, "DISTRIBUTED
PROPERTY"),  then,  at  the  request of any Holder delivered before the 90th day
after  the  record  date  fixed  for  determination  of stockholders entitled to
receive  such distribution, the Company will deliver to such Holder, within five
Trading  Days  after  such  request (or, if later, on the effective date of such
distribution),  the  Distributed  Property  that  such  Holder  would  have been
entitled  to  receive  in  respect of the Warrant Shares for which such Holder's
Warrant  could  have  been  exercised immediately prior to such record date.  If
such Distributed Property is not delivered to a Holder pursuant to the preceding
     sentence,  then  upon  any  exercise  of the Warrant that occurs after such
record  date,  such  Holder  shall  be  entitled  to receive, in addition to the
Warrant Shares otherwise issuable upon such conversion, the Distributed Property
that  such  Holder would have been entitled to receive in respect of such number
of  Warrant  Shares had the Holder been the record holder of such Warrant Shares
immediately  prior  to  such  record  date.

(c)     Fundamental  Transactions.  If,  at  any  time  while  this  Warrant  is
        -------------------------
outstanding:  (i) the Company effects any merger or consolidation of the Company
with  or  into  another  Person,  (ii)  the  Company  effects any sale of all or
substantially  all  of  its  assets  in one or a series of related transactions,
(iii)  any  tender  offer  or  exchange offer (whether by the Company or another
Person)  is completed pursuant to which holders of Common Stock are permitted to
tender  or exchange their shares for other securities, cash or property, or (iv)
the  Company  effects any reclassification of the Common Stock or any compulsory
share  exchange pursuant to which the Common Stock is effectively converted into
or  exchanged  for  other  securities,  cash  or  property  (in any such case, a
"FUNDAMENTAL  TRANSACTION"),  then the Holder shall have the right thereafter to
receive,  upon exercise of this Warrant, the same amount and kind of securities,
cash  or  property as it would have been entitled to receive upon the occurrence
of  such  Fundamental  Transaction  if  it  had  been, immediately prior to such
Fundamental  Transaction,  the  holder  of  the  number  of  Warrant Shares then
issuable  upon exercise in full of this Warrant (the "ALTERNATE CONSIDERATION").
For purposes of any such exercise, the determination of the Exercise Price shall
be  appropriately adjusted to apply to such Alternate Consideration based on the
amount  of  Alternate  Consideration  issuable in respect of one share of Common
Stock  in  such  Fundamental  Transaction,  and  the Company shall apportion the
Exercise  Price  among  the  Alternate  Consideration  in  a  reasonable  manner
reflecting  the  relative  value  of  any  different components of the Alternate
Consideration.  If  holders  of  Common  Stock  are  given  any choice as to the
securities,  cash  or property to be received in a Fundamental Transaction, then
the  Holder  shall be given the same choice as to the Alternate Consideration it
receives  upon  any  exercise  of  this  Warrant  following  such  Fundamental
Transaction.  At  the  Holder's option and request, any successor to the Company
or  surviving  entity in such Fundamental Transaction shall, either (i) issue to
the  Holder  a  new  warrant  substantially  in  the  form  of  this Warrant and
consistent  with  the  foregoing provisions and evidencing the Holder's right to
purchase  the  Alternate  Consideration  for  the  aggregate Exercise Price upon
exercise  thereof,  or  (ii) purchase the Warrant from the Holder for a purchase
price,  payable  in  cash  within  five  Trading Days after such request (or, if
later, on the effective date of the Fundamental Transaction), equal to the Black
Scholes  value  of the remaining unexercised portion of this Warrant on the date
of  such  request.  The  terms  of any agreement pursuant to which a Fundamental
Transaction  is  effected  shall  include  terms requiring any such successor or
surviving  entity  to  comply  with  the  provisions  of  this paragraph (c) and
insuring  that  the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

(d)     Issuances  or  Sales  at  less  than  Exercise  Price.
        -----------------------------------------------------
(i)     If  at  any time during the term of this Warrant the Company shall issue
or  sell  any shares of Common Stock for a consideration per share less than the
Exercise  Price in effect immediately prior to such issue or sale, then, in each
such  case  the  number of shares subject to this Warrant thereafter purchasable
upon  the exercise of this Warrant shall be determined by multiplying the number
of  shares of Common Stock theretofore purchasable upon exercise of this Warrant
by  a  fraction,  the  numerator  of  which shall be (x) the number of shares of
Common  Stock  outstanding  on  the date of issuance of such rights or warrants,
plus the number of additional shares of Common Stock offered for subscription or
     purchase, and the denominator of which shall be (y) the number of shares of
Common Stock outstanding on the date of issuance of such rights or warrants plus
the  number  of  shares that the aggregate offering price of the total number of
shares  of  Common Stock so offered would purchase at the Exercise Price on such
date  of issuance.  For purposes of this Section 5(d)(i), the issuance of rights
or warrants or any other security to subscribe for or purchase or acquire Common
Stock  or  securities  convertible  into  Common Stock shall be deemed to be the
issuance  of  Common Stock at an aggregate offering price equal to the aggregate
offering  price  of  such  securities plus the minimum aggregate amount (if any)
payable  upon  conversion  of such securities into Common Stock.  In addition to
the  adjustment  in  the  number of shares in this Section 5(d)(i), the Exercise
Price  per share shall be appropriately adjusted so that Exercise Price shall be
equal  to  the  price  determined  by  multiplying  the Exercise Price in effect
immediately prior to the issuance by a fraction, the numerator of which shall be
(x)  the  total  number  of  outstanding  shares  of Common Stock of the Company
immediately  prior  to  such issuance; and the denominator of which shall be (y)
the  total  number  of  outstanding  shares  of  Common  Stock  of  the  Company
immediately  after  such  issuance.  The  following transactions shall be exempt
from  the  antidilution  adjustment  requirements  of  this Section 5(d)(i): (A)
consideration  in  a  merger  (the  primary  purpose  of  which  is not to raise
capital),  consolidation  or acquisition of assets (the primary purpose of which
is  not  to  raise  capital),  or  in connection with any strategic partnership,
collaboration  or  joint  venture  (the primary purpose of which is not to raise
capital),  or  as  consideration  for  the acquisition of a business, product or
license  by  the Company (the primary purpose of which is not to raise capital),
(B)  pursuant  to  widely  distributed  underwritten  public  offering, (C) upon
exercise  or  conversion of the Company's options, warrants or other convertible
securities  outstanding  as  of the date hereof as set forth in Schedule 4(c) of
the Securities Purchase Agreement or issued pursuant to such Securities Purchase
Agreement, (D) under any duly authorized Company stock option, stock purchase or
restricted  stock  plan (for the benefit of the Company's employees, consultants
or  directors),  and  (E)  in  connection with any loan made to the Company by a
lending  institution  engaged  in the business of lending money, such as a bank,
trust  company,  insurance  company  or  other  institutional  lender.
     (ii)  For the purposes of any computation respecting consideration received
pursuant  to  this  Section  5(d):
     (A)     In the case of the issuance of shares of Common Stock for cash, the
consideration  shall  be  the  amount of cash received, provided that in no case
shall any deduction be made for any commissions, discounts, or expenses incurred
by  the  Company  for  any  underwriting of the issue or otherwise in connection
therewith;
(B)     In  the  case  of  the  issuance  of  shares  of  Common  Stock  for  a
consideration  in whole or in part other than cash, the consideration other than
cash  shall  be deemed to be the fair market value thereof as determined in good
faith  by  the Board of Directors of the Company, irrespective of the accounting
treatment  thereof;  and
     (C)     In  the  case  of  the  issuance  of  securities  convertible into,
exchangeable  for,  or  consisting of any right or option to purchase, shares of
Common  Stock,  the  aggregate  consideration  received for such shares shall be
equal to the consideration received by the Company for any such securities, plus
the additional minimum consideration, if any, to be received by the Company upon
the conversion, exchange, or exercise thereof (the consideration in each case to
be  determined  in  the  same  manner  as  provided  in  (A)  and  (B)  above).

(e)     Notice  of  Adjustment.  Upon the occurrence of any event which requires
        ----------------------
any  adjustment  of the Exercise Price, then, and in each such case, the Company
shall  give  notice  thereof  to  the Holder of this Warrant, which notice shall
state  the  Exercise  Price  resulting  from such adjustment and the increase or
decrease in the number of Warrant Shares issuable upon exercise of this Warrant,
     setting  forth in reasonable detail the method of calculation and the facts
upon  which  such  calculation is based.  Such calculation shall be certified by
the  chief  financial  officer  of  the  Company.

(f)     Minimum Adjustment of the Exercise Price.  No adjustment of the Exercise
        ----------------------------------------
     Price  shall  be made in an amount of less than 1% of the Exercise Price in
effect  at  the  time  such adjustment is otherwise required to be made, but any
such  lesser  adjustment  shall be carried forward and shall be made at the time
and  together  with  the  next  subsequent  adjustment  which, together with any
adjustments  so  carried  forward,  shall  amount  to  not  less than 1% of such
Exercise  Price.

(g)     No  Fractional  Shares.  No  fractional shares of Common Stock are to be
        ----------------------
issued  upon  the  exercise  of  this  Warrant, but the Company shall pay a cash
adjustment  in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock  on  the  date  of  such  exercise.

(h)     Other  Notices.  In  case  at  any  time:
        --------------
(i)     the  Company shall declare any dividend upon the Common Stock payable in
shares  of  stock  of  any  class  or  make  any  other distribution (other than
dividends  or  distributions payable in cash out of retained earnings consistent
with the Company's past practices with respect to declaring dividends and making
     distributions)  to  the  holders  of  the  Common  Stock;
(ii)     the Company shall offer for subscription pro rata to the holders of the
Common  Stock  any  additional  shares  of  stock  of any class or other rights;
(iii)     there  shall  be  any  capital  reorganiza-tion  of  the  Company,  or
reclassification  of the Common Stock, or consolidation or merger of the Company
with  or  into,  or  sale of all or substan-tially all of its assets to, another
corporation  or  entity;  or
(iv)     there  shall be a voluntary or involun-tary dissolution, liquidation or
winding-up  of  the  Company;
then,  in  each  such case, the Company shall give to the Holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company shall
close  or  a  record  shall be taken for determining the holders of Common Stock
entitled  to receive any such divi-dend, distribution, or subscription rights or
for  determining  the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation  or  winding-up  and  (b)  in  the  case of any such reorganization,
reclassification,  consolidation,  merger,  sale,  dissolution,  liquidation  or
winding-up,  notice  of  the  date (or, if not then known, a reasonable estimate
thereof  by the Company) when the same shall take place.  Such notice shall also
specify  the  date  on  which  the  holders of Common Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to exchange their
Common  Stock  for  stock  or other securities or property deliverable upon such
reorganization,  re-classification,  consolidation,  merger,  sale, dissolution,
liquidation,  or  winding-up, as the case may be.  Such notice shall be given at
least  fifteen  (15)  days  prior  to  the  record date or the date on which the
Company's  books are closed in respect thereto.  Failure to give any such notice
or  any defect therein shall not affect the validity of the proceedings referred
to  in  clauses (i), (ii), (iii) and (iv) above.  Notwithstanding the foregoing,
the  Company  may  publicly  disclose  the  substance  of  any  notice delivered
hereunder  prior  to  delivery  of  such  notice  to the Holder of this Warrant.
(i)     Certain  Events.  If,  at any time during the Exercise Period, any event
        ---------------
occurs  of  the type contemplated by the adjustment provisions of this Section 5
but  not expressly provided for by such provisions, the Company will give notice
of  such  event  as  provided in Section 5(e) hereof, and the Company's Board of
Directors  will  make  an  appropriate  adjustment in the Exercise Price and the
number  of  shares  of  Common Stock acquirable upon exercise of this Warrant so
that  the  rights of the Holder shall be neither enhanced nor diminished by such
event.

6.     Issue  Tax.  The  issuance  of  certificates  for Warrant Shares upon the
       ----------
exercise  of  this  Warrant  shall  be made without charge to the Holder of this
Warrant  or  such shares for any issuance tax or other costs in respect thereof,
provided  that  the  Company  shall  not be required to pay any tax which may be
payable  in respect of any transfer involved in the issuance and delivery of any
certificate  in  a  name  other  than  the  Holder  of  this  Warrant.

7.     No  Rights  or  Liabilities  as  a  Shareholder.  This  Warrant shall not
       -----------------------------------------------
entitle  the Holder hereof to any voting rights or other rights as a shareholder
of  the  Company.  No  provision  of this Warrant, in the absence of affirmative
action  by the Holder hereof to purchase Warrant Shares, and no mere enumeration
herein  of the rights or privileges of the Holder hereof, shall give rise to any
liability  of  such  Holder  for  the  Exercise Price or as a shareholder of the
Company,  whether  such  liability is asserted by the Company or by creditors of
the  Company.

8.     Transfer,  Exchange,  Redemption  and  Replacement  of  Warrant.
       ---------------------------------------------------------------

(a)     Restriction  on  Transfer.  This  Warrant  and the rights granted to the
        -------------------------
Holder  hereof  are  transferable  in  whole  or  in part, at any one time, upon
surrender  of  this Warrant, together with a properly executed assignment in the
form  attached  hereto,  at  the  office or agency of the Company referred to in
Section  8(e) below, provided, however, that any transfer or assignment shall be
subject  to  the  conditions  set  forth  in  Sections  8(f)  hereof  and to the
provisions  of  Sections  3(e)  of the Securities Purchase Agreement.  Until due
presentment  for  registration  of  transfer  on  the  books of the Company, the
Company  may  treat  the registered Holder hereof as the owner and Holder hereof
for  all  purposes,  and  the Company shall not be affected by any notice to the
con-trary.  Notwithstanding  anything  to  the  contrary  contained  herein, the
registration  rights  described  in  Section  8  hereof  are  assignable only in
accordance  with  the  provisions  of  the  Registration  Rights  Agreement.

(b)     Warrant  Exchangeable  for  Different  Denominations.  This  Warrant  is
        ----------------------------------------------------
exchangeable,  upon  the  surrender hereof by the Holder hereof at the office or
agency  of  the  Company  referred to in Section 8(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right to
purchase  the number of shares of Common Stock which may be purchased hereunder,
each  of  such  new  Warrant  to  represent the right to purchase such number of
shares  as  shall  be  designated  by  the  Holder  hereof  at  the time of such
surrender.

(c)     Replacement  of  Warrant.  Upon  receipt  of  evidence  reasonably
        ------------------------
satisfactory  to  the  Company of the loss, theft, destruction, or mutilation of
        ---
this  Warrant  and,  in  the  case of any such loss, theft, or destruction, upon
delivery  of  an indemnity agreement reason-ably satisfactory in form and amount
to  the  Company,  or,  in  the  case of any such mutilation, upon surrender and
cancellation  of  this  Warrant,  the  Company, at its expense, will execute and
deliver,  in  lieu  thereof,  a  new  Warrant  of  like  tenor.

(d)     Cancellation;  Payment  of Expenses.  Upon the surrender of this Warrant
        -----------------------------------
in  connection  with any trans-fer, exchange, or replacement as provided in this
Section  8, this Warrant shall be promptly canceled by the Company.  The Company
shall  pay  all  taxes  (other  than  securities  transfer  taxes) and all other
expenses  (other  than  legal  expenses,  if  any,  incurred  by  the  Holder or
transferees)  and charges payable in connection with the preparation, execution,
and  delivery  of  Warrants  pursuant  to  this  Section  8.  The  Company shall
indemnify  and  reimburse  the Holder of this Warrant for all losses and damages
arising  as  a result of or related to any breach by the Company of the terms of
this  Warrant,  including  costs and expenses (including legal fees) incurred by
such  Holder  in  connection  with  the  enforcement  of  its  rights hereunder.

(e)     Warrant  Register.  The  Company  shall  maintain,  at  its  principal
        -----------------
executive  offices  (or  such  other  office  or agency of the Company as it may
designate by notice to the Holder hereof), a register for this Warrant, in which
the  Company  shall record the name and address of the person in whose name this
Warrant  has been issued, as well as the name and address of each transferee and
each  prior  owner  of  this  Warrant.

(f)     Transfer Without Registration.  If, at the time of the surrender of this
        -----------------------------
Warrant  in  connection  with any transfer of this Warrant, this Warrant (or, in
the  case  of any exercise, the Warrant Shares issuable hereunder), shall not be
registered  under  the  Securities  Act and under applicable state securities or
blue  sky  laws,  the  Com-pany  may  require,  as  a condition of allowing such
transfer,  (i)  a  written  opinion  of counsel (which opinion shall be in form,
substance  and  scope  customary  for  opinions  of  counsel  in  comparable
transactions)  to the effect that such exercise may be made without registration
under the Securities Act and under applicable state securities or blue sky laws,
and  (ii)  that  the  transferee  be an "ACCREDITED INVESTOR" as defined in Rule
501(a)  promulgated  under  the  Securities  Act; provided that no such opinion,
letter,  or  status  as an "accredited investor" shall be required in connection
with  a  transfer  pursuant  to  Rule  144  under  the  Securities  Act.

9.     Registration  Rights.  The  initial  Holder  of this Warrant (and certain
       --------------------
assignees  thereof)  are  entitled to the benefit of such registration rights in
respect  of  the  Warrant  Shares  as  are  set forth in the Registration Rights
Agreement,  including  the  right to assign such rights to certain assignees, as
set  forth  therein.

10.     Notices.  Any  notices required or permitted to be given under the terms
        -------
of  this  Warrant  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 by
confirmed  telecopy,  in each case addressed to a party.  The addresses for such
communications  shall  be:

     If  to  the  Company:

     Genus,  Inc.
     1139  Karlstad  Drive
     Sunnyvale,  CA  94089
     Telephone  No.:  (408)  747-7140  (x1311)
     Facsimile  No.:  (408)  747-7198
     Attention:  Mr.  Shum  Mukherjee

     With  a  copy  to:

     Wilson  Sonsini  Goodrich  &  Rosati
     650  Page  Mill  Road
     Palo  Alto,  CA  94304
     Telephone  No.:  (650)  493-9300
     Facsimile  No.:   (650)  493-6811
     Attention:  Mark  Casillas,  Esq.

     If  to  the  Holder,  at such address as such Holder shall have provided in
writing  to  the  Company,  or at such other address as such Holder furnishes by
notice  given  in  accordance  with  this  Section  10.

11.     Governing Law; Jurisdiction.  All questions concerning the construction,
        ---------------------------
     validity,  enforcement and interpretation of this Warrant shall be governed
by  and construed and enforced in accordance with the internal laws of the State
of New York, without regard to the principles of conflicts of law thereof.  Each
party  agrees  that  all proceedings concerning the interpretations, enforcement
and  defense  of  the transactions contemplated by this Warrant (whether brought
against  a  party  hereto  or  its  respective  affiliates, directors, officers,
shareholders,  employees  or agents) shall be commenced exclusively in the state
and  federal courts sitting in the City of New York, Borough of Manhattan.  Each
party  hereto  hereby  irrevocably  submits to the exclusive jurisdiction of the
state  and  federal courts sitting in the City of New York, Borough of Manhattan
for  the adjudication of any dispute hereunder or in connection herewith or with
any  transaction contemplated hereby or discussed herein (including with respect
to  the  enforcement  of  the  any  of  the  Transaction  Documents), and hereby
irrevocably  waives,  and agrees not to assert in any proceeding, any claim that
it  is  not  personally subject to the jurisdiction of any such court, that such
proceeding  is  improper.  Each  party hereto hereby irrevocably waives personal
service  of  process and consents to process being served in any such proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery
(with  evidence  of delivery) to such party at the address in effect for notices
to  it under this Warrant and agrees that such service shall constitute good and
sufficient  service  of  process  and  notice thereof.  Nothing contained herein
shall  be  deemed  to  limit in any way any right to serve process in any manner
permitted  by  law.  Each party hereto hereby irrevocably waives, to the fullest
extent  permitted  by  applicable law, any and all right to trial by jury in any
legal  proceeding arising out of or relating to this Warrant or the transactions
contemplated  hereby. If either party shall commence a proceeding to enforce any
provisions  of  a  Transaction  Document,  then  the  prevailing  party  in such
proceeding  shall  be  reimbursed  by the other party for its attorneys fees and
other  costs  and  expenses  incurred  with  the  investigation, preparation and
prosecution  of  such  proceeding.

12.     Limitations  on  Holder's  Right  to  Exercise.
        ----------------------------------------------
(a)     Notwithstanding anything to the contrary contained herein, the number of
     shares of Common Stock that may be acquired by the Holder upon any exercise
of  this Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number  of shares of Common Stock then beneficially owned by such Holder and its
Affiliates  and  any  other  Persons  whose beneficial ownership of Common Stock
would  be  aggregated  with  the  Holder's  for purposes of Section 13(d) of the
Exchange  Act,  does  not  exceed  4.999%  of  the  total  number  of issued and
outstanding  shares  of  Common  Stock (including for such purpose the shares of
Common  Stock  issuable  upon  such  exercise).  For  such  purposes, beneficial
ownership  shall  be determined in accordance with Section 13(d) of the Exchange
Act  and  the rules and regulations promulgated thereunder.  Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that it
has  evaluated  the  limitation  set forth in this paragraph and determined that
issuance  of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph.  By written notice to the Company, the Holder
may  waive  the  provisions  of this Section but (i) any such waiver will not be
effective  until the 61st day after such notice is delivered to the Company, and
(ii)  any  such waiver will apply only to the Holder and not to any other holder
of  Warrants.
(b)     Notwithstanding anything to the contrary contained herein, the number of
shares  of  Common Stock that may be acquired by the Holder upon any exercise of
this  Warrant  (or  otherwise  in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number  of shares of Common Stock then beneficially owned by such Holder and its
Affiliates  and  any  other  Persons  whose beneficial ownership of Common Stock
would  be  aggregated  with  the  Holder's  for purposes of Section 13(d) of the
Exchange  Act,  does  not  exceed  9.999%  of  the  total  number  of issued and
outstanding  shares  of  Common  Stock (including for such purpose the shares of
Common  Stock  issuable  upon  such  exercise).  For  such  purposes, beneficial
ownership  shall  be determined in accordance with Section 13(d) of the Exchange
Act  and  the rules and regulations promulgated thereunder.  Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that it
has  evaluated  the  limitation  set forth in this paragraph and determined that
issuance  of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph.  By written notice to the Company, the Holder
may  waive  the  provisions  of this Section but (i) any such waiver will not be
effective  until the 61st day after such notice is delivered to the Company, and
(ii)  any  such waiver will apply only to the Holder and not to any other holder
of  Warrants.

13.     Miscellaneous.
        -------------

(a)     Amendments.  This  Warrant  and any provision hereof may only be amended
        ----------
by  an  instrument  in  writing  signed  by  the  Company and the Holder hereof.
(b)     Descriptive Headings.  The descriptive head-ings of the several Sections
        --------------------
of  this  Warrant  are  in-serted  for purposes of reference only, and shall not
affect  the  meaning  or  construction  of  any  of  the  provisions  hereof.
(c)     Cashless  Exercise.  This  Warrant  may be exercised at any time or from
        ------------------
time  to  time during the Exercise Period, by presentation and surrender of this
Warrant  to the Company at its principal executive offices with a written notice
of the Holder's intention to effect a cashless exercise, including a calculation
of  the  number  of  shares  of  Common Stock to be issued upon such exercise in
accordance  with  the  terms hereof (a "CASHLESS EXERCISE" ).  In the event of a
Cashless Exercise in lieu of paying the Exercise Price in cash, the Holder shall
surrender  this  Warrant for that number of shares of Common Stock determined by
multiplying  (i)  the  number  of  Warrant Shares to which it would otherwise be
entitled  by  (ii)  a  fraction,  the numerator of which shall be the difference
between  the  then  current  Market  Price per share of the Common Stock and the
Exercise Price, and the denominator of which shall be the Market Price per share
of  Common  Stock.
     For  purposes  of  Rule  144  promulgated  under  the Securities Act, it is
intended,  understood  and  acknowledged  that  the  Warrant  Shares issued in a
cashless  exercise  transaction  shall  be  deemed  to have been acquired by the
Holder,  and  the  holding period for the Warrant Shares shall be deemed to have
commenced,  on  the  date  this  Warrant  was  originally issued pursuant to the
Securities  Purchase  Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly  authorized  officer.

GENUS,  INC.


     By:  _________________________________
     Name:Shum  Mukherjee
     Title:  Chief  Financial  Officer


<PAGE>

                           FORM OF EXERCISE AGREEMENT
         (TO BE EXECUTED BY THE HOLDER IN ORDER TO EXERCISE THE WARRANT)

To:     Genus,  Inc.
1139  Karlstad  Drive
Sunnyvale,  CA  94089
Attention:  Shum  Mukherjee

     The  undersigned  hereby  irrevocably  exercises  the  right  to  purchase
_____________ shares of the Common Stock of GENUS, INC., a corporation organized
under  the  laws  of  the  State  of  California  (the  "COMPANY"),  and either:
     tenders  herewith  payment  of the Exercise Price in full, in the amount of
$_____________, in cash, by certified or official bank check or by wire transfer
for  the  account  of  the  Company;  or
     elects  pursuant  to  Section  14(c) of the Warrant to convert such Warrant
into  Common  Stock  on  a  cashless  exercise  basis.
     The undersigned agrees not to offer, sell, transfer or otherwise dispose of
any Common Stock obtained on exercise of the Warrant, except under circumstances
that  will  not result in a violation of the Securities Act of 1933, as amended,
or  any  state  securities  laws.
     The  undersigned  requests  that  the  Company  cause its transfer agent to
electronically  transmit  the  Common  Stock  issuable pursuant to this Exercise
Agreement  to  the  account  of  the  undersigned  or  its  nominee  (which  is
_________________)  with  DTC  through  its  Deposit Withdrawal Agent Commission
System  ("DTC  TRANSFER").
     In  lieu  of receiving the shares of Common Stock issuable pursuant to this
Exercise  Agreement by way of DTC Transfer, the undersigned hereby requests that
the  Company  cause  its  transfer agent to issue and deliver to the undersigned
physical  certificates  representing  such  shares  of  Common  Stock.
          By  its delivery of this Exercise Agreement, the Holder represents and
warrants  to  the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock  (determined  in  accordance with Section 13(d) of the Securities Exchange
Act  of  1934)  permitted  to be owned under Section 13 of this Warrant to which
this  notice  relates.
     The  undersigned  requests  that  a  Warrant  representing  any unexercised
portion hereof be issued, pursuant to the Warrant, in the name of the Holder and
delivered  to  the  undersigned  at  the  address  set  forth  below:
Dated:_________________     _____________________________________
     Signature  of  Holder

     _____________________________________
Name of Holder (Print)
Address:
     _____________________________________
     _____________________________________
     _____________________________________

<PAGE>

                               FORM OF ASSIGNMENT


     FOR  VALUE  RECEIVED,  the undersigned hereby sells, assigns, and transfers
all  the  rights  of the undersigned under the attached Warrant, with respect to
the  number  of  shares of Common Stock covered thereby issuable pursuant to the
attached  Warrant  set  forth  hereinbelow,  to:

Name  of  Assignee               Address                    No  of  Shares
- ------------------               -------                    --------------



,  and  hereby  irrevocably  constitutes  and  appoints
_____________________________________  as agent and attorney-in-fact to transfer
said  Warrant  on  the books of the within-named corporation, with full power of
substitution  in  the  premises.


Dated:  _____________________,  ____

In the presence of

__________________

     Name:  ____________________________


     Signature:  _______________________
     Title of Signing Officer or Agent (if  any):
               ________________________
     Address:  ________________________
               ________________________


Note:     The  above  signature  should  correspond exactly with the name on the
face  of  the  within  Warrant.

<PAGE>
                                      - 6 -


     EXHIBIT  B
     TOSECURITIESPURCHASE  AGREEMENT
     -------------------------------


     REGISTRATION  RIGHTS  AGREEMENT

     REGISTRATION  RIGHTS  AGREEMENT (this "AGREEMENT"), dated as of January 17,
2002,  by  and  among GENUS, INC., a corporation organized under the laws of the
State  of  California  (the  "COMPANY"),  and  the  undersigned  (the  "INITIAL
INVESTORS").

