Document:

Amendment - Employment - Mr. Connelly

Exhibit 10.29

AMENDMENT NO. 1 TO 

EMPLOYMENT AGREEMENT 

This Amendment No. 1 to Employment Agreement (this " Agreement ") is made and entered into as of March 12, 2004, by and between Citadel Security Software Inc., a Delaware corporation (the " Company "), and Richard Connelly (the " Employee ").

WHEREAS, the Company and the Employee have entered into an Employment Agreement between the Company and the Employee (the " Employment Agreement "), and the Company and the Employee desire to amend the Employment Agreement pursuant to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and other good and valuable consideration, the receipt and adequacy of which are acknowledged, the parties agree as follows:

1.      Bonus.  Following a Change in Control (as defined in the Employment Agreement) of the Company, the Employee shall have the option to require the Company to pay to the Employee a bonus in an amount equal to the exercise price of up to 50,000 options (if vested) that the Company granted to the Employee on or about September 30, 2003. The Bonus, if any, shall be subject to withholding for all applicable taxes.

2.      No Further Amendment.  Except as amended by this Agreement, the Employment Agreement shall remain in full force and effect in accordance with its terms.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

COMPANY

CITADEL SECURITY SOFTWARE INC.

 

By:      ______________________________

Name: ______________________________

Title:   ______________________________

EMPLOYEE 

__________________________________________

Print Name:     Richard Connelly 

Address:        8750 North Central Expressway, Suite 100 

                         Dallas, Texas 75231EXHIBIT 4.11

                    STOCK PURCHASE AND REGISTRATION AGREEMENT
                    -----------------------------------------

     This STOCK PURCHASE AND REGISTRATION AGREEMENT (this "AGREEMENT"), dated as
of November 7, 2003, by and among GENUS, INC., a corporation organized under the
laws  of  the  State  of  California  (the  "COMPANY"),  and the purchasers (the
"PURCHASERS")  set  forth on the execution pages hereof (the "EXECUTION PAGES").

     WHEREAS:

     A.     The  Company  and  each  Purchaser are executing and delivering this
Agreement  in  reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States  Securities  and Exchange Commission (the "SEC") under the Securities Act
of  1933,  as  amended  (the  "SECURITIES  ACT").

     B.     Each  Purchaser  desires  to  purchase,  severally  and not jointly,
subject  to  the  terms  and  conditions stated in this Agreement, shares of the
Company's  common  stock,  no  par  value  (the  "COMMON  STOCK").

     C.     The  Company has agreed to provide certain registration rights under
the  Securities  Act  and  the rules and regulations promulgated thereunder, and
applicable  state  securities  laws.

     NOW,  THEREFORE,  the  Company  and the Purchasers hereby agree as follows:

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

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

     "BUSINESS  DAY"  shall  be  each  Monday,  Tuesday, Wednesday, Thursday and
Friday  that  is  not  a  day  on which the banking institutions in the State of
California  are authorized or obligated by law or executive order to close or be
closed.

     "CLOSING  PRICE"  shall  be  $5.25.

     "INVESTMENT  AMOUNT"  shall  mean  the  dollar amount to be invested in the
Company  at  the Closing pursuant to this Agreement by a Purchaser, as set forth
on  the  Execution  Page  hereto  executed  by  such  Purchaser.

     "MATERIAL ADVERSE EFFECT" shall mean any material adverse effect on (i) the
Shares,  (ii)  the  ability  of the Company to perform its obligations hereunder
(including  the  issuance  of  the  Shares)  or  (iii) the business, operations,
properties  or financial condition of the Company and its subsidiaries, taken as
a  whole.

<PAGE>
     "PLACEMENT  AGENT"  shall  mean  Halpern  Capital,  Inc.

     "PROSPECTUS"  shall  mean  the prospectus included in a Resale Registration
Statement,  as  amended  or supplemented by any prospectus supplement and by all
other  amendments thereto, including post-effective amendments, and all material
incorporated  by  reference  into  such  prospectus.

     "REGISTRABLE SHARES" or "SHARES" shall mean each of the shares of Common
Stock issued or issuable pursuant to this Agreement or as a result of any stock
split, stock dividend, recapitalization exchange or similar event without regard
to any limitations on conversions or exercises, until the earlier of:

          (i)  the  date  on  which  such  share has been effectively registered
               under  the  Securities Act and disposed of in accordance with the
               Resale  Registration  Statement;

          (ii) the  date  on  which such share is transferred in compliance with
               Rule  144  under the Securities Act or may be sold or transferred
               by  a  person  who is not an affiliate of the Company pursuant to
               Rule  144(k)  under  the  Securities  Act  (or  any other similar
               provision  then  in  force);  or

          (iii)  the  date on which such share ceases to be outstanding (whether
               as  a  result  of  redemption,  repurchase  and  cancellation  or
               otherwise).

     "TRADING DAY" shall mean a day during which trading in securities generally
occurs  on  the  Nasdaq National Market or, if the Common Stock is not quoted on
the  Nasdaq  National  Market,  on  the  principal  other  national  or regional
securities  exchange  on which the Common Stock then is listed or, if the Common
Stock  is  not  listed  on  a  national  or regional securities exchange, on the
National  Association  of  Securities Dealers Automated Quotation System, on the
principal  other  market  on  which  the  Common Stock is then traded; provided,
however, that "Trading Day" shall not include any day (an "excluded day") during
which trading in the Common Stock is suspended for more than three hours between
9:30  a.m.  (New  York  time)  and  4:00  p.m.  (New  York  time).

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

     a.     Generally.  Except  as  otherwise  provided  in  this  Section 2 and
            ---------
subject to the satisfaction (or waiver) of the conditions set forth in Section 7
and  Section  8  below,  each  Purchaser  shall  purchase  the  number of Shares
determined  as  provided in this Section 2, and the Company shall issue and sell
such  number  of Shares to each Purchaser for such Purchaser's Investment Amount
as  provided  below.  The  Company's  agreement with each of the Purchasers is a
separate  agreement, and the sale of the Securities to each of the Purchasers is
a  separate  sale.

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

            (i)  On  the Closing Date (as defined below), the Company shall sell
and each Purchaser shall buy the number of Shares as is equal to the quotient of
(A)  such Purchaser's

                                        2
<PAGE>
Investment  Amount  divided  by (B) the Closing Price. On the Closing Date, each
Purchaser  shall  pay the Company an amount equal to such Purchaser's Investment
Amount.

            (ii)  On  the  Closing Date, each Purchaser shall pay its Investment
Amount by wire transfer to the Company, in accordance with the Company's written
wiring  instructions  against  delivery  of certificates representing the Shares
being  purchased  by  such  Purchaser, and the Company shall deliver such Shares
against  delivery  of  such  Purchaser's  Investment  Amount.

            (iii)  Subject  to  the  satisfaction  (or waiver) of the conditions
thereto  set  forth  in  Section 7 and Section 8 below, the date and time of the
sale  of  the  Shares  pursuant to this Agreement (the "CLOSING") shall be 10:00
a.m.  California  time  on  November  7,  2003 or such other date or time as the
Placement Agent and the Company may mutually agree ("CLOSING DATE"). The Closing
shall  occur  at  the  Palo  Alto  offices  of  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  follows:

     a.     Purchase  for  Own  Account.  The Purchaser is purchasing the Shares
            ---------------------------
for  the  Purchaser's  own  account  and  not  with  a  present view towards the
distribution  thereof.  The  Purchaser  understands that the Purchaser must bear
the  economic  risk  of  this  investment  indefinitely,  unless  the Shares are
registered pursuant to the Securities Act and any applicable state securities or
blue  sky laws or an exemption from such registration is available, and that the
Company  has  no  present intention of registering any such Shares other than as
contemplated  by  this Agreement.  Notwithstanding anything in this Section 3(a)
to  the contrary, by making the foregoing representation, the Purchaser does not
agree to hold the Shares for any minimum or other specific term and reserves the
right  to  dispose of the Shares at any time in accordance with or pursuant to a
registration  statement  or  an exemption from registration under the Securities
Act  and  any  applicable  state  securities  laws.

