Exhibit 4.16


 


THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.


 


FOCUS
ENHANCEMENTS, INC.


 


COMMON
STOCK PURCHASE WARRANT


 


1. Issuance;
Certain Definitions. For good and valuable consideration, the receipt of
which is hereby acknowledged by FOCUS ENHANCEMENTS, INC.,
a Delaware corporation (the “Company”), Marketing
By Design, or registered
assigns (the “Holder”) is hereby granted the right to purchase at any time
until 5:00 P.M., New York City time, on April 7,
2009 (the “Expiration Date”), 30,000 (thirty thousand)
fully paid and non-assessable shares of the Company’s Common Stock, $0.01 par
value per share (the “Common Stock”), at an initial exercise price  (the “Exercise Price”) of $0.79 (seventy-nine cents) per share,
subject to further adjustment as set forth herein. Such Warrant shall vest in
accordance with Appendix A. 


 


2. Exercise
of Warrants.


 


(a)                                  This
Warrant is exercisable in whole or in part at any time and from time to
time. Such exercise shall be effectuated by submitting to the Company (either
by delivery to the Company or by facsimile transmission as provided in Section 8
hereof) a completed and duly executed Notice of Exercise (substantially in the form attached
to this Warrant) as provided in this paragraph. The date such Notice of
Exercise is faxed to the Company shall be the “Exercise Date,” provided that
the Holder of this Warrant tenders this Warrant Certificate to the Company
within five (5) business days thereafter and at the time of such Notice of
Exercise the Company has received payment for the shares being purchased. The
Notice of Exercise shall be executed by the Holder of this Warrant and shall
indicate the number of shares then being purchased pursuant to such exercise. Upon
surrender of this Warrant Certificate, together with appropriate payment of the
Exercise Price for the shares of Common Stock purchased, the Holder shall be
entitled to receive a certificate or certificates for the shares of Common
Stock so purchased.


 


(b)                                 The
Exercise Price per share of Common Stock for the shares then being exercised
shall be payable in cash by wire, certified or official bank check.


 


(c)                                  In
no event shall Holder exercise this Warrant for less than ten thousand (10,000)
Warrant Shares unless the Holder has a Warrant for less than ten thousand
(10,000) Warrant Shares, in which case Holder shall be required to exercise the
Warrant for all remaining Warrant Shares on the Exercise Date.


 

















 


(d)                                 The
Holder shall be deemed to be the holder of the shares issuable to it in
accordance with the provisions of this Section 2 only on and after the
Exercise Date.


 


3. Reservation
of Shares. At all times during the term of this Warrant the Company  shall 
reserve for issuance upon exercise of this Warrant such number of shares
of its Common Stock as shall be required for issuance upon exercise of this
Warrant (the “Warrant Shares”).


 


4. Mutilation
or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) receipt of reasonably satisfactory
indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new
Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.


 


5. Rights
of the Holder. Until the Warrant is exercised in whole or in part, the
Holder shall not, by virtue hereof, be entitled to any rights of a stockholder
in the Company, either at law or equity, and the rights of the Holder shall be
limited to those expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein.


 


6. Adjustments.


 


6.1                                 Adjustment
Mechanism. If an adjustment of the Exercise Price is required pursuant to
this Section 6, the Holder shall be entitled to purchase such number of
shares of Common Stock as will cause (i) the total number of shares of
Common Stock Holder is entitled to purchase pursuant to this Warrant,
multiplied by (ii) the adjusted Exercise Price per share, to equal (iii) the
dollar amount of the total number of shares of Common Stock Holder is entitled
to purchase before adjustment multiplied by the total Exercise Price
immediately before adjustment.


 


6.2                                 Capital
Adjustments. In case of any stock split or reverse stock split, stock
dividend, reclassification of the Common Stock, recapitalization, merger or
consolidation, or like capital adjustment affecting the Common Stock of the
Company prior to the exercise of this Warrant or its applicable portion, the
provisions of this Section 6 shall be applied as if such capital
adjustment event had occurred immediately prior to the exercise date of this
Warrant and the original Exercise Price had been fairly allocated to the stock
resulting from such capital adjustment; and in other respects the provisions of
this Section shall be applied in a fair, equitable and reasonable manner,
as determined by the Company’s Board of Directors in its absolute
discretion,  so as to give effect, as
nearly as may be practicable, to the purposes hereof.


 


6.3                                 Spin
Off. If, for any reason, prior to the exercise of this Warrant in full, the
Company spins off or otherwise divests itself of a part of its business or
operations or disposes all or of a part of its assets in a transaction
(the “Spin Off”) in which the Company does not receive compensation for such
business, operations or assets, but causes securities of another entity to be
issued to Common Stock security holders of the Company, then the Company
shall  notify


 


2

















 


the Holder at least twenty  (20) days prior to the record date with
respect to such Spin-Off.