     WHEREAS:

     A.     The Company and the Initial Investors have entered into a Securities
Purchase  Agreement  dated the date hereof (the "SECURITIES PURCHASE AGREEMENT;"
capitalized  terms  used  herein  and  not otherwise defined herein and that are
defined  in the Securities Purchase Agreement shall have the respective meanings
set  forth  in  the  Securities  Purchase  Agreement).  In  connection  with the
Securities  Purchase  Agreement,  the  Company  has  agreed,  upon the terms and
subject  to  the  conditions contained therein, to issue and sell to the Initial
Investors  (i)  shares  of the Company's common stock, no par value (the "COMMON
STOCK"),  and  (ii)  warrants  to  purchase  Common Stock (the "WARRANTS").  The
shares  of Common Stock issued on the Closing Date under the Securities Purchase
Agreement  are referred to herein as the "SHARES" and the shares of Common Stock
issuable  upon exercise of or otherwise pursuant to the Warrants are referred to
herein  as  the  "WARRANT  SHARES."

     B.     To  induce  the  Initial  Investors  to  execute  and  deliver  the
Securities  Purchase  Agreement,  the  Company  has  agreed  to  provide certain
registration  rights under the Securities Act of 1933, as amended, and the rules
and  regulations thereunder, or any similar successor statute (collectively, the
"SECURITIES  ACT"),  and  applicable  state  securities  laws;

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein  and  other  good  and valuable consideration, the receipt and
sufficiency  of  which  are  hereby  acknowledged,  the  Company and the Initial
Investors,  intending  to  be  legally  bound,  hereby  agree  as  follows:

     1.     DEFINITIONS.
            -----------

     As  used  in  this  Agreement, the following terms shall have the following
meanings:

     (i)     "INVESTORS"  means  the  Initial  Investors  and any transferees or
assignees  who  agree  to  become  bound  by the provisions of this Agreement in
accordance  with  Section 9 hereof; provided, however, that the term "Investors"
shall  not include any of the Initial Investors and any transferees or assignees
who agree to become bound by the provisions of this Agreement in accordance with
Section  9  hereof  that cease to own or hold all of the Registrable Securities.

     (ii)     "REGISTER,"  "REGISTERED,"  and  "REGISTRATION"  refer  to  a
registration  effected  by  preparing  and  filing  a  Registration Statement or
Statements  in compliance with the Securities Act and pursuant to Rule 415 under
the  Securities Act or any successor rule providing for offering securities on a
continuous  basis ("RULE 415"), and the declaration or ordering of effectiveness
of  such  Registration  Statement  by  the United States Securities and Exchange
Commission  (the  "SEC").

     (iii)     "REGISTRABLE  SECURITIES" means  (i) the Shares, (ii) the Warrant
Shares,  and  (iii) any shares of capital stock issued or issuable, from time to
time  (with  any  adjustments),  as  a  distribution  on  or  in exchange for or
otherwise  with  respect  to  any  of  the  Transaction  Documents.

     (iv)     "REGISTRATION STATEMENT" means one or more registration statements
of  the  Company  under  the  Securities  Act registering all of the Registrable
Securities,  including  the Initial Registration Statement, any Uncovered Shares
Amendments  and  Uncovered  Shares  Registration  Statements  (each,  as defined
below).

     2.     REGISTRATION.
            ------------

     a.     Mandatory  Registration.  The  Company  shall  file  with the United
            -----------------------
States Securities and Exchange Commission ("SEC"), on or prior to the date which
is  forty-five (45) calendar days after the Closing Date (the "FILING DEADLINE")
a  Registration Statement on Form S-3 (or, if Form S-3 is not then available, on
such  form  of  Registration  Statement  as  is  then  available  to  effect  a
registration of all of the Registrable Securities, subject to the consent of the
Initial  Investors as to the use of such form (as determined pursuant to Section
11(j)  hereof)) to include the Plan of Distribution attached hereto as Exhibit A
                                                                       ---------
covering  the  resale  of  at  least  4,300,000  shares  of  Common Stock, which
Registration Statement, to the extent allowable under the Securities Act and the
rules  promulgated  thereunder shall state that such Registration Statement also
covers  such  indeterminate  number  of additional shares of Common Stock as may
become issuable upon exercise of the Warrants to prevent dilution resulting from
stock splits, stock dividends or similar transactions (the "INITIAL REGISTRATION
STATEMENT").  In  the event that the Initial Registration Statement is not filed
within  forty-five  (45)  calendar  days of the Closing Date, the Exercise Price
shall  be reduced to $2.90.   The Registrable Securities included in the Initial
Registration  Statement  shall  be  registered on behalf of the Investors as set
forth  in  Section  11(k) hereof.  If for any reason (including, but not limited
to,  a  determination  by  the  staff  of the SEC that all or any portion of the
Warrant  Shares  or  any  other Registrable Securities cannot be included in the
Initial  Registration  Statement  (an  "SEC  DETERMINATION"))  the  Initial
Registration Statement declared effective by the SEC does not include all of the
Registrable  Securities  (any  such  shares  that  are  not  included  being the
"UNCOVERED SHARES"), the Company shall prepare and file with the SEC, as soon as
practicable,  but  in  any  event  prior  to the tenth (10th) Business Day after
becoming  aware  of the existence of any Uncovered Shares (such date referred to
herein  as  the "UNCOVERED SHARE FILING DEADLINE"), either (a) an amendment (the
"UNCOVERED  SHARES AMENDMENT") to the Initial Registration Statement effecting a
registration  of  the  Uncovered  Shares  or  (b) a registration statement which
registers  the Uncovered Shares (the "UNCOVERED SHARES REGISTRATION STATEMENT").
The  Company  shall  file  additional  Registration  Statements if the number of
Registrable Securities at any time exceeds 85% of the number of shares of Common
Stock  then  registered  in  a  Registration  Statement.  The  Uncovered  Shares
Amendment  or the Uncovered Shares Registration Statement (and each amendment or
supplement  thereto, and each request for acceleration of effectiveness thereof)
shall  be  provided  to  the  Initial Investors and their counsel for review and
comment  at least two (2) Business Days prior to its filing or other submission.
The  Company  shall  use  its commercially reasonable best efforts to cause each
Registration  Statement  required  to  be filed pursuant to this Section 2(a) to
become  effective  as  soon  as practicable, but, as to the Initial Registration
Statement filed pursuant to Section 2(a), in no event later than the one hundred
and  twentieth  (120th)  calendar  day  after the Filing Deadline, and as to any
Uncovered  Shares  Amendment  or  Uncovered Shares Registration Statement, in no
event  later  than  the one hundred and twentieth (120th) calendar day after the
Uncovered  Share  Filing Deadline (the "UNCOVERED SHARE REGISTRATION DEADLINE").
In  the  event  that the Registration Statement is not effective one hundred and
twenty  (120) calendar days after the Filing Deadline, the Company shall pay the
Initial  Investors  a cash penalty of one percent (1%) of the Initial Investors'
Investment  Amount  as  defined under the Securities Purchase Agreement for each
thirty  (30)  calendar  day  period  that the Registration remains non-effective
beyond  the  initial  one  hundred  and  twenty  (120)  calendar  day  period.

     b.     Underwritten  Offering.  The  Investors  may  offer  and  sell  the
            ----------------------
Registrable  Securities pursuant to a Registration Statement filed in accordance
with  Section  2(a)  in  an  underwritten  offering.  In  any  such underwritten
offering,  the  Investors  who  hold  a  majority in interest of the Registrable
Securities subject to such underwritten offering, shall have the right to select
one legal counsel to represent the Investors and an investment banker or bankers
and  manager  or managers to administer the offering, which investment banker or
bankers  or manager or managers shall be reasonably satisfactory to the Company.
In  the  event  that any Investors elect not to participate in such underwritten
offering,  the Registration Statement covering all of the Registrable Securities
shall  contain  appropriate plans of distribution reasonably satisfactory to the
Investors participating in such underwritten offering and the Investors electing
not to participate in such underwritten offering (including, without limitation,
the  ability  of nonparticipating Investors to sell from time to time and at any
time  during  the  effectiveness  of  such  Registration  Statement).

     c.     Piggy  Back  Registrations.
            --------------------------

     (i)  If  at any time prior to the expiration of the Registration Period (as
hereinafter  defined)  the  Company  shall  file  with  the  SEC  a registration
statement  relating  to an offering for its own account or the account of others
under the Securities Act of any of its equity securities (other than on Form S-4
or Form S-8 or their then equivalents relating to equity securities to be issued
solely  in  connection  with any acquisition of any entity or business or equity
securities  issuable  in  connection with stock option or other employee benefit
plans),  the Company shall send to each Investor who is entitled to registration
rights  under  this  Section  2(c)  written notice of such determination and, if
within  twenty  (20)  days after the date of such notice, such Investor shall so
request in writing, the Company shall include in such registration statement all
or  any  part  of  the  Registrable  Securities  such  Investor  requests  to be
registered,  provided,  however,  that  (i) the number of Registrable Securities
proposed  to be sold by such securities is equal to at least fifty percent (50%)
of  the  total  number of Registrable Securities then held by such participating
Investor,  (ii) such Investor agrees to sell those of its Registrable Securities
to be included in such registration in the same manner and on the same terms and
conditions  as  the  other  shares of Common Stock which the Company proposes to
register,  and (iii) if the registration is to include shares of Common Stock to
be  sold  for  the  account  of the Company or any party exercising registration
rights  pursuant  to any other agreement with the Company, the proposed managing
underwriter,  if  any,  does  not  advise  the  Company  that in its opinion the
inclusion  of  such  Investor's Registrable Securities (without any reduction in
the  number  of  shares  to be sold for the account of the Company or such party
exercising registration rights) is likely to affect materially and adversely the
success  of  the  offering or the price that would be received for any shares of
Common  Stock  offered,  in  which  case the rights of such Investor shall be as
provided  in  Section  2(c)(ii)  hereof.

     (ii)  If  a  registration pursuant to Section 2(c)(i) is done in connection
with  any  underwritten  public  offering  for  the  account  of the Company the
managing  underwriter(s)  thereof  shall  impose  a  limitation on the number of
shares  of  Common  Stock  which  may  be included in the registration statement
because,  in  such  underwriter(s)' judgment, marketing or other factors dictate
such limitation is necessary to facilitate public distribution, then the Company
shall  be  obligated to include in such registration statement only such limited
portion,  if  any  of  the  Registrable  Securities  with  respect to which such
Investor has requested inclusion hereunder as the underwriter shall permit.  Any
exclusion  of  Registrable Securities shall be made pro rata among the Investors
seeking  to  include  Registrable  Securities,  in  proportion  to the number of
Registrable  Securities  sought  to  be  included  by  such Investors; provided,
however,  that  the  Company shall not exclude any Registrable Securities unless
the  Company has first excluded all outstanding securities, the holders of which
are  not entitled to inclusion of such securities in such registration statement
or  are  not entitled to pro rata inclusion with the Registrable Securities; and
provided  further,  however,  that,  after  giving  effect  to  the  immediately
preceding  proviso,  any  exclusion  of Registrable Securities shall be made pro
rata  with  holders  of  other  securities  having  the  right  to  include such
securities  in  the  registration  statement  other  than  holders of securities
entitled  to  inclusion  of  their  securities in such registration statement by
reason  of  demand  registration  rights  (except  to  the  extent  any existing
agreements  otherwise  provide).  No  right  to  registration  of  Registrable
Securities  under this Section 2(c) shall be construed to limit any registration
required  under Section 2(a) hereof.  If an offering in connection with which an
Investor  is entitled to registration under this Section 2(c) is an underwritten
offering,  then  each Investor whose Registrable Securities are included in such
registration  statement shall, unless otherwise agreed by the Company, offer and
sell  such  Registrable  Securities  in  an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the  same  terms and conditions as other shares of Common Stock included in such
underwritten  offering.

     d.     Eligibility  for Form S-3.  The Company represents and warrants that
            -------------------------
it  is  eligible  to  register  the  resale  of  Registrable  Securities  on  a
registration  statement  on  Form  S-3  under the Securities Act, and that there
exist  no  facts  or  circumstances  (including  without limitation any required
approvals  or  waivers  or  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 Securities.  The Company shall file all reports required to be filed
by  the  Company  with  the  SEC  in  a  timely  manner so as to maintain or, if
applicable,  regain  its  eligibility  for  the  use  of  Form  S-3.

     3.     OBLIGATIONS  OF  THE  COMPANY.
            -----------------------------

     In  connection  with  the  registration  of the Registrable Securities, the
Company  shall  have  the  following  obligations:

     a.     The  Company  shall  prepare and file with the SEC, on or before the
Filing  Deadline  or  the  Uncovered  Share  Filing Deadline, as applicable, the
applicable  Registration  Statement  required  by Section 2(a) and shall use its
best efforts to cause such Registration Statement to become effective as soon as
practicable  thereafter  pursuant  to  the terms hereof.  The Company shall keep
such  Registration  Statement  effective pursuant to Rule 415 at all times until
the  earlier  of (i) two years or (ii)  the date on which all of the Registrable
Securities  may  (in the reasonable opinion of counsel to the Initial Investors)
be  immediately  sold to the public without registration or restriction pursuant
to  Rule  144(k)  under  the Securities Act (the "REGISTRATION PERIOD").  In the
event  that  the  sale  of  Registrable  Securities  by one or more Investors is
determined by the SEC to constitute a primary offering, upon the written request
from  time  to  time  of  any  such  Investor,  the Company shall as promptly as
practicable:  cause  a  Registration  Statement to be amended and/or one or more
additional  Registration  Statements  (which  may  be  requested on a sequential
basis) to be filed (as specified by the applicable Investors) and to be declared
effective;  and take all other actions reasonably requested by such Investors to
effectuate  the offering of Registrable Securities.  If the Initial Registration
Statement is not filed on Form S-3, the Company shall, as soon as it is eligible
to  do  so,  file  a  post-effective  amendment  on  Form  S-3  to  the  Initial
Registration  Statement  to  the  extent  permitted  by  the  SEC  or, if not so
permitted,  file a new Registration Statement on Form S-3 to permit sales of the
Registrable  Securities  pursuant  to Rule 429 under the Securities Act; and the
Company  shall  use  its  best efforts to cause such post-effective amendment or
Registration  Statement  to  become  effective  as  soon  as  possible.  Each
Registration  Statement  (including  any  amendments  or supplements thereto and
prospectuses  contained  therein  and  all  documents  incorporated by reference
therein)  filed  pursuant  to  this  Agreement  (i) shall comply in all material
respects  with  the  requirements  of  the  Securities  Act  and  the  rules and
regulations  of  the  SEC  promulgated thereunder and (ii) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be  stated  therein, or necessary to make the statements therein not misleading.
The  financial  statements of the Company included in the Registration Statement
or  incorporated  by  reference  therein  will comply as to form in all material
respects  with  applicable  accounting  requirements and the published rules and
regulations  of  the  SEC  applicable  with  respect  thereto.  Such  financial
statements  shall  be  prepared  in  accordance  with  U.S.  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  include footnotes or may be condensed or summary statements) and shall
fairly  present  in all material respects the consolidated financial position of
the  Company  and  its consolidated subsidiaries as of the dates thereof and the
consolidated  results  of  their  operations and cash flows for the periods then
ended  (subject,  in  the  case  of unaudited statements, to immaterial year-end
adjustments).

     b.     The  Company  shall  prepare  and  file with the SEC such amendments
(including  post-effective  amendments)  and  supplements  to  the  Registration
Statement  and the prospectus used in connection with the Registration Statement
as  may  be  necessary to keep the Registration Statement effective at all times
during  the  Registration  Period,  and,  during  such  period,  comply with the
provisions  of  the  Securities  Act  with  respect  to  the  disposition of all
Registrable  Securities  of  the  Company  covered by the Registration Statement
until  such  time as all of such Registrable Securities have been disposed of in
accordance  with  the  intended  methods of disposition by the seller or sellers
thereof  as  set  forth  in  the  Registration  Statement.

     c.     The  Company  shall  furnish  to  each  Investor  whose  Registrable
Securities  are  included  in  the  Registration Statement and its legal counsel
promptly  after  the  same  is prepared and publicly distributed, filed with the
SEC,  or received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or  supplement  thereto.  The  Company  shall  notify the holders of Registrable
Securities  to be sold and their counsel as promptly as reasonably possible, and
(if  requested  by any such Person) confirm such notice in writing no later than
one Trading Day thereafter, of any of the following events: (i) the SEC notifies
the Company whether there will be a "review" of any Registration Statement; (ii)
the  SEC  comments  in  writing on any Registration Statement (in which case the
Company  shall deliver to each Holder a copy of such comments and of all written
responses  thereto);  (iii)  any  Registration  Statement  or any post-effective
amendment  is  declared  effective;  (iv)  the SEC or any other Federal or state
governmental  authority  requests  any amendment or supplement to a Registration
Statement  or Prospectus or requests additional information related thereto; (v)
the  SEC  issues any stop order suspending the effectiveness of any Registration
Statement  or  initiates  any  Proceedings  for  that  purpose; (vi) the Company
receives  notice  of  any  suspension  of  the  qualification  or exemption from
qualification of any Registrable Securities for sale in any jurisdiction, or the
initiation  or threat of any Proceeding for such purpose; or (vii) the financial
statements  included  in  any  Registration  Statement  become  ineligible  for
inclusion  therein  or  any  statement  made  in  any  Registration Statement or
Prospectus  or any document incorporated or deemed to be incorporated therein by
reference  is  untrue  in any material respect or any revision to a Registration
Statement,  Prospectus or other document is required so that it will not contain
any  untrue  statement  of  a  material  fact or omit to state any material fact
required  to  be  stated therein or necessary to make the statements therein, in
light  of  the  circumstances  under  which  they  were  made,  not  misleading.
     The  Company  shall  use  its  best efforts to avoid the issuance of or, if
issued,  obtain  the withdrawal of any order suspending the effectiveness of any
Registration  Statement.

The  Initial  Registration  Statement (and each amendment or supplement thereto,
and each request for acceleration of effectiveness thereof) shall be provided to
(and  subject to the review by) the Initial Investors and their counsel at least
five  (5)  Business  Days  prior  to  its  filing or other submission; provided,
however,  that the Initial Investors and their counsel shall submit any comments
to  the  Initial Registration Statement within two (2) Business Days of receipt.

The  Company  shall respond as promptly as reasonably possible, and in any event
within  twenty  (20)  Trading  Days,  to any comments received from the SEC with
respect  to  the Registration Statement or any amendment thereto and as promptly
as  reasonably  possible  provide  the Investors true and complete copies of all
correspondence  from and to the SEC relating to the Registration Statement.  The
Company  shall not file the Registration Statement or any such Prospectus or any
amendments  or  supplements  thereto  to  which the Holders of a majority of the
Registrable  Securities  and  their  counsel  shall  reasonably  object.

     d.     The  Company  shall use its best efforts to (i) register and qualify
the  Registrable  Securities  covered  by  the Registration Statement under such
other  securities  or "blue sky" laws of such jurisdictions in the United States
as  each  Investor  who  holds  Registrable  Securities being offered reasonably
requests,  (ii)  prepare  and  file  in  those  jurisdictions  such  amendments
(including  post-effective amendments) and supplements to such registrations and
qualifications  as may be necessary to maintain the effectiveness thereof during
the  Registration  Period,  (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration  Period,  and  (iv)  take all other actions reasonably necessary or
advisable  to qualify the Registrable Securities for sale in such jurisdictions;
provided,  however,  that  the  Company  shall  not  be  required  in connection
therewith  or  as  a  condition  thereto  to  (a)  qualify to do business in any
jurisdiction  where  it  would not otherwise be required to qualify but for this
Section  3(d),  (b) subject itself to general taxation in any such jurisdiction,
(c)  file  a general consent to service of process in any such jurisdiction, (d)
provide  any undertakings that cause the Company undue expense or burden, or (e)
make  any  change  in its certificate of incorporation or by-laws, which in each
case the Board of Directors of the Company determines to be contrary to the best
interests  of  the  Company  and  its  stockholders.

e.     In  the  event  the  Investors  who  hold  a  majority in interest of the
Registrable  Securities being offered in an offering select underwriters for the
offering,  the  Company  shall  enter  into and perform its obligations under an
underwriting  agreement,  in  usual  and  customary  form,  including,  without
limitation,  customary  indemnification  and  contribution obligations, with the
underwriters  of  such  offering.

     f.     As  promptly  as practicable after becoming aware of such event, the
Company  shall notify each Investor in writing of the happening of any event, of
which the Company has knowledge, as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or  necessary  to  make  the statements therein not misleading, and use its best
efforts  promptly  to  prepare  a  supplement  or  amendment to the Registration
Statement  to  correct such untrue statement or omission and deliver such number
of  copies of such supplement or amendment to each Investor as such Investor may
reasonably  request.

     g.     The  Company  shall  use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
and,  if  such an order is issued, to obtain the withdrawal of such order at the
earliest  practicable  date (including in each case by amending or supplementing
such  Registration  Statement) and to notify each Investor who holds Registrable
Securities  being  sold  (or,  in  the  event  of  an underwritten offering, the
managing  underwriters) of the issuance of such order and the resolution thereof
(and  if  such  Registration  Statement is supplemented or amended, deliver such
number  of  copies  of  such  supplement  or  amendment to each Investor as such
Investor  may  reasonably  request).

     h.     [Removed]

     i.     At the request of the Initial Investors whose Registrable Securities
are included in a Registration Statement, the Company shall furnish, on the date
of  effectiveness of the Registration Statement (i) an opinion, dated as of such
date,  from  counsel  representing the Company addressed to the Investors and in
form,  scope  and  substance  as  is customarily given in an underwritten public
offering,  including  that  the  Registration  Statement  and related prospectus
comply  as  to  form  in  all  material  respects  with  the requirements of the
Securities  Act  and the applicable rules and regulations thereunder, and (ii) a
letter,  dated  as of such date, from the Company's independent certified public
accountants  in  form  and  substance  as  is  customarily  given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed  to  the  Initial  Investors  and  the  underwriters,  if  any.

     j.     The  Company shall make available for inspection by (i) any Investor
whose  Registrable Securities are included in a Registration Statement, (ii) any
underwriter  participating  in  any  disposition  pursuant  to  a  Registration
Statement,  (iii)  one  firm  of  attorneys and one firm of accountants or other
agents retained by the Investors, and (iv) one firm of attorneys retained by all
such  underwriters  (collectively, the "INSPECTORS") all pertinent financial and
other  records,  and pertinent corporate documents and properties of the Company
(collectively,  the  "RECORDS"), as shall be reasonably deemed necessary by each
Inspector to enable each Inspector to exercise its due diligence responsibility,
and  cause  the  Company's  officers,  directors  and  employees  to  supply all
information  which any Inspector may reasonably request for purposes of such due
diligence.

     k.     The  Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of  such  information  is  necessary  to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement  or  omission  in  any Registration Statement, (iii) the release of
such  information  is ordered pursuant to a subpoena or other order from a court
or  governmental  body of competent jurisdiction, (iv) such information has been
made  generally available to the public other than by disclosure in violation of
this  or  any  other  agreement,  or  (v) such Investor consents to the form and
content of any such disclosure.  The Company agrees that it shall, upon learning
that  disclosure of such information concerning an Investor is sought in or by a
court  or  governmental  body  of competent jurisdiction or through other means,
give  prompt  notice to such Investor prior to making such disclosure, and allow
the  Investor,  at  its  expense,  to  undertake  appropriate  action to prevent
disclosure  of,  or  to  obtain  a  protective  order  for,  such  information.

     l.     The Company shall use its best efforts to promptly either (i) secure
the  designation and quotation, of all the Registrable Securities covered by the
Registration  Statement  on  The  Nasdaq  Stock  Market,  or  (ii) cause all the
Registrable Securities covered by the Registration Statement to be listed on the
New  York  Stock  Exchange  or  the  American Stock Exchange or another national
securities exchange and on each additional national securities exchange on which
securities of the same class or series issued by the Company are then listed, if
any,  if  the listing of such Registrable Securities is then permitted under the
rules  of  such  exchange.

     m.     The  Company shall provide a transfer agent and registrar, which may
be  a single entity, for the Registrable Securities not later than the effective
date  of  the  Registration  Statement.

     n.     [Removed]

     o.     The  Company  shall  comply  with  applicable  federal  and  state
securities laws and regulations related to a Registration Statement and offering
and  sale  of  securities.

     p.     The Company shall take all such other actions as any Investor or the
underwriters,  if any, reasonably request in order to expedite or facilitate the
disposition  of  such  Registrable  Securities.

     q.     From  and  after  the date of this Agreement, the Company shall not,
and  shall  not  agree  to,  allow  the holders of any securities of the Company
(except  to the extent existing agreements may otherwise provide) to include any
of  their  securities in any Registration Statement under Section 2(a) hereof or
any  amendment  or  supplement  thereto  under  Section  3(b) hereof without the
consent  of the holders of a majority in interest of the Registrable Securities.

     4.     OBLIGATIONS  OF  THE  INVESTORS.
            -------------------------------

     In  connection  with  the  registration  of the Registrable Securities, the
Investors  shall  have  the  following  obligations:

     a.     It  shall be a condition precedent to the obligations of the Company
to  complete  the  registration  pursuant  to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to  the  Company  such  information regarding itself, the Registrable Securities
held  by it and the intended method of disposition of the Registrable Securities
held  by  it  as shall be reasonably required to effect the registration of such
Registrable  Securities and shall execute such documents in connection with such
registration  as the Company may reasonably request.  At least five (5) Business
Days  prior  to the first anticipated filing date of the Registration Statement,
the  Company  shall notify each Investor of any information the Company requires
from  each  such  Investor.

     b.     Each  Investor,  by  such  Investor's  acceptance of the Registrable
Securities,  agrees to cooperate with the Company as reasonably requested by the
Company  in  connection  with  the  preparation  and  filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such  Investor's  election  to  exclude  all  of  such  Investor's  Registrable
Securities  from  the  Registration  Statement.

     c.     In  the  event  Investors  holding  a  majority  in  interest of the
Registrable  Securities  being  offered  determine  to engage the services of an
underwriter,  each  Investor  agrees  to  enter into and perform such Investor's
obligations  under  an  underwriting  agreement,  in  usual  and customary form,
including,  without  limitation,  customary  indemnification  and  contribution
obligations,  with  the underwriter(s) of such offering and the Company and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of the Registrable Securities, unless such Investor has notified
the  Company  in  writing of such Investor's election not to participate in such
underwritten  distribution.

     d.     No  Investor  may  participate  in  any  underwritten  distribution
hereunder  unless  such  Investor (i) agrees to sell such Investor's Registrable
Securities  on  the basis provided in any underwriting arrangements in usual and
customary  form  entered  into  by  the Company, (ii) completes and executes all
questionnaires,  powers  of  attorney,  indemnities, underwriting agreements and
other  documents  reasonably  required  under  the  terms  of  such underwriting
arrangements,  and  (iii)  agrees  to pay its pro rata share of all underwriting
discounts  and  commissions  and  any expenses in excess of those payable by the
Company  pursuant  to Section 5 below.  Notwithstanding anything in this Section
4(d)  to  the contrary, this Section 4(d) is not intended to limit an Investor's
rights  under  Section  2(a)  or  3(b)  hereof.

     5.     EXPENSES  OF  REGISTRATION.
            --------------------------

     All  reasonable  expenses  incurred  by  the  Company  or  the Investors in
connection  with registrations, filings or qualifications pursuant to Sections 2
and  3  above  (excluding brokers' fees, underwriting discounts and commissions,
and  similar selling expenses), including, without limitation, all registration,
listing  and  qualifications fees, printers and accounting fees and the fees and
disbursements  of  counsel  for  the  Company, and the fees and disbursements of
counsel  selected by the Investors, shall be borne by the Company.  In addition,
the  Company  shall  pay  all  of  the  Investors' costs and expenses (including
reasonable legal fees) incurred in connection with the enforcement of the rights
of  the  Investors  hereunder.

