Document:

Exhibit
10.1

AMENDMENT TO
SENIOR SECURED CONVERTIBLE NOTE PURCHASE AGREEMENT

This AMENDMENT TO
SENIOR SECURED CONVERTIBLE NOTE PURCHASE AGREEMENT (this “Amendment”) is made
and entered into as of June 28, 2006 by and among Focus Enhancements, Inc., a
Delaware corporation (“Focus”), the purchasers signatory hereto (each such
purchaser, a “Purchaser” and collectively, the “Purchasers”), and
Thomas Boucher (the “Purchasers’ Agent”).

RECITALS

WHEREAS, the
Purchasers and Focus previously have entered into that certain Senior Secured
Convertible Note Purchase Agreement, dated as of January 24, 2006 (the “Original
Purchase Agreement”), which Original Purchase Agreement provided for, among
other things, the mandatory registration (as more fully described in the Original
Purchase Agreement, the “Mandatory Registration”) for resale of shares of
common stock of Focus issuable upon conversion of the Notes, as defined in the
Original Purchase Agreement (the “Registrable Securities”);

WHEREAS, the
failure to register the Registrable Securities would constitute an Event of
Default under the Original Purchase Agreement;

WHEREAS, Focus has
registered the Registrable Securities on a registration statement on Form S-3
(File No. 333-133291, the “Effective Registration Statement”), declared
effective by the Securities and Exchange Commission (“SEC”) on May 10, 2006;

WHEREAS, as a
consequence of the terms of the Original Purchase Agreement and related
Registration Rights Agreement entered into by and among Focus, the Purchasers
and Ingalls & Snyder, LLC as of January 24, 2006 (the “Original
Registration Rights Agreement”), Focus has been required under Generally
Accepted Accounting Principles to record a liability on its balance sheet
relating to the Registrable Securities resulting in an $4.0 million expense to
its statement of operations at the date of closing.  In addition, any appreciation in Focus’ stock
price will result in additional expense on Focus’ statement of
operations reflecting the change in fair value of such liability; and

WHEREAS, in order to permit Focus to reclassify the accounting
treatment of the Registrable Securities to additional paid in capital and
thereby remove the above-referenced liability from its balance sheet and to
eliminate the continued impact of such changes in fair value of such liability
to its statement of operations, the parties hereto agree to amend the Original
Purchase Agreement and the Original Registration Rights Agreement to delete the
Mandatory Registration obligation and the liquidated damages provisions and in
partial consideration therefor grant “piggy-back” registration rights to the
Holders, all upon the terms and conditions of this Amendment;

NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants hereinafter set forth, the consideration set forth in
the Amendment to the Original Registration Rights Agreement of even date
herewith, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

Section
1.               Defined Terms.

Capitalized terms used in this Amendment but not otherwise defined
herein shall have the meanings ascribed to them in the Original Purchase
Agreement.

Section
2.               Amendments to Original
Purchase Agreement.

 

Section 7.5 of the Original Purchase Agreement relating to registration
of the Registrable Securities is hereby deleted in its entirety.

Section
3.               Ratification of Original
Purchase Agreement.

Except as modified by the terms of this Amendment, the Original
Purchase Agreement is hereby ratified and confirmed in its entirety, and shall
remain in full force and effect in accordance with its terms.

Section
4.               Counterparts.

This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Each party hereto confirms that any facsimile copy
of such party’s executed counterpart of this Amendment (or its signature page
thereof) shall be deemed to be an executed copy thereof.

Section
5.               Governing Law.

This Amendment shall be governed by the laws of the State of New York
(other than its rules of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby).

Section
6.               Counsel.

EACH OF THE UNDERSIGNED PARTIES ACKNOWLEDGES THAT HE, SHE OR IT HAS
BEEN ADVISED TO CONSULT SUCH PARTY’S LEGAL AND FINANCIAL ADVISORS WITH RESPECT
TO THE TERMS AND CONDITIONS OF THIS AMENDMENT AND HAS BEEN GIVEN THE
OPPORTUNITY TO DO SO.

Section
7.               Entire Agreement.

The Original Purchase Agreement (including any and all annexes,
exhibits and schedules thereto), as amended by this Amendment, constitute the
entire agreement of the parties hereto with respect to the subject matter
thereof and hereof, and supersede all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter thereof and
hereof. The parties hereto intend to be bound, and hereby agree, that this
amendment is effective as of June 28, 2006.

