EXHIBIT 4.20


 


THIS WARRANT AND THE
SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE
144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.


 


WARRANT TO PURCHASE STOCK


 


	
  Corporation:

  	
  FOCUS
  Enhancements, Inc., a Delaware corporation

  
	
  Number of
  Shares:

  	
  40,000

  
	
  Class of
  Stock:

  	
  Common

  
	
  Initial Exercise
  Price:

  	
  $1.00 per share

  
	
  Issue Date:

  	
  December 1,
  2005

  
	
  Expiration Date:

  	
  December 1,
  2010

  



 


THIS
WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good
and valuable consideration, GREATER BAY BANCORP (“Holder”) is entitled to
purchase the number of fully paid and nonassessable shares of Common Stock (the
“Shares”) of the corporation (the “Company”) at the price per Share (the “Warrant
Price”) all as set forth herein and as adjusted pursuant to Article 2 of
this Warrant, subject to the provisions and upon the terms and conditions set
forth of this Warrant.


 


ARTICLE 1.                                EXERCISE.


 


1.1                                 Method
of Exercise.  Holder may exercise
this Warrant by delivering a duly executed Notice of Exercise in substantially
the form attached as Appendix 1 to the principal office of the
Company.  Unless Holder is exercising the
conversion right set forth in Section 1.2, Holder shall also deliver to
the Company a check for the aggregate Warrant Price for the Shares being purchased.


 


1.2                                 Conversion
Right.  In lieu of exercising this
Warrant as specified in Section 1.1, Holder may from time to time convert
this Warrant, in whole or in part, into a number of Shares determined by
dividing (a) the aggregate fair market value of the Shares or other
securities otherwise issuable upon exercise of this Warrant minus the aggregate
Warrant Price of such Shares by (b) the fair market value of one
Share.  The fair market value of the
Shares shall be determined pursuant Section 1.4.


 


1.3                                 No
Rights of Shareholder.  This Warrant
does not entitle Holder to any voting rights as a shareholder of the Company
prior to the exercise hereof.


 


1.4                                 Fair
Market Value.  If the Shares are
traded in a public market, the fair market value of the Shares shall be the
closing price of the Shares (or the closing price of the Company’s stock into
which the Shares are convertible) reported for the business day immediately
before Holder delivers its Notice of Exercise to the Company.  If the Shares are not traded in a public
market, the Board of Directors of the Company shall determine fair market value
in its reasonable good faith judgment. 
The foregoing notwithstanding, if Holder advises the Board of Directors
in writing that Holder disagrees with such determination, then the Company and
Holder shall promptly agree upon a reputable investment banking or public
accounting firm to undertake such valuation. 
If the valuation of such investment banking firm is greater than that
determined by the Board of Directors, then all fees and expenses of such
investment banking firm shall be paid by the Company.  In all other circumstances, such fees and
expenses shall be paid by Holder.


 


1.5                                 Delivery
of Certificate and New Warrant. 
Promptly after Holder exercises or converts this Warrant, the Company
shall deliver to Holder certificates for the Shares acquired and, if this
Warrant has not been fully exercised or converted and has not expired, a new
Warrant representing the Shares not so acquired.


 


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1.6                                 Replacement
of Warrants.  On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of mutilation, or surrender and cancellation of
this Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.


 


1.7                                 Repurchase
on Sale, Merger, or Consolidation of the Company.


 


1.7.1                        “Acquisition”.  For the purpose of this Warrant, “Acquisition”
means any sale, license, or other disposition of all or substantially all of
the assets of the Company, or any reorganization, consolidation, or merger of
the Company where the holders of the Company’s securities before the
transaction beneficially own less than 50% of the outstanding voting securities
of the surviving entity after the transaction.


 


1.7.2                        Assumption of Warrant.  Upon the closing of any Acquisition the
successor entity shall assume the obligations of this Warrant, and this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of
this Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing.  The
Warrant Price shall be adjusted accordingly.