     6.     INDEMNIFICATION.
            ---------------

     In  the  event  any  Registrable  Securities are included in a Registration
Statement  under  this  Agreement:

     a.     To  the  extent  permitted  by law, the Company will indemnify, hold
harmless  and  defend  (i)  each Investor who holds such Registrable Securities,
(ii)  the  directors,  officers, partners, members, employees and agents of such
Investor,  and  (iii)  each person who controls any Investor (and the directors,
officers,  partners,  members,  employees  and  agents  of  such control person)
within  the  meaning  of  Section  15 of the Securities Act or Section 20 of the
Securities  Exchange Act of 1934, as amended (the "EXCHANGE ACT"), if any (each,
an  "INDEMNIFIED PERSON"), against any joint or several losses, claims, damages,
liabilities  or  expenses  (collectively,  together with actions, proceedings or
inquiries  by  any regulatory or self-regulatory organization, whether commenced
or  threatened,  in  respect  thereof, "CLAIMS") to which any of them may become
subject  insofar  as  such Claims arise out of or are based upon: (i) any untrue
statement  or  alleged  untrue  statement  of  a material fact in a Registration
Statement  or  the omission or alleged omission to state therein a material fact
required  to  be  stated  or  necessary  to  make  the  statements  therein  not
misleading,  (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final prospectus (as amended
or  supplemented,  if  the  Company  files  any  amendment thereof or supplement
thereto  with  the SEC) or the omission or alleged omission to state therein any
material  fact  necessary  to  make the statements made therein, in light of the
circumstances  under  which the statements therein were made, not misleading, or
(iii)  any  violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law, or any rule or regulation thereunder
relating  to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, "VIOLATIONS").  Subject
to  the  restrictions  set  forth  in Section 6(c) with respect to the number of
legal  counsel,  the  Company  shall  reimburse  the  Investors  and  each other
Indemnified  Person,  promptly  as  such  expenses  are incurred and are due and
payable,  for any reasonable legal fees or other reasonable expenses incurred by
them  in  connection  with  investigating  or  defending  any  such  Claim.
Notwithstanding  anything  to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with  information furnished in writing to the Company by such Indemnified Person
expressly for use in the Registration Statement or any such amendment thereof or
supplement  thereto;  (ii)  shall not apply to amounts paid in settlement of any
Claim  if  such  settlement is effected without the prior written consent of the
Company,  which  consent  shall  not  be  unreasonably  withheld; and (iii) with
respect  to  any  prospectus,  shall not inure to the benefit of any Indemnified
Person  if  the  untrue statement or omission of material fact contained in such
prospectus was corrected on a timely basis in the prospectus, as then amended or
supplemented,  if  such  corrected  prospectus  was timely made available by the
Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly
advised  in  writing not to use the incorrect prospectus prior to the use giving
rise  to  a  Violation and such Indemnified Person, notwithstanding such advice,
used it.  Such indemnity shall remain in full force and effect regardless of any
investigation  made  by or on behalf of the Indemnified Person and shall survive
the  transfer of the Registrable Securities by the Investors pursuant to Section
9.

     b.     In  connection  with any Registration Statement in which an Investor
is  participating,  each  such  Investor  agrees  severally  and  not jointly to
indemnify,  hold  harmless and defend, to the same extent and in the same manner
set  forth  in  Section  6(a),  the  Company, each of its directors, each of its
officers  who  signs  the Registration Statement, its employees, agents and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities  Act  or  Section  20  of the Exchange Act, and any other stockholder
selling  securities  pursuant  to  the  Registration  Statement  or  any  of its
directors or officers or any person who controls such stockholder or underwriter
within  the  meaning of the Securities Act or the Exchange Act (collectively and
together  with an Indemnified Person, an "INDEMNIFIED PARTY"), against any Claim
to  which any of them may become subject, under the Securities Act, the Exchange
Act  or  otherwise,  insofar  as  such  Claim arises out of or is based upon any
Violation,  in  each  case  to  the  extent  (and  only to the extent) that such
Violation  occurs  in  reliance  upon and in conformity with written information
furnished  to  the Company by such Investor expressly for use in connection with
such  Registration  Statement;  and  subject  to Section 6(c) such Investor will
reimburse  any  legal  or other expenses (promptly as such expenses are incurred
and  are  due  and  payable)  reasonably  incurred  by  them  in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement  contained  in  this  Section  6(b) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor; provided, further, however, that the Investor shall be
liable under this Agreement (including this Section 6(b) and Section 7) for only
that  amount  as  does  not  exceed  the  net proceeds actually received by such
Investor  as  a result of the sale of Registrable Securities giving rise to such
indemnification  obligation.  Such  indemnity  shall  remain  in  full force and
effect  regardless of any investigation made by or on behalf of such Indemnified
Party  and  shall  survive  the  transfer  of  the Registrable Securities by the
Investors  pursuant  to  Section  9.  Notwithstanding  anything  to the contrary
contained  herein,  the indemnification agreement contained in this Section 6(b)
with respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified  Party  if  the untrue statement or omission of material fact by the
Investor contained in the preliminary prospectus was corrected on a timely basis
in  the  prospectus,  as then amended or supplemented, and the Indemnified Party
failed  to  utilize  such  corrected  prospectus.

     c.     Promptly after receipt by an Indemnified Person or Indemnified Party
under  this Section 6 of notice of the commencement of any action (including any
governmental  action),  such Indemnified Person or Indemnified Party shall, if a
Claim  in  respect  thereof is to made against any indemnifying party under this
Section  6,  deliver  to  the  indemnifying  party  a  written  notice  of  the
commencement  thereof, and the indemnifying party shall have the right to assume
control  of  the  defense  thereof  with  counsel  mutually  satisfactory to the
indemnifying  party  and the Indemnified Person or the Indemnified Party, as the
case  may  be;  provided,  however,  that  such  indemnifying party shall not be
entitled  to  assume such defense and an Indemnified Person or Indemnified Party
shall  have  the  right  to  retain its own counsel with the reasonable fees and
expenses  to be paid by the indemnifying party, if, in the reasonable opinion of
counsel  retained  by the indemnifying party, the representation by such counsel
of  the Indemnified Person or Indemnified Party and the indemnifying party would
be  inappropriate  due to actual or potential conflicts of interest between such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel  in such proceeding or the actual or potential defendants in, or targets
of, any such action include both the Indemnified Person or the Indemnified Party
and  the indemnifying party and any such Indemnified Person or Indemnified Party
reasonably  determines  that  there  may  be  legal  defenses  available to such
Indemnified  Person  or  Indemnified  Party  which  are  in  conflict with those
available to such indemnifying party.  The indemnifying party shall pay for only
one  separate  legal  counsel  for  the  Indemnified  Persons or the Indemnified
Parties,  as  applicable,  and such legal counsel shall be selected by Investors
holding  a  majority-in-interest  of  the Registrable Securities included in the
Registration  Statement  to  which  the  Claim relates (with the approval of the
Initial  Investors  if any of them holds Registrable Securities included in such
Registration  Statement),  if  the  Investors  are  entitled  to indemnification
hereunder,  or  by  the  Company,  if the Company is entitled to indemnification
hereunder,  as  applicable.  The  failure  to  deliver  written  notice  to  the
indemnifying  party  within  a  reasonable  time of the commencement of any such
action  shall  not  relieve  such  indemnifying  party  of  any liability to the
Indemnified  Person  or  Indemnified  Party  under this Section 6, except to the
extent  that  the  indemnifying  party  is actually prejudiced in its ability to
defend  such  action.  The  indemnification  required by this Section 6 shall be
made  by  periodic  payments  of  the  amount  thereof  during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and  is  due  and  payable.

          (d)     Notwithstanding  anything  to  the  contrary  herein,  the
indemnifying party shall not be entitled to settle any claim, suit or proceeding
unless  in  connection  with  such  settlement the indemnified party receives an
unconditional  release with respect to the subject matter of such claim, suit or
proceeding  and  such  settlement does not contain any admission of fault by the
indemnified  party.

     7.     CONTRIBUTION.
            ------------

     To the extent any indemnification by an indemnifying party is prohibited or
limited  by  law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6  to  the  fullest  extent  permitted  by  law;  provided, however, that (i) no
contribution  shall  be  made under circumstances where the maker would not have
been  liable  for indemnification under the fault standards set forth in Section
6,  (ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section  11(f) of the Securities Act) shall be entitled to contribution from any
seller  of  Registrable  Securities  who  was  not  guilty  of  such  fraudulent
misrepresentation,  and (iii) contribution (together with any indemnification or
other  obligations under this Agreement) by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from  the  sale  of  such  Registrable  Securities.

     8.     REPORTS  UNDER  THE  EXCHANGE  ACT.
            ----------------------------------

     With  a  view to making available to the Investors the benefits of Rule 144
promulgated  under the Securities Act or any other similar rule or regulation of
the  SEC  that  may  at  any time permit the Investors to sell securities of the
Company  to the public without registration ("RULE 144"), the Company agrees to:

     a.     file with the SEC in a timely manner and make and keep available all
reports and other documents required of the Company under the Securities Act and
the Exchange Act so long as the Company remains subject to such requirements (it
being understood that nothing herein shall limit the Company's obligations under
Section  5(c)  of  the  Securities  Purchase  Agreement)  and  the  filing  and
availability  of  such  reports  and  other  documents  as  is  required for the
applicable  provisions  of  Rule  144;  and

     b.     furnish  to  each Investor so long as such Investor owns Registrable
Securities,  promptly  upon request, (i) a written statement by the Company that
it  has complied with the reporting requirements of Rule 144, the Securities Act
and  the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company, and
(iii)  such  other  information  as  may  be  reasonably requested to permit the
Investors  to  sell  such  securities pursuant to Rule 144 without registration.

     9.     ASSIGNMENT  OF  REGISTRATION  RIGHTS.
            ------------------------------------

     The  rights  of  the  Investors  hereunder, including the right to have the
Company  register  Registrable  Securities  pursuant to this Agreement, shall be
assignable  by  each  Investor  to  any  transferee of all or any portion of the
Registrable  Securities  if:  (i)  the  Investor  agrees  in  writing  with  the
transferee  or  assignee  to assign such rights, and a copy of such agreement is
furnished  to  the  Company after such assignment, (ii) the Company is furnished
with  written  notice of (a) the name and address of such transferee or assignee
and  (b) the securities with respect to which such registration rights are being
transferred  or  assigned,  (iii)  following  such  transfer  or assignment, the
further  disposition  of  such  securities  by the transferee or assignee may be
subject to restrictions under the Securities Act and applicable state securities
laws,  (iv)  the transferee or assignee agrees in writing with the Company to be
bound  by  all  of  the provisions contained herein, and (v) such transfer shall
have  been made in accordance with the applicable requirements of the Securities
Purchase  Agreement.  In  addition, and notwithstanding anything to the contrary
contained  in this Agreement, the Securities Purchase Agreement or the Warrants,
the Securities (as defined in the Securities Purchase Agreement) may be pledged,
and  all  rights of the Investors under this Agreement or any other agreement or
document related to the transaction contemplated hereby may be assigned, without
further  consent  of  the  Company, to a bona fide pledgee in connection with an
Investor's  margin  or  brokerage  accounts.

     10.     AMENDMENT  OF  REGISTRATION  RIGHTS.
             -----------------------------------

     Provisions  of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively), and Investors (excluding Investors who are affiliates of the
Company)  who hold fifty percent (50%) in interest of the Registrable Securities
(excluding  Registrable Securities held by affiliates of the Company) or, in the
case  of  a  waiver,  with  the  written  consent  of the party charged with the
enforcement  of  any  such  provision.  Any  amendment  or  waiver  effected  in
accordance  with  this  Section  10  shall be binding upon each Investor and the
Company.

     11.     MISCELLANEOUS.
             -------------

     a.     A  person  or  entity  is  deemed  to  be  a  holder  of Registrable
Securities  whenever  such  person  or  entity  owns  of record such Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two  or  more  persons  or  entities  with  respect to the same
Registrable  Securities,  the  Company shall act upon the basis of instructions,
notice  or  election  received  from  the  registered  owner of such Registrable
Securities.

     b.     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 (5) 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.
     1139  Karlstad  Drive
     Sunnyvale,  CA  94089
     Telephone  No.:  (408)  747-7140  (x1311)
     Facsimile  No.:  (408)  747-7198
     Attention:  Mr.  Shum  Mukherjee

     With  a  copy  to:

     Wilson  Sonsini  Goodrich  &  Rosati
     650  Page  Mill  Road
     Palo  Alto,  CA  94304
     Telephone  No.:  (650)  493-9300
     Facsimile  No.:   (650)  493-6811
     Attention:  Mark  Casillas,  Esq.

     If  to an Investor, at such address as such Investor shall have provided in
writing  to  the  Company  or  such  other address as such Investor furnishes by
notice  given  in  accordance  with  this  Section  11(b).

     Each  party  hereto  may  from time to time change its address or facsimile
number  for  notices  under this Section 11(b) by giving at least ten (10) days'
prior written notice of such changed address or facsimile number, in the case of
the  Investors  to  the  Company,  and  in the case of the Company to all of the
Investors.

     c.     Failure  of  any  party  to  exercise any right or remedy under this
Agreement  or otherwise, or delay by a party in exercising such right or remedy,
shall  not  operate  as  a  waiver  thereof.

          d.     All  questions  concerning  the  construction,  validity,
enforcement  and  interpretation  of  this  Agreement  shall  be governed by and
construed  and enforced in accordance with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
agrees  that  all  Proceedings  concerning  the interpretations, enforcement and
defense  of  the  transactions  contemplated  by  this  Agreement  and any other
Transaction  Documents (whether brought against a party hereto or its respective
affiliates,  directors,  officers,  shareholders,  employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New
York, Borough of Manhattan.  Each party hereto hereby irrevocably submits to the
exclusive  jurisdiction  of  the state and federal courts sitting in the City of
New  York, Borough of Manhattan for the adjudication of any dispute hereunder or
in  connection herewith or with any transaction contemplated hereby or discussed
herein  (including with respect to the enforcement of the any of the Transaction
Documents),  and  hereby  irrevocably  waives,  and  agrees not to assert in any
Proceeding,  any  claim that it is not personally subject to the jurisdiction of
any  such  court,  that  such  Proceeding is improper.  Each party hereto hereby
irrevocably  waives  personal  service  of process and consents to process being
served  in  any  such  Proceeding  by  mailing  a copy thereof via registered or
certified  mail  or overnight delivery (with evidence of delivery) to such party
at  the address in effect for notices to it under this Agreement and agrees that
such  service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to  serve  process  in  any  manner  permitted  by law. Each party hereto hereby
irrevocably  waives,  to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this  Agreement  or  the transactions contemplated hereby. If either party shall
commence  a Proceeding to enforce any provisions of a Transaction Document, then
the  prevailing  party in such Proceeding shall be reimbursed by the other party
for  its  attorneys  fees  and  other  costs  and  expenses  incurred  with  the
investigation,  preparation  and  prosecution  of  such  Proceeding.
     e.     The  Transaction  Documents  (including  all  schedules and exhibits
thereto)  constitute  the entire agreement among the parties hereto with respect
to  the subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  The  Transaction  Docuemtns  supersede  all  prior  agreements  and
understandings  among the parties hereto and thereto with respect to the subject
matter  hereof  and  thereof.

     f.     Subject  to  the  requirements  of  Section 9 hereof, this Agreement
shall  inure to the benefit of and be binding upon the successors and assigns of
each  of  the  parties  hereto.

     g.     The headings in this Agreement are for convenience of reference only
and  shall  not  limit  or  otherwise  affect  the  meaning  hereof.

     h.     This  Agreement may be executed in two or more counterparts, each of
which  shall be deemed an original but all of which shall constitute one and the
same  agreement.  This  Agreement, once executed by a party, may be delivered to
the  other  party  hereto  by facsimile transmission of a copy of this Agreement
bearing  the  signature  of  the  party  so  delivering  this  Agreement.

     i.     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.

     j.     All  consents,  approvals and other determinations to be made by the
Investors pursuant to this Agreement shall be made by the Investors holding more
than  fifty  percent  (50%)  of the Registrable Securities (determined as if all
Warrants  then  outstanding had been exercised by the payment of cash) then held
by  all  Investors.

     k.     The  initial  number  of  Registrable  Securities  included  on  any
Registration Statement and each increase to the number of Registrable Securities
included  thereon  shall be registered on behalf of each Investor pro rata based
on  the  number  of  Registrable Securities held by each Investor at the time of
such  establishment  or  increase, as the case may be.  In the event an Investor
shall  sell  or  otherwise transfer any of such holder's Registrable Securities,
each  transferee  shall  be  deemed  to have registered on its behalf a pro rata
portion  of  the  number  of  Registrable  Securities included on a Registration
Statement  for  such  transferor.  Any  shares  of  Common  Stock  included on a
Registration Statement on behalf of any person or entity which does not hold any
Registrable  Securities  shall  be  deemed registered on behalf of the remaining
Investors, pro rata based on the number of shares of Registrable Securities then
held  by  such  Investors.  For  the  avoidance  of  doubt,  (A)  the  number of
Registrable  Securities  held  by  an  Investor  shall  be  determined as if all
Warrants  then outstanding and held by an Investor were exercised by the payment
of  cash  and  (B)  no  provision of this subsection shall operate to reduce the
number  of  Registrable Securities registered on behalf of any Investor pursuant
to  the  first  sentence  of  this  subsection.



     [REMAINDER  OF  PAGE  INTENTIONALLY  LEFT  BLANK]


<PAGE>

                                    EXHIBIT A
                                    ---------

                              PLAN OF DISTRIBUTION

The  Selling  Stockholders  and  any  of  their  pledgees,  assignees  and
successors-in-interest  may,  from time to time, sell any or all of their shares
of  Common  Stock on any stock exchange, market or trading facility on which the
shares  are  traded  or in private transactions.  These sales may be at fixed or
negotiated  prices.  The  Selling  Stockholders  may  use any one or more of the
following  methods  when  selling  shares:

- -     ordinary  brokerage  transactions  and  transactions  in  which  the
broker-dealer  solicits  purchasers;

- -     block trades in which the broker-dealer will attempt to sell the shares as
agent  but  may  position  and  resell  a  portion  of the block as principal to
facilitate  the  transaction;

- -     purchases  by a broker-dealer as principal and resale by the broker-dealer
for  its  account;

- -     an  exchange  distribution  in accordance with the rules of the applicable
exchange;

- -     privately  negotiated  transactions;

- -     short  sales

- -     broker-dealers may agree with the Selling Stockholders to sell a specified
number  of  such  shares  at  a  stipulated  price  per  share;

- -     a  combination  of  any  such  methods  of  sale;  and

- -     any  other  method  permitted  pursuant  to  applicable  law.

     The  Selling  Stockholders  may  also  sell shares under Rule 144 under the
Securities  Act,  if  available,  rather  than  under  this  prospectus.

     Broker-dealers  engaged  by  the Selling Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or  discounts  from  the  Selling Stockholders (or, if any broker-dealer acts as
agent  for  the  purchaser  of  shares,  from  the  purchaser)  in amounts to be
negotiated.  The  Selling  Stockholders  do  not  expect  these  commissions and
discounts  to  exceed  what  is customary in the types of transactions involved.

     The  selling  stockholder  may from time to time pledge or grant a security
interest  in  some or all of the Shares or common stock or Warrant owned by them
and,  if  they  default  in  the  performance  of their secured obligations, the
pledgees  or  secured parties may offer and sell the shares of common stock from
time  to  time  under  this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
amending  the list of selling stockholders to include the pledgee, transferee or
other  successors  in  interest  as  selling stockholders under this prospectus.

     The  selling  stockholders  also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in  interest  will  be  the  selling  beneficial  owners  for  purposes  of this
prospectus.

     The Selling Stockholders and any broker-dealers or agents that are involved
in  selling  the shares may be deemed to be "underwriters" within the meaning of
the  Securities  Act  in  connection  with  such  sales.  In  such  event,  any
commissions  received  by  such  broker-dealers  or agents and any profit on the
resale  of  the  shares  purchased  by  them  may  be  deemed to be underwriting
commissions  or  discounts  under  the Securities Act.  The Selling Stockholders
have  informed the Company that it does not have any agreement or understanding,
directly  or  indirectly,  with  any  person  to  distribute  the  Common Stock.

     The  Company  is  required  to  pay  all  fees and expenses incident to the
registration  of  the  shares.  The  Company has agreed to indemnify the Selling
Stockholders  against certain losses, claims, damages and liabilities, including
liabilities  under  the  Securities  Act.



<PAGE>
                                        2


                   AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
     THIS  AMENDMENT  TO REGISTRATION RIGHTS AGREEMENT (this "Amendment"), dated
as  of  January  22,  2002,  is entered into between and among, on the one hand,
Genus,  Inc.,  a  California  corporation  (the  "Company"), and the undersigned
Initial  Investor  (as  defined  in  the  Agreement)  in light of the following:

                               W I T N E S S E T H
                               -------------------

     WHEREAS,  the  Company and the Initial Investor are parties to that certain
Registration  Rights  Agreement  dated  January  17,  2002  (the  "Agreement");
WHEREAS,  the  Initial  Investor  requested  that  the  Company  consent  to the
amendments  to  the  Agreement  set  forth  in  Section  2  hereof;  and
                                                ----------
WHEREAS,  the  Company  is  willing  to  so  consent  to  such amendments to the
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of  which  are  hereby acknowledged, the parties agree to amend the Agreement as
follows:

1.     DEFINITIONS
       -----------

     .  Capitalized  terms  used  herein  and not otherwise defined herein shall
have  the  meanings  ascribed  to  them  in  the  Agreement,  as amended hereby.

2.     AMENDMENTS  TO  AGREEMENT
       -------------------------
     .
(a)     Section  1(i) of the Agreement, the definition of "Investors", is hereby
        -------------
amended  and  restated  in  its  entirety  as  follows:
     "(i)     "INVESTORS"  means  the  Initial  Investors and any transferees or
assignees  who  agree  to  become  bound  by the provisions of this Agreement in
accordance  with  Section 9 hereof; provided, however, that the term "Investors"
shall  not include any of the Initial Investors and any transferees or assignees
who agree to become bound by the provisions of this Agreement in accordance with
Section  9  hereof  that  cease  to  own  or  hold  Registrable  Securities."

(b)     Section  2(a)  of  the  Agreement  hereby is amended and restated in its
        -------------
entirety  as  follows:

     "Mandatory  Registration.  The  Company  shall  file with the United States
      -----------------------
Securities  and  Exchange  Commission  ("SEC"), on or prior to the date which is
forty-five  (45)  calendar days after the Closing Date (the "FILING DEADLINE") a
Registration  Statement  on  Form S-3 (or, if Form S-3 is not then available, on
such  form  of  Registration  Statement  as  is  then  available  to  effect  a
registration of all of the Registrable Securities, subject to the consent of the
Initial  Investors as to the use of such form (as determined pursuant to Section
11(j)  hereof)) to include the Plan of Distribution attached hereto as Exhibit A
                                                                       ---------
covering  the  resale  of  at  least  4,300,000  shares  of  Common Stock, which
Registration Statement, to the extent allowable under the Securities Act and the
rules  promulgated  thereunder shall state that such Registration Statement also
covers  such  indeterminate  number  of additional shares of Common Stock as may
become issuable upon exercise of the Warrants to prevent dilution resulting from
stock splits, stock dividends or similar transactions (the "INITIAL REGISTRATION
STATEMENT").  In  the event that the Initial Registration Statement is not filed
within  forty-five  (45)  calendar  days of the Closing Date, the Exercise Price
shall  be reduced to $2.90.   The Registrable Securities included in the Initial
Registration  Statement  shall  be  registered on behalf of the Investors as set
forth  in  Section  11(k) hereof.  If for any reason (including, but not limited
to,  a  determination  by  the  staff  of the SEC that all or any portion of the
Warrant  Shares  or  any  other Registrable Securities cannot be included in the
Initial  Registration  Statement  (an  "SEC  DETERMINATION"))  the  Initial
Registration Statement declared effective by the SEC does not include all of the
Registrable  Securities  (any  such  shares  that  are  not  included  being the
"UNCOVERED SHARES"), the Company shall prepare and file with the SEC, as soon as
practicable,  but  in  any  event  prior  to the tenth (10th) Business Day after
becoming  aware  of the existence of any Uncovered Shares (such date referred to
herein  as  the "UNCOVERED SHARE FILING DEADLINE"), either (a) an amendment (the
"UNCOVERED  SHARES AMENDMENT") to the Initial Registration Statement effecting a
registration  of  the  Uncovered  Shares  or  (b) a registration statement which
registers  the Uncovered Shares (the "UNCOVERED SHARES REGISTRATION STATEMENT").
The  Company  shall  file  additional  Registration  Statements if the number of
Registrable Securities at any time exceeds 85% of the number of shares of Common
Stock  then  registered  in  a  Registration  Statement.  The  Uncovered  Shares
Amendment  or the Uncovered Shares Registration Statement (and each amendment or
supplement  thereto, and each request for acceleration of effectiveness thereof)
shall  be  provided  to  the  Initial Investors and their counsel for review and
comment  at least two (2) Business Days prior to its filing or other submission.
The  Company  shall  use  its commercially reasonable best efforts to cause each
Registration  Statement  required  to  be filed pursuant to this Section 2(a) to
become  effective  as  soon  as practicable, but, as to the Initial Registration
Statement filed pursuant to Section 2(a), in no event later than the one hundred
and  twentieth  (120th)  calendar  day  after  the  Closing  Date, and as to any
Uncovered  Shares  Amendment  or  Uncovered Shares Registration Statement, in no
event  later  than  the one hundred and twentieth (120th) calendar day after the
Uncovered  Share  Filing Deadline (the "UNCOVERED SHARE REGISTRATION DEADLINE").
In  the  event  that  the  Initial  Registration  Statement is not effective one
hundred  and  twenty (120) calendar days after the Closing Date or the Uncovered
Shares  Registration  Statement  is  not  effective  as  of the Uncovered Shares
Registration  Deadline,  the  Company  shall  pay  the  Initial Investors a cash
penalty  of  one  percent  (1%)  of  the Initial Investors' Investment Amount as
defined  under  the  Securities Purchase Agreement for each thirty (30) calendar
day  period  that  the Registration remains non-effective beyond the initial one
hundred  and twenty (120) calendar day period .  Nothing in this provision shall
limit  the  Initial  Investors'  other  rights  and  remedies  under  the  law."

3.     CONSTRUCTION
       ------------

     .  THIS  AMENDMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE  LAW  OF  THE  STATE  OF  NEW  YORK  APPLICABLE  TO CONTRACTS MADE AND TO BE
PERFORMED  IN  THE  STATE  OF  NEW  YORK.

4.     ENTIRE  AMENDMENT;  EFFECT  OF  AMENDMENT
       -----------------------------------------

     .  This  Amendment,  and terms and provisions hereof, constitute the entire
agreement  among  the  parties  pertaining  to  the  subject  matter  hereof and
supersedes  any  and  all  prior  or  contemporaneous amendments relating to the
subject matter hereof.  Except for the amendments to the Agreement expressly set
forth  in  Section  2  hereof,  the Agreement shall remain unchanged and in full
           ----------
force  and  effect.  To  the  extent  any  terms or provisions of this Amendment
conflict  with  those  of  the  Agreement,  the  terms  and  provisions  of this
Amendment  shall  control.

5.     COUNTERPARTS;  TELEFACSIMILE  EXECUTION
       ---------------------------------------

     .  This  Amendment  may  be  executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties  hereto  may  execute  this  Amendment  by signing any such counterpart.
Delivery  of an executed counterpart of this Amendment by telefacsimile shall be
equally  as  effective  as  delivery of an original executed counterpart of this
Amendment.  Any  party  delivering  an executed counterpart of this Amendment by
telefacsimile  also  shall  deliver  an  original  executed  counterpart of this
Amendment, but the failure to deliver an original executed counterpart shall not
affect  the  validity,  enforceability,  and  binding  effect of this Amendment.

6.     MISCELLANEOUS.
       --------------

(a)     Upon  the  effectiveness  of  this  Amendment,  each  reference  in  the
Agreement  to "this Agreement", "hereunder", "herein", "hereof" or words of like
import  referring  to  the  Agreement  shall  mean and refer to the Agreement as
amended  by  this  Amendment.
(b)     Upon  the  effectiveness  of  this  Amendment,  each  reference  in  the
Transaction  Documents  to  the  "Registration  Rights Agreement", "thereunder",
"therein",  "thereof"  or  words of like import referring to the Agreement shall
mean  and  refer  to  the  Agreement  as  amended  by  this  Amendment.



                            [Signature page follows.]

<PAGE>


     IN  WITNESS  WHEREOF, the parties have caused this Amendment to be executed
and  delivered  as  of  the  date  first  written  above.