Section
8.               Other General.

The recitals hereto are a material part hereof and are incorporated in
this Amendment by reference as if fully set forth herein. Captions and headings
are for convenience only, are not deemed to be part of this Amendment and shall
not be used in the interpretation of this Amendment.

 

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

	
   

  	
  

  	
  

  	
  FOCUS ENHANCEMENTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett Moyer

  
	
   

  	
  Name:

  	
  Brett Moyer

  
	
   

  	
  Title:

  	
  CEO & President

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASERS’ AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  Ingalls & Snyder LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Boucher Jr.

  
	
   

  	
  Name:

  	
  Thomas Boucher Jr.

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASERS

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas Boucher Jr for Ingalls & Snyder Value
  Partners

  
	
   

  	
  /s/ Steven FooteExhibit
10.2

AMENDMENT
TO REGISTRATION RIGHTS AGREEMENT

This AMENDMENT TO REGISTRATION RIGHTS AGREEMENT (this “Amendment”) is
made and entered into as of June 28, 2006 by and among Focus Enhancements,
Inc., a Delaware corporation (“Focus”), the purchasers signatory hereto (each
such purchaser, a “Purchaser” and collectively, the “Purchasers”).

RECITALS

WHEREAS, the parties hereto previously have
entered into that certain Registration Rights Agreement dated as of January 24,
2006 (such Registration Rights Agreement, the “Original Agreement”), which
Original Agreement provided for, among other things, the mandatory registration
(as more fully described in the Original Agreement, the “Mandatory Registration”)
for resale of shares of common stock of Focus issuable upon conversion of the
Notes, as defined in the Original Agreement (the “Registrable Securities”);

WHEREAS, the failure to register the
Registrable Securities and to otherwise observe the covenants contained in the
Original Agreement would constitute an Event of Default under the Senior
Secured Convertible Note Purchase Agreement by an among Focus and each
Purchaser dated as of January 24, 2006 (the “Original Purchase Agreement”)
and the terms of the Notes issued thereto;

WHEREAS, Focus has registered the Registrable
Securities on a registration statement on Form S-3 (File No. 333-133291, the “Effective
Registration Statement”), declared effective by the Securities and Exchange
Commission (“SEC”) on May 10, 2006;

WHEREAS, as a consequence of the terms of the
Registration Rights Agreement Focus has been required under Generally Accepted
Accounting Principles to record a liability on its balance sheet and to record
the continued impact of such changes in fair value of such liability to
statement of operations;

WHEREAS, it is the belief of Focus’
management that such liability and expense relating to the terms of the
Registration Rights Agreement, hinders Focus’ ability to continue to be listed
on the NASDAQ Capital Market, and

WHEREAS, in order to permit Focus to
reclassify the accounting treatment of the Registrable Securities to additional
paid in capital and thereby remove the above-referenced liability from its
balance sheet and to eliminate the continued impact of such changes in fair
value of such liability to its statement of operations, the parties hereto
agree to amend the Original Agreement to delete the Mandatory Registration
obligation  and in partial consideration
therefore grant “piggy-back” registration rights to the holders of Registrable
Securities, all upon the terms and conditions of this Amendment

NOW, THEREFORE, in consideration of the
foregoing and of the mutual promises and covenants hereinafter set forth and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

Section
1.               Defined Terms.

Capitalized terms used in this Amendment but
not otherwise defined herein shall have the meanings ascribed to them in the
Original Agreement.

Section
2.               Amendments to Registration
Rights Agreement.

 

(a)           The obligations of Focus to register
the Registrable Securities pursuant to Section 2  of the Original Agreement and to keep the
registration statement effective relating to such Registrable Securities are
hereby amended to delete such obligations of Focus in its entirety;

(b)           The Original Agreement is hereby
amended to add the following to Section 2 of the Agreement  “In no event will the failure to register the
Registrable Securities or to maintain the effectiveness of the Registration
Statement relating to the Registrable Securities constitute an Event of Default
under the Original Purchase Agreement or the Notes.”

(c)           Notwithstanding the foregoing
amendments, Focus agrees to use its commercially reasonable best efforts to
maintain the effectiveness of the Effective Registration Statement for the
period specified in the Original Agreement and the Holders shall remain
obligated to satisfy their respective obligations under the Original Agreement
relating to the Effective Registration Statement.

