Document:

September 24 2004 Exhibit 10.64

EXHIBIT 10.64

DIGITAL VIDEO SYSTEMS, INC.

8% SERIES C CONVERTIBLE PREFERRED

STOCK PURCHASE AGREEMENT

TABLE OF CONTENTS

	
 
	
Page

	
1.    AGREEMENT TO SELL AND PURCHASE    

	
 1
	
       1.1    Authorization of Securities

	
 1
	
       1.2    Sale and Purchase

	
 1
	
       1.3    Use of Proceeds

	
 2
	
       1.4    Reservation of Common Stock

	
 2
	
2.    CLOSINGS, DELIVERY AND PAYMENT

	
 3
	
       2.1    Initial Closing

	
 3
	
       2.2    Delivery

	
 3
	
       2.3    Subsequent Sales of Securities

	
 3
	
       2.4    Right to Exercise the Green Shoe Warrant

	
 4
	
3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY

	
 5
	
       3.1    Organization, Good Standing and Qualification

	
 5
	
       3.2    Subsidiaries

	
 5
	
       3.3    Capitalization; Voting Rights

	
 5
	
       3.4    Authorization; Binding Obligations

	
 6
	
       3.5    Disclosure Documents

	
 7
	
       3.6    Changes

	
 7
	
       3.7    Offering Valid

	
 8
	
       3.8    Disclosure

	
 8
	
4.    REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

	
 8
	
       4.1    Requisite Power and Authority

	
 8
	
       4.2    Organization, Good Standing

	
 9
	
       4.3    Investment Representations

	
 9
	
       4.4    Transfer Restrictions

	
 10
	
       4.5    Broker's Fees; Agent's Compensation

	
 10
	
5.    CONDITIONS TO CLOSING

	
 10
	
       5.1    Conditions to Purchasers' Obligations at the Closing

	
 10
	
       5.2    Conditions to Additional Purchasers' Obligations at Subsequent Closings

	
 11
	
       5.3    Conditions to Purchasers' and Additional Purchasers' Obligations at the Green Shoe Closing

	
 13
	
       5.4    Conditions to Obligations of the Company

	
 13
	
6.    MISCELLANEOUS

	
 14
	
       6.1    Governing Law

	
 14
	
       6.2    Survival

	
 14
	
       6.3    Successors and Assigns

	
 15
	
       6.4    Entire Agreement

	
 15
	
       6.5    Severability

	
 15
	
       6.6    Amendment and Waiver.

	
 15
	
       6.7    Delays or Omissions

	
 15
	
       6.8    Waiver of Conflicts

	
 16
	
       6.9    Indemnification and Advancement for Third-Party Claims

	
 16
	
       6.10    Notices

	
 17
	
       6.11    Expenses

	
 18
	
       6.12    Attorneys' Fees

	
 18
	
       6.13    Titles

	
 18
	
       6.14    Counterparts

	
 18
	
       6.15    Exculpation Among Purchasers

	
 18
	
       6.16    Pronouns

	
 18
	
       6.17    California Corporate Securities Law

	
 18
	
       6.18    Reliance

	
 19
	
       6.19    Publicity

	
 19
	
       6.20    Like Treatment of Holders

	
 19
	
       6.21    Delivery by Facsimile

	
 19

LIST OF EXHIBITS

	
Schedule of Purchasers 
	
Exhibit A

	
Amended and Restated Certificate of Incorporation of Corporation 
	
Exhibit B

	
Form of Certificate of Designation of Rights, Preferences, Privileges and
Restrictions of Series C Preferred Stock 
	
Exhibit C

	
Form of Class A Warrant 
	
Exhibit D

	
Form of Class B Warrant 
	
Exhibit E

	
Form of "Green Shoe" Warrant 
	
Exhibit F

	
Schedule of Exceptions 
	
Exhibit G

	
Form of Registration Rights Agreement 
	
Exhibit H

	
Form of Joinder Agreement 
	
Exhibit I

	
Accredited Investor Definition 
	
Exhibit J

	
Rule 144 
	
Exhibit K

	
Wire Instructions for Purchasers to Wire Purchase Price 
	
Exhibit L

Disclosure Documents:

A.Annual Report on Form 10-K for the Year Ended December 31, 2003, as
amended

B.Quarterly Report on Form 10-Q for the Quarterly Period Ended June
30, 2004

DIGITAL VIDEO SYSTEMS, INC.

8% SERIES C CONVERTIBLE 

PREFERRED STOCK PURCHASE AGREEMENT

THIS 8% SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the
"Agreement") is entered into as of September 20, 2004, by and among DIGITAL
VIDEO SYSTEMS, INC., a Delaware corporation (the "Company") and each of those
persons and entities whose names are set forth on the Schedule of Purchasers
attached hereto as Exhibit A, as the same may be amended by the
Company from time to pursuant to the terms hereof (which persons and entities
are hereinafter sometimes collectively referred to as "Purchasers" and each
individually sometimes as a "Purchaser").

RECITALS

WHEREAS, the Company has authorized, or shall have authorized prior to
the Initial Closing (as defined in Section 2.1 below), the sale and
issuance of up to that number of shares of its 8% Series C Convertible Preferred
Stock (the "Shares") calculated by dividing one million five hundred thousand
dollars ($1,500,000) by the Purchase Price (as defined in Section 1.2 below),
plus fifty percent (50%) Class A warrant coverage (the "Class A Warrants") and,
potentially, fifty percent (50%) Class B warrant coverage (the "Class B
Warrants"); the Class A Warrants and Class B Warrants are sometimes referred to
collectively as the "Warrants;" the Shares and Warrants are sometimes
collectively referred to as the "Securities;" the Company shall also have
included in such authorization fifty percent (50%) more of the Securities to
cover the possible exercise of the Green Shoe Warrant (as defined in Section 2.4
below);

WHEREAS, the Company desires to issue and sell to the Purchasers, and the
Purchasers jointly and severally desire to purchase and acquire, on the terms
and subject to the conditions set forth in this Agreement, their respective
portions of the Securities;

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

	AGREEMENT TO SELL AND PURCHASE

1.1    Authorization of Securities
.
 The Company has, or prior to the Closing shall have, duly authorized
(i) the sale and issuance to the Purchasers of the Shares, the Warrants and
the Green Shoe Warrants; (ii) the issuance of such shares of the Company's
common stock, $0.0001 par value ("Common Stock") to be issued upon conversion of
the Shares (the "Conversion Shares"), and (iii) the issuance of such shares of
Common Stock to be issued upon exercise of the Class A Warrants and Class B
Warrants (the "Warrant Shares"). The Shares and the Conversion Shares shall, as
of the Closing and each Subsequent Closing (as defined in Section 2.3
below), have the respective rights, preferences, privileges and restrictions set
forth in the Certificate of Incorporation, as amended, of the Company, attached
hereto as Exhibit B, the Certificate of Designations of Preferences of 8%
Series C Convertible Preferred Stock of the Company, in the form attached hereto
as Exhibit C (the "Certificate of Designations"). The Class A
Warrants, the Class B Warrants and the Warrant Shares shall have the respective
rights, preferences, privileges and restrictions set forth in the forms of Class
A Warrant and Class B Warrant attached hereto as Exhibit D and Exhibit
E, respectively. 

1.2    Sale and Purchase.

 Subject to the terms and conditions hereof, at the Closing the Company
will issue and sell to each Purchaser jointly and severally, and, in express
reliance upon the representations and warranties hereof, and each Purchaser,
jointly and severally, agrees to purchase from the Company, the dollar amount of
Shares set forth opposite such Purchaser's name in the column entitled "Closing"
on the Schedule of Purchasers on Exhibit A, at a purchase price
equal to the average of the closing prices of the Company's Common Stock for
each of the five (5) trading days immediately preceding the Closing of this
offering (the "Purchase Price"). The Company will also issue to each Purchaser,
for no additional consideration, that number of Class A Warrants set forth
opposite such Purchaser's name on the Schedule of Purchasers and a separate
warrant entitling the Purchaser to purchase up to fifty percent (50%) of the
number of Securities purchased in the Closing, on the same terms as the Closing,
which warrants will be exercisable for the ten (10)-day period immediately
following the effective date of the registration statement covering the resale
of the Conversion Shares and Warrant Shares (the "Green Shoe Warrants"). 

Class B Warrants will be issued if, on the third (3rd) anniversary of the
Initial Closing, a Purchaser, or its permitted transferee, still owns any shares
of Series C Preferred Stock. In such event, the Company will issue to each such
Purchaser, or its permitted transferee, that number of Class B Warrants that
will entitle the Purchaser, or its permitted transferee, to purchase up to fifty
percent (50%) of the number of Series C Preferred shares held on such date.