     GENUS,  INC.
     a  California  corporation

     By:  _________________________________
     Name:  Shum  Mukherjee
     Title:  CFO

     INITIAL  INVESTOR

     By:__________________________________

     Name:________________________________

     Title:_________________________________




<PAGE>
[{"type": "8-K", "sequence": "1", "filename": "doc1.txt", "secsgml_size_bytes": 207201}]
{"company-data": {"conformed-name": "GENUS INC", "cik": "0000837913", "assigned-sic": "3559", "irs-number": "942790804", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-17139", "film-number": "02518046"}, "business-address": {"street1": "1139 KARLSTAD DRIVE", "city": "SUNNYVALE", "state": "CA", "zip": "94089-2117", "phone": "4087477120"}, "mail-address": {"street1": "1139 KARLSTAD DRIVE", "city": "SUNNYVALE", "state": "CA", "zip": "94089-2117"}}
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                                January 25, 2002
           -----------------------------------------------------------
                                (Date of Report)

                                   GENUS, INC.
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          California                  000-17139            94-2790804
- -------------------------------------------------------------------------------
   (State or other jurisdiction     (Commission        (IRS Employer
       of incorporation)            File Number)     Identification No.)

        1139  Karlstad  Drive
        Sunnyvale, CA                                        94089
 ----------------------------------------------      -------------------
    (Address of principal executive offices)              (Zip Code)

Registrant's  telephone  number,  including  area  code:    (408) 747-7120
                                                            --------------

                                       N/A
          -------------------------------------------------------------
          (Former name or former address, if changed since last report)

Item  5.     Other  Events

     On  January  25,  2002,  the  Registrant  completed  a $8.7 million private
placement  of  shares  of  common  stock  and  warrants.  In connection with the
private  placement,  the  Registrant  issued approximately 3.8 million shares of
common  stock  and  warrants  to purchase up to approximately 581,005 additional
shares  of  common  stock.  The purchase price of $2.25 per share was based on a
discount  to  the  trailing  five-day average closing bid price and the warrants
have an exercise price of $3.23 per share.   The Registrant has agreed to file a
registration  statement  covering the resale of these shares and shares issuable
upon  exercise  of  the  warrants.

      The foregoing matters are further described in the press release issued by
the Registrant on January 25, 2002, a copy of which is filed herewith as Exhibit
99.1  and  incorporated  herein  by  reference.

Item 7.  Financial  Statements  and  Exhibits

     (c)  Exhibits

          99.1 Press  release  of  Genus,  Inc.  dated  January  25,  2002.

          99.2 Securities Purchase Agreement dated as of January 17, 2002 by and
               between  Genus,  Inc.  and  each  of  the  undersigned Investors.

          99.3 Form  of Genus, Inc. Stock Purchase Warrant issued to each of the
               Investors.

          99.4 Form  of Genus, Inc. Registration Rights Agreement issued to each
               of  the  Investors.

          99.5 Form  of  Genus,  Inc. Amendment to Registration Rights Agreement
               issued  to  each  of  the  Investors.
SIGNATURES

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
Registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  hereunto  duly  authorized.

Date:  January  25,  2002                    GENUS,  INC.

                                             By:   /s/  Shum  Mukherjee
                                             -----------------------------
                                             Shum  Mukherjee
                                             Chief Financial Officer
INDEX TO EXHIBITS

Exhibits

99.1 Press  release  of  Genus,  Inc.  dated  January  25,  2002.

99.2 Common Stock and Warrant Purchase Agreement dated as of January 17, 2002 by
     and  between  Genus,  Inc.  and  each  of  the  undersigned  Investors.

99.3 Form of Genus, Inc. Stock Purchase Warrant issued to each of the Investors.

99.4 Form  of  Genus,  Inc.  Registration Rights Agreement issued to each of the
     Investors.

99.5 Form  of  Genus,  Inc. Amendment to Registration Rights Agreement issued to
     each  of  the  Investors.
COMPANY  CONTACT:                                  PRESS  CONTACT:
Shum  Mukherjee                                    Dave  Richardson
Genus,  Inc.                                       Positio
Tel:  (408)  747-7140 Ext. 1311                    Tel: (650) 815 1006 Ext.  108
Email:  smukherjee@genus.com                       Email: dave@positiopr.com
       -----------

                        GENUS COMPLETES PRIVATE PLACEMENT

SUNNYVALE,  CALIF.-JANUARY  25, 2002- Genus, Inc. (Nasdaq:  GGNS) announced that
it  has completed a private placement of approximately 3.8 million shares of its
common  stock.  The purchase price for the shares was based on a discount to the
trailing  five-day  average  closing  bid price.  In connection with the private
placement,  the  company  also  issued  warrants  to purchase up to 581 thousand
additional  shares.  The  offering  resulted  in  gross proceeds to the company,
prior  to  the  exercise  of  the  warrants, of approximately $8.7 million.  The
warrants  have  a  five-year  term.

The  company  stated that it expects to use the net proceeds of the offering for
working  capital  and general corporate purposes.  Hoefer & Arnett, Incorporated
acted  as  the  placement agent to Genus for this private placement and Cardinal
Capital  acted  as  a  sales  agent.

This  press  release does not constitute an offer to sell or the solicitation of
an  offer to buy any security.  The shares and warrants have not been registered
under the Securities Act of 1933 or applicable state securities laws and may not
be offered or sold in the United States absent registration under the Securities
Act  and  applicable  state  securities  laws  or  an  applicable exemption from
registration  requirements.  Genus  has  agreed to file a registration statement
covering  the  resale of the shares and the shares issuable upon exercise of the
warrants.

FORWARD  LOOKING  STATEMENT
Except for the historical information contained herein, the matters set forth in
this  press release, including the expected use of proceeds of the offering, are
forward-looking statements within the meaning of the "safe harbor" provisions of
the  Private  Securities  Litigation  Reform Act of 1995.  These forward-looking
statements  are subject to risks and uncertainties that may cause actual results
to  differ  materially,  including  the  effect  of the offering on Genus' share
price, changing customer requirements, and the effects of technological advances
and  competition.  For a discussion of additional factors that may cause results
to  differ,  see Genus' SEC reports, including its Quarterly Report on Form 10-Q
for  the  quarter  ended  September  30,  2001  and Form 10-K for the year ended
December  31,  2000.  These forward-looking statements speak only as of the date
hereof.  Genus  disclaims  any  intent  or  obligation  to  update  these
forward-looking  statements.
19

     SECURITIES  PURCHASE  AGREEMENT
     -------------------------------

     SECURITIES  PURCHASE  AGREEMENT (this "AGREEMENT"), dated as of January 17,
2002,  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 Rule 506 and 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, (i) shares of the
Company's  common stock, no par value (the "COMMON STOCK"), and (ii) warrants in
the  form  attached  hereto  as  Exhibit  A  (including  any  warrants issued in
                                 ----------
replacement  thereof,  the  "WARRANTS"), to acquire shares of Common Stock.  The
shares  of  Common  Stock issuable upon exercise of or otherwise pursuant to the
Warrants  are  referred  to  herein  as  the  "WARRANT  SHARES."

     C.     Contemporaneous  with  the execution and delivery of this Agreement,
the  parties hereto are executing and delivering a Registration Rights Agreement
in  the form attached hereto as Exhibit B (the "REGISTRATION RIGHTS AGREEMENT"),
                                ---------
pursuant  to which 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.
     --------------------

     For purposes of this Agreement, the following terms shall have the meanings
ascribed  to  them  as  provided  below:

     "BUSINESS  DAY"  means  any  day  except Saturday, Sunday and any day which
shall  be a legal holiday or a day on which banking institutions in the State of
New  York  or  California  are authorized or required by law or other government
action  to  close.

"CLOSING  PRICE" shall mean for the Common Stock as of any date, the closing bid
price  of  such  security  on the principal United States securities exchange or
trading  market  on  which  such security is listed or traded as reported by the
Research  Service  of  Nasdaq  Trading  and  Market  Services  (or  a comparable
reporting  service of national reputation selected by the Purchasers as provided
in Section 8(n) hereof, and reasonably acceptable to the Company if the Research
Service  of Nasdaq Trading and Market Services is not then reporting closing bid
prices  of  such  security) (collectively, "NTMS"), or if the foregoing does not
apply,  the  last  reported  sale price of such security in the over-the-counter
market  on  the electronic bulletin board for such security as reported by NTMS,
or,  if  no sale price is reported for such security by NTMS, the average of the
bid  prices  of  any  market  makers  for such security as reported in the "pink
sheets"  by  Pink  Sheets LLC (formerly the National Quotation Bureau, Inc.), in
each  case  for  such  date  or,  if such date was not a Trading Day (as defined
below) for such security, on the next preceding day which was a Trading Day.  If
the Closing Price cannot be calculated for a share of Common Stock on any of the
foregoing  bases,  the  Closing  Price of such security shall be the fair market
value  as  determined  by an investment banking firm selected by the Company and
reasonably  acceptable to the Purchasers, with the costs of such appraisal to be
borne  by  the  Company.

     "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.

"MARKET  PRICE"  shall  mean,  with  respect  to  any date of determination, the
Closing  Price  on  the  Trading  Day  immediately  preceding  such  date  of
determination, appropriately adjusted to reflect any stock dividend, stock split
or  similar  transaction  during  either  such  relevant  period.

     "MATERIAL  ADVERSE  EFFECT"  means any one or more material adverse effects
which,  individually  or  in  the  aggregate: (i) adversely affect the legality,
validity or enforceability of any Transaction Document, (ii) have or result in a
material  adverse  effect  on  the  results  of  operations,  assets, prospects,
business  or  condition  (financial  or  otherwise)  of  the  Company  and  the
Subsidiaries,  taken as a whole, or (iii) adversely impair the Company's ability
to  perform  fully  on  a  timely  basis  its  obligations under any Transaction
Document  (it  being  understood  that  any  of (i), (ii) or (iii), constitute a
"Material  Adverse  Effect").
    ----------------------

"PLACEMENT  AGENT"  shall  mean  Hoefer  &  Arnett,  Inc.

     "PRO  RATA  PERCENTAGE"  shall  mean,  with  respect  to  any  Purchaser, a
percentage  computed  by  dividing  such  Purchaser's  Investment  Amount by the
aggregate  Investment  Amounts  of  all  Purchasers.

     "SECURITIES"  shall  mean  the Shares, the Warrants and the Warrant Shares.

     "SHARES"  means  the  shares  of  Common Stock to be issued and sold by the
Company  and  purchased  by  the  Purchasers  at  the  Closing.

"TRADING  DAY"  shall  mean  a  Business  Day on which at least 10,000 shares of
Common  Stock  are  traded on the principal United States securities exchange or
trading  market  on which such security is listed or traded as reported by NTMS.

"TRANSACTION DOCUMENTS" means this Agreement, the Registration Rights Agreement,
the  Transfer  Agent  Instructions (attached as Exhibit C hereto), and the Stock
                                                ---------
Purchase  Warrant  (and  the  exhibits  and  schedules  thereto).

2.     PURCHASE  AND  SALE  OF  SHARES  AND  WARRANTS.
       ----------------------------------------------

     a.     Generally.  Except  as  otherwise  provided  in  this  Section 2 and
            ---------
subject to the satisfaction (or waiver) of the conditions set forth in Section 6
and  Section  7  below,  each  Purchaser shall purchase the number of Shares and
Warrants  determined  as provided in this Section 2, and the Company shall issue
and  sell  such  number  of  Shares  and  Warrants  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.

     b.     Number  of  Closing  Shares  and  Warrants; Form of Payment; Closing
            --------------------------------------------------------------------
Date.

     i.     On  the  Closing Date (as defined below), the Company shall sell and
each Purchaser shall buy (A) the number of Shares as is equal to the quotient of
(I)  such  Purchaser's  Investment Amount divided by (II) $2.25 and (B) Warrants
exercisable for a number of shares of Common Stock equal to 15% of the number of
Shares  referred to in subclause (A) above.  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 and duly
executed  Warrants  being  purchased  by  such  Purchaser, and the Company shall
deliver such Shares and Warrants against delivery of such Purchaser's Investment
Amount.

     iii.     Subject  to the satisfaction (or waiver) of the conditions thereto
set forth in Section 6 and Section 7 below, the date and time of the sale of the
Shares  and  the  Warrants  pursuant  to this Agreement (the "CLOSING") shall be
10:00 a.m. California time on January 17, 2002 or such other date or time as the
Purchasers  and  the  Company  may mutually agree ("CLOSING DATE").  The Closing
shall  occur  at  the  Palo  Alto  offices  of  Wilson Sonsini Goodrich & Rosati
("WSGR"),  or  at  such  other  place as the Placement Agent and the Company may
otherwise  mutually  agree.

3.   THE  PURCHASER'S  REPRESENTATIONS  AND  WARRANTIES.
     --------------------------------------------------

     Each  Purchaser,  severally and not jointly, represents and warrants to the
Company  as  to  itself  and  for  no  other  Purchaser  as  follows:

     a.     Purchase  for  Own  Account.  Such  Purchaser  is  purchasing  the
            ---------------------------
Securities for such  Purchaser's own account and not with a present view towards
the  distribution  thereof.  Such Purchaser understands that such Purchaser must
bear  the  economic  risk of this investment indefinitely, unless the Securities
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 Securities
other  than  as  contemplated  by  the  Registration  Rights  Agreement.
Notwithstanding  anything  in  this  Section 3(a) to the contrary, by making the
foregoing  representation,  such Purchaser does not agree to hold the Securities
for  any minimum or other specific term and reserves the right to dispose of the
Securities  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.  Purchaser has no agreement or understanding,
directly  or  indirectly,  with any person to distribute any of the Sercurities.

     b.     Information.  Such  Purchaser  has  been  furnished  all  materials
            -----------
(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 Securities that have been requested by
such  Purchaser.  Such  Purchaser  has  been  afforded  the  opportunity  to ask
questions  of  the  Company  and has received what such Purchaser believes to be
satisfactory answers to any such inquiries.  Such Purchaser understands that its
investment  in  the  Securities  involves  a  high degree of risk.  Neither such
inquiries  nor any other due diligence investigation conducted by such Purchaser
or  its counsel or any of its representatives shall modify, amend or affect such
Purchaser's  right  to  rely  on  the  Company's  representations and warranties
contained  in  Section  4  below.

     c.     Governmental  Review.  Such  Purchaser  understands  that  no United
            --------------------
States  federal  or  state agency or any other government or governmental agency
has  passed  upon  or  made any recommendation or endorsement of the Securities.

     d.     Authorization;  Enforcement.  Such Purchaser has the requisite power
            ---------------------------
and authority to enter into and perform its obligations under this Agreement and
to  purchase  the  Shares  and the Warrants in accordance with the terms hereof.
This  Agreement  has been duly and validly authorized, executed and delivered on
behalf  of such Purchaser and is a valid and binding agreement of such Purchaser
enforceable  against  such  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.  Such Purchaser understands that (i) except as
            --------------------
provided in the Registration Rights Agreement and this Agreement, the Securities
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) such 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 Securities 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
Securities  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  the  Registration  Rights  Agreement.

     f.     Investor  Status.  Purchaser  is an "ACCREDITED INVESTOR" within 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 Securities
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 Securities.
Such  Purchaser  has  not  been  formed  solely for the purpose of acquiring the
Securities.  Such  Purchaser  is not a registered broker-dealer under Section 15
of  the  Exchange  Act.

     g.   Representation  by  Non-United States Persons. If a Purchaser is not a
          -----------------------------------------------
United  States  person,  such  Person  hereby  represents that such Purchaser is
satisfied as to the full observance of the laws of such Purchaser's jurisdiction
in connection with any invitation to subscribe for the Shares and Warrant Shares
or  any  use  of the Transaction Documents, including (i) the legal requirements
within  such  Purchaser's jurisdiction for the purchase of such securities, (ii)
any  foreign  exchange  restrictions  applicable  to  such  purchase,  (iii) any
governmental  or other consents that may need to be obtained and (iv) the income
tax  and  other  tax consequences, if any, that may be relevant to the purchase,
holding,  redemption,  sale  or  transfer  of such securities.  Such Purchaser's
subscription  and  payment  for,  and  such  Purchaser's  continued  beneficial
ownership  of,  the  Shares  and  Warrant Shares will not violate any applicable
securities  or  other  laws  of  such  Purchaser's  jurisdiction.

     4.     REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.
            --------------------------------------------------

     The  Company  represents  and  warrants  to  each  Purchaser  as  follows:

     a.     Organization  and  Qualification.  Each  of  the  Company  and  its
            --------------------------------
subsidiaries  is  a  corporation  duly  organized, in good standing, and validly
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. Schedule 4(a) sets forth the Company's jurisdiction of
                          -------------
incorporation  and  the  name  of  each  of  the  Company's subsidiaries and its
jurisdiction  of incorporation.  Neither the Company nor any of its subsidiaries
is  in  violation  of  any provision of its organizational or charter documents.

b.     Authorization;  Enforcement.  (i) The Company has the requisite corporate
       ---------------------------
power  and  authority  to  enter  into  and  perform  its  obligations under the
Transaction  Documents,  to  issue  and  sell  the  Shares  and  the Warrants in
accordance  with  the terms hereof and to issue the Warrant Shares upon exercise
of  the  Warrants  in  accordance  with  the  terms  of  the  Warrants; (ii) the
execution,  delivery and performance of the Transaction Documents by the Company
and  the  consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Shares  and  the  issuance  of the Warrants and the reservation for issuance and
issuance of the Warrant 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, and,
upon  execution and delivery by the Company and the other parties thereto to the
extent  required  of  the  Registration  Rights Agreement and the Warrants, such
agreements  will  constitute,  valid  and  binding  obligations  of  the Company
enforceable  against  the  Company  in  accordance  with their respective 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).

c.     Capitalization.  The  capitalization  of  the  Company  and  each  of its
       --------------
subsidiaries  as of the date hereof is set forth on Schedule 4(c), including the
                                                    -------------
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
                                             -------------
stock of the Company (including the Shares and the Warrant 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
Securities  and as disclosed in Schedule 4(c), as of the date of this Agreement,
                                -------------
(i)  there  are no 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 for the
Registration Rights Agreement).  Except as set forth on Schedule 4(c), there are
                                                        -------------
no  securities or instruments containing antidilution or similar provisions that
may  be triggered by the issuance of the Securities in accordance with the terms
of  this  Agreement,  the  Warrants or the Registration Rights 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 or similar provisions in
connection  with  the issuance of the Securities in accordance with the terms of
this  Agreement, the Warrants or the Registration Rights 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  Securities.  The  Shares  are duly authorized and when
            ------------------------
issued 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 any
Purchaser), 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.  The  Warrant  Shares  are  duly  authorized  and  reserved for
issuance,  and,  upon  exercise  of  the  Warrants  in accordance with the terms
thereof, will be validly issued, fully paid and non-assessable and free from all
taxes  and liens, claims and encumbrances (other than those imposed through acts
or  omissions of any Purchaser), 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
            -------------
Agreement,  the  Registration  Rights Agreement and the Warrants by the Company,
and  the consummation by the Company of the transactions contemplated hereby and
thereby  (including,  without  limitation,  the  reservation  for  issuance  and
issuance  of the Shares and the Warrant Shares and the issuance of the Warrants)
will  not  (i)  conflict  with  or  result  in  a  violation  of the Articles of
Incorporation  or  By-laws  (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 (including (assuming the accuracy of the
representations  and  warranties of the Purchasers set forth in Section 3(a) and
3(f)  hereof)  the  United  States  federal  and  state  securities  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), or (iii)
result  in  a  violation of any law, rule, regulation, order, judgment or decree
(including  federal  and state securities laws and regulations and the rules and
regulations of the Nasdaq Stock Market) or by which any property or asset of the
Company  or  any  of  its  subsidiaries  is  bound  or  affected.
     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 (including without limitation the issuance and sale of the
Shares  and  Warrants  as  provided  hereby),  the  Warrants  (including without
limitation  the  issuance  of  the  Warrant  Shares)  or the Registration Rights
Agreement,  in  each  case  in accordance with the terms hereof or thereof.  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 (and
interpretations  thereof)  as  currently  in  effect.

     f.     SEC  Documents;  Financial  Statements.  Since  January 1, 2000, the
            --------------------------------------
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  herein 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 in all material respects 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 in all material respects 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
include  footnotes or may be condensed or summary statements) and fairly present
in  all material respects 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
            -----------------------------
Documents  and  the Schedules hereto, since December 31, 2001, there has been no
change  or  development  which individually or in the aggregate has had or could
have  a  Material Adverse Effect or which adverse change or developments affects
or  challenges  the  legality  or  enforceability  of  any  of  the  Transaction
Documents.

     h.     Absence  of Litigation.  Except as disclosed in Schedule 5(h) or the
            ----------------------
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
            ----------------------
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.  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.  Neither the Company nor any of its
subsidiaries  has  entered into any consent, indemnification, forbearance to sue
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.   Environment.  Except as disclosed in the SEC Documents (i) there is no
          -----------
environmental  liability,  nor  factors likely to give rise to any environmental
liability,  affecting  any  of  the  properties  of  the  Company  or any of its
subsidiaries  that,  individually  or  in  the  aggregate, would have a Material
Adverse  Effect  and  (ii)  neither  the Company nor any of the subsidiaries has
violated  any  environmental  law  applicable to it now or previously in effect,
other  than  such  violations  or  infringements  that,  individually  or in the
aggregate,  have  not  had  and  will  not  have  a  Material  Adverse  Effect.

     k.     Title.  The  Company  and each of its subsidiaries has good title in
            -----
fee simple to all real property and good title to all personal property owned by
it  which is material to its business, free and clear of all liens, encumbrances
and  defects  except  for  such  defects  in  title that, individually or in the
aggregate,  could  not  have  a  Material Adverse Effect.  Any real property and
facilities  held  under lease by the Company or any of its subsidiaries are held
by the Company or such subsidiary under valid, subsisting and enforceable leases
with  such  exceptions  which  have not had and will not have a Material Adverse
Effect.

     l.     Insurance.  The Company and its subsidiaries maintain such insurance
            ---------
relating  to  their business, operations, assets, key-employees and officers and
directors  as  is  appropriate to their business, assets and operations, in such
amounts and against such risks as are customarily carried and insured against by
owners  of  comparable  businesses,  assets  and  operations, and such insurance
coverages  will  be  continued  in  full  force  and effect to and including the
Closing  Date  other  than  those  insurance  coverages  in respect of which the
failure to continue in full force and effect could not reasonably be expected to
have  a  Material  Adverse  Effect.

     m.     Acknowledgment Regarding the Purchasers' Purchase of the Securities.
            -------------------------------------------------------------------
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 and is merely incidental to such Purchaser's purchase
of  Securities  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.

     n.     No  Brokers.  Except  for  the  Placement Agent, the Company has not
            -----------
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.  The Purchasers
shall  have no obligation with respect to any fees or with respect to any claims
made  by  or  on behalf of other persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this
Agreement.

     o.     Tax  Status.  The  Company  and each of its subsidiaries has made or
            -----------
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.

     p.     No  General  Solicitation.  Neither  the  Company  nor  any  person
            -------------------------
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 Securities being offered
hereby.

     q.     Securities  Laws.  Neither  the  Company, nor any of its affiliates,
            ----------------
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 Securities being
offered  hereby under the Securities Act or cause this offering of Securities 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(a) and 3(f) of this
Agreement,  the  offer,  sale and delivery of the Shares and Warrants as well as
the issuance of Warrant Shares upon exercise of the Warrants will be exempt from
the  registration requirements of Section 5 of the Securities Act.  Assuming the
truth  and  accuracy of the representations and warranties of the Purchasers set
forth  in  Section  3(a)  and 3(f) of this Agreement, the Purchasers will not be
statutory  underwriters  within the meaning of Section 2(a) 11 of the Securities
Act.

     r.     Form S-3 Eligibility.  The Company is currently eligible to register
            --------------------
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 Securities (as defined in the Registration Rights Agreement).

     s.     Disclosure.  All  information  relating to or concerning the Company
            ----------
and  its  subsidiaries  set forth in this Agreement or provided to any Purchaser
pursuant  to  Section  3(b)  hereof  and  otherwise  in  connection  with  the
transactions  contemplated  hereby  is true and correct in all material respects
and the Company has not omitted to state any material fact necessary in order to
make  the statements made herein or therein, in light of the circumstances under
which  they were made, not misleading.  No event or circumstance has occurred or
exists  with  respect  to  the  Company or its subsidiaries or their businesses,
properties,  operations,  prospects  or financial conditions, which has not been
publicly  disclosed  but,  under  applicable  law,  rule or regulation, would be
required to be disclosed by the Company in a registration statement filed on the
date  hereof  by  the Company under the Securities Act with respect to a primary
issuance  of  the  Company's  securities.  The  Company  has  not  disclosed  or
provided,  and  without  such  Purchaser's  consent  thereto, will not hereafter
disclose  or  provide  to  any  Purchaser,  any  material non-public information

5.     COVENANTS.
       ---------

     a.     Form  D;  Blue  Sky  Laws.  The Company agrees to file a Form D with
            -------------------------
respect  to  the Securities 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 Securities for sale to such Purchasers
pursuant to this Agreement under applicable securities or "blue sky" laws of the
states  of  the  United  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.

     b.     Reporting  Status.  So  long  as  a  Purchaser beneficially owns any
            -----------------
Securities  or  has  the  right  to  acquire  any  Securities  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.

     c.     Use  of  Proceeds.  The  Company shall use the net proceeds from the
            -----------------
sale of the Shares and the Warrants for the purposes set forth on Schedule 5(c),
                                                                  -------------
but  in  no  event  shall  the  Company  use such net proceeds to repurchase any
outstanding  securities  of  the  Company.

     d.     Financial  Information.  For  a  period of three (3) years following
            ----------------------
the  Closing,  the  Company agrees to send to each Purchaser (i) within ten days
after  the  filing  with  the SEC, to the extent not available through the SEC's
EDGAR system, a copy of its Annual Report on Form 10-K, its Quarterly Reports on
Form  10-Q, its proxy and information statements and any Current Reports on Form
8-K  and  (ii) within one day after release, copies of all press releases issued
by  the  Company  or  any  of  its  subsidiaries,  if  any.

     e.     Reservation  of Shares.  The Company has and shall at all times have
            ----------------------
authorized  and  reserved  for  the  purpose  of issuance a sufficient number of
shares  of Common Stock to provide for the issuance of the Shares as provided in
Section  2 hereof, and the full exercise of the Warrants and the issuance of the
Warrant  Shares  in connection therewith and as otherwise required hereby and by
the Warrants.  The Company shall not reduce the number of shares of Common Stock
reserved  for  issuance under this Agreement (except as a result of the issuance
of  the  Shares  hereunder), the Warrants (except as a result of the issuance of
the Warrant Shares upon the exercise of the Warrants) or the Registration Rights
Agreement,  without  the  consent  of  the  Purchasers.

     f.     Listing.  On  the  Closing  Date, the Company shall have applied for
            -------
the  listing  of the Shares and Warrant 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  and all Warrant Shares from time to time issuable
upon  exercise  of  the  Warrants.  The  Company  shall  use its best efforts to
include the Shares and Warrant Shares 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 Securities and
Exchange  Commission  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.

     g.     Additional  Equity  Capital.   The  Company  agrees  that during the
            ---------------------------
period  beginning on the date hereof and ending on the date which is one hundred
eighty  (180) days following the Closing Date and for the ninety (90) day period
following  any  Automatic  Mandatory  Exercise  Date  under  any Warrant (each a
"LOCK-UP  PERIOD"),  the  Company will not, without the prior written consent of
the  Purchasers or their designees, contract with any party to obtain additional
financing  in  which  any  equity or equity-linked securities or convertible are
issued  (including  any  debt  financing  with  an equity component) (an "EQUITY
FINANCING")  at  a  price per share or an exercise or conversion price per share
less  than  $2.25  pursuant  to  any  offering  exempt  from  the  registration
requirements of the Securities Act which grants any registration rights and such
registration  rights  may be exercised within one year of the Closing Date.  The
Company will not conduct any Equity Financing during the period beginning on the
Closing  Date  and ending one hundred eighty (180) days following the expiration
of  a  Lock-Up  Period unless it shall have first delivered to the Purchaser, at
least  ten  (10)  Business  Days  prior to the closing of such Equity Financing,
written notice describing the proposed Equity Financing, including the terms and
conditions  thereof, and providing the Purchasers and their affiliates an option
during  the  ten  (10)  Business  Day period following receipt of such notice to
purchase  any  or all of the securities being offered in the Equity Financing on
the  same  terms as contemplated by such Equity Financing.  Such option shall be
exercised  by  each  applicable  Purchaser  giving written notice to the Company
within  such  period  of  its agreement to buy a specified amount of the offered
securities.  Closing  of  such sale shall be contemporaneous with the closing of
the offering with investors other than the Purchasers (or, if there are no other
such  investors,  on a date specified by the Company), provided that the Company
shall  provide  written  notice  to  each applicable Purchaser at least five (5)
Business  Days prior to any such closing.  To the extent that the Purchasers, in
the  aggregate,  elect  to purchase more than all of such securities, the amount
that  each  Purchaser  shall be entitled to purchase shall be pro rated based on
the  Purchaser's  Pro  Rata Percentage.  Each Purchaser can buy its own pro-rata
amount  unless  a  Purchaser no longer owns Securities in which event its amount
shall  be  allocated  pro rata among the Purchaser still holding Securities.  To
the  extent  that  the  terms of an additional Equity Financing are changed in a
manner  that  is  at  least  partially  favorable  to prospective investors, the
Company  shall  notify  the  Purchasers  of  all  changes  in such terms and the
Purchasers  shall  have  another ten (10) Business Day option to purchase on the
revised  terms  and  otherwise  in  accordance  with the provisions hereof.  The
limitations  referred  to  in  this  Section  5(i)  shall  not  apply to (i) any
transaction  involving  issuances  of  securities  as consideration in a merger,
consolidation  or  acquisition  of  assets,  or in connection with any strategic
partnership, collaboration or joint venture (the primary purpose of which is not
to raise equity capital), or as consideration for the acquisition of a business,
product  or  license by the Company, (ii) the issuance of securities pursuant to
widely  distributed  underwritten  public  offering,  (iii)  the  issuance  of
securities  upon  exercise  or  conversion of the Company's options, warrants or
other  convertible  securities outstanding as of the date hereof as set forth in
Schedule  4(c),  or  (iv)  the  grant  of additional options or warrants, or the
- ---------------
issuance  of  additional  securities,  under  any  duly authorized Company stock
 ----
option, stock purchase or restricted stock plan for the benefit of the Company's
- -----
employees,  consultants  or  directors.

     h.     No  Integrated  Offerings.  The Company shall not make any offers or
            --------------------------
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
Securities  Act  or  cause this offering of Securities 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.

i.     Legends.  Each  Purchaser  understands  that  the Shares and the Warrants
       -------
and, until such time as the Shares and Warrant Shares have been registered under
the  Securities  Act  as  contemplated  by  the Registration Rights Agreement or
otherwise  may be sold by the Purchaser under Rule 144, the certificates for the
Shares  and  Warrant  Shares  may bear a restrictive legend in substantially the
following  form:

NEITHER  THESE  SECURITIES  NOR  THE  SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE  HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE  SECURITIES  COMMISSION  OF  ANY  STATE  IN  RELIANCE UPON AN EXEMPTION FROM
REGISTRATION  UNDER  THE  SECURITIES  ACT  OF  1933, AS AMENDED (THE "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY  NOT  BE  OFFERED  OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  SECURITIES ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION  FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF  WHICH  SHALL  BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE  SHARES  MAY  BE  PLEDGED  IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT  OR  OTHER  LOAN  SECURED  BY  SUCH  SHARES.