 


1.7.3                        Purchase Right.  Notwithstanding the foregoing, at the
election of Holder, the Company shall purchase the unexercised portion of this
Warrant for cash upon the closing of any Acquisition for an amount equal to (a) the
fair market value of any consideration that would have been received by Holder
in consideration of the Shares had Holder exercised the unexercised portion of
this Warrant immediately before the record date for determining the
shareholders entitled to participate in the proceeds of the Acquisition, less (b) the
aggregate Warrant Price of the Shares, but in no event less than zero.


 


ARTICLE 2.                                ADJUSTMENTS TO THE SHARES.


 


2.1                                 Stock
Dividends, Splits, Etc.   If the
Company declares or pays a dividend on its common stock payable in common
stock, or other securities, subdivides the outstanding common stock into a
greater amount of common stock,  then
upon exercise of this Warrant, for each Share acquired, Holder shall receive,
without cost to Holder, the total number and kind of securities to which Holder
would have been entitled had Holder owned the Shares of record as of the date
the dividend or subdivision occurred.


 


2.2                                 Reclassification,
Exchange or Substitution.  Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event.  The Company or its
successor shall promptly issue to Holder a new Warrant for such new securities
or other property.  The new Warrant shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 2 including,
without limitation, adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise of the new Warrant.  The provisions of this Section 2.2 shall
similarly apply to successive reclassifications, exchanges, substitutions, or
other events.


 


2.3                                 Adjustments
for Combinations, Etc.  If the
outstanding Shares are combined or consolidated, by reclassification or
otherwise, into a lesser number of shares, the Warrant Price shall be
proportionately increased.


 


2.4                                 No
Impairment.  The Company shall not,
by amendment of its Certificate of Incorporation or through a reorganization,
transfer of assets, consolidation, merger, dissolution, issue, or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed under this
Warrant by the Company, but shall at all times in good faith assist in carrying
out of all the provisions of this Article 2 and in taking all such action
as may be necessary or appropriate to protect Holder’s rights under this Article against
impairment.  If the Company takes any
action affecting the Shares or its common stock other than as described above
that adversely affects Holder’s rights under this Warrant, the Warrant Price
shall 


 


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be adjusted downward and the number of Shares issuable upon exercise of
this Warrant shall be adjusted upward in such a manner that the aggregate
Warrant Price of this Warrant is unchanged.


 


2.5                                 Fractional
Shares.  No fractional Shares shall
be issuable upon exercise or conversion of the Warrant and the number of Shares
to be issued shall be rounded down to the nearest whole Share.  If a fractional share interest arises upon
any exercise or conversion of the Warrant, the Company shall eliminate such
fractional share interest by paying Holder amount computed by multiplying the
fractional interest by the fair market value of a full Share.


 


2.6                                 Certificate
as to Adjustments.  Upon each
adjustment of the Warrant Price, the Company at its expense shall promptly
compute such adjustment, and furnish Holder with a certificate of its Chief
Financial Officer setting forth such adjustment and the facts upon which such
adjustment is based.  The Company shall,
upon written request, furnish Holder a certificate setting forth the Warrant
Price in effect upon the date thereof and the series of adjustments leading to
such Warrant Price.


 


ARTICLE 3.                                REPRESENTATIONS AND COVENANTS OF THE COMPANY.


 


3.1                                 Representations
and Warranties.  The Company hereby
represents and warrants to the Holder that all Shares which may be issued upon
the exercise of the purchase right represented by this Warrant, and all
securities, if any, issuable upon conversion of the Shares, shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, and
free of any liens and encumbrances except for restrictions on transfer provided
for herein or under applicable federal and state securities laws.  The Company shall at all times reserve a
sufficient number of shares of common stock for issuance upon Holder’s exercise
of its rights hereunder.