1.3    Use of Proceeds
.
 The Company agrees to use the proceeds received by it from the sale of
the Shares for working capital and general corporate purposes, up to one million
dollars ($1,000,000). The net proceeds in excess of one million dollars
($1,000,000), if any, up to two hundred fifty thousand dollars ($250,000) shall
be allocated for additional investment by the Company in DVS Electronics Private
Limited, the Company's Indian subsidiary ("DVS India") to be used to enhance
brand recognition. 

1.4    Reservation of Common Stock

.
 The Company has authorized and reserved, and will continue to reserve,
free of preemptive and other preferential rights, a sufficient number of its
authorized but unissued shares of Common Stock to satisfy the rights of
conversion of any holders of Shares and the exercise rights of the holders of
the Class A, Class B Warrants and the Green Shoe Warrants.

	 CLOSINGS, DELIVERY AND PAYMENT 

2.1    Initial Closing
.
 The initial Closing under this Agreement shall take place at 5:00 p.m.
(Pacific Daylight Time) on September 1, 2004 (the "Initial Closing"), at the
offices of Wickersham & Murphy, P.C., 430 Cambridge Avenue, Suite 100, Palo
Alto, California 94306, or at such other time or place as the Company and the
Purchasers participating in the Initial Closing may agree. There is no minimum
dollar amount that must be subscribed for in order to conduct the Initial
Closing. 

2.2    Delivery
.
 At the Initial Closing, subject to the terms and conditions hereof, the
Company shall deliver to each Purchaser participating in the Initial Closing one
or more certificates representing in the aggregate the Shares being purchased
and acquired at the Closing by such Purchaser, as set forth opposite such
Purchaser's name in the column entitled "Closing" on the Schedule of Purchasers
on Exhibit A attached hereto, calculated in accordance with the terms of
Section 1.2, plus that number of Class A Warrants equal to fifty percent (50%)
of the number of shares of Common Stock into which the Shares purchased by such
Purchaser is convertible and the Green Shoe Warrants to which such Purchaser is
entitled pursuant to Section 2.4 hereof. Such Share certificates, Class A
Warrants and Green Shoe Warrants shall be registered in such Purchaser's (or its
nominee's) name, against delivery by such Purchaser of payment of the purchase
price therefor, in its, his or her discretion, by check or wire transfer made
payable to the order of the Company. 

2.3    Subsequent Sales of Securities
.
 The Company may sell the Shares and Warrants in multiple closings, in
its discretion. Any closing after the Initial Closing, shall be referred to as a
"Subsequent Closing." All such sales at each such Subsequent Closing shall be
made on the terms and conditions set forth in this Agreement. Each Subsequent
Closing shall take place at the offices of Wickersham & Murphy, 430
Cambridge Avenue, Suite 100, Palo Alto, California 94306, at such time and date
as the Company and the additional Purchasers participating in such Subsequent
Closing (each, an "Additional Purchaser" and collectively, the "Additional
Purchasers") may agree (each such date, a "Subsequent Closing Date"). At each
Subsequent Closing, each Additional Purchaser shall agree in writing to be a
"Purchaser" for all purposes of this Agreement, by executing a Joinder Agreement
in the form of Exhibit I attached hereto (a "Joinder Agreement"),
and all appropriate information regarding the purchase and sale of Securities to
such Additional Purchasers shall be added to Exhibit A by the
Company. 

At each Subsequent Closing, subject to the terms and conditions hereof, the
Company shall deliver to each Additional Purchaser participating in the
Subsequent Closing, one or more certificates representing in the aggregate the
Shares being purchased and acquired at the Subsequent Closing by such Additional
Purchaser, as set forth opposite such Purchaser's name in the column entitled
"Closing" on the Schedule of Purchasers on Exhibit A, as amended,
calculated in accordance with the terms of Section 1.2, plus that number of
Class A Warrants equal to fifty percent (50%) of the number of shares of Common
Stock into which the Shares purchased by such Additional Purchaser is
convertible and the Green Shoe Warrants to which such Purchaser is entitled
pursuant to Section 2.4 hereof. Such Share certificates, Class A Warrants and
Green Shoe Warrants shall be registered in such Additional Purchaser's (or its
nominee's) name, against delivery by such Additional Purchaser of payment of the
purchase price therefor, in its, his or her discretion, by check or wire
transfer made payable to the order of the Company. Any Class A Warrants issued
at a Subsequent Closing shall expire five (5) years from the Initial Closing
Date.

All Shares of 8% Series C Convertible Preferred Stock and Class A Warrants
sold at each Subsequent Closing pursuant to this Section 2.3 shall be
deemed to be "Shares" and "Class A Warrants" for all purposes under this
Agreement, and all Additional Purchasers thereof, upon full execution of their
respective Joinder Agreements, shall be deemed to be "Purchasers" for all
purposes under this Agreement. The Registration Rights Agreement (as defined in
Section 3.1 below) as of the time of the subsequent sale of Securities shall
mean the Registration Rights Agreement, as amended to include the Additional
Purchasers. The rights and obligations of each Additional Purchaser hereunder
and under the Registration Rights Agreement, and the Company's rights and
obligations hereunder and thereunder with respect to each such Additional
Purchaser shall commence as of such Additional Purchaser's respective Subsequent
Closing Date.

2.4    Right to Exercise the Green Shoe Warrant
.
 For ten (10) days following the effective date of the registration
statement referred to in Section 3.1 below (the "Effective Date"), the
Purchasers and Additional Purchasers shall have the right to purchase, on the
same terms as the original purchases, additional Shares (together with the fifty
percent (50%) Class A Warrant coverage) up to that number of Shares equal to
fifty percent (50%) of the number of Shares previously purchased pursuant to
Section 2.1 or 2.3 hereof (the "Green Shoe Closing"). All such sales at such
Green Shoe Closing shall be made on the terms and conditions set forth in this
Agreement. The Green Shoe Closing shall take place at the offices of Wickersham
& Murphy, 430 Cambridge Avenue, Suite 100, Palo Alto, California 94306, at
such time and date as the Company and the Purchasers or Additional Purchasers
participating in such Green Shoe Closing may agree.

At the Green Shoe Closing, subject to the terms and conditions hereof, the
Company shall deliver to each Purchaser or Additional Purchaser participating in
the Green Shoe Closing, one or more certificates representing in the aggregate
the Shares being purchased and acquired at the Green Shoe Closing by such
Purchaser or Additional Purchaser, as set forth opposite such Purchaser's or
Additional Purchaser's name in the column entitled "Green Shoe Closing" on the
Schedule of Purchasers on Exhibit A, as amended, calculated in accordance
with the terms of Section 1.2, plus that number of Class A Warrants equal to
fifty percent (50%) of the number of shares of Common Stock into which the
Shares purchased by such Purchaser or Additional Purchaser is convertible. Such
Share certificates and Class A Warrants shall be registered in such Purchaser's
or Additional Purchaser's (or its nominee's) name, against delivery by such
Purchaser or Additional Purchaser of payment of the purchase price therefor, in
its, his or her discretion, by check or wire transfer made payable to the order
of the Company. Any Class A Warrants issued at a Green Shoe Closing shall expire
five (5) years from the Initial Closing Date.

All Shares of 8% Series C Convertible Preferred Stock sold at the Green
Closing pursuant to this Section 2.4 shall be deemed to be "Shares" for all
purposes under this Agreement, all Class A Warrants issued at the Green Shoe
Closing shall be deemed to be "Class A Warrants" for all purposes under this
Agreement, and all Conversion Shares or Warrant Shares issuable as a result of
the conversion or exercise of Shares or Class A Warrants issued in the Green
Shoe Closing shall be "Conversion Shares" or "Warrant Shares," as the case may
be, for all purposes under this Agreement. 

	REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit G (the "Schedule of Exceptions"), which exceptions shall be
deemed to qualify the representations and warranties made hereunder, the
Company, in order to induce the Purchasers to enter into and to consummate the
transactions contemplated hereby, jointly and severally represent and warrant to
each Purchaser as follows:

3.1    Organization, Good Standing and
Qualification
.
 The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to own and operate its properties and
assets, and full power, authority and legal right to execute and deliver this
Agreement and the Registration Rights Agreement in the form attached hereto as
Exhibit H (the "Registration Rights Agreement"), to execute and
deliver each Joinder Agreement in the form attached as Exhibit I, to
issue, sell and deliver the Shares, the Class A Warrants, the Class B Warrants
(if applicable), the Green Shoe Warrant, the Conversion Shares and the Warrant
Shares and to perform their obligations under this Agreement, the Registration
Rights Agreement, the Certificate of Designations, the Class A Warrants, the
Class B Warrants and the Green Shoe Warrants, to engage in the transactions
contemplated hereby and thereby and to carry on its business as presently
conducted and as now proposed to be conducted. The Company is duly qualified to
transact business as a foreign corporation and is in good standing,
respectively, in all relevant jurisdictions in which the failure to so qualify
would reasonably be expected to result in a material and adverse effect on the
Company's properties, business, condition, financial or otherwise, or results of
operations (a "Material Adverse Effect").