     Securities  may  only  be  disposed of in compliance with state and federal
securities  laws.  In  connection with any transfer of the Securities other than
pursuant to an effective registration statement, to the Company, to an affiliate
of  a  Purchaser who is an "accredited investor" as defined in Rule 501(a) under
the  Securities  Act  or in connection with a pledge as contemplated pursuant to
the  terms  hereof, the Company may require the transferor thereof to provide to
the  Company  an  opinion  of  counsel  selected by the transferor, the form and
substance  of  which opinion shall be reasonably satisfactory to the Company, to
the  effect that such transfer does not require registration of such transferred
Securities  under  the  Securities  Act.  As  a  condition of transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement and
shall  have  the rights of a Purchaser under this Agreement and the Registration
Rights  Agreement.

     The  Company acknowledges and agrees that a Purchaser may from time to time
pledge  pursuant to a bona fide margin agreement or grant a security interest in
some  or  all  of  the  Securities  and,  if  required  under  the terms of such
arrangement, such Purchaser may transfer pledged or secured or Securities to the
pledgees  or secured parties.  Such a pledge or transfer would not be subject to
approval  of  the  Company and no legal opinion of the pledgee, secured party or
pledgor  shall be required in connection therewith.  Further, no notice shall be
required  of  such  pledge.  At the appropriate Purchaser's expense, the Company
will  execute  and deliver such reasonable documentation as a pledgee or secured
party  of  Securities  may  reasonably  request  in  connection with a pledge or
transfer  of the Securities including the preparation and filing of any required
prospectus  supplement  under  Rule  424(b)(3)  of  the  Securities Act or other
applicable  provision  of  the Securities Act to appropriately amend the list of
Selling  Stockholders  thereunder.

     Certificates  evidencing  Shares  and  Warrant Shares shall not contain any
legend  (including  the  legend  set  forth  herein):  (i)  while a registration
statement  (including  the  Registration  Statement) covering the resale of such
security  is  effective  under the Securities Act, or (ii) following any sale of
such  Shares  or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or
Warrant  Shares  are eligible for sale under Rule 144(k), or (iv) if such legend
is  not  required under applicable requirements of the Securities Act (including
judicial  interpretations  and  pronouncements  issued  by  the  Staff  of  the
Commission).  The Company shall cause its counsel to issue the legal opinion and
transfer  agent  instructions  to  the  Company's transfer agent on the date the
Registration Statement is declared effective by the SEC. The Company agrees that
following  the date the Registration Statement is declared effective by the SEC,
or  at  such  time as such legend is no longer required under this Section 5, it
will,  no later than three Trading Days following the delivery by a Purchaser to
the Company or the Company's transfer agent of a certificate representing Shares
or  Warrant  Shares  issued  with  a  restrictive legend, deliver or cause to be
delivered  to  such  Purchaser a certificate representing such Shares or Warrant
Shares that is free from all restrictive and other legends.  The Company may not
make  any  notation on its records or give instructions to any transfer agent of
the Company that enlarge the restrictions on transfer set forth in this Section.

6.     CONDITIONS  TO  THE  COMPANY'S  OBLIGATION  TO  SELL.
       ----------------------------------------------------

     The  obligation  of  the  Company  hereunder  to  issue and sell Shares and
Warrants 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 the Registration Rights 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.

7.     CONDITIONS  TO  EACH  PURCHASER'S  OBLIGATION  TO  PURCHASE  SHARES  AND
       ------------------------------------------------------------------------
WARRANTS.
- ---------

     The  obligation of each Purchaser hereunder to purchase Shares and Warrants
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  the Registration Rights Agreement, and delivered the same to the
Purchaser.

     b.     The  Company  shall  have  delivered  to the Purchaser duly executed
certificates  representing  the  number  of Shares and duly executed Warrants as
provided  in  Section  2(b)  above.

     c.     The  Shares  shall  be  authorized for quotation on The Nasdaq Stock
Market  and  trading  in  the  Common Stock or The Nasdaq Stock Market generally
shall not have been suspended or be under threat of suspension by the SEC or any
governing  body  of  The  Nasdaq  Stock  Market.

     d.     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 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,  the  Warrants  and  the  Registration  Rights  Agreement.

     e.   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.

     f.     The  Purchaser  shall  have  received  an  opinion  of the Company's
counsel,  dated  as  of  the  Closing Date, relating to the matters set forth in
Exhibit  C  attached  hereto.
- ---------

     g.     From  the  date  of  this  Agreement through the Closing Date, there
shall  not  have  occurred  any  Material  Adverse  Effect.

     h.     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.

     8.     GOVERNING  LAW  MISCELLANEOUS.
            -----------------------------

     a.     Governing  Law;  Jurisdiction.  All  questions  concerning  the
            -----------------------------
construction,  validity,  enforcement and interpretation of this Agreement shall
be  governed  by and construed and enforced in accordance with the internal laws
of  the  State of New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all proceedings concerning the interpretations,
enforcement  and  defense of the transactions contemplated by this Agreement and
any  other  Transaction Documents (whether brought against a party hereto or its
respective  affiliates,  directors, officers, shareholders, employees or agents)
shall  be  commenced  exclusively in the state and federal courts sitting in the
City  of  New  York, Borough of Manhattan.  Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the  City  of New York, Borough of Manhattan for the adjudication of any dispute
hereunder  or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of the any of the
Transaction  Documents), and hereby irrevocably waives, and agrees not to assert
in  any  proceeding,  any  claim  that  it  is  not  personally  subject  to the
jurisdiction  of  any  such court, that such proceeding is improper.  Each party
hereto  hereby  irrevocably  waives  personal service of process and consents to
process  being  served  in  any  such  proceeding  by mailing a copy thereof via
registered  or  certified mail or overnight delivery (with evidence of delivery)
to  such  party  at the address in effect for notices to it under this Agreement
and  agrees  that  such  service shall constitute good and sufficient service of
process  and  notice thereof.  Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. Each party
hereto  hereby irrevocably waives, to the fullest extent permitted by applicable
law,  any  and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby. If either
party  shall  commence  a  proceeding to enforce any provisions of a Transaction
Document,  then  the  prevailing party in such proceeding shall be reimbursed by
the  other  party  for  its attorneys fees and other costs and expenses incurred
with  the  investigation,  preparation  and  prosecution  of  such  proceeding.

     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 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 8(n) 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.
     1139  Karlstad  Drive
     Sunnyvale,  CA  94089
     Telephone  No.:  (408)  747-7140  (x1311)
     Facsimile  No.:  (408)  747-7198
     Attention:  Mr.  Shum  Mukherjee

     With  a  copy  to:

      Wilson  Sonsini  Goodrich  &  Rosati
      650  Page  Mill  Road
     Palo  Alto,  CA  94304
     Telephone  No.:  (650)  493-9300
     Facsimile  No.:   (650)  493-6811
     Attention:  Mark  Casillas,  Esq.

     If to the Purchaser, to the address set forth under the Purchaser's name on
the  Execution  Page  hereto  executed  by  such  Purchaser.

Each  party  hereto may from time to time change its address or facsimile number
for notices under this Section 8 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  Securities 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, including advancement of expenses as they are
incurred.

     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.     Joint  Participation  in Drafting.  Each party to this Agreement has
            ---------------------------------
participated in the negotiation and drafting of this Agreement, the Registration
Rights Agreement and the Warrants. As such, the language used herein and therein
shall be deemed to be the language chosen by the parties hereto to express their
mutual  intent,  and  no rule of strict construction will be applied against any
party  to  this  Agreement,  the  Registration Rights Agreement or the Warrants.

     l.     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 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.

     m.   Independent  Nature  of  Purchasers'  Obligations  and  Rights.  The
          --------------------------------------------------------
obligations of each Purchaser under any Transaction Document are several and not
joint  with  the  obligations  of any other Purchaser, and no Purchaser shall be
responsible  in  any  way  for  the  performance of the obligations of any other
Purchaser  under  any  Transaction  Document. Nothing contained herein or in any
Transaction  Document,  and  no  action taken by any Purchaser pursuant thereto,
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 the Transaction Document. Each
Purchaser  shall  be  entitled  to independently protect and enforce its rights,
including  without limitation the rights arising out of this Agreement or out of
the  other  Transaction  Documents,  and it shall not be necessary for any other
Purchaser  to  be  joined  as  an  additional  party  in any proceeding for such
purpose.

     n.     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), except Sections 2, 5, and 8 which require consent and approval of each
Purchaser  to  be  binding  on  that  Purchaser.

     [REMAINDER  OF  PAGE  INTENTIONALLY  LEFT  BLANK]
3

     EXHIBIT  A
     TO  SECURITIES  PURCHASE  AGREEMENT
     -----------------------------------

VOID  AFTER  5:00  P.M.,  CALIFORNIA  TIME,
ON  JANUARY  17,  2007

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR  THE SECURITIES
COMMISSION  OF  ANY  STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY  NOT  BE  OFFERED  OR  SOLD  EXCEPT  PURSUANT  TO  AN EFFECTIVE REGISTRATION
STATEMENT  UNDER  THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR  IN  A  TRANSACTION  NOT  SUBJECT  TO,  THE  REGISTRATION REQUIREMENTS OF THE
SECURITIES  ACT  AND  IN  ACCORDANCE  WITH  APPLICABLE  STATE SECURITIES LAWS AS
EVIDENCED  BY  A  LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE  OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SHARES
MAY  BE  PLEDGED  IN  CONNECTION  WITH  A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED  BY  SUCH  SHARES.
Date:  January  17,  2002

     GENUS,  INC.
     STOCK  PURCHASE  WARRANT

     THIS  CERTIFIES  THAT,  for  value  received,  __________________  or  its
registered  assigns  (the "Holder"), is entitled to purchase from GENUS, INC., a
corporation organized under the laws of the State of California (the "COMPANY"),
at  any  time  or  from  time  to  time during the period specified in Section 2
hereof,  _______  fully  paid  and  nonassessable shares of the Company's common
stock,  no  par  value (the "COMMON STOCK"), at an exercise price per share (the
"EXERCISE  PRICE")  of  $3.23.  The number of shares of Common Stock purchasable
hereunder  (the  "WARRANT  SHARES")  and  the  Exercise  Price  are  subject  to
adjustment  as  provided  in  Section  5 hereof.  The term "WARRANTS" means this
Warrant  and  the  other Warrants of the Company issued pursuant to that certain
Securities  Purchase  Agreement,  dated as of January 17, 2002, by and among the
Company  and  the  other  signatories  thereto  (the  "SECURITIES  PURCHASE
AGREEMENT").  Terms  used  and  not  defined  herein  that  are  defined  in the
Securities  Purchase  Agreement  shall  have the meaning ascribed to them in the
Securities  Purchase  Agreement.

This  Warrant  is  subject  to  the  following terms, provisions and conditions:

1.     Manner  of  Exercise;  Issuance  of  Certificates;  Payment  for  Shares.
       ------------------------------------------------------------------------
Subject to the provisions hereof, including, without limitation, the limitations
     contained in Sections 8 and 12 hereof, this Warrant may be exercised at any
time  during  the  Exercise  Period  (as defined below) by the Holder hereof, in
whole  or  in  part, by the surrender of this Warrant, together with a completed
exercise  agreement  in  the form attached hereto (the "EXERCISE AGREEMENT"), to
the  Company  by  5  p.m.  California  time on any Business Day at the Company's
principal executive offices (or such other office or agency of the Company as it
may  designate  by  notice  to  the  Holder  hereof) and upon (i) payment to the
Company in cash, by certified or official bank check or by wire transfer for the
account  of the Company, of the applicable Exercise Price for the Warrant Shares
specified  in  the Exercise Agreement or (ii) delivery to the Company of written
notice of an election to effect a Cashless Exercise (as defined in Section 13(c)
hereof) for the Warrant Shares specified in the Exercise Agreement.  The Warrant
Shares  so  purchased  shall be deemed to be issued to the Holder hereof or such
Holder's  designee,  as  the  record  owner  of  such shares, as of the close of
business  on  the date on which this Warrant shall have been surrendered and the
completed  Exercise  Agreement  shall have been delivered and payment shall have
been  made  for such shares as set forth above or, if such day is not a Business
Day,  on  the  next  succeeding  Business Day.  The Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall  be  delivered  to the Holder hereof within a reasonable time, in any case
not  exceeding  three  Business  Days  after  this  Warrant  shall  have been so
exercised  (the  "DELIVERY  PERIOD").  If  the  Company's  transfer  agent  is
participating  in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer  program, and so long as the certificates therefor do not bear a legend
and  the Holder is not obligated to return such certificate for the placement of
a  legend  thereon, the Company shall cause its transfer agent to electronically
transmit  the Warrant Shares so purchased to the Holder by crediting the account
of  the  Holder  or  its  nominee  with DTC through its Deposit Withdrawal Agent
Commission  system  ("DTC TRANSFER").  If the aforementioned conditions to a DTC
Transfer  are  not  satisfied,  the Company shall deliver to the Holder physical
certificates  representing the Warrant Shares so purchased.  Further, the Holder
may  instruct  the  Company  to  deliver  to  the  Holder  physical certificates
representing  the  Warrant Shares so purchased in lieu of delivering such shares
by  way  of  DTC  Transfer.  Any  certificates  so  delivered  shall  be in such
denominations as may be requested by the Holder, shall be registered in the name
of  Holder  or such other name as shall be designated by such holder and, unless
otherwise  required  by  the  Securities  Purchase Agreement, shall not bear any
restrictive  legend.  If  this  Warrant  shall have been exercised only in part,
then, unless this Warrant has expired, the Company shall, at its expense, at the
time  of  delivery  of  such  certificates,  deliver to the Holder a new Warrant
representing  the  number of shares with respect to which this Warrant shall not
then  have  been  exercised.

     If by the thirteenth Trading Day after exercise of this Warrant the Company
fails  to  deliver  the required number of Warrant Shares in the manner required
pursuant  to this Section 1, and if after such thirteenth Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver  in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder  anticipated  receiving upon such exercise, then the Company shall pay in
cash  to  the  Holder  the amount by which (x) the Holder's total purchase price
(including  brokerage  commissions,  if  any)  for the shares of Common Stock so
purchased  exceeds  (y)  the  amount  obtained  by multiplying (A) the number of
Warrant  Shares  that  the  Company  was  required  to  deliver to the Holder in
connection with the exercise at issue by (B) the closing bid price of the Common
Stock  at the time of the obligation giving rise to such purchase obligation and
deliver  to the Holder the number of shares of Common Stock that would have been
issued  had  the  Company  timely  complied  with  its  exercise  and  delivery
obligations  hereunder;  provided,  however,  the Company shall only render such
payment  in  the  event  the Holder can provide reasonable evidence of an actual
loss  in  that  amount.

     If  by  the third Trading Day after a date of exercise the Company fails to
deliver the required number of Warrant Shares in the manner required pursuant to
Section  1,  then  the  Holder  will  have  the  right to rescind such exercise.
The Company's obligations to issue and deliver Warrant Shares in accordance with
the  terms  hereof are absolute and unconditional, irrespective of any action or
inaction  by  the Holder to enforce the same, any waiver or consent with respect
to  any provision hereof, the recovery of any judgment against any Person or any
action  to enforce the same, or any setoff, counterclaim, recoupment, limitation
or  termination,  or  any  breach  or  alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of
law  by  the  Holder  or  any  other  Person,  and  irrespective  of  any  other
circumstance  which  might otherwise limit such obligation of the Company to the
Holder  in connection with the issuance of Warrant Shares.  Nothing herein shall
limit  a  Holder's right to pursue any other remedies available to it hereunder,
at  law  or  in  equity  including,  without  limitation,  a  decree of specific
performance  and/or  injunctive  relief with respect to the Company's failure to
timely deliver certificates representing shares of Common Stock upon exercise of
the  Warrant  as  required  pursuant  to  the  terms  hereof.

2.     Period of Exercise.  Except as set forth in Section 3 below, this Warrant
       ------------------
     may  be  exercised  at  any  time or from time to time (an "EXERCISE DATE")
during  the  period (the "EXERCISE PERIOD") beginning on (a) the date hereof and
ending (b) at 5:00 p.m., California time, on the fifth annual anniversary of the
date  of  original  issuance  hereof.

3.     Mandatory  Exercise.  On  any  Notification  Date (as defined below), the
       --------------------
Company  may  request  that the Holder exercise this Warrant in whole but not in
part  (the "MANDATORY EXERCISE") within twenty (20) Business Days after the date
of  the  Mandatory  Exercise  Notice  (as defined below) by delivering a written
notice  to  the  Holder  at such address as set forth in the Securities Purchase
Agreement  (the  "MANDATORY  EXERCISE  NOTICE").  The  Mandatory Exercise Notice
shall  set  forth  the  Exercise Price and the Closing Price for each of the ten
(10)  consecutive Trading Days immediately preceding the date of the delivery of
the  Mandatory Exercise Notice and shall state that this Warrant be exercised in
conformity  with  this  Section  3 within twenty (20) Business Days.  Within ten
(10)  calendar  days of receipt of a Mandatory Exercise Notice, the Holder shall
deliver  a  written  notice to the Company (the "PARTICIPATION NOTICE"), stating
whether  or not the Holder agrees to participate in such Mandatory Exercise.  If
the  Holder states in its Participation Notice that it elects not to participate
in  the  Mandatory  Exercise,  then  (i)  the Holder shall forfeit such Holder's
rights, title and interest under this Warrant, (ii) this Warrant shall be deemed
     terminated and (iii) the Holder shall deliver to the Company within two (2)
Business  Days  of  the  date of such Holder's Participation Notice this Warrant
marked  "cancelled."  If  the  Holder states in its Participation Notice that it
elects  to  participate  in  the  Mandatory  Exercise  or if the Holder fails to
deliver  a Participation Notice within the time period specified in this Section
3,  then  this  Warrant  shall  be deemed to be exercised on a cashless or "net"
exercise  basis  without  any  further  action  on the part of the Holder hereof
pursuant  to  this  Section 3 for all of the Warrant Shares that can be obtained
pursuant to such exercise on the twentieth (20th) Business Day after the receipt
of  the  Mandatory  Exercise  Notice  (the "AUTOMATIC MANDATORY EXERCISE DATE"),
unless  prior  to noon California time on the Automatic Mandatory Exercise Date,
the  Holder  shall have exercised this Warrant in whole, but not in part, in the
manner  set  forth  in  Section  1  hereof.  Notwithstanding  the  foregoing, no
Mandatory Exercise may occur unless: (a) at all times from the Notification Date
through  the Automatic Mandatory Exercise Date a Registration Statement covering
all  Registrable  Securities  (as  those  terms  are  defined  in  that  certain
Registration  Rights  Agreement  dated January 17, 2002 by and among the company
and the other signatories thereto (the "REGISTRATION RIGHTS AGREEMENT")): (i) is
effective  as  to  all  Warrant  Shares,  (ii) does not require any amendment or
supplement  and  and  (iii)  discloses  directly  or  through  incorporation  by
reference all material facts relating to Company and the Registrable Securities,
(b)  the  Company  has no reason to believe that, during the period beginning on
the  Notification Date and ending ninety (90) days after the Automatic Mandatory
Exercise  Date (the "INITIAL SELLING PERIOD"), there will be any need to suspend
sales pursuant to the Registration Statement as a result of the need to amend or
supplement  the  Registration  Statement or otherwise; (c) the Company covenants
not  to  take  any  action  during the Initial Selling Period that is reasonably
likely  to  result in the suspension of sales during the Initial Selling Period;
(d)  the  Company  is  listed  on  Nasdaq; and (e) the Mandatory Exercise Notice
contains  (i)  a  certification  from  the Company's chief executive officer and
chief financial officer as to the matters set forth in the immediately preceding
subclause  (a)  (as  of  the  Notification Date; provided that the Company shall
immediately  notify  the  Holder  if such certification is no longer true at any
time  on  or  prior to the Automatic Mandatory Exercise Date) and subclause (b);
and  (ii)  the  covenant  of  the Company set forth in the immediately preceding
subclause  (c).  For purposes of this Section 3, "NOTIFICATION  DATE" shall mean
any  Business  Day  during  the  Exercise  Period but after the Trigger Date (as
defined  below)  which  Business  Day  is  immediately  preceded  by  ten  (10)
consecutive  Trading  Days  on  each of which the Closing Price was greater than
200%  of  the  Exercise  Price  ;  and  "TRIGGER  DATE"  shall mean the date the
Registration  Statement  covering all Registrable Securities (as those terms are
defined  in  the  Registration  Rights  Agreement)  is declared effective by the
Securities  and  Exchange  Commission.

4.     Certain  Agreements  of  the  Company.  The  Company hereby covenants and
       -------------------------------------
agrees  as  follows:

(a)     Shares  to  be  Fully  Paid.  All  Warrant Shares will, upon issuance in
        ---------------------------
accordance  with  the  terms  of this Warrant, be validly issued, fully paid and
nonassessable  and  free  from  all  taxes,  liens,  claims  and  encumbrances.

(b)     Reservation of Shares.  During the Exercise Period, the Company shall at
        ---------------------
all  times  have  authorized,  and  reserved  for  the  purpose of issuance upon
exercise  of  this  Warrant,  a  suf-ficient number of shares of Common Stock to
provide  for  the exercise in full of this Warrant (without giving effect to the
limitations  on  exercise  set  forth  in  Section  12  hereof).

(c)     Listing.  The  Company  has  secured the listing of the shares of Common
        -------
Stock  issuable upon exercise of or otherwise pursuant to this Warrant upon each
national  securities  exchange or automated quotation system, if any, upon which
shares  of  Common  Stock  are then listed or become listed (subject to official
notice of issuance upon exercise of this Warrant) and shall maintain, so long as
any  other shares of Common Stock shall be so listed, such listing of all shares
of  Common  Stock  from  time to time issuable upon the exercise of or otherwise
pursuant  to  this  Warrant;  and  the  Company  shall  so list on each national
securities exchange or automated quotation system, as the case may be, and shall
maintain  such  listing  of,  any  other  shares of capital stock of the Company
issuable  upon  the  exercise of or otherwise pursuant to this Warrant if and so
long as any shares of the same class shall be listed on such national securities
exchange  or  automated  quotation  system.

(d)     Certain  Actions  Prohibited.  The Company will not, by amendment of its
        ----------------------------
charter  or  through  any  re-organi-zation,  transfer of assets, consolidation,
mer-ger,  dissolution,  issuance  or  sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed by it hereunder, but will at all times in good faith
assist  in  the  carrying  out  of  all the provisions of this Warrant.  Without
limiting  the generality of the foregoing, the Company (i) will not increase the
par  value  of  any  shares of Common Stock receivable upon the exercise of this
Warrant  above  the  Exercise  Price then in effect, and (ii) will take all such
actions as may be necessary or appropriate in order that the Company may validly
and  legally  issue fully paid and nonassessable shares of Common Stock upon the
exercise  of  this  Warrant.

(e)     Successors  and  Assigns.  This  Warrant will be binding upon any entity
        ------------------------
succeeding  to  the  Company  by merger, consolidation, or acquisition of all or
substantially  all  of  the  Company's  assets.

(f)     Blue  Sky Laws.  The Company shall, on or before the date of issuance of
        --------------
any  Warrant Shares, take such actions as the Company shall reasonably determine
are  necessary  to  qualify  the Warrant Shares for, or obtain exemption for the
Warrant  Shares for, sale to the Holder of this Warrant upon the exercise hereof
under  applicable  securities  or  "blue  sky"  laws of the states of the United
States,  and shall provide evidence of any such action so taken to the Holder of
this  Warrant  prior to such date; provided, however, that the Company shall not
be  required  to  qualify  as a foreign corporation or file a general consent to
service  of  process  in  any  such  jurisdiction.

5.     Antidilution  Provisions.  During the Exercise Period, the Exercise Price
       ------------------------
and  the  number  of  Warrant Shares issuable upon the exercise of the Warrants,
shall  be subject to adjustment from time to time as provided in this Section 5.
     In  the  event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up or down
to  the  nearest  cent;  provided that, in no event shall the Exercise Price per
share  be  reduced  below  $.01.

(a)     Subdivision or Combination of Common Stock.  If the Company, at any time
        ------------------------------------------
     during the Exercise Period, subdivides (by any stock split, stock dividend,
recapitalization,  reorganization,  reclassification or otherwise) its shares of
Common Stock into a greater number of shares, then, after the date of record for
effecting  such  subdivision,  the Exercise Price in effect immediately prior to
such  subdivision  will be proportionately reduced.  If the Company, at any time
during  the Exercise Period, combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
smaller  number  of  shares,  then,  after the date of record for effecting such
combination,  the Exercise Price in effect immediately prior to such combination
will  be  proportionately increased.  Upon each adjustment of the Exercise Price
pursuant  to the provisions of this Section 5(a), the number of shares of Common
Stock  issuable upon exercise of this Warrant shall be increased or decreased to
equal  the  quotient  obtained  by  dividing (i) the product of (A) the Exercise
Price  in  effect  immediately  prior  to such adjustment, multiplied by (B) the
number  of  shares  of  Common  Stock  issuable  upon  exercise  of this Warrant
immediately  prior  to  such  adjustment,  by (ii) the adjusted Exercise Price .