(d)           The Original Agreement is hereby
amended to add the following subsection to Section 3 of the Original Agreement:

“(l) “Piggy-Back” Registration. If (but
without any obligation to do so) Focus proposes to register  any of its stock or other securities under
the Securities Act in connection with the public offering of such securities
solely for cash for the account of any selling securityholder (other than a
registration relating solely to the sale of securities to participants in Focus
stock plan, a registration with respect solely to a corporate reorganization or
other transaction under Rule 145 of the Securities Act, a registration on any
form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities),  Focus shall, at
such time, promptly give each Holder written notice of such registration. Upon
the written request of each Holder given within twenty (20) days after mailing
of such notice by Focus, Focus shall, subject to the provisions of Section 3,
cause to be registered under the Securities Act all of the Registrable
Securities that each such Holder has requested to be registered. The
registration rights granted to a Holder pursuant to this paragraph shall
terminate with respect to such Holder on the date when all of the Registrable
Securities of such Holder covered by the Effective Registration Statement or an
effective registration statement under this paragraph have been sold pursuant
to the Effective Registration Statement or such other registration statement or
an exemption from the registration requirements of the Securities Act or (b)
may be sold without any volume or other restrictions pursuant to Rule 144(k).

Section
3.               Effectiveness of
Amendments.

In accordance with Section 6(e) of the
Original Agreement, this Amendment shall not be effective unless and until
executed by Focus and each Holder of Registrable Securities, and upon execution
by Focus and each Holder of Registrable Securities thereto, the parties agree
to be bound to this Amendment, and this Amendment to be effective as of, June
28, 2006.

Section
4.               Ratification of Original
Agreement.

Except as modified by the terms of this
Amendment, the Original Agreement is hereby ratified and confirmed in its
entirety, and shall remain in full force and effect in accordance with its
terms.

Section
5.               Counterparts.

This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Each party hereto
confirms that any facsimile copy of such party’s executed counterpart of this
Amendment (or its

 

signature page thereof) shall be deemed to be an executed copy thereof.

Section
6.               Governing Law.

This Amendment shall be governed by the laws
of the State of California (other than its rules of conflicts of law to the
extent that the application of the laws of another jurisdiction would be
required thereby).

Section
7.               Counsel.

EACH OF THE UNDERSIGNED PARTIES ACKNOWLEDGES
THAT HE, SHE OR IT HAS BEEN ADVISED TO CONSULT SUCH PARTY’S LEGAL AND FINANCIAL
ADVISORS WITH RESPECT TO THE TERMS AND CONDITIONS OF THIS AMENDMENT AND HAS
BEEN GIVEN THE OPPORTUNITY TO DO SO.

Section
8.               Entire Agreement.

The Original Agreement (including any and all
annexes, exhibits and schedules thereto), as amended by this Amendment,
constitute the entire agreement of the parties hereto with respect to the
subject matter thereof and hereof, and supersede all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter thereof and hereof.

Section
9.               Other General.

The recitals hereto are a material part
hereof and are incorporated in this Amendment by reference as if fully set
forth herein. Captions and headings are for convenience only, are not deemed to
be part of this Amendment and shall not be used in the interpretation of this
Amendment.

 

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

	
  

  	
  FOCUS ENHANCEMENTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett Moyer

  
	
   

  	
  Name:

  	
  Brett Moyer 

  
	
   

  	
  Title:

  	
  CEO & President

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASERS

  
	
   

  	
  

  	
   

  
	
   

  	
  /s/ Barbara Shingleton
  for Barbara Shingleton Trust

  /s/ Brad Shingleton for
  Brad Shingleton Trust

  /s/ Cheryl Groenendyke
  for CFG Trust #1

  /s/ David Foote

  /s/ Kenneth Foote for
  Don L. Foote Trust #1

  /s/ Kenneth Foote for
  Heritage Mark Foundation

  /s/ Thomas Boucher Jr
  for Ingalls & Snyder Value Partners L.P.

  /s/ Kenneth Foote

  /s/ Rhonda Foote-Judy

  /s/ Ronald Altman

  /s/ Steven Foote

  /s/ Steven Foote for
  Steven Foote IRA

  /s/ Theresa Foote

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