3.2    Subsidiaries
.
 The Company does not own, of record or beneficially, directly or
indirectly, (i) any equity securities of any other corporation, limited
partnership or similar entity or (ii) any participating interest in any
partnership, joint venture or similar arrangement and does not control, directly
or indirectly, any other entity, except for those indicated under the Schedule
of Exceptions.

3.3    Capitalization; Voting Rights
.
  

	Company Capitalization. The authorized capital stock of the Company
consists of (i) thirty thousand (30,000) shares of Common Stock, $0.0001
par value, of which ten million seven hundred two thousand one hundred
seventy-nine (10,702,179) are issued and outstanding as of June 30, 2004; and
(ii) five million (5,000,000) shares of Preferred Stock, $0.0001 par value
per share, of which no shares are issued and outstanding. Immediately prior to
the initial Closing, there shall be authorized Three Million Seven Hundred Fifty
Thousand (3,750,000) shares of Preferred Stock, which are to be designated 8%
Series C Convertible Preferred Stock, none of which are issued and outstanding
prior to the Initial Closing. Although the Company's Amended and Restated
Certificate of Incorporation sets forth the rights, preferences, privileges and
restrictions of two series of Preferred Stock, designated Series A Preferred and
Series B Preferred, no number of shares has been allocated to such series, and
the Company represents and warrants that it will not issue such series of
Preferred Stock. 

The outstanding shares of Common Stock (a) have been duly authorized and
validly issued and (b) are fully paid and nonassessable, with no personal
liability attaching to the ownership thereof. The designations, powers,
preferences, rights, qualifications, limitations and restrictions in respect of
the authorized capital stock of the Company are as stated in the Company's
Certificate of Incorporation, as amended and currently in effect (including the
Certificate of Designations), and all such designations, powers, preferences,
rights, qualifications, limitations and restrictions are valid, binding and
enforceable and in accordance with all applicable laws. The Conversion Shares
and the Warrant Shares have been duly and validly reserved for issuance. The
Shares, when issued in compliance with the provisions of this Agreement, the
Conversion Shares, when issued in compliance with the provisions of this
Agreement and the Certificate of Designations, and the Warrant Shares, when
issued in compliance with the provisions of the Class A Warrants or the Class B
Warrants, as the case may be, will be duly authorized, validly issued, fully
paid and nonassessable, no personal liability will attach to the ownership
thereof, and will be free of any liens or encumbrances and will be issued in
compliance with applicable federal and state securities laws; provided, however,
that the Shares, the Conversion Shares and the Warrant Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is
proposed.

	Voting Rights. Except as set forth in the Schedule of Exceptions,
(i) there are no restrictions on the transfer of shares of capital stock of
the Company other than those imposed by relevant foreign, state and federal
securities laws, (ii) there are no agreements, understandings, proxies,
trusts or other collaborative arrangements concerning the pledge or purchase and
sale of the capital stock of the Company and (iii) there are no conversion
privileges or "phantom stock" or "stock appreciation rights" plans, other than
as specifically created by the Certificate of Designations. Except as provided
for in the Certificate of Designations, the Company has no obligations
(contingent or otherwise) to purchase, redeem or otherwise acquire any of their
equity securities or any interest therein or to pay any dividend or make any
other distribution in respect thereof.

3.4    Authorization; Binding Obligations
.
 All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and
delivery of this Agreement and the Registration Rights Agreement, the
authorization, execution and filing of the Certificate of Designations with the
Secretary of State of the State of Delaware, the performance of all obligations
of the Company hereunder and thereunder and the authorization, sale, issuance
and delivery of the Shares, the Warrants and the Green Shoe Warrants pursuant
hereto and the Conversion Shares and the Warrant Shares pursuant to the
respective Warrants has been taken or will be taken prior to the Initial
Closing. The Agreement, the Registration Rights Agreement, the Warrants and the
Green Shoe Warrants, when executed and delivered, and the Certificate of
Designations, when executed and filed with the Secretary of State of the State
of Delaware, will be valid and binding obligations of the Company enforceable in
accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights; (b) general
principles of equity that restrict the availability of equitable remedies; and
(c) to the extent that the enforceability of the indemnification provisions
in Section 2.8 of the Registration Rights Agreement may be limited by
applicable federal and state securities laws. The sale of the Shares and
Warrants, the subsequent conversion of the Shares into Conversion Shares and the
subsequent exercise of the Warrants into Warrant Shares, and issuance of such
Conversion Shares and Warrant Shares by the Company, are not and will not be
subject to any preemptive rights, rights of first refusal or other preferential
or similar contractual rights in favor of any person or entity that have not
been properly waived or exercised.

3.5    Disclosure Documents
.
 The Company has delivered to each Purchaser its (i) Annual Report
on Form 10-K, as amended, for the year ended December 31, 2003 ("Form 10-K");
and (ii) its Quarterly Report on Form 10-Q for the Quarterly Period ended
June 30, 2004 ("Form 10-Q"). 

The financial statements included in the Form 10-K and Form 10-Q, including
as applicable the notes thereto (collectively, the "Financial Statements"), are
complete and correct in all material respects, have been prepared in accordance
with generally accepted accounting principles consistently applied; provided,
however, that the unaudited financial statements included in the Form 10-Q are
subject to normal recurring year-end audit adjustments, and do not contain all
footnotes required under generally accepted accounting principles, and present
fairly the financial condition and position of the Company as of such dates and
the results of its operations for the periods ending on such dates.

3.6    Changes
.
 Since June 30, 2004, there has not been:

	Any change in the business, assets, liabilities, financial condition or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which has resulted in
or, to the knowledge and reasonable expectations of the Company would be
expected to result in, whether individually or in the aggregate, a Material
Adverse Effect;
	Any resignation or termination of any key officers of the Company; and the
Company, to the best of its knowledge, does not know of the impending
resignation or termination of employment of any such officer, except as set
forth in Schedule of Exceptions;
	Any waiver by the Company of a valuable right or of a material debt owed to
it, except as set forth in Schedule of Exceptions;
	Any declaration or payment of any dividend or other distribution of the
assets of the Company;
	Any debt, obligation or liability incurred, assumed or guaranteed by the
Company, whether directly or contingently, except those for immaterial amounts
and for current liabilities incurred in the ordinary course of business;
	Any sale, assignment or transfer of any patents, trademarks, copyrights,
trade secrets or other intangible assets, other than those which have occurred
between the Company;
	Any change in any material agreement to which the Company is a party or by
which it is bound which has resulted in or, to the knowledge and reasonable
expectations of the Company, which would reasonably be expected to result in,
whether individually or in the aggregate, a Material Adverse Effect; or
	Any other event or condition of any character that, either individually or
in the aggregate, has resulted in or, to the knowledge of the Company would
reasonably be expected to result in a Material Adverse Effect.

3.7    Offering Valid
.
 Assuming the accuracy of the representations and warranties of the
Purchasers contained in Section 4.2 hereof, the offer, sale and issuance of
the Shares, the Warrants, the Green Shoe Warrants, the Conversion Shares and the
Warrant Shares will be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act") and will have been
registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws. Neither the Company or any agent on its behalf has
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the Securities to any person or persons so as
to bring the sale of such Securities by the Company within the registration
provisions of the Securities Act or any state securities laws.

3.8    Disclosure
.
 The Company and the Subsidiary have fully provided the Purchasers with
all the information that the Purchasers have requested for deciding whether to
acquire the Securities that the Company believes is reasonably necessary to
enable the Purchasers to make such a decision. 

	REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

Each Purchaser severally, but not jointly, hereby represents and warrants to
the Company solely as to itself as follows (such representations and warranties
do not lessen or obviate the representations and warranties of the Company set
forth in this Agreement or the right of any Purchaser to rely thereon):

4.1    Requisite Power and Authority
.
 Purchaser has all necessary power and authority under all applicable
provisions of law to execute and deliver this Agreement and the Registration
Rights Agreement and to carry out their provisions. All action on Purchaser's
part required for the lawful execution and delivery of this Agreement and the
Registration Rights Agreement have been or will be effectively taken prior to
the Closing. Upon their execution and delivery, this Agreement and the
Registration Rights Agreement will be valid and binding obligations of
Purchaser, enforceable in accordance with their terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights,
(b) general principles of equity that restrict the availability of
equitable remedies, and (c) to the extent that the enforceability of the
indemnification provisions of Section 1.8 of the Registration Rights
Agreement may be limited by applicable laws.

4.2    Organization, Good Standing.

If Purchaser is not an individual, it is duly organized, validly existing and
in good standing under the laws of its state of incorporation or
formation.