 


7. Transfer
to Comply with the Securities Act; Restriction on Sales; Registration Rights.


 


7.1                                 Transfer.
This Warrant has not been registered under the Securities Act of 1933, as
amended, (the “Act”) and has been issued to the Holder for investment and not
with a view to the distribution of either the Warrant or the Warrant Shares. Neither
this Warrant nor any of the Warrant Shares or any other security issued or
issuable upon exercise of this Warrant may be sold, transferred, pledged
or hypothecated in the absence of an effective registration statement under the
Act relating to such security or an opinion of counsel satisfactory to the
Company that registration is not required under the Act. Each certificate for
the Warrant, the Warrant Shares and any other security issued or issuable upon
exercise of this Warrant shall contain a legend on the face thereof, in form and
substance satisfactory to counsel for the Company, setting forth the
restrictions on transfer contained in this Section.


 


7.2                                 Registration
Rights. As set forth in Exhibit 1, Holder shall have piggy-back
registration rights with respect to the Warrant Shares then held by the Holder
or then subject to issuance upon exercise of this Warrant (collectively, the “Remaining
Warrant Shares”).


 


8. Notices.
Any notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally (including by recognized courier),
sent by facsimile transmission, or sent by certified, registered or express
mail, postage pre-paid. Any such notice shall be deemed given when so delivered
personally, or sent by facsimile transmission, or, if mailed, four days after
the date of prepaid deposit in the United States mail, certified, registered or
overnight delivery as follows:


 


if to the Company, to:


 


FOCUS ENHANCEMENTS, INC.


1370 Dell Avenue


Campbell, California 95008


ATTN: Gary Williams, Chief Financial Officer


Telephone No.: (408) 866-8300


Facsimile No.:  (408) 866-4795


 


with
a copy to:


 


Manatt, Phelps & Phillips, LLP


1001 Page Mill Road, Bldg. 2


Palo Alto, California 94304


Attn: Jerrold F. Petruzzelli, Esq.


Telephone No.: (650) 812-1335


Telecopier No.: (650) 213-0260


 


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(ii) if to
the Holder, to:


 


 


Fax No.:


 


 


Any party may give notice to the other parties
designated in accordance with this Section to change its respective
address or addressee for notices.


 


9. Supplements
and Amendments; Whole Agreement. This Warrant may be amended or
supplemented only by an instrument in writing signed by the parties hereto. This
Warrant contains the full understanding of the parties with respect to its  subject matter,  and there are no representations, warranties,
agreements or understandings other than expressly contained herein and therein.


 


10. Governing
Law. This Warrant shall be deemed to be a contract made under the laws of
the State of Delaware for contracts to be wholly performed in such state and
without giving effect to the principles thereof regarding the conflict of laws.
Each of the parties consents to the jurisdiction of the federal courts whose
districts encompass any part of the State of California, Santa Clara
County in connection with any dispute arising under this Warrant and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.


 


11. Jury
Trial Waiver. The Company and the Holder hereby waive a trial by jury in
any action, proceeding or counterclaim brought by either of the parties hereto
against the other in respect of any matter arising out or in connection with
this Warrant.


 


12. Counterparts.
This Warrant may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.


 


13. Descriptive
Headings. Descriptive headings of the several Sections of this Warrant are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.


 


4

















 


IN
WITNESS WHEREOF, the parties hereto have executed this Warrant as of the 7 day
of April, 2006.


 


	
   

  	
  FOCUS ENHANCEMENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Williams

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: Gary Williams

  
	
   

  	
  Title: EVP of Finance & CFO

  



 


5

















 


NOTICE
OF EXERCISE OF WARRANT


 


The undersigned
hereby irrevocably elects to exercise the right, represented by the Warrant
Certificate dated as of                                     ,            ,to
purchase                             shares
of the Common Stock, $0.01 par value, of FOCUS ENHANCEMENTS, INC.,
and tenders herewith payment in accordance with Section 1 of said Common
Stock Purchase Warrant.


 


CASH:$                                                                  =  
(Exercise Price x Exercise Shares)


 


Payment is being made by:


 


                                                          enclosed check


 


                                                          wire transfer


 


                                                          other


 


Please deliver the
stock certificate to:


 


Dated:


 


 


[Name of Holder]


 


By:


 

















 


Appendix A


 




	
  Number of Shares

  	
   

  	
  Exercise Price

  	
   

  	
  Vesting Date

  	
   

  	
  Expiration Date

  	
   

  
	
  10,000

  	
   

  	
  $

  	
  0.79

  	
   

  	
  April 7, 2006

  	
   

  	
  April 7, 2009

  	
   

  
	
  10,000

  	
   

  	
  $

  	
  0.79

  	
   

  	
  December 31, 2006

  	
   

  	
  April 7, 2009

  	
   

  
	
  10,000

  	
   

  	
  $

  	
  0.79

  	
   

  	
  June 30, 2007

  	
   

  	
  April 7, 2009