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

     c.     Governmental  Review.  The  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 Shares.

                                        3
<PAGE>
     d.     Authorization;  Enforcement.  The  Purchaser has the requisite power
            ---------------------------
and authority to enter into and perform its obligations under this Agreement and
to  purchase the Shares in accordance with the terms hereof.  This Agreement has
been  duly  and  validly  authorized,  executed  and  delivered on behalf of the
Purchaser  and  is  a  valid  and binding agreement of the Purchaser enforceable
against  the  Purchaser  in  accordance  with  its  terms, subject to applicable
bankruptcy,  insolvency,  reorganization,  moratorium,  fraudulent  transfer and
other  laws  affecting  creditors'  rights and remedies generally and to general
principles  of  equity  (regardless  of  whether  enforcement  is  sought  in  a
proceeding  at  law  or  in  equity).

     e.     Transfer  or  Resale.  The  Purchaser understands that (i) except as
            --------------------
provided  in  Section  5 of this Agreement, the Shares have not been and are not
being  registered under the Securities Act or any state securities laws, and may
not  be  transferred  unless  (a) subsequently registered thereunder, or (b) the
Purchaser  shall  have delivered to the Company an opinion of counsel reasonably
acceptable  to  the Company (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the  Shares  to  be  sold  or  transferred  may  be sold or transferred under an
exemption  from  such  registration,  and (ii) neither the Company nor any other
person  is under any obligation to register such Shares under the Securities Act
or  any  state securities laws or to comply with the terms and conditions of any
exemption  thereunder,  in  each  case,  other  than pursuant to this Agreement.

     f.     Legends.  The  Purchaser  understands  that,  until  the  end of the
            -------
holding  period  under  Rule  144(k)  of  the  Securities  Act (or any successor
provision)  with  respect  to the Shares, any stock certificate representing the
Shares  shall  bear  a  legend  in  substantially  the  following  form:

          THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
          REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS AMENDED, OR THE
          SECURITIES  LAWS  OF  ANY  STATE  OF THE UNITED STATES. THE SECURITIES
          REPRESENTED  HEREBY  MAY  NOT  BE OFFERED OR SOLD IN THE ABSENCE OF AN
          EFFECTIVE  REGISTRATION  STATEMENT FOR THE SECURITIES UNDER APPLICABLE
          SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED UNDER AN AVAILABLE
          EXEMPTION  FROM  THE  REGISTRATION  REQUIREMENTS  OF  THOSE  LAWS.

     The legend set forth above shall be removed and the Company shall within
three (3) Trading Days issue the Shares without such legend to the holder of the
Shares upon which it is stamped, (i) if such Shares have been resold or
transferred pursuant to the registration statement contemplated by Section 5 of
this Agreement and the registration statement was effective at the time of such
transfer, (ii) if, in connection with a sale transaction, such holder provides
the Company with an opinion of counsel reasonably acceptable to the Company to
the effect that a public sale, assignment, pledge or transfer of the Shares may
be made without registration under the Securities Act, or (iii) upon expiration
of the two-year period under Rule 144(k) of the Securities Act (or any successor
rule).  The Company shall not require such opinion of counsel for the sale of
Shares in accordance with Rule 144 of the Securities Act, provided that the
seller provides such representations that the Company shall reasonably request
confirming compliance

                                        4
<PAGE>
with  the  requirements  of  Rule  144.

     Such  Purchaser  understands  that, in the event Rule 144(k) as promulgated
under  the  Securities  Act  (or  any  successor  rule) is amended to change the
two-year  period  under  Rule  144(k)  (or  the  corresponding  period under any
successor  rule),  (i)  each reference in Section 3(f) of this Agreement to "two
(2)  years"  or  the  "two-year period" shall be deemed for all purposes of this
Agreement  to  be  references to such changed period, and (ii) all corresponding
references  in  the  Shares shall be deemed for all purposes to be references to
the  changed  period,  provided  that such changes shall not become effective if
they  are  otherwise prohibited by, or would otherwise cause a violation of, the
then-applicable  federal  securities  laws.

     g.     Investor  Status.  The  Purchaser is an "accredited investor" within
            ----------------
the  meaning  of  Rule  501 Regulation D under the Securities Act. In the normal
course  of  its  business,  it invests in or purchases securities similar to the
Shares  and  it  has  such  knowledge  and  experience in financial and business
matters  as  to  be capable of evaluating the merits and risks of purchasing the
Shares.

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

     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 and existing under the laws of the
jurisdiction  in which it is incorporated, and has the requisite corporate power
to own its properties and to carry on its business as now being conducted.  Each
of  the  Company and its subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which the nature
of the business conducted by it makes such qualification necessary and where the
failure  so  to  qualify  would  have  a  Material  Adverse  Effect.

     b.     Authorization;  Enforcement.  (i)  The  Company  has  the  requisite
            ---------------------------
corporate  power  and  authority to enter into and perform its obligations under
this  Agreement,  to  issue  and  sell  the  Shares in accordance with the terms
hereof;  (ii)  the  execution, delivery and performance of this Agreement by the
Company  and  the  consummation  by  it  of the transactions contemplated hereby
(including, without limitation, the reservation for issuance and issuance of the
Shares)  have  been  duly  authorized by the Company's Board of Directors and no
further  consent  or authorization of the Company, its Board of Directors or its
shareholders  is  required;  (iii)  this  Agreement  has  been duly executed and
delivered  by  the  Company;  and  (iv)  this  Agreement constitutes a valid and
binding  obligation of the Company enforceable against the Company in accordance
with  its  terms,  subject to applicable bankruptcy, insolvency, reorganization,
moratorium,  fraudulent  transfer and other laws affecting creditors' rights and
remedies  generally  and  to general principles of equity (regardless of whether
enforcement  is  sought  in  a  proceeding  at  law  or  in  equity).

     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

                                        5
<PAGE>
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) or any of the subsidiaries are subject to preemptive rights or any other
similar  rights of the shareholders of the Company or any liens or encumbrances.
Except  for the Shares and as disclosed in Schedule 4(c), as of the date of this
                                           -------------
Agreement,  (i)  there  are  no  outstanding options, warrants, scrip, rights to
subscribe  to,  calls  or  commitments  of any character whatsoever to which the
Company  or  any  of the subsidiaries is a party relating to the issuance by the
Company  or  any of its subsidiaries of securities or rights convertible into or
exercisable  or  exchangeable for, any shares of capital stock of the Company or
any  of  its  subsidiaries,  or  arrangements by which the Company or any of its
subsidiaries  is or may become bound to issue additional shares of capital stock
of  the  Company  or  such  subsidiaries,  and  (ii)  there are no agreements or
arrangements  under which the Company or any of its subsidiaries is obligated to
register  the  sale  of  any of its or their securities under the Securities Act
(except  as  contemplated  by  this  Agreement). Except as set forth on Schedule
                                                                        --------
4(c),  there are no securities or instruments containing antidilution or similar
----
provisions  that  may  be  triggered by the issuance of the Shares in accordance
with  the  terms  of  this  Agreement  and  the  holders  of  the securities and
instruments  listed  on  such Schedule 4(c) have waived any rights they may have
                              -------------
under such antidilution or similar provisions in connection with the issuance of
the  Shares in accordance with the terms of this Agreement. The Company has made
available to each Purchaser true and correct copies of the Company's Articles of
Incorporation as in effect on the date hereof ("ARTICLES OF INCORPORATION"), the
Company's  By-laws as in effect on the date hereof (the "BY-LAWS") and all other
instruments  and agreements governing securities convertible into or exercisable
or  exchangeable  for  capital  stock  of  the Company, except for stock options
granted  under  any  benefit  plan  of  the  Company.