(b)     Pro  Rata Distributions.  If the Company, at any time while this Warrant
        -----------------------
is  outstanding, distributes to all holders of Common Stock (i) evidences of its
indebtedness,  (ii)  any  security  (other  than  a distribution of Common Stock
covered  by  the preceding paragraph), (iii) rights or warrants to subscribe for
or  purchase  any  security, or (iv) any other asset (in each case, "DISTRIBUTED
PROPERTY"),  then,  at  the  request of any Holder delivered before the 90th day
after  the  record  date  fixed  for  determination  of stockholders entitled to
receive  such distribution, the Company will deliver to such Holder, within five
Trading  Days  after  such  request (or, if later, on the effective date of such
distribution),  the  Distributed  Property  that  such  Holder  would  have been
entitled  to  receive  in  respect of the Warrant Shares for which such Holder's
Warrant  could  have  been  exercised immediately prior to such record date.  If
such Distributed Property is not delivered to a Holder pursuant to the preceding
     sentence,  then  upon  any  exercise  of the Warrant that occurs after such
record  date,  such  Holder  shall  be  entitled  to receive, in addition to the
Warrant Shares otherwise issuable upon such conversion, the Distributed Property
that  such  Holder would have been entitled to receive in respect of such number
of  Warrant  Shares had the Holder been the record holder of such Warrant Shares
immediately  prior  to  such  record  date.

(c)     Fundamental  Transactions.  If,  at  any  time  while  this  Warrant  is
        -------------------------
outstanding:  (i) the Company effects any merger or consolidation of the Company
with  or  into  another  Person,  (ii)  the  Company  effects any sale of all or
substantially  all  of  its  assets  in one or a series of related transactions,
(iii)  any  tender  offer  or  exchange offer (whether by the Company or another
Person)  is completed pursuant to which holders of Common Stock are permitted to
tender  or exchange their shares for other securities, cash or property, or (iv)
the  Company  effects any reclassification of the Common Stock or any compulsory
share  exchange pursuant to which the Common Stock is effectively converted into
or  exchanged  for  other  securities,  cash  or  property  (in any such case, a
"FUNDAMENTAL  TRANSACTION"),  then the Holder shall have the right thereafter to
receive,  upon exercise of this Warrant, the same amount and kind of securities,
cash  or  property as it would have been entitled to receive upon the occurrence
of  such  Fundamental  Transaction  if  it  had  been, immediately prior to such
Fundamental  Transaction,  the  holder  of  the  number  of  Warrant Shares then
issuable  upon exercise in full of this Warrant (the "ALTERNATE CONSIDERATION").
For purposes of any such exercise, the determination of the Exercise Price shall
be  appropriately adjusted to apply to such Alternate Consideration based on the
amount  of  Alternate  Consideration  issuable in respect of one share of Common
Stock  in  such  Fundamental  Transaction,  and  the Company shall apportion the
Exercise  Price  among  the  Alternate  Consideration  in  a  reasonable  manner
reflecting  the  relative  value  of  any  different components of the Alternate
Consideration.  If  holders  of  Common  Stock  are  given  any choice as to the
securities,  cash  or property to be received in a Fundamental Transaction, then
the  Holder  shall be given the same choice as to the Alternate Consideration it
receives  upon  any  exercise  of  this  Warrant  following  such  Fundamental
Transaction.  At  the  Holder's option and request, any successor to the Company
or  surviving  entity in such Fundamental Transaction shall, either (i) issue to
the  Holder  a  new  warrant  substantially  in  the  form  of  this Warrant and
consistent  with  the  foregoing provisions and evidencing the Holder's right to
purchase  the  Alternate  Consideration  for  the  aggregate Exercise Price upon
exercise  thereof,  or  (ii) purchase the Warrant from the Holder for a purchase
price,  payable  in  cash  within  five  Trading Days after such request (or, if
later, on the effective date of the Fundamental Transaction), equal to the Black
Scholes  value  of the remaining unexercised portion of this Warrant on the date
of  such  request.  The  terms  of any agreement pursuant to which a Fundamental
Transaction  is  effected  shall  include  terms requiring any such successor or
surviving  entity  to  comply  with  the  provisions  of  this paragraph (c) and
insuring  that  the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

(d)     Issuances  or  Sales  at  less  than  Exercise  Price.
        -----------------------------------------------------
(i)     If  at  any time during the term of this Warrant the Company shall issue
or  sell  any shares of Common Stock for a consideration per share less than the
Exercise  Price in effect immediately prior to such issue or sale, then, in each
such  case  the  number of shares subject to this Warrant thereafter purchasable
upon  the exercise of this Warrant shall be determined by multiplying the number
of  shares of Common Stock theretofore purchasable upon exercise of this Warrant
by  a  fraction,  the  numerator  of  which shall be (x) the number of shares of
Common  Stock  outstanding  on  the date of issuance of such rights or warrants,
plus the number of additional shares of Common Stock offered for subscription or
     purchase, and the denominator of which shall be (y) the number of shares of
Common Stock outstanding on the date of issuance of such rights or warrants plus
the  number  of  shares that the aggregate offering price of the total number of
shares  of  Common Stock so offered would purchase at the Exercise Price on such
date  of issuance.  For purposes of this Section 5(d)(i), the issuance of rights
or warrants or any other security to subscribe for or purchase or acquire Common
Stock  or  securities  convertible  into  Common Stock shall be deemed to be the
issuance  of  Common Stock at an aggregate offering price equal to the aggregate
offering  price  of  such  securities plus the minimum aggregate amount (if any)
payable  upon  conversion  of such securities into Common Stock.  In addition to
the  adjustment  in  the  number of shares in this Section 5(d)(i), the Exercise
Price  per share shall be appropriately adjusted so that Exercise Price shall be
equal  to  the  price  determined  by  multiplying  the Exercise Price in effect
immediately prior to the issuance by a fraction, the numerator of which shall be
(x)  the  total  number  of  outstanding  shares  of Common Stock of the Company
immediately  prior  to  such issuance; and the denominator of which shall be (y)
the  total  number  of  outstanding  shares  of  Common  Stock  of  the  Company
immediately  after  such  issuance.  The  following transactions shall be exempt
from  the  antidilution  adjustment  requirements  of  this Section 5(d)(i): (A)
consideration  in  a  merger  (the  primary  purpose  of  which  is not to raise
capital),  consolidation  or acquisition of assets (the primary purpose of which
is  not  to  raise  capital),  or  in connection with any strategic partnership,
collaboration  or  joint  venture  (the primary purpose of which is not to raise
capital),  or  as  consideration  for  the acquisition of a business, product or
license  by  the Company (the primary purpose of which is not to raise capital),
(B)  pursuant  to  widely  distributed  underwritten  public  offering, (C) upon
exercise  or  conversion of the Company's options, warrants or other convertible
securities  outstanding  as  of the date hereof as set forth in Schedule 4(c) of
the Securities Purchase Agreement or issued pursuant to such Securities Purchase
Agreement, (D) under any duly authorized Company stock option, stock purchase or
restricted  stock  plan (for the benefit of the Company's employees, consultants
or  directors),  and  (E)  in  connection with any loan made to the Company by a
lending  institution  engaged  in the business of lending money, such as a bank,
trust  company,  insurance  company  or  other  institutional  lender.
     (ii)  For the purposes of any computation respecting consideration received
pursuant  to  this  Section  5(d):
     (A)     In the case of the issuance of shares of Common Stock for cash, the
consideration  shall  be  the  amount of cash received, provided that in no case
shall any deduction be made for any commissions, discounts, or expenses incurred
by  the  Company  for  any  underwriting of the issue or otherwise in connection
therewith;
(B)     In  the  case  of  the  issuance  of  shares  of  Common  Stock  for  a
consideration  in whole or in part other than cash, the consideration other than
cash  shall  be deemed to be the fair market value thereof as determined in good
faith  by  the Board of Directors of the Company, irrespective of the accounting
treatment  thereof;  and
     (C)     In  the  case  of  the  issuance  of  securities  convertible into,
exchangeable  for,  or  consisting of any right or option to purchase, shares of
Common  Stock,  the  aggregate  consideration  received for such shares shall be
equal to the consideration received by the Company for any such securities, plus
the additional minimum consideration, if any, to be received by the Company upon
the conversion, exchange, or exercise thereof (the consideration in each case to
be  determined  in  the  same  manner  as  provided  in  (A)  and  (B)  above).

(e)     Notice  of  Adjustment.  Upon the occurrence of any event which requires
        ----------------------
any  adjustment  of the Exercise Price, then, and in each such case, the Company
shall  give  notice  thereof  to  the Holder of this Warrant, which notice shall
state  the  Exercise  Price  resulting  from such adjustment and the increase or
decrease in the number of Warrant Shares issuable upon exercise of this Warrant,
     setting  forth in reasonable detail the method of calculation and the facts
upon  which  such  calculation is based.  Such calculation shall be certified by
the  chief  financial  officer  of  the  Company.

(f)     Minimum Adjustment of the Exercise Price.  No adjustment of the Exercise
        ----------------------------------------
     Price  shall  be made in an amount of less than 1% of the Exercise Price in
effect  at  the  time  such adjustment is otherwise required to be made, but any
such  lesser  adjustment  shall be carried forward and shall be made at the time
and  together  with  the  next  subsequent  adjustment  which, together with any
adjustments  so  carried  forward,  shall  amount  to  not  less than 1% of such
Exercise  Price.

(g)     No  Fractional  Shares.  No  fractional shares of Common Stock are to be
        ----------------------
issued  upon  the  exercise  of  this  Warrant, but the Company shall pay a cash
adjustment  in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock  on  the  date  of  such  exercise.

(h)     Other  Notices.  In  case  at  any  time:
        --------------
(i)     the  Company shall declare any dividend upon the Common Stock payable in
shares  of  stock  of  any  class  or  make  any  other distribution (other than
dividends  or  distributions payable in cash out of retained earnings consistent
with the Company's past practices with respect to declaring dividends and making
     distributions)  to  the  holders  of  the  Common  Stock;
(ii)     the Company shall offer for subscription pro rata to the holders of the
Common  Stock  any  additional  shares  of  stock  of any class or other rights;
(iii)     there  shall  be  any  capital  reorganiza-tion  of  the  Company,  or
reclassification  of the Common Stock, or consolidation or merger of the Company
with  or  into,  or  sale of all or substan-tially all of its assets to, another
corporation  or  entity;  or
(iv)     there  shall be a voluntary or involun-tary dissolution, liquidation or
winding-up  of  the  Company;
then,  in  each  such case, the Company shall give to the Holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company shall
close  or  a  record  shall be taken for determining the holders of Common Stock
entitled  to receive any such divi-dend, distribution, or subscription rights or
for  determining  the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation  or  winding-up  and  (b)  in  the  case of any such reorganization,
reclassification,  consolidation,  merger,  sale,  dissolution,  liquidation  or
winding-up,  notice  of  the  date (or, if not then known, a reasonable estimate
thereof  by the Company) when the same shall take place.  Such notice shall also
specify  the  date  on  which  the  holders of Common Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to exchange their
Common  Stock  for  stock  or other securities or property deliverable upon such
reorganization,  re-classification,  consolidation,  merger,  sale, dissolution,
liquidation,  or  winding-up, as the case may be.  Such notice shall be given at
least  fifteen  (15)  days  prior  to  the  record date or the date on which the
Company's  books are closed in respect thereto.  Failure to give any such notice
or  any defect therein shall not affect the validity of the proceedings referred
to  in  clauses (i), (ii), (iii) and (iv) above.  Notwithstanding the foregoing,
the  Company  may  publicly  disclose  the  substance  of  any  notice delivered
hereunder  prior  to  delivery  of  such  notice  to the Holder of this Warrant.
(i)     Certain  Events.  If,  at any time during the Exercise Period, any event
        ---------------
occurs  of  the type contemplated by the adjustment provisions of this Section 5
but  not expressly provided for by such provisions, the Company will give notice
of  such  event  as  provided in Section 5(e) hereof, and the Company's Board of
Directors  will  make  an  appropriate  adjustment in the Exercise Price and the
number  of  shares  of  Common Stock acquirable upon exercise of this Warrant so
that  the  rights of the Holder shall be neither enhanced nor diminished by such
event.

6.     Issue  Tax.  The  issuance  of  certificates  for Warrant Shares upon the
       ----------
exercise  of  this  Warrant  shall  be made without charge to the Holder of this
Warrant  or  such shares for any issuance tax or other costs in respect thereof,
provided  that  the  Company  shall  not be required to pay any tax which may be
payable  in respect of any transfer involved in the issuance and delivery of any
certificate  in  a  name  other  than  the  Holder  of  this  Warrant.

7.     No  Rights  or  Liabilities  as  a  Shareholder.  This  Warrant shall not
       -----------------------------------------------
entitle  the Holder hereof to any voting rights or other rights as a shareholder
of  the  Company.  No  provision  of this Warrant, in the absence of affirmative
action  by the Holder hereof to purchase Warrant Shares, and no mere enumeration
herein  of the rights or privileges of the Holder hereof, shall give rise to any
liability  of  such  Holder  for  the  Exercise Price or as a shareholder of the
Company,  whether  such  liability is asserted by the Company or by creditors of
the  Company.

8.     Transfer,  Exchange,  Redemption  and  Replacement  of  Warrant.
       ---------------------------------------------------------------

(a)     Restriction  on  Transfer.  This  Warrant  and the rights granted to the
        -------------------------
Holder  hereof  are  transferable  in  whole  or  in part, at any one time, upon
surrender  of  this Warrant, together with a properly executed assignment in the
form  attached  hereto,  at  the  office or agency of the Company referred to in
Section  8(e) below, provided, however, that any transfer or assignment shall be
subject  to  the  conditions  set  forth  in  Sections  8(f)  hereof  and to the
provisions  of  Sections  3(e)  of the Securities Purchase Agreement.  Until due
presentment  for  registration  of  transfer  on  the  books of the Company, the
Company  may  treat  the registered Holder hereof as the owner and Holder hereof
for  all  purposes,  and  the Company shall not be affected by any notice to the
con-trary.  Notwithstanding  anything  to  the  contrary  contained  herein, the
registration  rights  described  in  Section  8  hereof  are  assignable only in
accordance  with  the  provisions  of  the  Registration  Rights  Agreement.

(b)     Warrant  Exchangeable  for  Different  Denominations.  This  Warrant  is
        ----------------------------------------------------
exchangeable,  upon  the  surrender hereof by the Holder hereof at the office or
agency  of  the  Company  referred to in Section 8(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right to
purchase  the number of shares of Common Stock which may be purchased hereunder,
each  of  such  new  Warrant  to  represent the right to purchase such number of
shares  as  shall  be  designated  by  the  Holder  hereof  at  the time of such
surrender.

(c)     Replacement  of  Warrant.  Upon  receipt  of  evidence  reasonably
        ------------------------
satisfactory  to  the  Company of the loss, theft, destruction, or mutilation of
        ---
this  Warrant  and,  in  the  case of any such loss, theft, or destruction, upon
delivery  of  an indemnity agreement reason-ably satisfactory in form and amount
to  the  Company,  or,  in  the  case of any such mutilation, upon surrender and
cancellation  of  this  Warrant,  the  Company, at its expense, will execute and
deliver,  in  lieu  thereof,  a  new  Warrant  of  like  tenor.

(d)     Cancellation;  Payment  of Expenses.  Upon the surrender of this Warrant
        -----------------------------------
in  connection  with any trans-fer, exchange, or replacement as provided in this
Section  8, this Warrant shall be promptly canceled by the Company.  The Company
shall  pay  all  taxes  (other  than  securities  transfer  taxes) and all other
expenses  (other  than  legal  expenses,  if  any,  incurred  by  the  Holder or
transferees)  and charges payable in connection with the preparation, execution,
and  delivery  of  Warrants  pursuant  to  this  Section  8.  The  Company shall
indemnify  and  reimburse  the Holder of this Warrant for all losses and damages
arising  as  a result of or related to any breach by the Company of the terms of
this  Warrant,  including  costs and expenses (including legal fees) incurred by
such  Holder  in  connection  with  the  enforcement  of  its  rights hereunder.

(e)     Warrant  Register.  The  Company  shall  maintain,  at  its  principal
        -----------------
executive  offices  (or  such  other  office  or agency of the Company as it may
designate by notice to the Holder hereof), a register for this Warrant, in which
the  Company  shall record the name and address of the person in whose name this
Warrant  has been issued, as well as the name and address of each transferee and
each  prior  owner  of  this  Warrant.

(f)     Transfer Without Registration.  If, at the time of the surrender of this
        -----------------------------
Warrant  in  connection  with any transfer of this Warrant, this Warrant (or, in
the  case  of any exercise, the Warrant Shares issuable hereunder), shall not be
registered  under  the  Securities  Act and under applicable state securities or
blue  sky  laws,  the  Com-pany  may  require,  as  a condition of allowing such
transfer,  (i)  a  written  opinion  of counsel (which opinion shall be in form,
substance  and  scope  customary  for  opinions  of  counsel  in  comparable
transactions)  to the effect that such exercise may be made without registration
under the Securities Act and under applicable state securities or blue sky laws,
and  (ii)  that  the  transferee  be an "ACCREDITED INVESTOR" as defined in Rule
501(a)  promulgated  under  the  Securities  Act; provided that no such opinion,
letter,  or  status  as an "accredited investor" shall be required in connection
with  a  transfer  pursuant  to  Rule  144  under  the  Securities  Act.

9.     Registration  Rights.  The  initial  Holder  of this Warrant (and certain
       --------------------
assignees  thereof)  are  entitled to the benefit of such registration rights in
respect  of  the  Warrant  Shares  as  are  set forth in the Registration Rights
Agreement,  including  the  right to assign such rights to certain assignees, as
set  forth  therein.

10.     Notices.  Any  notices required or permitted to be given under the terms
        -------
of  this  Warrant  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 by
confirmed  telecopy,  in each case addressed to a party.  The addresses for such
communications  shall  be:

     If  to  the  Company:

     Genus,  Inc.
     1139  Karlstad  Drive
     Sunnyvale,  CA  94089
     Telephone  No.:  (408)  747-7140  (x1311)
     Facsimile  No.:  (408)  747-7198
     Attention:  Mr.  Shum  Mukherjee

     With  a  copy  to:

     Wilson  Sonsini  Goodrich  &  Rosati
     650  Page  Mill  Road
     Palo  Alto,  CA  94304
     Telephone  No.:  (650)  493-9300
     Facsimile  No.:   (650)  493-6811
     Attention:  Mark  Casillas,  Esq.

     If  to  the  Holder,  at such address as such Holder shall have provided in
writing  to  the  Company,  or at such other address as such Holder furnishes by
notice  given  in  accordance  with  this  Section  10.

11.     Governing Law; Jurisdiction.  All questions concerning the construction,
        ---------------------------
     validity,  enforcement and interpretation of this Warrant shall be governed
by  and construed and enforced in accordance with the internal laws of the State
of New York, without regard to the principles of conflicts of law thereof.  Each
party  agrees  that  all proceedings concerning the interpretations, enforcement
and  defense  of  the transactions contemplated by this Warrant (whether brought
against  a  party  hereto  or  its  respective  affiliates, directors, officers,
shareholders,  employees  or agents) shall be commenced exclusively in the state
and  federal courts sitting in the City of New York, Borough of Manhattan.  Each
party  hereto  hereby  irrevocably  submits to the exclusive jurisdiction of the
state  and  federal courts sitting in the City of New York, Borough of Manhattan
for  the adjudication of any dispute hereunder or in connection herewith or with
any  transaction contemplated hereby or discussed herein (including with respect
to  the  enforcement  of  the  any  of  the  Transaction  Documents), and hereby
irrevocably  waives,  and agrees not to assert in any proceeding, any claim that
it  is  not  personally subject to the jurisdiction of any such court, that such
proceeding  is  improper.  Each  party hereto hereby irrevocably waives personal
service  of  process and consents to process being served in any such proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery
(with  evidence  of delivery) to such party at the address in effect for notices
to  it under this Warrant and agrees that such service shall constitute good and
sufficient  service  of  process  and  notice thereof.  Nothing contained herein
shall  be  deemed  to  limit in any way any right to serve process in any manner
permitted  by  law.  Each party hereto hereby irrevocably waives, to the fullest
extent  permitted  by  applicable law, any and all right to trial by jury in any
legal  proceeding arising out of or relating to this Warrant or the transactions
contemplated  hereby. If either party shall commence a proceeding to enforce any
provisions  of  a  Transaction  Document,  then  the  prevailing  party  in such
proceeding  shall  be  reimbursed  by the other party for its attorneys fees and
other  costs  and  expenses  incurred  with  the  investigation, preparation and
prosecution  of  such  proceeding.

12.     Limitations  on  Holder's  Right  to  Exercise.
        ----------------------------------------------
(a)     Notwithstanding anything to the contrary contained herein, the number of
     shares of Common Stock that may be acquired by the Holder upon any exercise
of  this Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number  of shares of Common Stock then beneficially owned by such Holder and its
Affiliates  and  any  other  Persons  whose beneficial ownership of Common Stock
would  be  aggregated  with  the  Holder's  for purposes of Section 13(d) of the
Exchange  Act,  does  not  exceed  4.999%  of  the  total  number  of issued and
outstanding  shares  of  Common  Stock (including for such purpose the shares of
Common  Stock  issuable  upon  such  exercise).  For  such  purposes, beneficial
ownership  shall  be determined in accordance with Section 13(d) of the Exchange
Act  and  the rules and regulations promulgated thereunder.  Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that it
has  evaluated  the  limitation  set forth in this paragraph and determined that
issuance  of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph.  By written notice to the Company, the Holder
may  waive  the  provisions  of this Section but (i) any such waiver will not be
effective  until the 61st day after such notice is delivered to the Company, and
(ii)  any  such waiver will apply only to the Holder and not to any other holder
of  Warrants.
(b)     Notwithstanding anything to the contrary contained herein, the number of
shares  of  Common Stock that may be acquired by the Holder upon any exercise of
this  Warrant  (or  otherwise  in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number  of shares of Common Stock then beneficially owned by such Holder and its
Affiliates  and  any  other  Persons  whose beneficial ownership of Common Stock
would  be  aggregated  with  the  Holder's  for purposes of Section 13(d) of the
Exchange  Act,  does  not  exceed  9.999%  of  the  total  number  of issued and
outstanding  shares  of  Common  Stock (including for such purpose the shares of
Common  Stock  issuable  upon  such  exercise).  For  such  purposes, beneficial
ownership  shall  be determined in accordance with Section 13(d) of the Exchange
Act  and  the rules and regulations promulgated thereunder.  Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that it
has  evaluated  the  limitation  set forth in this paragraph and determined that
issuance  of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph.  By written notice to the Company, the Holder
may  waive  the  provisions  of this Section but (i) any such waiver will not be
effective  until the 61st day after such notice is delivered to the Company, and
(ii)  any  such waiver will apply only to the Holder and not to any other holder
of  Warrants.

13.     Miscellaneous.
        -------------

(a)     Amendments.  This  Warrant  and any provision hereof may only be amended
        ----------
by  an  instrument  in  writing  signed  by  the  Company and the Holder hereof.
(b)     Descriptive Headings.  The descriptive head-ings of the several Sections
        --------------------
of  this  Warrant  are  in-serted  for purposes of reference only, and shall not
affect  the  meaning  or  construction  of  any  of  the  provisions  hereof.
(c)     Cashless  Exercise.  This  Warrant  may be exercised at any time or from
        ------------------
time  to  time during the Exercise Period, by presentation and surrender of this
Warrant  to the Company at its principal executive offices with a written notice
of the Holder's intention to effect a cashless exercise, including a calculation
of  the  number  of  shares  of  Common Stock to be issued upon such exercise in
accordance  with  the  terms hereof (a "CASHLESS EXERCISE" ).  In the event of a
Cashless Exercise in lieu of paying the Exercise Price in cash, the Holder shall
surrender  this  Warrant for that number of shares of Common Stock determined by
multiplying  (i)  the  number  of  Warrant Shares to which it would otherwise be
entitled  by  (ii)  a  fraction,  the numerator of which shall be the difference
between  the  then  current  Market  Price per share of the Common Stock and the
Exercise Price, and the denominator of which shall be the Market Price per share
of  Common  Stock.
     For  purposes  of  Rule  144  promulgated  under  the Securities Act, it is
intended,  understood  and  acknowledged  that  the  Warrant  Shares issued in a
cashless  exercise  transaction  shall  be  deemed  to have been acquired by the
Holder,  and  the  holding period for the Warrant Shares shall be deemed to have
commenced,  on  the  date  this  Warrant  was  originally issued pursuant to the
Securities  Purchase  Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly  authorized  officer.

GENUS,  INC.

     By:  _________________________________
     Name:Shum  Mukherjee
     Title:  Chief  Financial  Officer
FORM OF EXERCISE AGREEMENT
         (TO BE EXECUTED BY THE HOLDER IN ORDER TO EXERCISE THE WARRANT)

To:     Genus,  Inc.
1139  Karlstad  Drive
Sunnyvale,  CA  94089
Attention:  Shum  Mukherjee

     The  undersigned  hereby  irrevocably  exercises  the  right  to  purchase
_____________ shares of the Common Stock of GENUS, INC., a corporation organized
under  the  laws  of  the  State  of  California  (the  "COMPANY"),  and either:
     tenders  herewith  payment  of the Exercise Price in full, in the amount of
$_____________, in cash, by certified or official bank check or by wire transfer
for  the  account  of  the  Company;  or
     elects  pursuant  to  Section  14(c) of the Warrant to convert such Warrant
into  Common  Stock  on  a  cashless  exercise  basis.
     The undersigned agrees not to offer, sell, transfer or otherwise dispose of
any Common Stock obtained on exercise of the Warrant, except under circumstances
that  will  not result in a violation of the Securities Act of 1933, as amended,
or  any  state  securities  laws.
     The  undersigned  requests  that  the  Company  cause its transfer agent to
electronically  transmit  the  Common  Stock  issuable pursuant to this Exercise
Agreement  to  the  account  of  the  undersigned  or  its  nominee  (which  is
_________________)  with  DTC  through  its  Deposit Withdrawal Agent Commission
System  ("DTC  TRANSFER").
     In  lieu  of receiving the shares of Common Stock issuable pursuant to this
Exercise  Agreement by way of DTC Transfer, the undersigned hereby requests that
the  Company  cause  its  transfer agent to issue and deliver to the undersigned
physical  certificates  representing  such  shares  of  Common  Stock.
          By  its delivery of this Exercise Agreement, the Holder represents and
warrants  to  the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock  (determined  in  accordance with Section 13(d) of the Securities Exchange
Act  of  1934)  permitted  to be owned under Section 13 of this Warrant to which
this  notice  relates.
     The  undersigned  requests  that  a  Warrant  representing  any unexercised
portion hereof be issued, pursuant to the Warrant, in the name of the Holder and
delivered  to  the  undersigned  at  the  address  set  forth  below:
Dated:_________________     _____________________________________
     Signature  of  Holder

     _____________________________________
Name of Holder (Print)
Address:
     _____________________________________
     _____________________________________
     _____________________________________
FORM OF ASSIGNMENT

     FOR  VALUE  RECEIVED,  the undersigned hereby sells, assigns, and transfers
all  the  rights  of the undersigned under the attached Warrant, with respect to
the  number  of  shares of Common Stock covered thereby issuable pursuant to the
attached  Warrant  set  forth  hereinbelow,  to:

Name  of  Assignee               Address                    No  of  Shares
- ------------------               -------                    --------------

,  and  hereby  irrevocably  constitutes  and  appoints
_____________________________________  as agent and attorney-in-fact to transfer
said  Warrant  on  the books of the within-named corporation, with full power of
substitution  in  the  premises.

Dated:  _____________________,  ____

In the presence of

__________________

     Name:  ____________________________

     Signature:  _______________________
     Title of Signing Officer or Agent (if  any):
               ________________________
     Address:  ________________________
               ________________________

Note:     The  above  signature  should  correspond exactly with the name on the
face  of  the  within  Warrant.
- 6 -

     EXHIBIT  B
     TOSECURITIESPURCHASE  AGREEMENT
     -------------------------------

     REGISTRATION  RIGHTS  AGREEMENT

     REGISTRATION  RIGHTS  AGREEMENT (this "AGREEMENT"), dated as of January 17,
2002,  by  and  among GENUS, INC., a corporation organized under the laws of the
State  of  California  (the  "COMPANY"),  and  the  undersigned  (the  "INITIAL
INVESTORS").