4.3    Investment Representations
.
 Purchaser understands that none of the Shares, the Warrants, the Green
Shoe Warrants, the Conversion Shares or the Warrant Shares has been registered
under the Securities Act. Purchaser also understands that the Securities are
being offered and sold pursuant to an exemption from registration contained in
the Securities Act based in part upon Purchaser's representations contained in
this Agreement. Each Purchaser severally, but not jointly, hereby represents and
warrants solely as to itself as follows:

	Purchaser Bears Economic Risk. Purchaser has substantial experience
in evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares or the Warrant Shares)
are registered pursuant to the Securities Act, or an exemption from registration
is available. Purchaser understands that while the Company intends to use its
best efforts to cause a registration statement covering the resale of the
Conversion Shares and the Warrant Shares to be declared effective by the
Securities and Exchange Commission, the Company cannot guarantee that such
registration statement will be declared effective at a time that would best
serve Purchaser's purposes or needs, if at all. Purchaser also understands that
there is no assurance that any exemption from registration under the Securities
Act will be available and that, even if available, such exemption may not allow
Purchaser to transfer all or any portion of the Shares, the Warrants, the
Conversion Shares or the Warrant Shares under the circumstances, in the amounts
or at the times Purchaser might propose.

	Acquisition for Own Account. Purchaser is acquiring the Shares, the
Warrants, the Conversion Shares and the Warrant Shares for Purchaser's own
account for investment only, and not with a view towards their
distribution.

	Purchaser Can Protect Its Interest. Purchaser represents that by
reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, the Warrants and the Registration
Rights Agreement. Further, Purchaser is aware of no publication of any
advertisement in connection with the transactions contemplated in the
Agreement.

	Accredited Investor. Purchaser represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act. See
Exhibit F.

	Company Information. Purchaser has received and read the Form 10-K
and Form 10-Q, including the Financial Statements and risk factors contained
therein, and has had an opportunity to discuss the Company's business,
management and financial affairs with directors, officers and management of the
Company and has had the opportunity to review the Company's operations and
facilities. Purchaser has also had the opportunity to ask questions of and
receive answers from, the Company and its management regarding the terms and
conditions of this investment.

	Rule 144. Purchaser acknowledges and agrees that the Shares and
Warrants, and, if issued, the Conversion Shares and Warrant Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Purchaser has been advised or
is aware of the provisions of Rule 144 promulgated under the Securities Act
as in effect from time to time, which permits limited resale of shares purchased
in a private placement subject to the satisfaction of certain conditions,
including, among other things: the availability of certain current public
information about the Company, the resale occurring following the required
holding period under Rule 144 and the number of shares being sold during
any three-month period not exceeding specified limitations. See Exhibit G.

	Residence. If the Purchaser is an individual, then the Purchaser
resides in the state, province or foreign country identified in the address of
the Purchaser set forth on Exhibit A; if the Purchaser is a
partnership, corporation, limited liability company or other entity, then the
office or offices of the Purchaser in which its investment decision was made is
located at the address or addresses of the Purchaser set forth on
Exhibit A.

4.4    Transfer Restrictions
.
 Each Purchaser acknowledges and agrees that the Shares and Warrants
and, if issued, the Conversion Shares and Warrant Shares are subject to
restrictions on transfer as set forth in the Registration Rights Agreement.

4.5    Broker's Fees; Agent's Compensation
.
 The Company has retained Bailey & Company Inc., Toronto, Ontario,
to serve as a non-exclusive placement agent in connection with the offer of the
Securities. In connection therewith, the Company has agreed to pay such agent a
six percent (6%) commission and a two percent (2%) expense allowance, based on
the total gross proceeds received by the Company as a direct result of the
agent's contacts becoming Purchasers in this offering. In addition, the agent
will receive warrants entitling it to purchase up to ten percent (10%) of the
number of Series C Preferred Stock and Warrants purchased by such agent's
contacts. All other offers are being made by the Company directly and are not
subject to any broker's or finder's fee or any other commission directly or
indirectly in connection with the transactions contemplated herein. Each
Purchaser hereto further agrees severally, but not jointly, to indemnify the
Company for any claims, losses or expenses incurred by the Company resulting
directly from such Purchaser's representation in this Section 4.5 being
untrue.

	CONDITIONS TO CLOSING

5.1    Conditions to Purchasers' Obligations at the
Initial Closing
.
 The obligation of each Purchaser at the Initial Closing to purchase the
Securities to be purchased by it at the Closing are subject to the satisfaction,
at or prior to the Initial Closing Date, of the following conditions:

	Representations and Warranties True; Performance of Obligations. The
representations and warranties made in Section 3 hereof shall be true,
complete and correct in all material respects on and as of the Initial Closing
Date with the same force and effect as if they had been made on and as of the
Initial Closing Date, and the Company shall have duly performed all obligations
and conditions herein required to be performed or observed by it on or prior to
the Initial Closing.

	Legal Investment. On the Initial Closing Date, the sale and issuance
of the Shares, the Class A Warrants and the Green Shoe Warrants, and the
proposed issuance of the Class B Warrants, the Conversion Shares and the Warrant
Shares shall be legally permitted by all laws and regulations to which
Purchasers and the Company are subject.

	Consents, Permits, and Waivers. The Company shall have obtained any
and all consents, permits and waivers necessary or appropriate for consummation
of the transactions contemplated by the Agreement and the Registration Rights
Agreement (except for such as may be properly obtained subsequent to the Initial
Closing).

	Filing of Certificate of Designations. The Certificate of
Designations shall have been filed with and accepted for filing by the Secretary
of State of the State of Delaware, and each Purchaser or its counsel shall have
received a copy of the same certified by said Secretary of State.

	Corporate Documents. The Company shall have delivered to Purchasers,
copies of all corporate documents of the Company as Purchasers shall reasonably
request.

	Reservation of Conversion Shares and Warrant Shares. The Conversion
Shares issuable upon conversion of the Shares and the Warrant Shares issuable
upon exercise of the Warrants (in both instances, including any Shares and
Warrants issuable upon exercise of the Green Shoe Warrant) shall have been duly
authorized and reserved for issuance upon such conversion or exercise, as the
case may be.

	Registration Rights Agreement. A Registration Rights Agreement
substantially in the form attached hereto as Exhibit H shall have been
executed and delivered by the parties thereto.

	Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Initial Closing hereby and
all documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to each Purchaser, and each Purchaser shall
have received all such counterpart originals or certified or other copies of
such documents as they may reasonably request.

	Lock-up Agreements. The officers and directors of the Company shall
have entered into agreements with the Company providing that they will not
publicly sell any shares of the Company's Common Stock owned by them or by their
affiliated entities for a period of six months from the Initial Closing.

	Simultaneous Closing. Each of the Purchasers participating in the
Initial Closing shall have tendered the purchase price and accepted delivery of
the Shares, the Class A Warrants and the Green Shoe Warrants to be issued to
them at the Initial Closing as set forth in Exhibit A.

5.2    Conditions to Additional Purchasers' Obligations
at Subsequent Closings
.
 The obligation of each Additional Purchaser at a Subsequent Closing to
purchase the Securities to be purchased by it at such Subsequent Closing are
subject to the satisfaction, at or prior to the Subsequent Closing Date, of the
following conditions:

	Representations and Warranties True; Performance of Obligations. The
representations and warranties made in Section 3 hereof shall be true,
complete and correct in all material respects on and as of the Subsequent
Closing Date with the same force and effect as if they had been made on and as
of the Subsequent Closing Date, and the Company shall have duly performed all
obligations and conditions herein required to be performed or observed by it on
or prior to the Subsequent Closing.

	Legal Investment. On the Subsequent Closing Date, the sale and
issuance of the Shares, the Class A Warrants and the Green Shoe Warrants, and
the proposed issuance of the Class B Warrants, the Conversion Shares and the
Warrant Shares shall be legally permitted by all laws and regulations to which
Additional Purchasers and the Company are subject.

	Consents, Permits, and Waivers. The Company shall have obtained any
and all consents, permits and waivers necessary or appropriate for consummation
of the transactions contemplated by the Agreement and the Registration Rights
Agreement (except for such as may be properly obtained subsequent to the
Subsequent Closing).

	Certificate of Designations. Each Additional Purchaser shall have
received a copy of the Certificate of Designations, as filed with and accepted
for filing by the Secretary of State of the State of Delaware, certified by said
Secretary of State.

	Corporate Documents. The Company shall have delivered to each
Additional Purchaser or its counsel, copies of all corporate documents of the
Company as such Additional Purchaser shall reasonably request.

	Reservation of Conversion Shares and Warrant Shares. The Conversion
Shares issuable upon conversion of the Shares and the Warrant Shares issuable
upon exercise of the Warrants (in both instances, including any Shares and
Warrants issuable upon exercise of the Green Shoe Warrant) shall have been duly
authorized and reserved for issuance upon such conversion or exercise, as the
case may be.

	Joinder Agreements. The Company and each Additional Purchaser
participating in such Subsequent Closing shall have entered into a Joinder
Agreement to this Agreement and the Registration Rights Agreement, pursuant to
which such Additional Purchaser agrees to be a party to and to be bound by the
terms and conditions of this Agreement and the Registration Rights Agreement
effective as of such Subsequent Closing Date.

	Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Subsequent Closing hereby
and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to each Additional Purchaser and
its counsel, and each Additional Purchaser and its counsel shall have received
all such counterpart originals or certified or other copies of such documents as
they may reasonably request.

	Simultaneous Closing. Each of the Additional Purchasers participating
in such Subsequent Closing shall have tendered the purchase price and accepted
delivery of the Shares, the Class A Warrants and the Green Shoe Warrants to be
issued to them at such Subsequent Closing as set forth in Exhibit A,
as amended.

5.3    Conditions to Purchasers' and Additional
Purchasers' Obligations at the Green Shoe Closing
.
 The obligation of each Purchaser and Additional Purchaser at a Green
Shoe Closing to purchase the Securities to be purchased by it at such Green Shoe
Closing are subject to the satisfaction, at or prior to the Green Shoe Closing
Date, of the following conditions:

	Representations and Warranties True; Performance of Obligations. The
representations and warranties made in Section 3 hereof shall be true,
complete and correct in all material respects on and as of the Green Shoe
Closing Date with the same force and effect as if they had been made on and as
of the Green Shoe Closing Date, and the Company shall have duly performed all
obligations and conditions herein required to be performed or observed by it on
or prior to the Green Shoe Closing.

	Legal Investment. On the Green Shoe Closing Date, the sale and
issuance of the Shares and the Class A Warrants, and the proposed issuance of
the Class B Warrants, the Conversion Shares and the Warrant Shares shall be
legally permitted by all laws and regulations to which Purchasers, Additional
Purchasers and the Company are subject.

	Consents, Permits, and Waivers. The Company shall have obtained any
and all consents, permits and waivers necessary or appropriate for consummation
of the transactions contemplated by the Agreement and the Registration Rights
Agreement (except for such as may be properly obtained subsequent to the Green
Shoe Closing).

	Reservation of Conversion Shares and Warrant Shares. The Conversion
Shares issuable upon conversion of the Shares and the Warrant Shares issuable
upon exercise of the Warrants issued or issuable in the Green Shoe Closing shall
have been duly authorized and reserved for issuance upon such conversion or
exercise, as the case may be.

	Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Green Shoe Closing hereby
and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to each Purchaser or Additional
Purchaser and its counsel, and each Purchaser or Additional Purchaser and its
counsel shall have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.

	Simultaneous Closing. Each of the Purchasers and Additional
Purchasers participating in such Green Shoe Closing shall have tendered the
purchase price and accepted delivery of the Shares and the Class A Warrants to
be issued to them at such Green Shoe Closing as set forth in
Exhibit A, as amended.

5.4    Conditions to Obligations of the Company
.
 The Company's obligation to issue and sell the Securities at the
Closing, at any Subsequent Closing or at the Green Shoe Closing, is subject to
the satisfaction, on or prior to such Closing, any Subsequent Closing or the
Green Shoe Closing, as the case may be, of the following conditions:

	Representations and Warranties True. The representations and
warranties made by each Purchaser or Additional Purchaser in Section 4
hereof, and with respect to such Additional Purchaser, in its Joinder Agreement,
shall be true and correct in all material respects on and as of the Closing
Date, the Subsequent Closing Date or the Green Shoe Closing Date, as applicable,
with the same force and effect as if they had been made on and as of such
date.

	Performance of Obligations. Each Purchaser or Additional Purchaser,
as applicable, shall have performed and complied with all agreements and
conditions herein required to be performed or complied with by such Purchaser or
Additional Purchaser, as applicable, on or before the Closing Date or the
Subsequent Closing Date, as applicable.

	Registration Rights Agreement; Joinder Agreement. With respect to the
Closing, the Registration Rights Agreement substantially in the form attached
hereto as Exhibit H shall have been executed and delivered by the
parties thereto. With respect to a Subsequent Closing, each Additional Purchaser
participating in such Subsequent Closing shall have entered into a Joinder
Agreement to this Agreement and the Registration Rights Agreement, pursuant to
which such Additional Purchaser agrees to be a party to and to be bound by the
terms and conditions of this Agreement and the Registration Rights Agreement
effective as of such Subsequent Closing Date.
	MISCELLANEOUS

6.1    Governing Law
.
 This Agreement shall be governed in all respects by the laws of the
State of California as such laws are applied to agreements between California
residents entered into and performed entirely in California. 

6.2    Survival
.
 The representations, warranties, covenants and agreements made and
deemed to be made, pursuant to the next sentence of this Section 6.2,
herein shall survive the execution and delivery hereof, any investigation made
by any Purchaser or Additional Purchaser and the Closing, each Subsequent
Closing and the Green Shoe Closing and shall remain in full force and effect
thereafter, but within the limits set forth under Section 6.9.

6.3    Successors and Assigns
.
 Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person who shall be a holder of the
Securities from time to time.

6.4    Entire Agreement
.
 This Agreement, the Exhibits and Schedules hereto, the
Registration Rights Agreement, each Joinder Agreement, if any, and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof and no
party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.

6.5    Severability
.
 In case any provision or any portion thereof, of the Agreement shall be
deemed by a court of competent jurisdiction to be invalid, illegal or
unenforceable, the parties agree to renegotiate such provisions in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then such provision, or portion thereof, shall
be deemed limited to the extent that such court deems it enforceable, and as so
limited shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and shall remain in full force and
effect.

6.6    Amendment and Waiver.

	This Agreement may be amended or modified only upon the written consent of
the Company and holders of at least sixty percent (60%) of the Shares (treated
as if converted and including any Conversion Shares into which the Shares have
been converted or Warrant Shares into which the Class A or Class B Warrants have
been exercised that have not been sold to the public).
	The obligations of the Company and the rights of the holders of the Shares,
the Warrants, the Conversion Shares and the Warrant Shares under the Agreement
may be waived only with the written consent of all holders of the Shares
(treated as if converted and including any Conversion Shares into which the
Shares have been converted or Warrant Shares into which the Class A or Class B
Warrants have been exercised that have not been sold to the public that have not
been sold to the public).

6.7    Delays or Omissions
.
 It is agreed that no delay or omission to exercise any right, power or
remedy accruing to any party, upon any breach, default or noncompliance by
another party under this Agreement, the Registration Rights Agreement, the
Certificate of Designations or the Warrants, and no course of dealing between or
among parties hereto, shall impair any such right, power or remedy, nor shall it
be construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring. No single or partial exercise of any right, power or
remedy under this Agreement by a party hereto, nor any abandonment or
discontinuance of steps to enforce any such right, power or remedy, shall
preclude such party from any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. No notice to or demand on a party
not expressly required under this Agreement shall entitle the party receiving
such notice or demand to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the party giving
such notice or demand to any other or further action in any circumstances
without such notice or demand. It is further agreed that any waiver, permit,
consent or approval of any kind or character on any Purchaser's or Additional
Purchaser's part of any breach, default or noncompliance under this Agreement,
the Warrants, the Registration Rights Agreement, and, if applicable, Joinder
Agreement or under the Certificate of Designations or any waiver on such party's
part of any provisions or conditions of the Agreement, the Warrants, the
Registration Rights Agreement, any Joinder Agreement or the Certificate of
Designations must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, the Warrants, the Registration Rights Agreement, the Certificate of
Designations, by law, or otherwise afforded to any party, shall be cumulative
and not alternative.

6.8    Waiver of Conflicts
.
 Each party to this Agreement acknowledges that legal counsel for the
Company, Wickersham & Murphy, P.C. ("W&M"), has in the past and may
continue in the future to perform legal services for one or more of the
Purchasers, Additional Purchasers or their affiliates in matters unrelated to
the transactions contemplated by this Agreement, including, but not limited to,
the representation of the such parties in matters of a similar nature to the
transactions contemplated herein, including prior private offerings of the
Company's securities. Each party to this Agreement hereby (a) acknowledges
that they have had an opportunity to ask for and have obtained information
relevant to such representation, including disclosure of the reasonably
foreseeable adverse consequences of such representation; (b) acknowledges
that with respect to the transactions contemplated herein, W&M has
represented the Company and not any other party; and (c) gives its informed
consent to W&M's representation of the Company in the transactions
contemplated by this Agreement and W&M's representation of one or more of
the Purchasers, Additional Purchasers or their affiliates in matters unrelated
to such transactions; provided, however, that no consent is hereby given to
W&M to represent the Purchasers or any other party in connection with any
dispute arising out of the transactions contemplated hereby, and it is expressly
understood and agreed that should such a dispute arise, irrespective of the
disputing party, W&M shall decline to represent either the Company or any
Purchaser or Additional Purchaser in such dispute.

