EXHIBIT 4.2
EXHIBIT A
to Securities Purchase Agreement
VOID AFTER 5:00 P.M., CALIFORNIA TIME,
ON May 13, 2006
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
Date: May 14, 2001
GENUS, INC.
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received,_____________________________, or its
registered assigns, 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,
_________________ [insert a number that is 50% of the number of Shares purchased
by the holder on the Closing Date pursuant to the Securities Purchase Agreement]
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
$3.50. 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 May 14, 2001, by and among the Company and the other signatories thereto (the
"Securities Purchase Agreement"). Capitalized terms used but not defined herein
shall have the meanings given 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 Section 8 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 12(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, 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 hereof, shall be registered in the name of such
holder or such other name as shall be designated by such holder and, following
the date on which the Warrant Shares may be sold by the holder pursuant to Rule
144(k) promulgated under the Securities Act (or a successor rule), shall not
bear any restrictive legend. Upon a sale of any Warrant Shares pursuant to an
effective registration statement, any restrictive legend on the certificates
representing such Warrant Shares shall be removed. 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.
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 Purchaser exercise this Warrant in whole but
not in part (the "Mandatory Exercise") within thirty calendar (30) days after
the date of the Mandatory Exercise Notice (as defined below) by delivering a
written notice to the holder at such address as such holder shall have provided
to the Company in writing pursuant to Section 10 hereof (the "Mandatory Exercise
Notice"). The Mandatory Exercise Notice shall set forth the Exercise Price and
the Closing Price of a share of Common Stock on each of the ten (10) consecutive
Trading Days immediately preceding the date of the Mandatory Exercise Notice and
shall state that this Warrant be exercised in conformity with this Section 3
within thirty (30) calendar days. The last day of such thirty-day period is
hereinafter referred to as the "Automatic Mandatory Exercise Date" provided such
day is a Business Day, and if not, the first Business Day thereafter shall be
considered the Automatic Mandatory Exercise Date. To the extent the holder fails
to exercise this Warrant by 5:00 pm California time of the Automatic Mandatory
Exercise Date, 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 this Warrant marked "cancelled."
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 May 14,
2001 by and among the company and the other signatories thereto (the
"Registration Rights Agreement")): (i) is effective, (ii) does not require any
amendment or supplement 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;
and (d) 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 Purchaser 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 for the Common Stock was greater than 150% 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 8(g) hereof).
(c) Listing. The Company shall use its best efforts to secure 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.
(b) Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 5, 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 .
(c) Consolidation, Merger or Sale. In case of any consolidation of the
Company with, or merger of the Company into, any other entity, or in case of any
sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company at
any time during the Exercise Period, then as a condition of such consolidation,
merger or sale or conveyance, adequate provision will be made whereby the holder
of this Warrant will have the right to acquire and receive upon exercise of this
Warrant in lieu of the shares of Common Stock immediately theretofore acquirable
upon the exercise of this Warrant, such shares of stock, securities, cash or
assets as may be issued or payable with respect to or in exchange for the number
of shares of Common Stock immediately theretofore acquirable and receivable upon
exercise of this Warrant had such consolidation, merger or sale or conveyance
not taken place. In any such case, the Company will make appropriate provision
to insure that the provisions of this Section 5 will thereafter be applicable as
nearly as may be in relation to any shares of stock or securities thereafter
deliverable upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor entity (if other than the Company) assumes by written
instrument the obligations under this Warrant and the obligations to deliver to
the holder of this Warrant such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the holder may be entitled to acquire.
Notwithstanding the foregoing, in the event of any consolidation of the Company
with, or merger of the Company into, any other entity, or the sale or conveyance
of all or substantially all of the assets of the Company, at any time during the
Exercise Period, the holder of the Warrant shall, at its option, have the right
to receive, in connection with such transaction, cash consideration equal to the
fair value of this Warrant as determined in accordance with customary valuation
methodology used in the investment banking industry.