 


3.2                                 Notice
of Certain Events.  If the Company
proposes at any time (a) to declare any dividend or distribution upon its
common stock, whether in cash, property, stock, or other securities and whether
or not a regular cash dividend; (b) to offer for subscription pro rata to
the holders of any class or series of its stock any additional shares of stock
of any class or series or other rights; (c) to effect any reclassification
or recapitalization of common stock; (d) to merge or consolidate with or
into any other corporation, or sell, lease, license, or convey all or
substantially all of its assets, or to liquidate, dissolve or wind up; or (e) offer
holders of registration rights the opportunity to participate in an
underwritten public offering of the company’s securities for cash, then, in
connection with each such event, the Company shall give Holder (1) at
least 20 days prior written notice of the date on which a record will be
taken for such dividend, distribution, or subscription rights (and specifying
the date on which the holders of common stock will be entitled thereto) or for
determining rights to vote, if any, in respect of the matters referred to in (c) and
(d) above; (2) in the case of the matters referred to in (c) and
(d) above at least 20 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the
case of the matter referred to in (e) above, the same notice as is given
to the holders of such registration rights.


 


3.3                                 Information
Rights.  So long as the Holder holds
this Warrant and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of
each fiscal year of the Company, the annual financial statements of the
Company.


 


3.4                                 Registration
Under Securities Act of 1933, as amended. 
The Company hereby grants to Holder the registration rights described in
the Registration Rights Agreement by and between the Company and the Holder
dated as of November 15, 2004.


 


ARTICLE 4.                                MISCELLANEOUS.


 


4.1                                 Term.  This Warrant is exercisable, in whole or in
part, at any time and from time to time on or before the Expiration Date set
forth above.


 


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4.2                                 Legends.  This Warrant and the Shares (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if
any) shall be imprinted with a legend in substantially the following form:


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.


 


4.3                                 Compliance
with Securities Laws on Transfer. 
This Warrant and the Shares issuable upon exercise this Warrant (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if
any) may not be transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the transferor and the
transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, as reasonably requested by the Company).  The Company shall not require Holder to
provide an opinion of counsel if the transfer is to an affiliate of Holder or
if there is no material question as to the availability of current information
as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and
(e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of
Holder’s notice of proposed sale.


 


4.4                                 Transfer
Procedure.  Subject to the provisions
of Section 4.3, Holder may transfer all or part of this Warrant or the
Shares issuable upon exercise of this Warrant (or the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) by giving the
Company notice of the portion of the Warrant being transferred setting forth
the name, address and taxpayer identification number of the transferee and
surrendering this Warrant to the Company for reissuance to the transferee(s)
(and Holder if applicable).  Unless the
Company is filing financial information with the SEC pursuant to the Securities
Exchange Act of 1934, the Company shall have the right to refuse to transfer
any portion of this Warrant to any person who directly competes with the
Company.


 


4.5                                 Notices.  All notices and other communications from the
Company to the Holder, or vice versa, shall be deemed delivered and effective
when given personally or mailed by first-class registered or certified mail,
postage prepaid, at such address as may have been furnished to the Company or
the Holder, as the case may be, in writing by the Company or such holder from
time to time.


 


4.6                                 Waiver.  This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.


 


4.7                                 Attorneys
Fees.  In the event of any dispute
between the parties concerning the terms and provisions of this Warrant, the
party prevailing in such dispute shall be entitled to collect from the other
party all costs incurred in such dispute, including reasonable attorneys’ fees.


 


4.8                                 Governing
Law.  This Warrant shall be governed
by and construed in accordance with the laws of the State of California,
without giving effect to its principles regarding conflicts of law.


 


 


	
   

  	
  FOCUS
  ENHANCEMENTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary
  Williams

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  EVP of Finance &
  CFO

  	
   

  
						



 


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APPENDIX 1


 


NOTICE OF
EXERCISE


 


1.                                       The
undersigned hereby elects to purchase                        
shares of the Common Stock of                                         
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the purchase price of such shares in full.


 


1.                                       The
undersigned hereby elects to convert the attached Warrant into Shares/cash
[strike one] in the manner specified in the Warrant.  This conversion is exercised with respect to                                       
of the Shares covered by the Warrant.


 


[Strike paragraph that does not apply.]


 


2.                                       Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:


 


 


	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  



 


 


3.                                       The
undersigned represents it is acquiring the shares solely for its own account
and not as a nominee for any other party and not with a view toward the resale
or distribution thereof except in compliance with applicable securities laws.


 


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
   

  



 


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