     d.     Issuance  of Shares.  The Shares are duly authorized and when issued
            -------------------
and  paid for in accordance with the terms hereof, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances
(other  than  those imposed through acts or omissions of the Purchaser thereof),
and  will  not  be  subject  to  preemptive  rights  or  other similar rights of
shareholders  of  the  Company  and  will not impose personal liability upon the
holder  thereof.

     e.     No  Conflicts.  The  execution,  delivery  and  performance  of this
            -------------
Agreement  by  the  Company,  and  the  consummation  by  the  Company  of  the
transactions contemplated hereby (including, without limitation, the reservation
for issuance and issuance of the Shares) will not (i) conflict with or result in
a  violation  of the Articles of Incorporation or By-laws or (ii) conflict with,
or  constitute  a  default  (or  an event which, with notice or lapse of time or
both,  would  become  a  default)  under,  or  give  to  others  any  rights  of
termination, amendment, acceleration or cancellation of any agreement, indenture
or  instrument  to  which  the Company or any of its subsidiaries is a party, or
result  in  a  violation of any law, rule, regulation, order, judgment or decree
(assuming  the accuracy of the representations and warranties of the Purchasers)
of  the  United  States  federal  and  state  securities  laws  and  regulations
applicable to the Company or any of its subsidiaries or by which any property or
asset  of  the  Company or any of its subsidiaries is bound or affected (except,
with  respect  to  clause  (ii),  for  such  conflicts,  defaults, terminations,
amendments,  accelerations,  cancellations  and  violations  as  would  not,
individually  or in the aggregate, have a Material Adverse Effect).  Neither the
Company  nor  any  of

                                        6
<PAGE>
its  subsidiaries  is in violation of its Articles of Incorporation, By-laws and
other  organizational  documents  and  neither  the  Company  nor  any  of  its
subsidiaries  is  in  default  (and  no event has occurred which, with notice or
lapse  of  time  or  both,  would  put the Company or any of its subsidiaries in
default)  under,  nor has there occurred any event giving others (with notice or
lapse  of  time  or  both) any rights of termination, amendment, acceleration or
cancellation  of, any agreement, indenture or instrument to which the Company or
any  of  its  subsidiaries is a party, except for actual or possible violations,
defaults  or  rights  as  would  not,  individually  or in the aggregate, have a
Material  Adverse Effect. The businesses of the Company and its subsidiaries are
not  being  conducted  in  violation  of any law, ordinance or regulation of any
governmental  entity,  except  for  actual  or  possible violations, if any, the
sanctions  for which either singly or in the aggregate would not have a Material
Adverse  Effect.  Except  as  specifically contemplated by this Agreement and as
required  under the Securities Act and any applicable state securities laws, the
Company  is not required to obtain any consent, approval, authorization or order
of, or make any filing or registration with, any court or governmental agency or
any  regulatory or self regulatory agency in order for it to execute, deliver or
perform any of its obligations under this Agreement in accordance with the terms
hereof.  The  Company  is  not  in  violation of the listing requirements of The
Nasdaq  Stock  Market  and  does not reasonably anticipate that the Common Stock
will  be  delisted by The Nasdaq Stock Market in the foreseeable future based on
its  rules  as  currently  in  effect.

     f.     SEC  Documents;  Financial  Statements.  Since  January 1, 2002, the
            --------------------------------------
Company  has  timely  filed  all reports, schedules, forms, statements and other
documents  required  to  be  filed by it with the SEC pursuant to the Securities
Exchange  Act  of  1934,  as  amended  (the  "EXCHANGE  ACT"), and has filed all
registration  statements and other documents required to be filed by it with the
SEC pursuant to the Securities Act (all of the foregoing filed prior to the date
hereof, and all exhibits included therein and financial statements and schedules
thereto  and  documents  incorporated  by  reference  therein, being hereinafter
referred  to  as  the  "SEC DOCUMENTS").  The Company has made available to each
Purchaser true and complete copies of the SEC Documents, except for the exhibits
and  schedules  thereto  and  the  documents  incorporated therein.  As of their
respective dates, the SEC Documents complied as to form with the requirements of
the  Exchange  Act  or the Securities Act, as the case may be, and the rules and
regulations  of  the SEC promulgated thereunder applicable to the SEC Documents,
and  none  of  the  SEC  Documents,  at  the  time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact  required to be stated therein or necessary in order to make the statements
therein,  in  light  of  the  circumstances  under  which  they  were  made, not
misleading.  Any  statements  made  in  any  such SEC Documents that are or were
required  to  be updated or amended under applicable law have been so updated or
amended.  As  of their respective dates, the financial statements of the Company
included  in  the  SEC  Documents complied as to form with applicable accounting
requirements  and the published rules and regulations of the SEC applicable with
respect  thereto.  Such  financial  statements  have been prepared in accordance
with  United  States  generally  accepted  accounting  principles,  consistently
applied,  during  the periods involved (except (i) as may be otherwise indicated
in  such  financial  statements  or  the  notes  thereto, or (ii) in the case of
unaudited  interim  statements,  to the extent they may not include footnotes or
may  be  condensed  or  summary  statements) and fairly present the consolidated
financial  position  of the Company and its subsidiaries as of the dates thereof
and  the  results  of their operations and cash flows for the periods then ended
(subject,  in the case of unaudited statements, to normal and recurring year-end
audit  adjustments).  Except  as set forth in the SEC Documents, the Company has
no  liabilities, contingent or otherwise, other than (i) liabilities incurred in
the ordinary course of business subsequent to the date of such SEC Documents and
(ii) obligations under contracts and commitments incurred in the ordinary course
of  business  and not required under generally accepted accounting principles to
be  reflected  in such SEC Documents, which liabilities

                                        7
<PAGE>
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,  since January 1, 2003, there has been no change or development which
individually  or  in  the  aggregate  has  had  or could have a Material Adverse
Effect.

     h.     Absence  of Litigation.  Except as disclosed in Schedule 4(h) or the
            ----------------------                          -------------
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.  Other than as disclosed in the Company's SEC
Documents,  neither the Company nor any of its subsidiaries has received written
notice  that  it  is  infringing  upon  or  in  conflict  with  any  third party
Intangibles.  Other  than  as  disclosed in the Company's SEC Documents, neither
the  Company  nor  any  of  its  subsidiaries  has  entered  into  any  consent,
indemnification, forbearance to 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.     Acknowledgment  Regarding  the  Purchasers'  Purchase of the Shares.
            -------------------------------------------------------------------
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 Shares and has not been relied upon by the Company, its officers or directors
in  any way.  The Company further represents to the Purchaser that the Company's
decision  to  enter  into this Agreement has been based solely on an independent
evaluation  by  the  Company  and  its  representatives.

     k.     No  Brokers.  Except  for  the  Placement Agent, the Company has not
            -----------
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.

                                        8
<PAGE>
     l.     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.

     m.     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 Shares being offered
hereby.

     n.     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 Shares being offered
hereby  under  the  Securities  Act  or  cause  this  offering  of  Shares to be
integrated  with any prior offering of securities of the Company for purposes of
the  Securities Act.  Assuming the truth and accuracy of the representations and
warranties  of  the  Purchasers  set  forth  in Section 3 of this Agreement, the
Purchasers  will  not  be  statutory  underwriters within the meaning of Section
2(a)(11)  of  the  Securities  Act.

     o.     Form S-3 Eligibility.  The Company is currently eligible to register
            --------------------
the resale of its Common Stock on a registration statement on Form S-3 under the
Securities  Act.  There  exist  no  facts  or  circumstances  (including without
limitation any required approvals or waivers of any circumstances that may delay
or  prevent the obtaining of accountant's consents) that would prohibit or delay
the  preparation and filing of a registration statement on Form S-3 with respect
to  the  Registrable  Shares.

     p.     Disclosure.  The Company confirms that neither it nor any other
            ----------
person acting on its behalf has provided any of the Purchasers or its agents or
counsel with any information that constitutes or might constitute material
non-public information (other than information necessary to consummate the
transaction contemplated by this Agreement).  The Company understands and
confirms that the Purchasers shall be relying on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided
to the Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Schedules to this Agreement, furnished by or
on behalf of the Company are true and correct and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.