(d) Distribution of Assets. In case the Company shall declare or make
any distribution of its assets (other than cash) (or rights to acquire its
assets (other than cash)) to holders of Common Stock as a partial liquidating
dividend, stock repurchase, by way of return of capital or otherwise (including
any dividend or distribution to the Company's shareholders of shares (or rights
to acquire shares) of capital stock of a subsidiary) (a "Distribution"), at any
time during the Exercise Period, then, upon exercise of this Warrant for the
purchase of any or all of the shares of Common Stock subject hereto, the holder
of this Warrant shall be entitled to receive its pro-rata amount of such assets
(or such rights) as would have been payable to the holder had such holder been
the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution.
(e) Issuances or Sales at less than Exercise Price.
(i) If at any time after May 14, 2001 the Company shall issue or sell
any shares of Common Stock (except (A) 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 capital), or as consideration for the acquisition of a business,
product or license by the Company, (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) upon exercise thereof
to WFVK or its assigns at the Closing in consideration of its services to the
Company as placement agent for the financing contemplated by the Securities
Purchase Agreement, (E) 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 (F) in connection with any financing made to the
Company by a financial institution engaged in the business of lending money,
such as a bank, trust company, insurance company or other institutional lender,
for a consideration per share less than the Exercise Price in effect immediately
prior to such issue or sale, then immediately upon such issue or sale the
Exercise Price then in effect shall be reduced to a price equal to the
consideration per share received by the Company upon such issuance or sale.
(ii) For purposes of this Section 5(e), in the event the Company shall
issue any securities (except (A) 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
capital), or as consideration for the acquisition of a business, product or
license by the Company, (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) upon exercise thereof to WFVK or its assigns
at the Closing in consideration of its services to the Company as placement
agent for the financing contemplated by the Securities Purchase Agreement, (E)
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 (F) in connection with any financing made to the Company by a
financial institution engaged in the business of lending money, such as a bank,
trust company, insurance company or other institutional lender, which by their
terms are convertible into or exchangeable for, or consist of any right or
option to purchase, shares of Common Stock (whether or not such rights of
conversion, exchange, or purchase are immediately exercisable) and the
consideration per share for which such shares of Common Stock are deliverable
upon conversion, exchange, or exercise of such securities, determined as
provided in Subsection 5(e)(iii) below, is less than the Exercise Price in
effect immediately prior to the issuance of such securities, then the total
maximum number of shares of Common Stock issuable upon conversion, exchange, or
exercise of such securities shall be deemed to be outstanding and to have been
issued for such consideration per share. Except as provided below, no further
adjustment of the Exercise Price shall be made pursuant to this Section upon the
actual issue of such shares upon conversion, exchange, or exercise of such
securities. Upon the redemption or repurchase of any such securities or the
expiration or termination of the right to convert into, exchange for, or
exercise with respect to, such shares, the Exercise Price shall be readjusted to
such price as would have been obtained had the adjustment in the Exercise Price
made upon the issuance of such securities been made upon the basis of the
issuance of only such number of such securities as were actually converted into,
exchanged for, or exercised with respect to, shares of Common Stock. If the
purchase price or conversion or exchange rate provided for in any such security
shall change or a different purchase price or rate shall become effective at any
time, then, upon such change becoming effective, the Exercise Price then in
effect shall be readjusted to such price as would have been obtained had the
adjustment made upon the issuance of such securities been made upon the basis of
(i) the issuance of only the number of shares of Common Stock theretofore
actually delivered upon the conversion, exchange, or exercise of such
securities, and the total consideration received therefor, and (ii) the
issuance, at the time of such change, of any such securities then still
outstanding for the consideration, determined on the basis of the new price or
rate, for which shares of Common Stock are deliverable upon conversion,
exchange, or exercise of such securities. No readjustment provided for in this
Subsection 5(e)(ii) shall, when taken together with any other readjustments
attributable to the same securities, increase any Exercise Price by an amount in
excess of the total of all decreases therein made prior to the date of such
readjustment pursuant to adjustments made upon issuance of or subsequent changes
with respect to such securities.
(iii) For the purposes of any computation respecting consideration
received pursuant to this Section 5(e):
(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).
(f) 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.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) Certain Definitions.
(i) "Business Day" means any day, other than a Saturday or Sunday or a
day on which banking institutions in the State of California or New York are
authorized or obligated by law, regulation or executive order to close.