6.9    Indemnification and Advancement for Third-Party
Claims
.

	The Company (the "Indemnitor") hereby agrees to jointly and severally
indemnify, defend and hold harmless each Purchaser, each Additional Purchaser
and each of their respective owners, officers, directors, employees and agents,
and their respective successors and assigns (collectively, referred to as the
"Investor Indemnitees") from, against and with respect to any claim, liability,
obligation, loss, damage, assessment, judgment, amount paid in settlement, cost
and expense (including, without limitation, reasonable attorneys' and
accountants' fees and costs and expenses reasonably incurred in investigating,
preparing, defending against or prosecuting any litigation or claim, action,
suit, proceeding or demand) of any kind or character, arising out of or in any
manner incident, relating or attributable to any breach of a representation,
warranty or covenant of this Agreement (a "Loss").

	Survival of Representations and Warranties. Notwithstanding the
foregoing, all of the representations and warranties contained in Section 3 of
this Agreement shall survive the Closing and shall expire at 5:00 pm, California
time, on the second anniversary of the Closing.

	Exclusive Remedy. Resort to the indemnification obligations of this
Section 6.9 shall be the sole and exclusive right and remedy of the Investor
Indemnitees for breaches of the representations, warranties, and covenants
contained in this Agreement, except in the case of fraud or intentional or
knowing breach in connection with the making of the representations and
warranties or covenants of the Company contained in this Agreement.

	Threshold and Indemnification Cap. Notwithstanding the foregoing,
after the Closing, no Investor Indemnitee shall be entitled to indemnification
for a Loss unless and until indemnifiable Losses in excess of one hundred
thousand dollars ($100,000) shall have been identified by the Investor
Indemnitee, in which case the full amount of such Loss shall be paid to such
Investor Indemnitee in accordance with the terms hereof. The maximum aggregate
liability of the Indemnitor with respect to each Purchaser or Additional
Purchaser, or agent thereof, in connection with the terms hereof shall not
exceed the amount of the purchase price paid by such Purchaser or Additional
Purchaser for the Shares of Series C Preferred Stock purchased hereunder.

	Satisfaction of Indemnification Obligation. The indemnification
obligations of the Company hereof shall, unless otherwise determined by the
Investor Indemnitees, be satisfied by the payment of cash in the amount of the
Loss, unless and to the extent that it is determined by the auditors of the
Company that the Company would be unable to meet their debts and obligations as
they became due if the full amount of the Loss was paid in cash, in which case
the amount of the Loss that is equal to the amount that is required to be
maintained by the Company and the Subsidiary in order to meet their debts and
obligations as they become due shall be satisfied by the issuance of shares of
the same class and Series Cnd with the same terms and conditions as being
purchased by the Purchasers or Additional Purchasers pursuant to this Agreement
with a purchase price per share as determined by the Board of Directors, acting
in good faith (except that, in any case the number of shares to be issued in
this respect shall not be in excess of the number of shares of Common Stock of
the Company, on an as converted basis, then held by such Purchaser or Additional
Purchaser), and the remainder of the Loss shall be satisfied by the payment of
cash. 

6.10    Notices
.
 All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party
to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (c) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (d) one (1) business
day after deposit (or, in the case of parties located outside the United States,
two (2) business days after deposit) with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All
communications shall be sent to the Company at the address as set forth on the
signature page hereof and to Purchaser or Additional Purchaser at the address
set forth on Exhibit A attached hereto, as amended, or at such other
address as the Company, Purchaser or Additional Purchaser may designate by ten
(10) days advance written notice to the other parties hereto.

6.11    Expenses
.
 The Company shall pay all costs and expenses incurred with respect to
the negotiation, execution, delivery and performance of this Agreement, the
Warrants, the Green Shoe Warrant, the Registration Rights Agreement, the
Certificate of Designations, each Joinder Agreement and any other document,
instrument or agreement contemplated hereby or prepared and/or delivered in
connection herewith. Purchasers and Additional Purchasers may, if they so
choose, hire counsel to represent their interests in these transactions, but at
their own expense. 

6.12    Attorneys' Fees
.
 In the event that any dispute among the parties to this Agreement
should result in litigation, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of
enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

6.13    Titles
.
 The titles of the sections and subsections of the Agreement
are for convenience of reference only and shall in no way modify, or affect the
meaning or construction of any of the terms or provisions hereof.

6.14    Counterparts
.
 This Agreement may be executed in any number of counterparts, including
by way of execution of one or more Joinder Agreements, each of which shall be an
original, but all of which together shall constitute one and the same
instrument.

6.15    Exculpation Among Purchasers
.
 Each Purchaser and Additional Purchaser acknowledges that it is not
relying upon any person, firm, or corporation (including without limitation any
other Purchaser or Additional Purchaser), other than the Company and its
officers and directors, in making its investment or decision to invest in the
Company. Each Purchaser and Additional Purchaser agrees that no other Purchaser
or other Additional Purchaser, nor their respective controlling persons,
officers, directors, partners, agents, or employees, shall be liable to such
Purchaser or Additional Purchaser for any losses incurred by such Purchaser or
Additional Purchaser in connection with its investment in the Company.

6.16    Pronouns
.
 All pronouns contained herein, and any variations thereof, shall be
deemed to refer to the masculine, feminine or neutral, singular or plural, as to
the identity of the parties hereto may require.

6.17    California Corporate Securities Law
.
 THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS
NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE
OF AN EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR
25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS
AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED,
UNLESS THE SALE IS SO EXEMPT.

6.18    Reliance
.
 The parties hereto agree that, notwithstanding any right of any party
to this Agreement to investigate the affairs of any other party to this
Agreement, the party having such right to investigate shall have the right to
rely fully upon the representations and warranties of the other parties
expressly contained in this Agreement and on the accuracy of any schedule or
other document attached hereto or referred to herein or delivered by such other
parties or pursuant to this Agreement.

6.19    Publicity
.
 No party shall issue any press releases or otherwise make any public
statement with respect to the transactions contemplated by this Agreement
without the prior written consent of the other parties hereto, except as may be
required by law or otherwise expressly permitted by this Agreement.

6.20    Like Treatment of Holders
.
 Neither the Company nor any of its affiliates shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee, payment for the redemption or exchange of any Preferred Stock, or
otherwise, to any holder of the Shares for or as in inducement to, or in
connection with solicitation of, any consent, waiver or amendment of any terms
or provisions of the Shares or this Agreement, the Registration Rights
Agreement, the Warrants or any other agreement entered into herewith, unless
such consideration is paid to all holders of Shares bound by such consent,
waiver or amendment, whether or not such holders so consent, waive or agree to
amend and whether or not such holders tender their Shares for redemption or
exchange.

6.21    Delivery by Facsimile

.
 This Agreement, the agreements referred to herein, and each other
agreement or instrument entered into in connection herewith or therewith or
contemplated hereby or thereby, and any amendments hereto or thereto, to the
extent signed and delivered by means of a facsimile machine, shall be treated in
all manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. At the request of any party hereto
or to any such agreement or instrument, each other party hereto or thereto shall
re-execute original forms thereof and deliver them to all other parties. No
party hereto or to any such agreement or instrument shall raise the use of a
facsimile machine to deliver a signature or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of a
facsimile machine as a defense to the enforceability of a contract and each such
party forever waives any such defense.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have executed the 8% SERIES C
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the
first paragraph hereof.

	
COMPANY:
	
PURCHASER (if an entity):

	
DIGITAL VIDEO SYSTEMS, INC.
	
_____________________________________

	
By: /s/ Thomas A. Spanier

   Thomas A Spanier

   Chairman and Chief Executive Officer
	
By: __/s/______________

PURCHASER (if an individual):

 ___/s/___________________________

EXHIBIT A

                  SCHEDULE OF PURCHASERS
First Closing - September 20, 2004

	
Name
	
Purchase Price
	
Series C Preferred Stock
	
Class A Warrants
	
Aggregate Purchase Price

	
Empire Capital Partners, LP
	
$0.61
	
334,052
	
167,026
	
$203,771.72

	
Empire Capital Partners, Ltd.
	
$0.61
	
622,865
	
311,432
	
$379,947.65

	
Empire Capital Partners II, Ltd.
	
$0.61
	
116,031
	
58,015
	
$70,778.91

	
Charter Oak Partners, LP
	
$0.61
	
61,945
	
30,972
	
$37,786.45

	
Charter Oak Partners II, LP
	
$0.61
	
12,647
	
6,323
	
$7,714.67

	
Glenbrook Capital, LP
	
$0.61
	
409,836
	
204,918
	
$249,999.96

	
Sanctus Spiritus Antilles, NV
	
$0.61
	
327,868
	
163,934
	
$199,999.48

	
Maria Molinsky
	
$0.61
	
81,967
	
40,983
	
$49,999.87

	
Edmund Y. Sun
	
$0.61
	
81,967
	
40,983
	
$49,999.87

	
Yuchien Chang
	
$0.61
	
32,786
	
16,393
	
$19,999.46September 24 2004 Exhibit 10.65

EXHIBIT 10.65

 

DIGITAL VIDEO SYSTEMS, INC.