                                        9
<PAGE>
     q.     Internal Accounting Controls.  The Company maintains a system of
            ----------------------------
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

     r.     Insurance.  The Company will continue to be insured by insurers of
            ---------
recognized financial responsibility against such losses and risks and in such
amounts as are commensurate with similarly situated companies engaged in
businesses similar to those of the Company.

     s.     Regulatory Permits.  The Company possess all material certificates,
            ------------------
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as currently conducted (the "Permits"), and the Company has not received any
written notice of proceedings relating to the revocation or modification of any
such Permit.

5.     REGISTRATION  OF  SHARES.
       ------------------------

     a.     The Company shall:

          (i)  as  promptly as practicable, but not later than 30 days after the
               earliest  date  of  original issuance of any of the Shares (the "
               Filing  Deadline"), cause to be filed with the SEC a registration
               statement  on  Form S-3 pursuant to Rule 415 under the Securities
               Act  (the  "Resale  Registration  Statement"),  which  Resale
               Registration  Statement  shall  provide for the offer and sale of
               all  Registrable Shares held by Purchasers that have provided the
               information  required  pursuant  to  the  terms  of  Section 5(b)
               hereof;

          (ii) use  its reasonable best efforts to cause the Resale Registration
               Statement  to  be  declared  effective  by the SEC as promptly as
               practicable,  but  not later than 60 days after the filing of the
               Resale  Registration Statement with the SEC or, in the event of a
               review  by  the  SEC,  120  days;  and

          (iii)  use its reasonable best efforts to keep the Resale Registration
               Statement  continuously  effective,  supplemented  and  amended
               subject  to the provisions of Section 5(d) hereof (subject to the
               right  of  the  Company  to  suspend  the  use  of  the  Resale
               Registration  Statement  by  delivery  of  a Suspension Notice in
               accordance  with  Section 5(d) hereof) to the extent necessary to
               ensure that it (A) is available for resales of Registrable Shares
               by  the  Purchasers  to  the  benefit  of  this Agreement and (B)
               conforms  with  the  requirements  of  this  Agreement  and  the
               Securities  Act  and  the  rules

                                       10
<PAGE>
               and  regulations  of  the SEC promulgated thereunder as announced
               from  time  to  time,  for  a period (the "Effectiveness Period")
               ending  two  (2)  years  from  the  date  the Resale Registration
               Statement  is  declared  effective  by  the  SEC.

     b.     The Company hereby agrees to pay damages to each Purchaser in an
amount equal to 1.0% of such Purchaser's Investment Amount for each consecutive
thirty (30) day period following (i) the Filing Deadline (in the event the
Company fails to file the Resale Registration Statement on or before that date)
and (ii) the date upon which the Company receives comments from the SEC relating
to the Resale Registration Statement (in the event the Company fails to respond
to any such SEC comments within thirty (30) days of its receipt of such
comments); provided, however, that no damages shall be payable pursuant to this
           --------  -------
Section 5(b) after such date that the Resale Registration Statement is filed
with the SEC or such date that the Company responds to any SEC comments to the
Resale Registration Statement.

     c.     No Purchaser may include any of its Registrable Shares in the Resale
Registration Statement pursuant to this Agreement unless such Purchaser
furnishes to the Company in writing, prior to or on the 10th Business Day after
such Purchaser's receipt from the Company of the Purchaser Questionnaire (such
applicable deadline, the "Questionnaire Deadline"), such information regarding
the Purchaser and the distribution of Registrable Shares as the Company may
reasonably request for use in connection with the Resale Registration Statement
or Prospectus or preliminary Prospectus included therein and in any application
to be filed with or under state securities laws (the form of which request is
attached as Appendix A hereto regarding the sale of the Shares to the Purchasers
            ----------
and is referred to herein as the "Purchaser Questionnaire").  In connection with
all requests for information from the Purchasers with respect to inclusion of
Registrable Shares in the Resale Registration Statement, the Company shall
notify such Purchasers of the requirements set forth in the preceding sentence.
The Company agrees and undertakes that (i) it shall distribute a Purchaser
Questionnaire no later than 10 Business Days prior to the initial effectiveness
of the Resale Registration Statement to each Purchaser and (ii) upon the request
of any Purchaser made prior to 9:00 a.m., California time, on the second
Business Day before the initial effectiveness of the Resale Registration
Statement, the Company shall also distribute a Purchaser Questionnaire to such
Purchaser at the address set forth in any request by such Purchaser.  Purchasers
that do not complete the Purchaser Questionnaire and timely deliver it to the
Company shall not be named as selling security holders in the Prospectus or
preliminary Prospectus included in the Resale Registration Statement and
therefore shall not be permitted to sell any Registrable Shares pursuant to the
Resale Registration Statement.  Notwithstanding the foregoing, upon request from
a Purchaser that did not return a Purchaser Questionnaire on a timely basis
because it was a subsequent transferee of Registrable Shares after the Company
distributed the Purchaser Questionnaire, (i) the Company shall distribute a
Purchaser Questionnaire to such Purchaser at the address set forth in the
request and (ii) upon receipt of a properly completed Purchaser Questionnaire
from such Purchaser, the Company shall use its reasonable efforts to name such
Purchaser as a selling security holder by means of an amendment or, if permitted
by the SEC, by means of a Prospectus supplement to the Resale Registration
Statement.  Each Purchaser as to which the Resale Registration Statement is
being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make information previously furnished to
the Company by such Purchaser

                                       11
<PAGE>
not  materially  misleading.

     d.     In connection with the Resale Registration Statement, the Company
shall use its reasonable best efforts to effect such registration to permit the
sale of the Registrable Shares, and pursuant thereto, shall prepare and file
with the SEC a Resale Registration Statement relating to the registration of the
Registrable Shares on Form S-3.  The Company represents and warrants that it
currently meets the requirements for use of Form S-3 for registration of the
resale of the Registrable Shares, and has no actual knowledge of any facts which
would reasonably cause the Company to fail to meet such requirements.

          In connection with the Resale Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of
Registrable Shares, the Company shall:

          (i)  Subject to any notice by the Company of the existence of any fact
          or event of the kind described in Section 5(e) and the Company's right
          to  invoke a Suspension Period in the manner described in this Section
          5(d)(i),  use  commercially  reasonable  efforts  to  keep  the Resale
          Registration Statement continuously effective during the Effectiveness
          Period;  upon  the occurrence of any event that would cause the Resale
          Registration  Statement  or  the  Prospectus  contained therein to (A)
          contain  a  material  misstatement or omission or (B) not be effective
          and  usable  for resale of Registrable Shares during the Effectiveness
          Period,  unless  a  Suspension  Period  is then in effect, the Company
          shall  file  promptly  an  appropriate  amendment  to  the  Resale
          Registration  Statement,  a  supplement  to the Prospectus or a report
          filed  with  the  SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of
          the  Exchange  Act,  in  the  case  of clause (A), correcting any such
          misstatement  or  omission,  and,  in the case of either clause (A) or
          (B), use commercially reasonable efforts to cause such amendment to be
          declared  effective  and  the  Resale  Registration  Statement and the
          related  Prospectus  to  become  usable for their intended purposes as
          soon  as  practicable  thereafter.  Notwithstanding the foregoing, the
          Company  may  suspend  the  effectiveness  of  the Resale Registration
          Statement  by  written  notice  to  the Purchasers for a period not to
          exceed  an  aggregate  of  60  days  in  any 360-day period (each such
          period,  a  "Suspension  Period");  provided  that  the  Company shall
          promptly  notify  each  Purchaser  in writing of the date on which the
          Suspension  Period  will  begin  and  the date on which the Suspension
          Period  ends  and  no  single  Suspension Period shall exceed 30 days.