     WHEREAS:

     A.     The Company and the Initial Investors have entered into a Securities
Purchase  Agreement  dated the date hereof (the "SECURITIES PURCHASE AGREEMENT;"
capitalized  terms  used  herein  and  not otherwise defined herein and that are
defined  in the Securities Purchase Agreement shall have the respective meanings
set  forth  in  the  Securities  Purchase  Agreement).  In  connection  with the
Securities  Purchase  Agreement,  the  Company  has  agreed,  upon the terms and
subject  to  the  conditions contained therein, to issue and sell to the Initial
Investors  (i)  shares  of the Company's common stock, no par value (the "COMMON
STOCK"),  and  (ii)  warrants  to  purchase  Common Stock (the "WARRANTS").  The
shares  of Common Stock issued on the Closing Date under the Securities Purchase
Agreement  are referred to herein as the "SHARES" and the shares of Common Stock
issuable  upon exercise of or otherwise pursuant to the Warrants are referred to
herein  as  the  "WARRANT  SHARES."

     B.     To  induce  the  Initial  Investors  to  execute  and  deliver  the
Securities  Purchase  Agreement,  the  Company  has  agreed  to  provide certain
registration  rights under the Securities Act of 1933, as amended, and the rules
and  regulations thereunder, or any similar successor statute (collectively, the
"SECURITIES  ACT"),  and  applicable  state  securities  laws;

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein  and  other  good  and valuable consideration, the receipt and
sufficiency  of  which  are  hereby  acknowledged,  the  Company and the Initial
Investors,  intending  to  be  legally  bound,  hereby  agree  as  follows:

     1.     DEFINITIONS.
            -----------

     As  used  in  this  Agreement, the following terms shall have the following
meanings:

     (i)     "INVESTORS"  means  the  Initial  Investors  and any transferees or
assignees  who  agree  to  become  bound  by the provisions of this Agreement in
accordance  with  Section 9 hereof; provided, however, that the term "Investors"
shall  not include any of the Initial Investors and any transferees or assignees
who agree to become bound by the provisions of this Agreement in accordance with
Section  9  hereof  that cease to own or hold all of the Registrable Securities.

     (ii)     "REGISTER,"  "REGISTERED,"  and  "REGISTRATION"  refer  to  a
registration  effected  by  preparing  and  filing  a  Registration Statement or
Statements  in compliance with the Securities Act and pursuant to Rule 415 under
the  Securities Act or any successor rule providing for offering securities on a
continuous  basis ("RULE 415"), and the declaration or ordering of effectiveness
of  such  Registration  Statement  by  the United States Securities and Exchange
Commission  (the  "SEC").

     (iii)     "REGISTRABLE  SECURITIES" means  (i) the Shares, (ii) the Warrant
Shares,  and  (iii) any shares of capital stock issued or issuable, from time to
time  (with  any  adjustments),  as  a  distribution  on  or  in exchange for or
otherwise  with  respect  to  any  of  the  Transaction  Documents.

     (iv)     "REGISTRATION STATEMENT" means one or more registration statements
of  the  Company  under  the  Securities  Act registering all of the Registrable
Securities,  including  the Initial Registration Statement, any Uncovered Shares
Amendments  and  Uncovered  Shares  Registration  Statements  (each,  as defined
below).

     2.     REGISTRATION.
            ------------

     a.     Mandatory  Registration.  The  Company  shall  file  with the United
            -----------------------
States Securities and Exchange Commission ("SEC"), on or prior to the date which
is  forty-five (45) calendar days after the Closing Date (the "FILING DEADLINE")
a  Registration Statement on Form S-3 (or, if Form S-3 is not then available, on
such  form  of  Registration  Statement  as  is  then  available  to  effect  a
registration of all of the Registrable Securities, subject to the consent of the
Initial  Investors as to the use of such form (as determined pursuant to Section
11(j)  hereof)) to include the Plan of Distribution attached hereto as Exhibit A
                                                                       ---------
covering  the  resale  of  at  least  4,300,000  shares  of  Common Stock, which
Registration Statement, to the extent allowable under the Securities Act and the
rules  promulgated  thereunder shall state that such Registration Statement also
covers  such  indeterminate  number  of additional shares of Common Stock as may
become issuable upon exercise of the Warrants to prevent dilution resulting from
stock splits, stock dividends or similar transactions (the "INITIAL REGISTRATION
STATEMENT").  In  the event that the Initial Registration Statement is not filed
within  forty-five  (45)  calendar  days of the Closing Date, the Exercise Price
shall  be reduced to $2.90.   The Registrable Securities included in the Initial
Registration  Statement  shall  be  registered on behalf of the Investors as set
forth  in  Section  11(k) hereof.  If for any reason (including, but not limited
to,  a  determination  by  the  staff  of the SEC that all or any portion of the
Warrant  Shares  or  any  other Registrable Securities cannot be included in the
Initial  Registration  Statement  (an  "SEC  DETERMINATION"))  the  Initial
Registration Statement declared effective by the SEC does not include all of the
Registrable  Securities  (any  such  shares  that  are  not  included  being the
"UNCOVERED SHARES"), the Company shall prepare and file with the SEC, as soon as
practicable,  but  in  any  event  prior  to the tenth (10th) Business Day after
becoming  aware  of the existence of any Uncovered Shares (such date referred to
herein  as  the "UNCOVERED SHARE FILING DEADLINE"), either (a) an amendment (the
"UNCOVERED  SHARES AMENDMENT") to the Initial Registration Statement effecting a
registration  of  the  Uncovered  Shares  or  (b) a registration statement which
registers  the Uncovered Shares (the "UNCOVERED SHARES REGISTRATION STATEMENT").
The  Company  shall  file  additional  Registration  Statements if the number of
Registrable Securities at any time exceeds 85% of the number of shares of Common
Stock  then  registered  in  a  Registration  Statement.  The  Uncovered  Shares
Amendment  or the Uncovered Shares Registration Statement (and each amendment or
supplement  thereto, and each request for acceleration of effectiveness thereof)
shall  be  provided  to  the  Initial Investors and their counsel for review and
comment  at least two (2) Business Days prior to its filing or other submission.
The  Company  shall  use  its commercially reasonable best efforts to cause each
Registration  Statement  required  to  be filed pursuant to this Section 2(a) to
become  effective  as  soon  as practicable, but, as to the Initial Registration
Statement filed pursuant to Section 2(a), in no event later than the one hundred
and  twentieth  (120th)  calendar  day  after the Filing Deadline, and as to any
Uncovered  Shares  Amendment  or  Uncovered Shares Registration Statement, in no
event  later  than  the one hundred and twentieth (120th) calendar day after the
Uncovered  Share  Filing Deadline (the "UNCOVERED SHARE REGISTRATION DEADLINE").
In  the  event  that the Registration Statement is not effective one hundred and
twenty  (120) calendar days after the Filing Deadline, the Company shall pay the
Initial  Investors  a cash penalty of one percent (1%) of the Initial Investors'
Investment  Amount  as  defined under the Securities Purchase Agreement for each
thirty  (30)  calendar  day  period  that the Registration remains non-effective
beyond  the  initial  one  hundred  and  twenty  (120)  calendar  day  period.

     b.     Underwritten  Offering.  The  Investors  may  offer  and  sell  the
            ----------------------
Registrable  Securities pursuant to a Registration Statement filed in accordance
with  Section  2(a)  in  an  underwritten  offering.  In  any  such underwritten
offering,  the  Investors  who  hold  a  majority in interest of the Registrable
Securities subject to such underwritten offering, shall have the right to select
one legal counsel to represent the Investors and an investment banker or bankers
and  manager  or managers to administer the offering, which investment banker or
bankers  or manager or managers shall be reasonably satisfactory to the Company.
In  the  event  that any Investors elect not to participate in such underwritten
offering,  the Registration Statement covering all of the Registrable Securities
shall  contain  appropriate plans of distribution reasonably satisfactory to the
Investors participating in such underwritten offering and the Investors electing
not to participate in such underwritten offering (including, without limitation,
the  ability  of nonparticipating Investors to sell from time to time and at any
time  during  the  effectiveness  of  such  Registration  Statement).

     c.     Piggy  Back  Registrations.
            --------------------------

     (i)  If  at any time prior to the expiration of the Registration Period (as
hereinafter  defined)  the  Company  shall  file  with  the  SEC  a registration
statement  relating  to an offering for its own account or the account of others
under the Securities Act of any of its equity securities (other than on Form S-4
or Form S-8 or their then equivalents relating to equity securities to be issued
solely  in  connection  with any acquisition of any entity or business or equity
securities  issuable  in  connection with stock option or other employee benefit
plans),  the Company shall send to each Investor who is entitled to registration
rights  under  this  Section  2(c)  written notice of such determination and, if
within  twenty  (20)  days after the date of such notice, such Investor shall so
request in writing, the Company shall include in such registration statement all
or  any  part  of  the  Registrable  Securities  such  Investor  requests  to be
registered,  provided,  however,  that  (i) the number of Registrable Securities
proposed  to be sold by such securities is equal to at least fifty percent (50%)
of  the  total  number of Registrable Securities then held by such participating
Investor,  (ii) such Investor agrees to sell those of its Registrable Securities
to be included in such registration in the same manner and on the same terms and
conditions  as  the  other  shares of Common Stock which the Company proposes to
register,  and (iii) if the registration is to include shares of Common Stock to
be  sold  for  the  account  of the Company or any party exercising registration
rights  pursuant  to any other agreement with the Company, the proposed managing
underwriter,  if  any,  does  not  advise  the  Company  that in its opinion the
inclusion  of  such  Investor's Registrable Securities (without any reduction in
the  number  of  shares  to be sold for the account of the Company or such party
exercising registration rights) is likely to affect materially and adversely the
success  of  the  offering or the price that would be received for any shares of
Common  Stock  offered,  in  which  case the rights of such Investor shall be as
provided  in  Section  2(c)(ii)  hereof.

     (ii)  If  a  registration pursuant to Section 2(c)(i) is done in connection
with  any  underwritten  public  offering  for  the  account  of the Company the
managing  underwriter(s)  thereof  shall  impose  a  limitation on the number of
shares  of  Common  Stock  which  may  be included in the registration statement
because,  in  such  underwriter(s)' judgment, marketing or other factors dictate
such limitation is necessary to facilitate public distribution, then the Company
shall  be  obligated to include in such registration statement only such limited
portion,  if  any  of  the  Registrable  Securities  with  respect to which such
Investor has requested inclusion hereunder as the underwriter shall permit.  Any
exclusion  of  Registrable Securities shall be made pro rata among the Investors
seeking  to  include  Registrable  Securities,  in  proportion  to the number of
Registrable  Securities  sought  to  be  included  by  such Investors; provided,
however,  that  the  Company shall not exclude any Registrable Securities unless
the  Company has first excluded all outstanding securities, the holders of which
are  not entitled to inclusion of such securities in such registration statement
or  are  not entitled to pro rata inclusion with the Registrable Securities; and
provided  further,  however,  that,  after  giving  effect  to  the  immediately
preceding  proviso,  any  exclusion  of Registrable Securities shall be made pro
rata  with  holders  of  other  securities  having  the  right  to  include such
securities  in  the  registration  statement  other  than  holders of securities
entitled  to  inclusion  of  their  securities in such registration statement by
reason  of  demand  registration  rights  (except  to  the  extent  any existing
agreements  otherwise  provide).  No  right  to  registration  of  Registrable
Securities  under this Section 2(c) shall be construed to limit any registration
required  under Section 2(a) hereof.  If an offering in connection with which an
Investor  is entitled to registration under this Section 2(c) is an underwritten
offering,  then  each Investor whose Registrable Securities are included in such
registration  statement shall, unless otherwise agreed by the Company, offer and
sell  such  Registrable  Securities  in  an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the  same  terms and conditions as other shares of Common Stock included in such
underwritten  offering.

     d.     Eligibility  for Form S-3.  The Company represents and warrants that
            -------------------------
it  is  eligible  to  register  the  resale  of  Registrable  Securities  on  a
registration  statement  on  Form  S-3  under the Securities Act, and that there
exist  no  facts  or  circumstances  (including  without limitation any required
approvals  or  waivers  or  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 Securities.  The Company shall file all reports required to be filed
by  the  Company  with  the  SEC  in  a  timely  manner so as to maintain or, if
applicable,  regain  its  eligibility  for  the  use  of  Form  S-3.

     3.     OBLIGATIONS  OF  THE  COMPANY.
            -----------------------------

     In  connection  with  the  registration  of the Registrable Securities, the
Company  shall  have  the  following  obligations:

     a.     The  Company  shall  prepare and file with the SEC, on or before the
Filing  Deadline  or  the  Uncovered  Share  Filing Deadline, as applicable, the
applicable  Registration  Statement  required  by Section 2(a) and shall use its
best efforts to cause such Registration Statement to become effective as soon as
practicable  thereafter  pursuant  to  the terms hereof.  The Company shall keep
such  Registration  Statement  effective pursuant to Rule 415 at all times until
the  earlier  of (i) two years or (ii)  the date on which all of the Registrable
Securities  may  (in the reasonable opinion of counsel to the Initial Investors)
be  immediately  sold to the public without registration or restriction pursuant
to  Rule  144(k)  under  the Securities Act (the "REGISTRATION PERIOD").  In the
event  that  the  sale  of  Registrable  Securities  by one or more Investors is
determined by the SEC to constitute a primary offering, upon the written request
from  time  to  time  of  any  such  Investor,  the Company shall as promptly as
practicable:  cause  a  Registration  Statement to be amended and/or one or more
additional  Registration  Statements  (which  may  be  requested on a sequential
basis) to be filed (as specified by the applicable Investors) and to be declared
effective;  and take all other actions reasonably requested by such Investors to
effectuate  the offering of Registrable Securities.  If the Initial Registration
Statement is not filed on Form S-3, the Company shall, as soon as it is eligible
to  do  so,  file  a  post-effective  amendment  on  Form  S-3  to  the  Initial
Registration  Statement  to  the  extent  permitted  by  the  SEC  or, if not so
permitted,  file a new Registration Statement on Form S-3 to permit sales of the
Registrable  Securities  pursuant  to Rule 429 under the Securities Act; and the
Company  shall  use  its  best efforts to cause such post-effective amendment or
Registration  Statement  to  become  effective  as  soon  as  possible.  Each
Registration  Statement  (including  any  amendments  or supplements thereto and
prospectuses  contained  therein  and  all  documents  incorporated by reference
therein)  filed  pursuant  to  this  Agreement  (i) shall comply in all material
respects  with  the  requirements  of  the  Securities  Act  and  the  rules and
regulations  of  the  SEC  promulgated thereunder and (ii) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be  stated  therein, or necessary to make the statements therein not misleading.
The  financial  statements of the Company included in the Registration Statement
or  incorporated  by  reference  therein  will comply as to form in all material
respects  with  applicable  accounting  requirements and the published rules and
regulations  of  the  SEC  applicable  with  respect  thereto.  Such  financial
statements  shall  be  prepared  in  accordance  with  U.S.  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  include footnotes or may be condensed or summary statements) and shall
fairly  present  in all material respects the consolidated financial position of
the  Company  and  its consolidated subsidiaries as of the dates thereof and the
consolidated  results  of  their  operations and cash flows for the periods then
ended  (subject,  in  the  case  of unaudited statements, to immaterial year-end
adjustments).

     b.     The  Company  shall  prepare  and  file with the SEC such amendments
(including  post-effective  amendments)  and  supplements  to  the  Registration
Statement  and the prospectus used in connection with the Registration Statement
as  may  be  necessary to keep the Registration Statement effective at all times
during  the  Registration  Period,  and,  during  such  period,  comply with the
provisions  of  the  Securities  Act  with  respect  to  the  disposition of all
Registrable  Securities  of  the  Company  covered by the Registration Statement
until  such  time as all of such Registrable Securities have been disposed of in
accordance  with  the  intended  methods of disposition by the seller or sellers
thereof  as  set  forth  in  the  Registration  Statement.

     c.     The  Company  shall  furnish  to  each  Investor  whose  Registrable
Securities  are  included  in  the  Registration Statement and its legal counsel
promptly  after  the  same  is prepared and publicly distributed, filed with the
SEC,  or received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or  supplement  thereto.  The  Company  shall  notify the holders of Registrable
Securities  to be sold and their counsel as promptly as reasonably possible, and
(if  requested  by any such Person) confirm such notice in writing no later than
one Trading Day thereafter, of any of the following events: (i) the SEC notifies
the Company whether there will be a "review" of any Registration Statement; (ii)
the  SEC  comments  in  writing on any Registration Statement (in which case the
Company  shall deliver to each Holder a copy of such comments and of all written
responses  thereto);  (iii)  any  Registration  Statement  or any post-effective
amendment  is  declared  effective;  (iv)  the SEC or any other Federal or state
governmental  authority  requests  any amendment or supplement to a Registration
Statement  or Prospectus or requests additional information related thereto; (v)
the  SEC  issues any stop order suspending the effectiveness of any Registration
Statement  or  initiates  any  Proceedings  for  that  purpose; (vi) the Company
receives  notice  of  any  suspension  of  the  qualification  or exemption from
qualification of any Registrable Securities for sale in any jurisdiction, or the
initiation  or threat of any Proceeding for such purpose; or (vii) the financial
statements  included  in  any  Registration  Statement  become  ineligible  for
inclusion  therein  or  any  statement  made  in  any  Registration Statement or
Prospectus  or any document incorporated or deemed to be incorporated therein by
reference  is  untrue  in any material respect or any revision to a Registration
Statement,  Prospectus or other document is required so that it will not contain
any  untrue  statement  of  a  material  fact or omit to state any material fact
required  to  be  stated therein or necessary to make the statements therein, in
light  of  the  circumstances  under  which  they  were  made,  not  misleading.
     The  Company  shall  use  its  best efforts to avoid the issuance of or, if
issued,  obtain  the withdrawal of any order suspending the effectiveness of any
Registration  Statement.

The  Initial  Registration  Statement (and each amendment or supplement thereto,
and each request for acceleration of effectiveness thereof) shall be provided to
(and  subject to the review by) the Initial Investors and their counsel at least
five  (5)  Business  Days  prior  to  its  filing or other submission; provided,
however,  that the Initial Investors and their counsel shall submit any comments
to  the  Initial Registration Statement within two (2) Business Days of receipt.

The  Company  shall respond as promptly as reasonably possible, and in any event
within  twenty  (20)  Trading  Days,  to any comments received from the SEC with
respect  to  the Registration Statement or any amendment thereto and as promptly
as  reasonably  possible  provide  the Investors true and complete copies of all
correspondence  from and to the SEC relating to the Registration Statement.  The
Company  shall not file the Registration Statement or any such Prospectus or any
amendments  or  supplements  thereto  to  which the Holders of a majority of the
Registrable  Securities  and  their  counsel  shall  reasonably  object.

     d.     The  Company  shall use its best efforts to (i) register and qualify
the  Registrable  Securities  covered  by  the Registration Statement under such
other  securities  or "blue sky" laws of such jurisdictions in the United States
as  each  Investor  who  holds  Registrable  Securities being offered reasonably
requests,  (ii)  prepare  and  file  in  those  jurisdictions  such  amendments
(including  post-effective amendments) and supplements to such registrations and
qualifications  as may be necessary to maintain the effectiveness thereof during
the  Registration  Period,  (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration  Period,  and  (iv)  take all other actions reasonably necessary or
advisable  to qualify the Registrable Securities for sale in such jurisdictions;
provided,  however,  that  the  Company  shall  not  be  required  in connection
therewith  or  as  a  condition  thereto  to  (a)  qualify to do business in any
jurisdiction  where  it  would not otherwise be required to qualify but for this
Section  3(d),  (b) subject itself to general taxation in any such jurisdiction,
(c)  file  a general consent to service of process in any such jurisdiction, (d)
provide  any undertakings that cause the Company undue expense or burden, or (e)
make  any  change  in its certificate of incorporation or by-laws, which in each
case the Board of Directors of the Company determines to be contrary to the best
interests  of  the  Company  and  its  stockholders.

e.     In  the  event  the  Investors  who  hold  a  majority in interest of the
Registrable  Securities being offered in an offering select underwriters for the
offering,  the  Company  shall  enter  into and perform its obligations under an
underwriting  agreement,  in  usual  and  customary  form,  including,  without
limitation,  customary  indemnification  and  contribution obligations, with the
underwriters  of  such  offering.

     f.     As  promptly  as practicable after becoming aware of such event, the
Company  shall notify each Investor in writing of the happening of any event, of
which the Company has knowledge, as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or  necessary  to  make  the statements therein not misleading, and use its best
efforts  promptly  to  prepare  a  supplement  or  amendment to the Registration
Statement  to  correct such untrue statement or omission and deliver such number
of  copies of such supplement or amendment to each Investor as such Investor may
reasonably  request.

     g.     The  Company  shall  use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
and,  if  such an order is issued, to obtain the withdrawal of such order at the
earliest  practicable  date (including in each case by amending or supplementing
such  Registration  Statement) and to notify each Investor who holds Registrable
Securities  being  sold  (or,  in  the  event  of  an underwritten offering, the
managing  underwriters) of the issuance of such order and the resolution thereof
(and  if  such  Registration  Statement is supplemented or amended, deliver such
number  of  copies  of  such  supplement  or  amendment to each Investor as such
Investor  may  reasonably  request).

     h.     [Removed]

     i.     At the request of the Initial Investors whose Registrable Securities
are included in a Registration Statement, the Company shall furnish, on the date
of  effectiveness of the Registration Statement (i) an opinion, dated as of such
date,  from  counsel  representing the Company addressed to the Investors and in
form,  scope  and  substance  as  is customarily given in an underwritten public
offering,  including  that  the  Registration  Statement  and related prospectus
comply  as  to  form  in  all  material  respects  with  the requirements of the
Securities  Act  and the applicable rules and regulations thereunder, and (ii) a
letter,  dated  as of such date, from the Company's independent certified public
accountants  in  form  and  substance  as  is  customarily  given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed  to  the  Initial  Investors  and  the  underwriters,  if  any.

     j.     The  Company shall make available for inspection by (i) any Investor
whose  Registrable Securities are included in a Registration Statement, (ii) any
underwriter  participating  in  any  disposition  pursuant  to  a  Registration
Statement,  (iii)  one  firm  of  attorneys and one firm of accountants or other
agents retained by the Investors, and (iv) one firm of attorneys retained by all
such  underwriters  (collectively, the "INSPECTORS") all pertinent financial and
other  records,  and pertinent corporate documents and properties of the Company
(collectively,  the  "RECORDS"), as shall be reasonably deemed necessary by each
Inspector to enable each Inspector to exercise its due diligence responsibility,
and  cause  the  Company's  officers,  directors  and  employees  to  supply all
information  which any Inspector may reasonably request for purposes of such due
diligence.

     k.     The  Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of  such  information  is  necessary  to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement  or  omission  in  any Registration Statement, (iii) the release of
such  information  is ordered pursuant to a subpoena or other order from a court
or  governmental  body of competent jurisdiction, (iv) such information has been
made  generally available to the public other than by disclosure in violation of
this  or  any  other  agreement,  or  (v) such Investor consents to the form and
content of any such disclosure.  The Company agrees that it shall, upon learning
that  disclosure of such information concerning an Investor is sought in or by a
court  or  governmental  body  of competent jurisdiction or through other means,
give  prompt  notice to such Investor prior to making such disclosure, and allow
the  Investor,  at  its  expense,  to  undertake  appropriate  action to prevent
disclosure  of,  or  to  obtain  a  protective  order  for,  such  information.

     l.     The Company shall use its best efforts to promptly either (i) secure
the  designation and quotation, of all the Registrable Securities covered by the
Registration  Statement  on  The  Nasdaq  Stock  Market,  or  (ii) cause all the
Registrable Securities covered by the Registration Statement to be listed on the
New  York  Stock  Exchange  or  the  American Stock Exchange or another national
securities exchange and on each additional national securities exchange on which
securities of the same class or series issued by the Company are then listed, if
any,  if  the listing of such Registrable Securities is then permitted under the
rules  of  such  exchange.

     m.     The  Company shall provide a transfer agent and registrar, which may
be  a single entity, for the Registrable Securities not later than the effective
date  of  the  Registration  Statement.

     n.     [Removed]

     o.     The  Company  shall  comply  with  applicable  federal  and  state
securities laws and regulations related to a Registration Statement and offering
and  sale  of  securities.

     p.     The Company shall take all such other actions as any Investor or the
underwriters,  if any, reasonably request in order to expedite or facilitate the
disposition  of  such  Registrable  Securities.

     q.     From  and  after  the date of this Agreement, the Company shall not,
and  shall  not  agree  to,  allow  the holders of any securities of the Company
(except  to the extent existing agreements may otherwise provide) to include any
of  their  securities in any Registration Statement under Section 2(a) hereof or
any  amendment  or  supplement  thereto  under  Section  3(b) hereof without the
consent  of the holders of a majority in interest of the Registrable Securities.

     4.     OBLIGATIONS  OF  THE  INVESTORS.
            -------------------------------

     In  connection  with  the  registration  of the Registrable Securities, the
Investors  shall  have  the  following  obligations:

     a.     It  shall be a condition precedent to the obligations of the Company
to  complete  the  registration  pursuant  to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to  the  Company  such  information regarding itself, the Registrable Securities
held  by it and the intended method of disposition of the Registrable Securities
held  by  it  as shall be reasonably required to effect the registration of such
Registrable  Securities and shall execute such documents in connection with such
registration  as the Company may reasonably request.  At least five (5) Business
Days  prior  to the first anticipated filing date of the Registration Statement,
the  Company  shall notify each Investor of any information the Company requires
from  each  such  Investor.

     b.     Each  Investor,  by  such  Investor's  acceptance of the Registrable
Securities,  agrees to cooperate with the Company as reasonably requested by the
Company  in  connection  with  the  preparation  and  filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such  Investor's  election  to  exclude  all  of  such  Investor's  Registrable
Securities  from  the  Registration  Statement.

     c.     In  the  event  Investors  holding  a  majority  in  interest of the
Registrable  Securities  being  offered  determine  to engage the services of an
underwriter,  each  Investor  agrees  to  enter into and perform such Investor's
obligations  under  an  underwriting  agreement,  in  usual  and customary form,
including,  without  limitation,  customary  indemnification  and  contribution
obligations,  with  the underwriter(s) of such offering and the Company and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of the Registrable Securities, unless such Investor has notified
the  Company  in  writing of such Investor's election not to participate in such
underwritten  distribution.

     d.     No  Investor  may  participate  in  any  underwritten  distribution
hereunder  unless  such  Investor (i) agrees to sell such Investor's Registrable
Securities  on  the basis provided in any underwriting arrangements in usual and
customary  form  entered  into  by  the Company, (ii) completes and executes all
questionnaires,  powers  of  attorney,  indemnities, underwriting agreements and
other  documents  reasonably  required  under  the  terms  of  such underwriting
arrangements,  and  (iii)  agrees  to pay its pro rata share of all underwriting
discounts  and  commissions  and  any expenses in excess of those payable by the
Company  pursuant  to Section 5 below.  Notwithstanding anything in this Section
4(d)  to  the contrary, this Section 4(d) is not intended to limit an Investor's
rights  under  Section  2(a)  or  3(b)  hereof.

     5.     EXPENSES  OF  REGISTRATION.
            --------------------------

     All  reasonable  expenses  incurred  by  the  Company  or  the Investors in
connection  with registrations, filings or qualifications pursuant to Sections 2
and  3  above  (excluding brokers' fees, underwriting discounts and commissions,
and  similar selling expenses), including, without limitation, all registration,
listing  and  qualifications fees, printers and accounting fees and the fees and
disbursements  of  counsel  for  the  Company, and the fees and disbursements of
counsel  selected by the Investors, shall be borne by the Company.  In addition,
the  Company  shall  pay  all  of  the  Investors' costs and expenses (including
reasonable legal fees) incurred in connection with the enforcement of the rights
of  the  Investors  hereunder.

