Document:

EXHIBIT 4.19

 

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”), Crestline
Consultancy Ltd, 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 December 6,
2009 (the “Expiration Date”), 60,000 (sixty 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 $1.00 (one dollar) per share, subject
to further adjustment as set forth herein. 
These shares are exercisable immediately 

 

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”) 

 

2

 

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 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.  Notwithstanding any other provision
hereof, of Exhibit 1, or of applicable securities laws, including,
without limitation, Rule 144, 
Holder agrees that under no circumstances shall Holder sell, alienate
or  otherwise transfer  all or any portion of the Warrant or  Warrant Shares before March 22, 2006.

 

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

 

3

 

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

 

(ii) if
to the Holder, to:

 

 

 

 

Telecopier 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 6th day of December, 2005.

 

	
   

  	
  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: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.

 

1

 

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 

 

2

 

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.

 

3

 

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

  	
   

  
						

 

4

 

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)

  	
   

  	
   

  

 

5

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