          (ii)  Prepare and file with the SEC such amendments and post-effective
          amendments to the Resale Registration Statement as may be necessary to
          keep  the  Resale  Registration  Statement  effective  during  the
          Effectiveness  Period;  cause the Prospectus to be supplemented by any
          required  Prospectus  supplement,  and  as so supplemented to be filed
          pursuant  to  Rule 424 (it being understood that the Company shall not
          be  required  to  file a Prospectus supplement pursuant to Rule 424(b)
          with  respect  to  any Purchaser that failed to submit their Purchaser
          Questionnaire  by  the  Questionnaire  Deadline)  under  the

                                       12
<PAGE>
          Securities  Act, and to comply fully with the applicable provisions of
          Rules  424  and  430A under the Securities Act in a timely manner; and
          comply  with  the provisions of the Securities Act with respect to the
          disposition  of  all  Registrable  Shares  covered  by  the  Resale
          Registration Statement during the applicable period in accordance with
          the  intended method or methods of distribution by the sellers thereof
          set  forth in the Resale Registration Statement or a supplement to the
          Prospectus.

     e.     Each Purchaser agrees that, upon receipt of any notice (a
"Suspension Notice") from the Company of the existence of any fact or the
happening of any event, during the Effectiveness Period, that makes any
statement of a material fact made in the Resale Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated by
reference therein untrue, or that requires the making of any additions to or
changes in the Resale Registration Statement or the Prospectus in order to make
the statements therein not misleading, such Purchaser shall discontinue
disposition of Registrable Shares pursuant to the Resale Registration Statement
and any use of the associated Prospectus until:

          (i)  such Purchaser has received copies of the supplemented or amended
          Prospectus  contemplated  by  Section  5(d)  hereof;  or

          (ii)  such Purchaser is advised in writing by the Company that the use
          of  the  Prospectus  may  be  resumed,  and has received copies of any
          additional or supplemental filings that are part of or incorporated by
          reference  in  the  Prospectus.

     Each  Purchaser  agrees  to keep the receipt of a Suspension Notice and its
contents  confidential.  If  so  directed  by  the  Company, each Purchaser will
deliver to the Company all copies, other than permanent file copies then in such
Purchaser's  possession, of the Prospectus covering such Registrable Shares that
was  current  at  the  time  of  receipt  of  such  Suspension  Notice.

     The  Company  agrees  that  the  Suspension  Notice  shall  not include any
material  non-public information other than such information necessary to inform
the  Purchasers  that  a  Suspension  Period  has  been  implemented.

     f.     All expenses incident to the Company's performance of or compliance
with Section 5 of this Agreement shall be borne by the Company regardless of
whether a Resale Registration Statement becomes effective, including, without
limitation:

          (i)  all  registration  and  filing  fees  and  expenses;

          (ii)  all  fees  and  expenses  of  compliance  with federal and state
          securities  laws;

          (iii) all expenses of printing (including printing of Prospectuses and
          certificates  for  the  Common  Stock)  and the Company's expenses for
          messenger  and  delivery  services  and  telephone;

          (iv)  all  fees  and  disbursements  of counsel to the Company and all
          Transfer

                                       13
<PAGE>
          agent  fees;

          (v)  all  application  and  filing fees in connection with listing (or
          authorizing  for  quotation) the Common Stock on a national securities
          exchange  or  automated  quotation system pursuant to the requirements
          hereof;  and

          (vi)  all  fees  and  disbursements  of  independent  certified public
          accountants  of  the  Company.

     Each Purchaser shall bear all costs associated with selling commissions,
discounts and expenses of any financial or legal advisors engaged to review the
Resale Registration Statement.

     The Company shall permit the Purchasers and their legal counsel to review
and comment upon the Resale Registration Statement at least two Business Days
prior to their filing with the SEC, and not file any document in a form to which
Purchasers reasonably object in a timely manner.

6.     COVENANTS.
       ---------

     a.     Satisfaction  of  Conditions.  The  parties  shall  use  their  best
            ----------------------------
efforts  to  satisfy  in  a  timely  manner  each of the conditions set forth in
Section  7  and  Section  8  of  this  Agreement.

     b.     Form  D;  Blue  Sky  Laws.  The Company agrees to file a Form D with
            -------------------------
respect  to  the  Shares  as  required  under Regulation D and to provide a copy
thereof  to each Purchaser promptly after such filing.  The Company shall, on or
before  the  Closing  Date,  take  such  action  as the Company shall reasonably
determine is necessary to qualify the Shares for sale to the Purchasers pursuant
to  this  Agreement under applicable securities or "blue sky" laws of the states
of  the  United States or obtain exemption therefrom, and shall provide evidence
of  any  such action so taken to each Purchaser on or prior to the Closing Date.

     c.     Reporting  Status.  So  long  as  a  Purchaser beneficially owns any
            -----------------
Shares  or  has  the right to acquire any Shares pursuant to this Agreement, the
Company shall timely file all reports required to be filed with the SEC pursuant
to the Exchange Act, and shall not terminate its status as an issuer required to
file  reports  under  the Exchange Act even if the Exchange Act or the rules and
regulations  thereunder  would  permit  such  termination.

     d.     Use  of  Proceeds.  The  Company shall use the net proceeds from the
            -----------------
sale  of  the  Shares  for  general business purposes, but in no event shall the
Company  use  such  net proceeds to repurchase any outstanding securities of the
Company.

     e.     Listing.  On  the  Closing  Date, the Company shall have applied for
            -------
the  listing of the Shares, in each case, upon each national securities exchange
and  automated  quotation  system, if any, upon which shares of Common Stock are
then  listed or quoted and shall maintain, so long as any other shares of Common
Stock  shall be so listed, such listing of all Shares from time to time issuable
hereunder.  The  Company  shall  use  its reasonable best efforts to include its
shares of Common Stock in The Nasdaq Stock Market at the earliest practical date
and,  in  any  event,  by the date the first

                                       14
<PAGE>
registration  statement  covering the resale of the Shares is declared effective
by  the SEC and will comply in all respects with the Company's reporting, filing
and  other  obligations  under  the  bylaws or rules of The Nasdaq Stock Market.

     f.     No  Integrated  Offerings.  The Company shall not make any offers or
            --------------------------
sales  of  any  security  (other than the Shares) under circumstances that would
require  registration  of  the  Shares being offered or sold hereunder under the
Securities  Act or cause this offering of Shares to be integrated with any other
offering  of  securities by the Company for any purposes, including for purposes
of  any  shareholder  approval  provision  applicable  to  the  Company  or  its
securities.

     g.     Securities Laws Disclosure; Publicity.  The Company shall issue a
            -------------------------------------
press release reasonably acceptable to the Purchasers disclosing the
transactions contemplated hereby
and file a Current Report on Form 8-K disclosing the material terms of the
transactions contemplated hereby.  In addition, the Company will make such other
filings and notices in the manner and time required by the SEC and the trading
market on which the Shares are listed.  Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the
name of any Purchaser in any filing with the SEC (other than the Resale
Registration Statement and any exhibits to filings made in respect of this
transaction in accordance with periodic filing requirements under the Exchange
Act) or any regulatory agency or trading market, without the prior written
consent of such Purchaser, except to the extent such disclosure is required by
law or trading market regulations, in which case the Company shall provide the
Purchaser with prior notice of such disclosure.