     6.     INDEMNIFICATION.
            ---------------

     In  the  event  any  Registrable  Securities are included in a Registration
Statement  under  this  Agreement:

     a.     To  the  extent  permitted  by law, the Company will indemnify, hold
harmless  and  defend  (i)  each Investor who holds such Registrable Securities,
(ii)  the  directors,  officers, partners, members, employees and agents of such
Investor,  and  (iii)  each person who controls any Investor (and the directors,
officers,  partners,  members,  employees  and  agents  of  such control person)
within  the  meaning  of  Section  15 of the Securities Act or Section 20 of the
Securities  Exchange Act of 1934, as amended (the "EXCHANGE ACT"), if any (each,
an  "INDEMNIFIED PERSON"), against any joint or several losses, claims, damages,
liabilities  or  expenses  (collectively,  together with actions, proceedings or
inquiries  by  any regulatory or self-regulatory organization, whether commenced
or  threatened,  in  respect  thereof, "CLAIMS") to which any of them may become
subject  insofar  as  such Claims arise out of or are based upon: (i) any untrue
statement  or  alleged  untrue  statement  of  a material fact in a Registration
Statement  or  the omission or alleged omission to state therein a material fact
required  to  be  stated  or  necessary  to  make  the  statements  therein  not
misleading,  (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final prospectus (as amended
or  supplemented,  if  the  Company  files  any  amendment thereof or supplement
thereto  with  the SEC) or the omission or alleged omission to state therein any
material  fact  necessary  to  make the statements made therein, in light of the
circumstances  under  which the statements therein were made, not misleading, or
(iii)  any  violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law, or any rule or regulation thereunder
relating  to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, "VIOLATIONS").  Subject
to  the  restrictions  set  forth  in Section 6(c) with respect to the number of
legal  counsel,  the  Company  shall  reimburse  the  Investors  and  each other
Indemnified  Person,  promptly  as  such  expenses  are incurred and are due and
payable,  for any reasonable legal fees or other reasonable expenses incurred by
them  in  connection  with  investigating  or  defending  any  such  Claim.
Notwithstanding  anything  to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with  information furnished in writing to the Company by such Indemnified Person
expressly for use in the Registration Statement or any such amendment thereof or
supplement  thereto;  (ii)  shall not apply to amounts paid in settlement of any
Claim  if  such  settlement is effected without the prior written consent of the
Company,  which  consent  shall  not  be  unreasonably  withheld; and (iii) with
respect  to  any  prospectus,  shall not inure to the benefit of any Indemnified
Person  if  the  untrue statement or omission of material fact contained in such
prospectus was corrected on a timely basis in the prospectus, as then amended or
supplemented,  if  such  corrected  prospectus  was timely made available by the
Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly
advised  in  writing not to use the incorrect prospectus prior to the use giving
rise  to  a  Violation and such Indemnified Person, notwithstanding such advice,
used it.  Such indemnity shall remain in full force and effect regardless of any
investigation  made  by or on behalf of the Indemnified Person and shall survive
the  transfer of the Registrable Securities by the Investors pursuant to Section
9.

     b.     In  connection  with any Registration Statement in which an Investor
is  participating,  each  such  Investor  agrees  severally  and  not jointly to
indemnify,  hold  harmless and defend, to the same extent and in the same manner
set  forth  in  Section  6(a),  the  Company, each of its directors, each of its
officers  who  signs  the Registration Statement, its employees, agents and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities  Act  or  Section  20  of the Exchange Act, and any other stockholder
selling  securities  pursuant  to  the  Registration  Statement  or  any  of its
directors or officers or any person who controls such stockholder or underwriter
within  the  meaning of the Securities Act or the Exchange Act (collectively and
together  with an Indemnified Person, an "INDEMNIFIED PARTY"), against any Claim
to  which any of them may become subject, under the Securities Act, the Exchange
Act  or  otherwise,  insofar  as  such  Claim arises out of or is based upon any
Violation,  in  each  case  to  the  extent  (and  only to the extent) that such
Violation  occurs  in  reliance  upon and in conformity with written information
furnished  to  the Company by such Investor expressly for use in connection with
such  Registration  Statement;  and  subject  to Section 6(c) such Investor will
reimburse  any  legal  or other expenses (promptly as such expenses are incurred
and  are  due  and  payable)  reasonably  incurred  by  them  in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement  contained  in  this  Section  6(b) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor; provided, further, however, that the Investor shall be
liable under this Agreement (including this Section 6(b) and Section 7) for only
that  amount  as  does  not  exceed  the  net proceeds actually received by such
Investor  as  a result of the sale of Registrable Securities giving rise to such
indemnification  obligation.  Such  indemnity  shall  remain  in  full force and
effect  regardless of any investigation made by or on behalf of such Indemnified
Party  and  shall  survive  the  transfer  of  the Registrable Securities by the
Investors  pursuant  to  Section  9.  Notwithstanding  anything  to the contrary
contained  herein,  the indemnification agreement contained in this Section 6(b)
with respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified  Party  if  the untrue statement or omission of material fact by the
Investor contained in the preliminary prospectus was corrected on a timely basis
in  the  prospectus,  as then amended or supplemented, and the Indemnified Party
failed  to  utilize  such  corrected  prospectus.

     c.     Promptly after receipt by an Indemnified Person or Indemnified Party
under  this Section 6 of notice of the commencement of any action (including any
governmental  action),  such Indemnified Person or Indemnified Party shall, if a
Claim  in  respect  thereof is to made against any indemnifying party under this
Section  6,  deliver  to  the  indemnifying  party  a  written  notice  of  the
commencement  thereof, and the indemnifying party shall have the right to assume
control  of  the  defense  thereof  with  counsel  mutually  satisfactory to the
indemnifying  party  and the Indemnified Person or the Indemnified Party, as the
case  may  be;  provided,  however,  that  such  indemnifying party shall not be
entitled  to  assume such defense and an Indemnified Person or Indemnified Party
shall  have  the  right  to  retain its own counsel with the reasonable fees and
expenses  to be paid by the indemnifying party, if, in the reasonable opinion of
counsel  retained  by the indemnifying party, the representation by such counsel
of  the Indemnified Person or Indemnified Party and the indemnifying party would
be  inappropriate  due to actual or potential conflicts of interest between such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel  in such proceeding or the actual or potential defendants in, or targets
of, any such action include both the Indemnified Person or the Indemnified Party
and  the indemnifying party and any such Indemnified Person or Indemnified Party
reasonably  determines  that  there  may  be  legal  defenses  available to such
Indemnified  Person  or  Indemnified  Party  which  are  in  conflict with those
available to such indemnifying party.  The indemnifying party shall pay for only
one  separate  legal  counsel  for  the  Indemnified  Persons or the Indemnified
Parties,  as  applicable,  and such legal counsel shall be selected by Investors
holding  a  majority-in-interest  of  the Registrable Securities included in the
Registration  Statement  to  which  the  Claim relates (with the approval of the
Initial  Investors  if any of them holds Registrable Securities included in such
Registration  Statement),  if  the  Investors  are  entitled  to indemnification
hereunder,  or  by  the  Company,  if the Company is entitled to indemnification
hereunder,  as  applicable.  The  failure  to  deliver  written  notice  to  the
indemnifying  party  within  a  reasonable  time of the commencement of any such
action  shall  not  relieve  such  indemnifying  party  of  any liability to the
Indemnified  Person  or  Indemnified  Party  under this Section 6, except to the
extent  that  the  indemnifying  party  is actually prejudiced in its ability to
defend  such  action.  The  indemnification  required by this Section 6 shall be
made  by  periodic  payments  of  the  amount  thereof  during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and  is  due  and  payable.

          (d)     Notwithstanding  anything  to  the  contrary  herein,  the
indemnifying party shall not be entitled to settle any claim, suit or proceeding
unless  in  connection  with  such  settlement the indemnified party receives an
unconditional  release with respect to the subject matter of such claim, suit or
proceeding  and  such  settlement does not contain any admission of fault by the
indemnified  party.

     7.     CONTRIBUTION.
            ------------

     To the extent any indemnification by an indemnifying party is prohibited or
limited  by  law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6  to  the  fullest  extent  permitted  by  law;  provided, however, that (i) no
contribution  shall  be  made under circumstances where the maker would not have
been  liable  for indemnification under the fault standards set forth in Section
6,  (ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section  11(f) of the Securities Act) shall be entitled to contribution from any
seller  of  Registrable  Securities  who  was  not  guilty  of  such  fraudulent
misrepresentation,  and (iii) contribution (together with any indemnification or
other  obligations under this Agreement) by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from  the  sale  of  such  Registrable  Securities.

     8.     REPORTS  UNDER  THE  EXCHANGE  ACT.
            ----------------------------------

     With  a  view to making available to the Investors the benefits of Rule 144
promulgated  under the Securities Act or any other similar rule or regulation of
the  SEC  that  may  at  any time permit the Investors to sell securities of the
Company  to the public without registration ("RULE 144"), the Company agrees to:

     a.     file with the SEC in a timely manner and make and keep available all
reports and other documents required of the Company under the Securities Act and
the Exchange Act so long as the Company remains subject to such requirements (it
being understood that nothing herein shall limit the Company's obligations under
Section  5(c)  of  the  Securities  Purchase  Agreement)  and  the  filing  and
availability  of  such  reports  and  other  documents  as  is  required for the
applicable  provisions  of  Rule  144;  and

     b.     furnish  to  each Investor so long as such Investor owns Registrable
Securities,  promptly  upon request, (i) a written statement by the Company that
it  has complied with the reporting requirements of Rule 144, the Securities Act
and  the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company, and
(iii)  such  other  information  as  may  be  reasonably requested to permit the
Investors  to  sell  such  securities pursuant to Rule 144 without registration.

     9.     ASSIGNMENT  OF  REGISTRATION  RIGHTS.
            ------------------------------------

     The  rights  of  the  Investors  hereunder, including the right to have the
Company  register  Registrable  Securities  pursuant to this Agreement, shall be
assignable  by  each  Investor  to  any  transferee of all or any portion of the
Registrable  Securities  if:  (i)  the  Investor  agrees  in  writing  with  the
transferee  or  assignee  to assign such rights, and a copy of such agreement is
furnished  to  the  Company after such assignment, (ii) the Company is furnished
with  written  notice of (a) the name and address of such transferee or assignee
and  (b) the securities with respect to which such registration rights are being
transferred  or  assigned,  (iii)  following  such  transfer  or assignment, the
further  disposition  of  such  securities  by the transferee or assignee may be
subject to restrictions under the Securities Act and applicable state securities
laws,  (iv)  the transferee or assignee agrees in writing with the Company to be
bound  by  all  of  the provisions contained herein, and (v) such transfer shall
have  been made in accordance with the applicable requirements of the Securities
Purchase  Agreement.  In  addition, and notwithstanding anything to the contrary
contained  in this Agreement, the Securities Purchase Agreement or the Warrants,
the Securities (as defined in the Securities Purchase Agreement) may be pledged,
and  all  rights of the Investors under this Agreement or any other agreement or
document related to the transaction contemplated hereby may be assigned, without
further  consent  of  the  Company, to a bona fide pledgee in connection with an
Investor's  margin  or  brokerage  accounts.

     10.     AMENDMENT  OF  REGISTRATION  RIGHTS.
             -----------------------------------

     Provisions  of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively), and Investors (excluding Investors who are affiliates of the
Company)  who hold fifty percent (50%) in interest of the Registrable Securities
(excluding  Registrable Securities held by affiliates of the Company) or, in the
case  of  a  waiver,  with  the  written  consent  of the party charged with the
enforcement  of  any  such  provision.  Any  amendment  or  waiver  effected  in
accordance  with  this  Section  10  shall be binding upon each Investor and the
Company.

     11.     MISCELLANEOUS.
             -------------

     a.     A  person  or  entity  is  deemed  to  be  a  holder  of Registrable
Securities  whenever  such  person  or  entity  owns  of record such Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two  or  more  persons  or  entities  with  respect to the same
Registrable  Securities,  the  Company shall act upon the basis of instructions,
notice  or  election  received  from  the  registered  owner of such Registrable
Securities.

     b.     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 (5) 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.
     1139  Karlstad  Drive
     Sunnyvale,  CA  94089
     Telephone  No.:  (408)  747-7140  (x1311)
     Facsimile  No.:  (408)  747-7198
     Attention:  Mr.  Shum  Mukherjee

     With  a  copy  to:

     Wilson  Sonsini  Goodrich  &  Rosati
     650  Page  Mill  Road
     Palo  Alto,  CA  94304
     Telephone  No.:  (650)  493-9300
     Facsimile  No.:   (650)  493-6811
     Attention:  Mark  Casillas,  Esq.

     If  to an Investor, at such address as such Investor shall have provided in
writing  to  the  Company  or  such  other address as such Investor furnishes by
notice  given  in  accordance  with  this  Section  11(b).

     Each  party  hereto  may  from time to time change its address or facsimile
number  for  notices  under this Section 11(b) by giving at least ten (10) days'
prior written notice of such changed address or facsimile number, in the case of
the  Investors  to  the  Company,  and  in the case of the Company to all of the
Investors.

     c.     Failure  of  any  party  to  exercise any right or remedy under this
Agreement  or otherwise, or delay by a party in exercising such right or remedy,
shall  not  operate  as  a  waiver  thereof.

          d.     All  questions  concerning  the  construction,  validity,
enforcement  and  interpretation  of  this  Agreement  shall  be governed by and
construed  and enforced in accordance with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
agrees  that  all  Proceedings  concerning  the interpretations, enforcement and
defense  of  the  transactions  contemplated  by  this  Agreement  and any other
Transaction  Documents (whether brought against a party hereto or its respective
affiliates,  directors,  officers,  shareholders,  employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New
York, Borough of Manhattan.  Each party hereto hereby irrevocably submits to the
exclusive  jurisdiction  of  the state and federal courts sitting in the City of
New  York, Borough of Manhattan for the adjudication of any dispute hereunder or
in  connection herewith or with any transaction contemplated hereby or discussed
herein  (including with respect to the enforcement of the any of the Transaction
Documents),  and  hereby  irrevocably  waives,  and  agrees not to assert in any
Proceeding,  any  claim that it is not personally subject to the jurisdiction of
any  such  court,  that  such  Proceeding is improper.  Each party hereto hereby
irrevocably  waives  personal  service  of process and consents to process being
served  in  any  such  Proceeding  by  mailing  a copy thereof via registered or
certified  mail  or overnight delivery (with evidence of delivery) to such party
at  the address in effect for notices to it under this Agreement and agrees that
such  service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to  serve  process  in  any  manner  permitted  by law. Each party hereto hereby
irrevocably  waives,  to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this  Agreement  or  the transactions contemplated hereby. If either party shall
commence  a Proceeding to enforce any provisions of a Transaction Document, then
the  prevailing  party in such Proceeding shall be reimbursed by the other party
for  its  attorneys  fees  and  other  costs  and  expenses  incurred  with  the
investigation,  preparation  and  prosecution  of  such  Proceeding.
     e.     The  Transaction  Documents  (including  all  schedules and exhibits
thereto)  constitute  the entire agreement among the parties hereto with respect
to  the subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  The  Transaction  Docuemtns  supersede  all  prior  agreements  and
understandings  among the parties hereto and thereto with respect to the subject
matter  hereof  and  thereof.

     f.     Subject  to  the  requirements  of  Section 9 hereof, this Agreement
shall  inure to the benefit of and be binding upon the successors and assigns of
each  of  the  parties  hereto.

     g.     The headings in this Agreement are for convenience of reference only
and  shall  not  limit  or  otherwise  affect  the  meaning  hereof.

     h.     This  Agreement may be executed in two or more counterparts, each of
which  shall be deemed an original but all of which shall constitute one and the
same  agreement.  This  Agreement, once executed by a party, may be delivered to
the  other  party  hereto  by facsimile transmission of a copy of this Agreement
bearing  the  signature  of  the  party  so  delivering  this  Agreement.

     i.     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.

     j.     All  consents,  approvals and other determinations to be made by the
Investors pursuant to this Agreement shall be made by the Investors holding more
than  fifty  percent  (50%)  of the Registrable Securities (determined as if all
Warrants  then  outstanding had been exercised by the payment of cash) then held
by  all  Investors.

     k.     The  initial  number  of  Registrable  Securities  included  on  any
Registration Statement and each increase to the number of Registrable Securities
included  thereon  shall be registered on behalf of each Investor pro rata based
on  the  number  of  Registrable Securities held by each Investor at the time of
such  establishment  or  increase, as the case may be.  In the event an Investor
shall  sell  or  otherwise transfer any of such holder's Registrable Securities,
each  transferee  shall  be  deemed  to have registered on its behalf a pro rata
portion  of  the  number  of  Registrable  Securities included on a Registration
Statement  for  such  transferor.  Any  shares  of  Common  Stock  included on a
Registration Statement on behalf of any person or entity which does not hold any
Registrable  Securities  shall  be  deemed registered on behalf of the remaining
Investors, pro rata based on the number of shares of Registrable Securities then
held  by  such  Investors.  For  the  avoidance  of  doubt,  (A)  the  number of
Registrable  Securities  held  by  an  Investor  shall  be  determined as if all
Warrants  then outstanding and held by an Investor were exercised by the payment
of  cash  and  (B)  no  provision of this subsection shall operate to reduce the
number  of  Registrable Securities registered on behalf of any Investor pursuant
to  the  first  sentence  of  this  subsection.

     [REMAINDER  OF  PAGE  INTENTIONALLY  LEFT  BLANK]
EXHIBIT A
                                    ---------

                              PLAN OF DISTRIBUTION

The  Selling  Stockholders  and  any  of  their  pledgees,  assignees  and
successors-in-interest  may,  from time to time, sell any or all of their shares
of  Common  Stock on any stock exchange, market or trading facility on which the
shares  are  traded  or in private transactions.  These sales may be at fixed or
negotiated  prices.  The  Selling  Stockholders  may  use any one or more of the
following  methods  when  selling  shares:

- -     ordinary  brokerage  transactions  and  transactions  in  which  the
broker-dealer  solicits  purchasers;

- -     block trades in which the broker-dealer will attempt to sell the shares as
agent  but  may  position  and  resell  a  portion  of the block as principal to
facilitate  the  transaction;

- -     purchases  by a broker-dealer as principal and resale by the broker-dealer
for  its  account;

- -     an  exchange  distribution  in accordance with the rules of the applicable
exchange;

- -     privately  negotiated  transactions;

- -     short  sales

- -     broker-dealers may agree with the Selling Stockholders to sell a specified
number  of  such  shares  at  a  stipulated  price  per  share;

- -     a  combination  of  any  such  methods  of  sale;  and

- -     any  other  method  permitted  pursuant  to  applicable  law.

     The  Selling  Stockholders  may  also  sell shares under Rule 144 under the
Securities  Act,  if  available,  rather  than  under  this  prospectus.

     Broker-dealers  engaged  by  the Selling Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or  discounts  from  the  Selling Stockholders (or, if any broker-dealer acts as
agent  for  the  purchaser  of  shares,  from  the  purchaser)  in amounts to be
negotiated.  The  Selling  Stockholders  do  not  expect  these  commissions and
discounts  to  exceed  what  is customary in the types of transactions involved.

     The  selling  stockholder  may from time to time pledge or grant a security
interest  in  some or all of the Shares or common stock or Warrant owned by them
and,  if  they  default  in  the  performance  of their secured obligations, the
pledgees  or  secured parties may offer and sell the shares of common stock from
time  to  time  under  this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
amending  the list of selling stockholders to include the pledgee, transferee or
other  successors  in  interest  as  selling stockholders under this prospectus.

     The  selling  stockholders  also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in  interest  will  be  the  selling  beneficial  owners  for  purposes  of this
prospectus.

     The Selling Stockholders and any broker-dealers or agents that are involved
in  selling  the shares may be deemed to be "underwriters" within the meaning of
the  Securities  Act  in  connection  with  such  sales.  In  such  event,  any
commissions  received  by  such  broker-dealers  or agents and any profit on the
resale  of  the  shares  purchased  by  them  may  be  deemed to be underwriting
commissions  or  discounts  under  the Securities Act.  The Selling Stockholders
have  informed the Company that it does not have any agreement or understanding,
directly  or  indirectly,  with  any  person  to  distribute  the  Common Stock.

     The  Company  is  required  to  pay  all  fees and expenses incident to the
registration  of  the  shares.  The  Company has agreed to indemnify the Selling
Stockholders  against certain losses, claims, damages and liabilities, including
liabilities  under  the  Securities  Act.
2

                   AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
     THIS  AMENDMENT  TO REGISTRATION RIGHTS AGREEMENT (this "Amendment"), dated
as  of  January  22,  2002,  is entered into between and among, on the one hand,
Genus,  Inc.,  a  California  corporation  (the  "Company"), and the undersigned
Initial  Investor  (as  defined  in  the  Agreement)  in light of the following:

                               W I T N E S S E T H
                               -------------------

     WHEREAS,  the  Company and the Initial Investor are parties to that certain
Registration  Rights  Agreement  dated  January  17,  2002  (the  "Agreement");
WHEREAS,  the  Initial  Investor  requested  that  the  Company  consent  to the
amendments  to  the  Agreement  set  forth  in  Section  2  hereof;  and
                                                ----------
WHEREAS,  the  Company  is  willing  to  so  consent  to  such amendments to the
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of  which  are  hereby acknowledged, the parties agree to amend the Agreement as
follows:

1.     DEFINITIONS
       -----------

     .  Capitalized  terms  used  herein  and not otherwise defined herein shall
have  the  meanings  ascribed  to  them  in  the  Agreement,  as amended hereby.

2.     AMENDMENTS  TO  AGREEMENT
       -------------------------
     .
(a)     Section  1(i) of the Agreement, the definition of "Investors", is hereby
        -------------
amended  and  restated  in  its  entirety  as  follows:
     "(i)     "INVESTORS"  means  the  Initial  Investors and any transferees or
assignees  who  agree  to  become  bound  by the provisions of this Agreement in
accordance  with  Section 9 hereof; provided, however, that the term "Investors"
shall  not include any of the Initial Investors and any transferees or assignees
who agree to become bound by the provisions of this Agreement in accordance with
Section  9  hereof  that  cease  to  own  or  hold  Registrable  Securities."

(b)     Section  2(a)  of  the  Agreement  hereby is amended and restated in its
        -------------
entirety  as  follows:

     "Mandatory  Registration.  The  Company  shall  file with the United States
      -----------------------
Securities  and  Exchange  Commission  ("SEC"), on or prior to the date which is
forty-five  (45)  calendar days after the Closing Date (the "FILING DEADLINE") a
Registration  Statement  on  Form S-3 (or, if Form S-3 is not then available, on
such  form  of  Registration  Statement  as  is  then  available  to  effect  a
registration of all of the Registrable Securities, subject to the consent of the
Initial  Investors as to the use of such form (as determined pursuant to Section
11(j)  hereof)) to include the Plan of Distribution attached hereto as Exhibit A
                                                                       ---------
covering  the  resale  of  at  least  4,300,000  shares  of  Common Stock, which
Registration Statement, to the extent allowable under the Securities Act and the
rules  promulgated  thereunder shall state that such Registration Statement also
covers  such  indeterminate  number  of additional shares of Common Stock as may
become issuable upon exercise of the Warrants to prevent dilution resulting from
stock splits, stock dividends or similar transactions (the "INITIAL REGISTRATION
STATEMENT").  In  the event that the Initial Registration Statement is not filed
within  forty-five  (45)  calendar  days of the Closing Date, the Exercise Price
shall  be reduced to $2.90.   The Registrable Securities included in the Initial
Registration  Statement  shall  be  registered on behalf of the Investors as set
forth  in  Section  11(k) hereof.  If for any reason (including, but not limited
to,  a  determination  by  the  staff  of the SEC that all or any portion of the
Warrant  Shares  or  any  other Registrable Securities cannot be included in the
Initial  Registration  Statement  (an  "SEC  DETERMINATION"))  the  Initial
Registration Statement declared effective by the SEC does not include all of the
Registrable  Securities  (any  such  shares  that  are  not  included  being the
"UNCOVERED SHARES"), the Company shall prepare and file with the SEC, as soon as
practicable,  but  in  any  event  prior  to the tenth (10th) Business Day after
becoming  aware  of the existence of any Uncovered Shares (such date referred to
herein  as  the "UNCOVERED SHARE FILING DEADLINE"), either (a) an amendment (the
"UNCOVERED  SHARES AMENDMENT") to the Initial Registration Statement effecting a
registration  of  the  Uncovered  Shares  or  (b) a registration statement which
registers  the Uncovered Shares (the "UNCOVERED SHARES REGISTRATION STATEMENT").
The  Company  shall  file  additional  Registration  Statements if the number of
Registrable Securities at any time exceeds 85% of the number of shares of Common
Stock  then  registered  in  a  Registration  Statement.  The  Uncovered  Shares
Amendment  or the Uncovered Shares Registration Statement (and each amendment or
supplement  thereto, and each request for acceleration of effectiveness thereof)
shall  be  provided  to  the  Initial Investors and their counsel for review and
comment  at least two (2) Business Days prior to its filing or other submission.
The  Company  shall  use  its commercially reasonable best efforts to cause each
Registration  Statement  required  to  be filed pursuant to this Section 2(a) to
become  effective  as  soon  as practicable, but, as to the Initial Registration
Statement filed pursuant to Section 2(a), in no event later than the one hundred
and  twentieth  (120th)  calendar  day  after  the  Closing  Date, and as to any
Uncovered  Shares  Amendment  or  Uncovered Shares Registration Statement, in no
event  later  than  the one hundred and twentieth (120th) calendar day after the
Uncovered  Share  Filing Deadline (the "UNCOVERED SHARE REGISTRATION DEADLINE").
In  the  event  that  the  Initial  Registration  Statement is not effective one
hundred  and  twenty (120) calendar days after the Closing Date or the Uncovered
Shares  Registration  Statement  is  not  effective  as  of the Uncovered Shares
Registration  Deadline,  the  Company  shall  pay  the  Initial Investors a cash
penalty  of  one  percent  (1%)  of  the Initial Investors' Investment Amount as
defined  under  the  Securities Purchase Agreement for each thirty (30) calendar
day  period  that  the Registration remains non-effective beyond the initial one
hundred  and twenty (120) calendar day period .  Nothing in this provision shall
limit  the  Initial  Investors'  other  rights  and  remedies  under  the  law."

3.     CONSTRUCTION
       ------------

     .  THIS  AMENDMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE  LAW  OF  THE  STATE  OF  NEW  YORK  APPLICABLE  TO CONTRACTS MADE AND TO BE
PERFORMED  IN  THE  STATE  OF  NEW  YORK.

4.     ENTIRE  AMENDMENT;  EFFECT  OF  AMENDMENT
       -----------------------------------------

     .  This  Amendment,  and terms and provisions hereof, constitute the entire
agreement  among  the  parties  pertaining  to  the  subject  matter  hereof and
supersedes  any  and  all  prior  or  contemporaneous amendments relating to the
subject matter hereof.  Except for the amendments to the Agreement expressly set
forth  in  Section  2  hereof,  the Agreement shall remain unchanged and in full
           ----------
force  and  effect.  To  the  extent  any  terms or provisions of this Amendment
conflict  with  those  of  the  Agreement,  the  terms  and  provisions  of this
Amendment  shall  control.

5.     COUNTERPARTS;  TELEFACSIMILE  EXECUTION
       ---------------------------------------

     .  This  Amendment  may  be  executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties  hereto  may  execute  this  Amendment  by signing any such counterpart.
Delivery  of an executed counterpart of this Amendment by telefacsimile shall be
equally  as  effective  as  delivery of an original executed counterpart of this
Amendment.  Any  party  delivering  an executed counterpart of this Amendment by
telefacsimile  also  shall  deliver  an  original  executed  counterpart of this
Amendment, but the failure to deliver an original executed counterpart shall not
affect  the  validity,  enforceability,  and  binding  effect of this Amendment.

6.     MISCELLANEOUS.
       --------------

(a)     Upon  the  effectiveness  of  this  Amendment,  each  reference  in  the
Agreement  to "this Agreement", "hereunder", "herein", "hereof" or words of like
import  referring  to  the  Agreement  shall  mean and refer to the Agreement as
amended  by  this  Amendment.
(b)     Upon  the  effectiveness  of  this  Amendment,  each  reference  in  the
Transaction  Documents  to  the  "Registration  Rights Agreement", "thereunder",
"therein",  "thereof"  or  words of like import referring to the Agreement shall
mean  and  refer  to  the  Agreement  as  amended  by  this  Amendment.

                            [Signature page follows.]
IN  WITNESS  WHEREOF, the parties have caused this Amendment to be executed
and  delivered  as  of  the  date  first  written  above.

     GENUS,  INC.
     a  California  corporation

     By:  _________________________________
     Name:  Shum  Mukherjee
     Title:  CFO

     INITIAL  INVESTOR

     By:__________________________________

     Name:________________________________

     Title:_________________________________