REGISTRATION RIGHTS AGREEMENT

DIGITAL VIDEO
SYSTEMS, INC

REGISTRATION RIGHTS AGREEMENT

THIS AGREEMENT is made as of September 20, 2004, among
Digital Video Systems, Inc., a Delaware corporation (the "Company") and the
purchasers of the Company's 8% Series C Convertible Preferred Stock (the "Series
C Preferred Stock") and accompanying Class A warrants (the "Warrants") listed on
Exhibit A hereto (each an "Investor," and collectively, the
"Investors"). Capitalized terms not defined herein shall have the meanings
defined for them in the 8% Series C Convertible Preferred Stock Purchase
Agreement by and between the Company and the Purchasers listed on Exhibit A
thereto, of even date herewith (the "SPA").

RECITALS

WHEREAS, the Investors desire to obtain certain rights
regarding registration of the Company's securities under the Securities Act
of 1933, as amended ("Registration Rights"). 

WHEREAS, the Company, to induce the Investors to invest,
desires to grant the Investors such rights.

NOW, THEREFORE, the parties agree as follows:

1.REGISTRATION UNDER THE SECURITIES ACT OF 1933

1.1Definitions. For purposes of this
Agreement:

(a)The term "Act" means the Securities Act of
1933, as amended.

(b)The term "Offering" refers to the non-
registered private placement of 8% Series C Convertible Preferred Stock, Class A
Warrants and (potentially) Class B Warrants pursuant to the SPA.

(c)The terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Act and the declaration or
ordering of effectiveness of such registration statement.

(d)The term "Registrable Securities" means: (i)
the Common Stock, $0.0001 par value of the Company (the "Common Stock) issuable
upon conversion of the Series C Preferred Stock sold in the Offering, including
any Series C Preferred Stock issuable upon exercise of the Green Shoe Warrant;
(ii) any Common Stock of the Company issuable upon exercise of the Class A
Warrants issued in connection with the Offering; and (iii) any Common Stock of
the Company issued or issuable with respect to such shares of Common Stock upon
any stock split, stock dividend, recapitalization, or similar event, or any
Common Stock otherwise issued or issuable with respect to such Common Stock;
provided, however, that such securities shall only be treated as
Registrable Securities if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Act under Section 4(1)
thereof so that all transfer restrictions and restrictive legends with respect
thereto are removed upon the consummation of such sale; the Common Stock
issuable upon exercise of the Class B Warrants, if issued in the future pursuant
to the terms of the Offering as described in the SPA, are not "Registrable
Securities" for purposes of Section 1.2 below, but shall be considered
"Registrable Securities for purposes of Section 1.3 hereof.

(e)The term "Holder" means the person or entity
holding Registrable Securities, who is also a party to this Agreement;

1.2Registration of Registrable Securities.
Within 30 days following the final Closing of the Offering (not including the
Green Shoe Closing, which by its terms will not occur until after the effective
date of the registration statement contemplated by this Section 1.2), the
Company shall use its reasonable efforts to file a registration under the Act of
all of the Registrable Securities and to use its best efforts to effect the
registration thereunder as promptly as possible thereafter, but in no event
later than 90 days following the final Closing of the Offering. In the event the
Company has not filed the registration statement within such 30-day period or
the Registrable Securities have not been registered pursuant to an effective
registration statement by such 90-day period, the Company agrees to pay a
penalty as liquidated damages at a rate of 1% of the aggregate purchase price
paid by each investor, payable in cash or in kind, for each 30-day period after
the deadline. The Company is obligated to effect only one registration pursuant
to this Section 1.2 unless the Company fails to effect the registration of all
Registrable Securities for which registration is required and have such
registration declared or ordered effective. The foregoing notwithstanding, there
can be no assurance that the registration statement, once filed by the Company,
will be declared effective by the Securities and Exchange Commission (the
"Commission").

1.3Company Registration. 

(a)If the Company shall determine to register any
of its securities either for its own account or the account of a security holder
or holders exercising their respective demand registration rights (other than
pursuant to Section 1.2 hereof), other than a registration relating solely to
employee benefit plans, or a registration relating to a corporate reorganization
or other transaction under Rule 145, or a registration on any registration form
that does not permit secondary sales, the Company will:

(i)promptly give to each Holder written notice
thereof; and

(ii)use its best efforts to include in such
registration (and any related qualification under blue sky laws or other
compliance), except as section forth in Section 1.3(b) below, and in any
underwriting involved therein, all the Registrable Securities (including for
this purpose, any Common Stock issuable upon exercise of Class B Warrants, if
such warrants have been issued at the time of the notice contemplated by Section
1.3(a)(i)) specified in a written request or requests, made by any Holder and
received by the Company within ten days after the written notice from the
Company described in clause (i) above is mailed or delivered by the Company.
Such written request may specify all or a part of the Holder's Registrable
Securities.

(b)If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.3(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 1.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and other holders of securities of the Company with
registration rights to participate therein distributing their securities through
such underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected by the
Company.

(c)Notwithstanding any other provision of this
Section 1.3, if the representative of the underwriters advises the Company in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the representative may (subject to the limitations set forth
below) exclude all Registrable Securities from, or limit the number of
Registrable Securities to be included in, the registration and underwriting. The
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated first to the Company for
securities being sold for its own account and thereafter as set forth in Section
1.3(d). If any person does not agree to the terms of any such underwriting, he
shall be excluded therefrom by written notice from the Company or the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration. 

If shares are so withdrawn from the registration or if
the number of shares of Registrable Securities to be included in such
registration was previously reduced as a result of marketing factors, the
Company shall then offer to all persons who have retained the right to include
securities in the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so withdrawn,
with such shares to allocated among the persons requesting additional inclusion
in accordance with Section 1.3(d).

(d)If any circumstance in which all of the
Registrable Securities and other shares of Common Stock of the Company
(including shares of Common Stock issued or issuable upon conversion of shares
of any currently unissued series of Preferred Stock of the Company) with
registration rights (the "Other Shares") requested to be included in a
registration on behalf of the holders or other selling stockholders cannot be so
included as a result of limitations of the aggregate number of shares of
Registrable Securities and Other Shares that may be so included, the number of
shares of Registrable Securities and Other Shares that may be so included shall
be allocated among the Holders and the other selling stockholders requesting
inclusion of shares pro rata on the basis of the number of shares of
Registrable Securities and Other Shares that would be held by such Holders and
other selling stockholders, assuming conversion; provided, however, that
such allocation shall not operate to reduce the aggregate number of Registrable
Securities and Other Shares to be included in such registration, if any Holder
or other selling stockholder does not request inclusion of the maximum number of
shares of Registrable Securities and Other Shares allocated to him pursuant to
the above-described procedure, the remaining portion of his allocation shall be
reallocated among those requesting Holders and other selling stockholders whose
allocations did not satisfy their requests pro rata on the basis of the
number of shares of Registrable Securities and Other Shares that would be held
by such Holders and other selling stockholders, assuming conversion, and this
procedure shall be repeated until all of the shares of Registrable Securities
and Other Shares that may be included in the registration on behalf of the
Holders and other selling stockholders have been so allocated. The Company shall
not limit the number of Registrable Securities to be included in a registration
pursuant to this Agreement in order to include shares held by stockholders with
no registration rights or any shares of stock issued to employees, officers,
directors or consultants pursuant to the Company's stock options plans, in order
to include such registration securities registered for the Company's own
account.

1.4Obligations of the Company. Whenever
required under Section 1.2 or 1.3 to use its reasonable efforts to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:

(a)Prepare and file with the Commission a
registration statement with respect to such Registrable Securities and use its
reasonable efforts to cause such registration statement to be declared or
ordered effective;

(b)Prepare and file with the Commission such
amendments or supplements to such registration statement and the prospectus used
in connection with such registration statement as may be necessary to keep such
registration statement effective for a period ending the earlier of (i) the
completion of the distribution of the Registrable Securities included in the
registration statement of (ii) one year from the effective date of such
registration statement;

(c)Furnish to the Holder such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them;
and

(d)Use its reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
appropriate for the distribution of the securities covered by the registration
statement, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions, and
further provided that (anything in this Agreement to the contrary
notwithstanding with respect to the bearing of expenses) if any jurisdiction in
which the securities shall be qualified shall require that expenses incurred in
connection with the qualification of the securities in that jurisdiction be
borne by selling stockholders, then such expenses shall be payable to selling
stockholders pro rata, to the extent required by such jurisdiction;

1.5Furnish Information. It shall be a
condition precedent to the obligations of the Company to take any action
pursuant to this Agreement as to any Holder that such Holder shall furnish to
the Company such information regarding him or it, the Registrable Securities
held by him or it, and the intended method of disposition of such securities as
the Company shall reasonably request and as shall be requested or required by
the SEC or otherwise in connection with the action to be taken by the
Company.