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

     The  obligation  of  the  Company  hereunder  to issue and sell Shares to a
Purchaser  at the Closing hereunder is subject to the satisfaction, at or before
the  Closing  Date,  of  each  of  the  following  conditions thereto; provided,
                                                                       --------
however,  that  these  conditions  are for the Company's sole benefit and may be
-------
waived  by  the  Company  at  any  time  in  its  sole  discretion.

     a.     The  applicable  Purchaser shall have executed the signature page to
this  Agreement  and  delivered  the  same  to  the  Company.

     b.     The  applicable  Purchaser  shall  have  delivered  such Purchaser's
Investment  Amount  in  accordance  with  Section  2(b)  above.

     c.     The representations and warranties of the applicable Purchaser shall
be  true  and  correct  as  of  the date when made and as of the Closing Date as
though  made  at that time (except for representations and warranties that speak
as  of  a  specific date, which representations and warranties shall be true and
correct  as  of  such  date), and the applicable Purchaser shall have performed,
satisfied  and  complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with  by  the  applicable  Purchaser  at  or  prior  to  the  Closing  Date.

     d.     No  statute,  rule,  regulation,  executive  order,  decree, ruling,
injunction,  action,  proceeding  or  interpretation  shall  have  been enacted,
entered, promulgated, endorsed or adopted by

                                       15
<PAGE>
any  court  or  governmental  authority  of  competent  jurisdiction  or  any
self-regulatory organization, or the staff of any thereof, having authority over
the  matters  contemplated hereby which questions the validity of, or challenges
or  prohibits  the consummation of, any of the transactions contemplated by this
Agreement.

8.     CONDITIONS  TO  EACH  PURCHASER'S  OBLIGATION  TO  PURCHASE.
       -----------------------------------------------------------

     The  obligation  of  each  Purchaser  hereunder  to  purchase  Shares to be
purchased  by  it  hereunder  is  subject  to the satisfaction, at or before the
Closing  Date,  of  each  of  the  following  conditions,  provided  that  these
                                                           --------
conditions  are  for  such  Purchaser's  sole  benefit and may be waived by such
Purchaser  at  any  time  in  such  Purchaser's  sole  discretion:

     a.     The  Company  shall  have  executed  the  signature  pages  to  this
Agreement  and  delivered  the  same  to  the  Purchaser.

     b.     The  trading  in  the  Company's  Common  Stock  shall not have been
suspended  or  be under threat of suspension by the SEC or any governing body of
The  Nasdaq  Stock  Market.

     c.     The  representations and warranties of the Company shall be true and
correct  as  of  the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date,  which representations and warranties shall be true and correct as of such
date)  and  the  Company  shall  have  performed,  satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to  the Closing Date.  The Purchaser shall have received a certificate, executed
on behalf of the Company by its Chief Financial Officer, dated as of the Closing
Date,  to  the  foregoing  effect  and  attaching true and correct copies of the
resolutions  adopted  by  the  Company's  Board  of  Directors  authorizing  the
execution, delivery and performance by the Company of its obligations under this
Agreement.

     d.     No  statute,  rule,  regulation,  executive  order,  decree, ruling,
injunction,  action,  proceeding  or  interpretation  shall  have  been enacted,
entered, promulgated, endorsed or adopted by any court or governmental authority
of  competent  jurisdiction or any self-regulatory organization, or the staff of
any  thereof,  having  authority  over  the  matters  contemplated  hereby which
questions  the  validity of, or challenges or prohibits the consummation of, any
of  the  transactions  contemplated  by  this  Agreement.

     e.     As  of  the Closing Date, there shall not have occurred any Material
Adverse  Effect.

     f.     The  Company  shall have provided advance notice to The Nasdaq Stock
Market  of  the  issuance  of  the Shares if so required by the rules applicable
thereto.

     g.     The  Purchaser  shall  have  received  an  opinion  of the Company's
counsel,  dated  as  of  the  Closing  Date.

9.     GOVERNING  LAW  MISCELLANEOUS.
       -----------------------------

                                       16
<PAGE>
     a.     Governing  Law;  Jurisdiction.  This  Agreement shall be governed by
            -----------------------------
and construed in accordance with the laws of the State of New York applicable to
contracts  made  and  to  be  performed  in  the State of New York.  Each of the
parties  irrevocably  consents  to  the  nonexclusive jurisdiction of the United
States  federal  courts and the state courts located in the State of New York in
any  suit or proceeding based on or arising under this Agreement and irrevocably
agrees  that  all claims in respect of such suit or proceeding may be determined
in  such  courts.  Each  of  the  parties,  irrevocably waives the defense of an
inconvenient  forum  to the maintenance of such suit or proceeding.  Each of the
parties  further  agrees that service of process upon such party mailed by first
class  mail  to  the  address set forth in Section 9(f) shall be deemed in every
respect  effective  service  of  process  upon  such  party  in any such suit or
proceeding.  Nothing  herein  shall  affect  the right of any Purchaser to serve
process in any other manner permitted by law. Each of the parties, agrees that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and  may  be  enforced in other jurisdictions by suit on such judgment or in any
other  lawful  manner.

     b.     Counterparts.  This  Agreement  may  be  executed  in  two  or  more
            ------------
counterparts,  all  of  which shall be considered one and the same agreement and
shall  become  effective  when  counterparts  have been signed by each party and
delivered  to the other party.  This Agreement, once executed by a party, may be
delivered  to  the  other  parties hereto by facsimile transmission of a copy of
this  Agreement bearing the signature of the party so delivering this Agreement.
In  the  event  any  signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed Execution Page(s)
hereof to be physically delivered to the other party within five (5) days of the
execution  hereof.

     c.     Headings.  The  headings  of  this  Agreement are for convenience of
            --------
reference  and  shall  not  form  part of, or affect the interpretation of, this
Agreement.

     d.     Severability.  If  any  provision of this Agreement shall be invalid
            ------------
or  unenforceable in any jurisdiction, such invalidity or unenforceability shall
not  affect the validity or enforceability of the remainder of this Agreement or
the  validity  or  enforceability  of  this Agreement in any other jurisdiction.

     e.     Entire  Agreement;  Amendments;  Waiver.  This  Agreement  and  the
            ---------------------------------------
instruments  referenced  herein  contain the entire understanding of the parties
with  respect  to  the  matters  covered  herein  and  therein  and,  except  as
specifically set forth herein or therein, neither the Company nor the Purchasers
make  any representation, warranty, covenant or undertaking with respect to such
matters.  No  provision of this Agreement may be waived or amended other than by
an  instrument  in  writing  signed  by  the  Company  and, by the Purchasers as
provided in Section 9(l) hereof.  Any waiver by the Purchasers, on the one hand,
or  the  Company,  on  the  other  hand,  of  a  breach of any provision of this
Agreement  shall  not  operate  as  or  be construed to be a waiver of any other
breach  of  such  provision  of  or  any  breach  of any other provision of this
Agreement.  The  failure  of the Purchasers, on the one hand, or the Company, on
the  other hand to insist upon strict adherence to any term of this Agreement on
one  or more occasions shall not be considered a waiver or deprive that party of
the  right  thereafter to insist upon strict adherence to that term or any other
term  of  this  Agreement.

     f.     Notices.  Any  notices  required  or permitted to be given under the
            -------
terms  of  this  Agreement shall be sent by certified or registered mail (return
receipt  requested)  or  delivered

                                       17
<PAGE>
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)  747-7120
          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  Reinstra,  Esq.