(ii) "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 holder 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 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 as of either of such dates on any of the foregoing bases, the
Closing Price of such security on such date shall be the fair market value as
determined by an investment banking firm selected by the holder and reasonably
acceptable to the Company, with the costs of such appraisal to be borne by the
Company. The manner of determining the Closing Price of the Common Stock set
forth in the foregoing definition shall apply with respect to any other security
in respect of which a determination as to market value must be made.
(iii) "Common Stock," for purposes of this Section 5, includes the Common
Stock and any additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only Common Stock in respect
of which this Warrant is exercisable, or shares resulting from any subdivision
or combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Section 5(c) hereof, the stock or other securities or property provided for in
such Section.
(iv) "Market Price" shall mean, with respect to any date of
determination, the average Closing Price during the ten (10) Trading Days ending
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. The manner of determining the
Market Price of the Common Stock set forth in the foregoing definition shall
apply with respect to any other security in respect of which a determination as
to market value must be made hereunder.
(v) "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.
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), 8(g) and 9 hereof and to
the provisions of Sections 4(e) and 4(f) 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) Exercise or Transfer Without Registration. If, at the time of the
surrender of this Warrant in connection with any exercise, transfer, or exchange
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 exercise, transfer, or exchange, (i) that the
holder or transferee of this Warrant, as the case may be, furnish to the Company
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, transfer, or exchange may be made without
registration under the Securities Act and under applicable state securities or
blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and sub-stance reasonably acceptable to the
Company and (iii) 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. [Reserved]
10. 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.
11. 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.
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
With a copy to:
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, 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, and, for any notice under Section 3,
with a copy to:
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Managing Director
12. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York. Each of the Company and the
holder further agrees that service of process upon the Company or the holder
mailed by certified or registered mail to the address set forth in Section 10
shall be deemed in every respect effective service of process upon the Company
or the holder in any such suit or proceeding. Nothing herein shall affect the
holder's or the Company's right to serve process in any other manner permitted
by law. Each of the Company and the holder agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
13. Limitations on Holder's Right to Exercise. In the event that upon
either (a) the surrender of this Warrant, together with a completed Exercise
Agreement, or (b) the delivery of the Mandatory Exercise Notice, the Company
would be obligated to issue an amount of shares of Common Stock which, when
aggregated with all shares of Common Stock issued upon exercise of all Warrants,
would exceed 19.99% of the number of shares of Common Stock outstanding on May
14, 2001 (such amount to be proportionately and equitably adjusted from time to
time in the event of stock dividends, subdivisions, combinations,
reclassifications, capital reorganizations and similar events relating to the
Common Stock) (the "Exchange Cap"), and such issuance would constitute a breach
of the Company's obligations under the rules or regulations of Nasdaq as they
apply to the Company, or any other principal securities exchange or market upon
which the Common Stock is or becomes traded (the "Cap Regulations"), the Company
shall not be obligated to issue any such shares of Common Stock in excess of the
Exchange Cap. Instead, the Company shall immediately give notice of these facts
to all holders of outstanding Warrants and shall, within twenty (20) days of the
occurrence of either (a) or (b) above, commence taking all steps reasonably
necessary to be in a position to issue shares pursuant to the exercise of this
Warrant without violating the Cap Regulations, which steps shall include (but
not be limited to) (i) the immediate preparation of all necessary proxy
solicitation materials for a meeting of the shareholders; (ii) best efforts to
obtain a waiver from the Cap Regulations for the issuances hereunder; and (iii)
the filing of such preliminary proxy solicitation materials with the Securities
and Exchange Commission within such twenty (20) day period. In the event that
shareholder approval is required for the Company to be in a position to issue
any shares pursuant to the exercise of this Warrant, the Company shall use its
best efforts to obtain such approval at the earliest practical date, including
without limitation using its best efforts to cause its management and board of
directors to vote shares that they beneficially own, and to recommend to the
Company's other shareholders to vote, in favor of such approval.
14. Miscellaneous.
(a) Amendments. Except as provided in Section 8(g) hereof, 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.
[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:
Title:
FORM OF EXERCISE AGREEMENT
(To be Executed by the Holder in order to Exercise the Warrant)
To: Genus, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ________________
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 12(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.
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.