If  to the Purchaser, to the address set forth under the Purchaser's name on the
Execution  Page  hereto  executed  by  such  Purchaser,  with  a  copy  to:

          Halpern  Capital,  Inc.
          1111  Kane  Concourse,  Suite  401
          Bay  Harbor  Island,  FL  33154
          Facsimile  No.:   (413)  521-8020
          Attention:  Baruch  Halpern

Each  party  hereto may from time to time change its address or facsimile number
for notices under this Section 9 by giving at least ten (10) days' prior written
notice  of  such  changed  address  or  facsimile  number,  in  the  case of the
Purchasers  to  the  Company,  and  in  the  case  of  the Company to all of the
Purchasers.

     g.     Successors  and  Assigns.  This  Agreement shall be binding upon and
            ------------------------
inure  to  the  benefit  of  the  parties and their successors and assigns.  The
Company  shall  not assign this Agreement or any rights or obligations hereunder
without  the  prior  written  consent  of  the  Purchasers.

     h.     Third  Party  Beneficiaries.  This  Agreement  is  intended  for the
            ---------------------------
benefit  of  the  parties  hereto  and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by  any  other  person.

     i.     Survival.  The representations and warranties of the Company and the
            --------
Agreements

                                       18
<PAGE>
and  covenants  of the Company shall survive the Closing notwithstanding any due
diligence  investigation  conducted by or on behalf of the Purchasers. Moreover,
none  of the representations and warranties made by the Company herein shall act
as  a  waiver  of  any  rights or remedies a Purchaser may have under applicable
federal  or  state  securities  laws.  The  Company agrees to indemnify and hold
harmless  each  Purchaser  and  each  of  such  Purchaser's officers, directors,
employees,  partners, members, agents and affiliates for loss or damage relating
to  the  Shares  purchased  hereunder  arising  as a result of or related to any
breach  by  the  Company  of  any  of its representations or covenants set forth
herein.

     j.     Further Assurances.  Each party shall do and perform, or cause to be
            ------------------
done  and  performed,  all  such  further acts and things, and shall execute and
deliver  all  such other agreements, certificates, instruments and documents, as
the  other  party  may  reasonably  request in order to carry out the intent and
accomplish  the  purposes  of  this  Agreement  and  the  consummation  of  the
transactions  contemplated  hereby.

     k.     Equitable  Relief.  Each  party  acknowledges that a breach by it of
            -----------------
its  obligations  hereunder  will cause irreparable harm to the other parties by
vitiating  the  intent  and  purpose  of  the  transactions contemplated hereby.
Accordingly,  each party acknowledges that the remedy at law for 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.

                                       19
<PAGE>
     l.     Determinations.  Except  as otherwise expressly provided herein, all
            --------------
consents,  approvals  and  other  determinations  to  be  made by the Purchasers
pursuant  to  this  Agreement  and  all  waivers  and  amendments  to  or of any
provisions  in  this  Agreement  prior  to the Closing Date to be binding upon a
Purchaser  shall  be  made  by  such Purchaser and except as otherwise expressly
provided  herein,  all  consents, approvals and other determinations (other than
amendments  to  the  terms  and  provisions of this Agreement) to be made by the
Purchasers  pursuant  to  this Agreement and all waivers and amendments to or of
any  provisions  in  this  Agreement  after  the  Closing  Date shall be made by
Purchasers  (excluding  Purchasers  who are affiliates of the Company) that have
invested  more  than  fifty  percent  (50%)  of the aggregate Investment Amounts
invested  by  all  Purchasers  (excluding  Purchasers  who are affiliates of the
Company).

     m.     Independent  Nature  of  Investors'  Obligations  and  Rights.  The
            -------------------------------------------------------------
obligations  of each Purchaser are several and not joint with the obligations of
any  other  Purchaser, and no Purchaser shall be responsible for the performance
of  obligations  of any other Purchaser under this Agreement.  Nothing contained
herein,  and  no  action  taken  by  any  Purchaser hereunder shall be deemed to
constitute  the  Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way  acting  in  concert  or  as a group with respect to such obligations or the
transactions  contemplated  by this Agreement.  Each Purchaser shall be entitled
to  independently  protect  and enforce its rights, including without limitation
the  rights  arising out of this Agreement and it shall not be necessary for any
other  Purchaser  to be joined as an additional party in any proceeding for such
purpose.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       20
<PAGE>
     IN  WITNESS  WHEREOF, the undersigned Purchaser and the Company have caused
this  Agreement  to  be  duly  executed  as  of  the  date  first above written.

                                       COMPANY:

                                       GENUS,  INC.

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

                                       21
<PAGE>
THE  PURCHASER:
[____________________________]

By:________________________________
Name:______________________________
Title:_____________________________
Investment  Amount:  $_____________
Residence: ________________________
___________________________________
___________________________________
Address:___________________________
___________________________________
___________________________________
Telephone  No.: (    )_____________
Telecopy  No.:  (    )_____________
Attention:_________________________

with  copies  of  all  notices  to:

___________________________________
___________________________________
___________________________________
___________________________________
Telephone  No.: (   )______________
Telecopy  No.:  (   )______________
Attention:_________________________

                                       22
<PAGE>
                                                                      APPENDIX A

                                __________, 2003

                                   GENUS, INC.

             FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

     The undersigned beneficial Purchaser of shares of common stock, no par
value per share (the "Shares" or "Registrable Shares"), of Genus, Inc. ("Genus"
or "Registrant"), issued or issuable pursuant to that certain Stock Purchase and
Registration Agreement dated November 7, 2003 (the "Purchase Agreement")
understands that the Registrant has filed or intends to file with the Securities
and Exchange Commission (the "Commission") a registration statement on Form S-3
(the "Resale Registration Statement") for the registration and resale under Rule
415 of the Securities Act of 1933, as amended (the "Securities Act" ), of the
Shares, in accordance with the terms of the Purchase Agreement.

     Each capitalized term not otherwise defined herein shall have the meaning
ascribed thereto in the Purchase Agreement.  Each beneficial owner of
Registrable Shares is entitled to the benefits of the Purchase Agreement.  In
order to sell or otherwise dispose of any Registrable Shares pursuant to the
Resale Registration Statement, a beneficial owner of Registrable Shares
generally will be required to be named as a selling securityholder in the
related prospectus, deliver a prospectus to purchasers of Registrable Shares and
be bound by those provisions of the Purchase Agreement applicable to such
beneficial owner.  Beneficial owners that do not complete this Notice and
Questionnaire and deliver it to Genus within 10 Business Days of the date of
this Notice and Questionnaire as provided below will not be named as selling
securityholders in the prospectus and therefore will not be permitted to sell
any Registrable Shares pursuant to the Resale Registration Statement.
Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Resale Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus at the time of effectiveness.  BENEFICIAL OWNERS THAT DO NOT
COMPLETE THIS NOTICE AND QUESTIONNAIRE AND TIMELY DELIVER IT TO GENUS SHALL NOT
BE NAMED AS SELLING SECURITYHOLDERS IN THE PROSPECTUS INCLUDED IN THE RESALE
REGISTRATION STATEMENT AND THEREFORE SHALL NOT BE PERMITTED TO SELL ANY
REGISTRABLE SHARES PURSUANT TO THE RESALE REGISTRATION STATEMENT.

     Certain legal consequences arise from being named as a selling
securityholder in the Resale Registration Statement and the related prospectus.
Accordingly, Purchasers and beneficial owners of Registrable Shares are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Resale Registration
Statement and the related prospectus.

                                       23
<PAGE>
                                     NOTICE

     The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Shares hereby gives notice to Genus of its intention to sell or
otherwise dispose of Registrable Shares beneficially owned by it and listed
below in Item 3 (unless otherwise specified under Item 3) pursuant to the Resale
Registration Statement.  The undersigned, by signing and returning this Notice
and Questionnaire, understands that it will be bound by the terms and conditions
of this Notice and Questionnaire and the Purchase Agreement.

     Upon any sale of Registrable Shares pursuant to the Resale Registration
Statement, the undersigned will be required to deliver to Genus the Notice of
Transfer (completed and signed) set forth in Exhibit 1 attached hereto and
                                             ---------
hereby undertakes to do so.
     The undersigned hereby provides the following information to Genus and
represents and warrants that such information is accurate and complete:
                                  QUESTIONNAIRE
1.   (a)Full Legal Name of Selling Securityholder:

     ___________________________________________________________________________

     (b)  Full Legal Name of Registered Purchaser (if not the same as (a) above)
          through  which  Registrable  Shares  listed  in Item 3 below are held:

     ___________________________________________________________________________

     (c)  Full  Legal Name of DTC Participant (if applicable and if not the same
          as  (b) above) through which Registrable Shares listed in Item 3 below
          are  held:

     ___________________________________________________________________________

2.   Address for Notices to Selling Securityholder:
     ___________________________________________________________________________
     ___________________________________________________________________________
     ___________________________________________________________________________
     Telephone:_________________________________________________________________
     Fax:_______________________________________________________________________
     Contact Person:____________________________________________________________

3.   Beneficial Ownership of Registrable Shares:

     (a)Type and Principal Amount of Registrable Shares beneficially owned:

     ___________________________________________________________________________

                                       24
<PAGE>
     (b)CUSIP No(s). of such Registrable Shares beneficially owned:

     ___________________________________________________________________________

4.   Beneficial  Ownership  of  other  securities  of  Genus  owned  by  Selling
     Securityholder:

     Except  as  set  forth  below  in  this  Item 4, the undersigned is not the
     beneficial  or  registered  owner of any securities of Genus other than the
     Registrable  Shares  listed  above  in  Item  3.

     (a)Type  and  Amount  of other securities beneficially owned by the Selling
     Securityholder:
     ________________________________________________________________________

     ________________________________________________________________________

     (b)CUSIP No(s). of such other securities beneficially owned:
     ________________________________________________________________________

     ________________________________________________________________________

5.   Relationships with Genus:

     Except as set forth below, neither the undersigned nor any of its
     affiliates, officers, directors or principal equity holders (5% or more)
     has held any position or office or has had any other material relationship
     with Genus (or its predecessors or affiliates) during the past three years.

     State any exceptions here:_________________________________________________

________________________________________________________________________________

6.   Plan of Distribution:

     Except  as  set  forth  below,  the  undersigned  (including  its donees or
     pledgees) intends to distribute the Registrable Shares listed above in Item
     3  pursuant  to  the  Resale  Registration Statement only as follows (if at
     all): Such Registrable Shares may be sold from time to time directly by the
     undersigned  or,  alternatively,  through  underwriters,  broker-dealers or
     agents.  If  the  Registrable  Shares  are  sold  through  underwriters  or
     broker-dealers,  the  Selling  Securityholder  will  be  responsible  for
     underwriting  discounts  or  commissions  or  agent's  commissions.  Such
     Registrable Shares may be sold in one or more transactions at fixed prices,
     at  prevailing  market  prices  at  the  time  of  sale,  at varying prices
     determined  at the time of sale, or at negotiated prices. Such sales may be
     effected  in transactions (which may involve block transactions) (i) on any
     national  securities exchange or quotation service on which the Registrable
     Shares  may  be  listed  or  quoted  at  the  time  of  sale,  (ii)  in the
     over-the-counter  market,  (iii)  in  transactions  otherwise  than on such
     exchanges  or  services or in the over-the-counter market, (iv) in ordinary
     brokers'  transactions,  (v)  in  purchasers  by  brokers,  dealers  or
     underwriters  as

                                       25
<PAGE>
     principal  and resale by the Selling Securityholders for their own accounts
     pursuant  to  this  prospectus,  (vi)  "at  the  risk of the market," to or
     through  market  makers, or into an existing market the Registrable Shares,
     (vii)  in  other  ways  not  involving market makers or established trading
     markets,  including  direct  sales  to purchasers or sales effected through
     agents,  (viii) through transactions in swaps or other derivatives (whether
     exchange-listed or otherwise), (ix) to cover short sales or (x) through the
     writing  of  options. In connection with sales of the Registrable Shares or
     otherwise,  the  undersigned  may  enter  into  hedging  transactions  with
     broker-dealers,  which may in turn engage in short sales of the Registrable
     Shares  in the course of hedging positions they assume. The undersigned may
     also  sell Registrable Shares short and deliver Registrable Shares to close
     out short positions, or loan or pledge Registrable Shares to broker-dealers
     that  in  turn  may  sell  such  securities.

     State any exceptions here:_________________________________________________
________________________________________________________________________________

Note:  In no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Shares without the prior written
agreement of Genus.

     The undersigned acknowledges that it understands its obligation to comply
with the provisions of the Exchange Act and the rules thereunder relating to
stock manipulation, particularly Regulation M thereunder (or any successor rules
or regulations), in connection with any offering of Registrable Shares pursuant
to the Purchase Agreement.  The undersigned agrees that neither it nor any
person acting on its behalf will engage in any transaction in violation of such
provisions.

     In accordance with the undersigned's obligation under the Purchase
Agreement, the undersigned agrees to promptly notify Genus of any inaccuracies
or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Resale Registration Statement remains
effective.  All notices hereunder and pursuant to the Purchase Agreement shall
be made in writing at the address set forth below.

     In  the  event  that  the  undersigned  transfers all or any portion of the
Registrable  Shares  listed  in  Item  3  above  after  the  date  on which such
information  is  provided  to  Genus,  the  undersigned  agrees  to  notify  the
transferee(s)  at  the time of transfer of its rights and obligations under this
Notice  and  Questionnaire  and  the  Purchase  Agreement.

     By signing below, the undersigned consents to the disclosure of the
information contained herein in, its answers to Items 1 through 6 above and the
inclusion of such information in the Resale Registration Statement and the
related prospectus.  The undersigned understands that such information will be
relied upon by Genus in connection with the preparation or amendment of the
Resale Registration Statement and the related prospectus.

     Once  this  Notice  and  Questionnaire  is  executed by the undersigned and
received  by  Genus,  the  terms  of  this  Notice  and  Questionnaire,  and the
representations  and  warranties  contained  herein,  shall be binding on, shall
inure  to  the benefit of and shall be enforceable by the

                                       26
<PAGE>
respective successors, heirs, personal representatives, and assigns of Genus and
the undersigned with respect to the Registrable Shares beneficially owned by the
undersigned  and listed in Item 3 above. This Agreement shall be governed in all
respects  by  the  laws  of  the  State  of  New  York.

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Date:________________________________  _________________________________________
                                       Beneficial Owner

                                       By:______________________________________
                                       Name:____________________________________
                                       Title:___________________________________

               PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND

                        QUESTIONNAIRE TO GENUS, INC. AT:

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

                                       27
<PAGE>
                                                                       EXHIBIT 1
              NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

Wilson  Sonsini  Goodrich  &  Rosati
650  Page  Mill  Road
Palo  Alto,  CA  94304
Attention:  Mark  Reinstra
Phone:(650) 493-9300
Fax:      (650) 493-6811

RE:     GENUS, INC. (THE "COMPANY") COMMON STOCK TRANSFER

Dear Sirs:

     Please be advised that __________ has transferred ___________ shares of the
Company's Common Stock pursuant to the Registration Statement on Form S-3 (File
No.___-______) filed by the Company.

     We hereby certify that the prospectus delivery requirements, if any, of the
Securities  Act  of  1933,  as  amended, have been satisfied with respect to the
transfer  described above and that the above-named beneficial owner of the Notes
or  Common  Stock  is  named as a selling securityholder in the Prospectus dated
__________, 2003 or in amendments or supplements thereto, and that the number of
shares  of  Common  Stock  transferred  are  all/a  portion  (please  circle  as
appropriate) of the Common Stock listed for resale in such Prospectus as amended
or  supplemented  opposite  such  owner's  name.

                                        Very truly yours,

                                        ________________________________________
                                                         (Name)

                                        By: ____________________________________
                                                   (Authorized Signature)

                                       28
<PAGE>

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