1.6Expenses of Registration. All expenses
incurred in connection with the registration, qualification or compliance
pursuant to Sections 1.2 or 1.3 (excluding underwriters' discounts and
commissions), including, without limitation, all registration and qualification
fees, printers' and accounting fees and fees and disbursements of counsel for
the Company, shall be borne by the Company. The foregoing notwithstanding, to
the extent any applicable state securities statutes or regulations require
selling stockholders to bear the costs of registration of their securities, the
Holders shall be responsible for such costs to the extent required by applicable
state law.

1.7Delay of Registration. Notwithstanding any
other provision of this Agreement, no Holder shall have any right to take any
action to restrain, enjoin or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.

1.8Indemnification. In the event any
Registrable Securities are included in a registration statement under this
Agreement:

(a)To the extent permitted by law, the Company
will indemnify each Holder, each of its officers and directors and partners, and
each person controlling such Holder within the meaning of Section 15 of the Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the Act,
against all expenses, claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, or any violation by the Company of the Act or any rule or regulation
promulgated under the Act applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, each of its officers and directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or alleged omission, made in reliance upon and in conformity with
written information furnished to the Company by such Holder, officer, director,
partner, controlling person or underwriter and stated to be specifically for use
therein.

(b)Each Holder will, if Registrable Securities
held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its officers and directors, each underwriter of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriting within the meaning of Section 15 of the Act,
and each other such Holder, each of its officers and directors and partners and
each person controlling such Holder within the meaning of Section 15 of the Act,
against all expenses, claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to such registration, qualification or
compliance, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company, such Holders, such directors,
officers, partners, persons, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or allege omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by any instrument duly executed by such Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
each Holder under this subsection (b) shall be limited in an amount equal to the
initial public offering price of the shares sold by such Holder, unless such
liability arises out of or is based on willful conduct by such Holder.

(c)Each party entitled to indemnification under
this Section 1.8 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom; provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense; and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnified Party's ability to
defend such action; and provided further that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
separate and different defenses. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.

1.9Proposed Transfers of Registrable
Securities. The Holder of each certificate representing Registrable
Securities by accepting those securities, agrees to comply in all respects with
the following provisions:

(a)Prior to any proposed transfer of any
Registrable Securities (other than under the circumstances described in Section
1.2 above), the Holder of those Registrable Securities shall give written notice
to the Company of such Holder's intention to effect the transfer;

(b)Each such notice shall describe the manner
and circumstances of the proposed transfer, shall be accompanied by such
information as is necessary in order to establish that such transfer may be made
without registration under the Act and except with respect to transactions not
involving a change in beneficial ownership or transactions involving the
distribution without consideration of Registrable Securities by any of the
Holders to any of their partners, retired partners, or any estate of their
partners or retired partners, or to any affiliated venture capital partnership,
or to any members of the immediate family of the Holders, shall also be
accompanied by either (i) a written opinion of legal counsel who shall be
reasonably satisfactory to the Company and its counsel stating that the proposed
transfer of the Registrable Securities may be effected without registration
under the Act and without qualification under the state securities or Blue Sky
laws; or (ii) a "no action" letter from the Commission; or (iii) an appropriate
registration statement with respect to such Registrable Securities filed by the
Company with the Commission and declared effective by the Commission.

(c)Having satisfied Section 1.9(b), above,
the Holder of such Registrable Securities shall be entitled to transfer the
Registrable Securities in accordance with the terms of the notice delivered by
the Holder to the Company.

(d)Each certificate evidencing the
Registrable Securities transferred shall bear the appropriate restrictive
legends as set forth on the Registrable Securities themselves prior to transfer.
However, the Company shall remove such restrictive legend upon the request of
the Holder if (i) the Company has received from or on behalf of the investor an
opinion of counsel who is reasonably acceptable to the Company and its counsel
to the effect that registration of any and all future transfers is not required;
or (ii) an appropriate registration statement with respect to such Registrable
Securities has been filed by the Company with the Commission and declared
effected by the Commission.

1.10Transfer of Registration Rights. The
registration rights of the Holders under this Agreement may be transferred to
any transferee who acquires Registrable Securities; provided, however,
that such transfer of rights shall be effective only where the Company is given
written notice by the Holder stating the name and address of the transferee and
identifying the securities with respect to which the rights under this Agreement
are being assigned.

2.MISCELLANEOUS

2.1Additional Investors. Additional
Investors will be added to this Agreement; such Investors may become party to
this Agreement, upon execution and delivery to the Company of signature pages
hereto.

2.2Waivers and Amendments. With the written
consent of the record or beneficial holders of at least 60% of the Registrable
Securities, the rights and obligations of the Company and the holders of
Registrable Securities under this Agreement may be waived (either generally or
in a particular instance, either retroactively or prospectively, and either for
a specified period of time or indefinitely), and with the same consent, the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that any proposed waiver or amendment which would adversely
affect the rights or obligations of the holders of the Series C Preferred Stock
relative to, or disproportionately with, the rights or obligations of the
holders of the other Preferred Stock, must be approved by the holders of at
least a majority of the Series C Preferred Stock; further provided, however,
that no such consent shall be required for the purpose of adding to this
Agreement an Investor pursuant to Section 2.1, and further, that no such
modification, amendment or waiver shall reduce the aforesaid percentage of
Registrable Securities without the consent of all of the Purchasers of the
Registrable Securities. Upon the effectuation of each such waiver, consent,
agreement of amendment or modification, the Company shall promptly give written
notice thereof to the record holders of the Registrable Securities who have not
previously consented thereto in writing. This Agreement or any provision hereof
may be changed, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, except to the extent provided in this Section 2.2
(Waivers and Amendments).

2.3Notices. All notices and other
communications required or permitted hereunder shall be in writing and, except
as otherwise noted herein, shall be deemed effectively given upon personal
delivery, delivery by nationally recognized courier or forty-eight (48) hours
after being deposited with the United States Post Office, (by registered mail,
postage prepaid) addressed: 

	if to the Company, at:

Digital Video Systems, Inc.

   430 Cambridge Avenue, Suite 110

   Palo Alto, CA 94306

   Attn.: Chief Executive Officer

   Tel: (650) 322-8108

   Fax: (650) 322-8109

	if to a Holder, at the latest address of such person shown on the Company's
records.

2.4Descriptive Headings. The descriptive
headings herein have been inserted for convenience only and shall not be deemed
to limit or otherwise affect the construction of any provisions hereof.

2.5Governing Law. This Agreement shall be
governed by and interpreted under the laws of the State of California, without
regard to conflict of law provisions.

2.6Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original and all of which shall constitute the same instrument,
but only one of which need be produced.

2.7Expenses. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled. 

2.8Successors and Assigns. Except as
otherwise expressly provided in this Agreement, this Agreement shall benefit and
bind the successors, assigns, heirs, executors and administrators of the parties
to this Agreement.

2.9Entire Agreement. This Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subject matter of this Agreement.

2.10Separability; Severability. Unless
expressly provided in this Agreement, the rights of each Investor under this
Agreement are several rights, not rights jointly held with any other Investors.
Any invalidity, illegality or limitation on the enforceability of this Agreement
with respect to any Investor shall not affect the validity, legality or
enforceability of this Agreement with respect to the other Investors. If any
provision of this Agreement is judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired.

2.11Stock Splits. All references to numbers
of shares in this Agreement shall be appropriately adjusted to reflect any stock
dividend, split, combination or other recapitalization of shares by the Company
occurring after the date of this Agreement.

2.12Aggregation of Stock. All shares of
Preferred Stock held or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.

2.13Facsimile
Signatures. Any signature page delivered by fax machine or telecopy
machine shall be binding to the same extent as an original signature page, with
regard to any agreement subject to the terms hereof or any amendment thereto.
Any party who delivers such a signature page agrees to later deliver an original
counterpart to any party which requests it.

IN WITNESS WHEREOF, the parties have executed this
Registration Rights' Agreement on the day and year first set forth above.

	
THE COMPANY:
	
DIGITAL VIDEO SYSTEMS, INC.,

   a Delaware corporation

By: /s/ Thomas A. Spanier

   Name: Thomas A. Spanier

   Title: Chief Executive Officer 

	
THE INVESTORS:
	
(If an entity):

______________________

Name: /s/________________

   Title: ______________________

(If an individual):

/s/______________

       Name: ___________________

                

 

 [Signature Page to Registration Rights
Agreement]

Schedule of Investors

First Closing

	

Stockholder
	
Series C Preferred Converted

                  Common Stock
	
Warrant Shares

	
	
	

	
Empire Capital Partners, LP
	
334,052
	
167,026

	
Empire Capital Partners, Ltd.
	
622,865
	
311,432

	
Empire Capital Partners II, Ltd.
	
116,031
	
58,015

	
Charter Oak Partners, LP
	
61,945
	
30,972

	
Charter Oak Partners II, LP
	
12,647
	
6,323

	
Glenbrook Capital, LP
	
409,836
	
204,918

	
Sanctus Spiritus Antilles, NV
	
327,868
	
163,934

	
Maria Molinsky
	
81,967
	
40,983

	
Edmund Y. Sun
	
81,967
	
40,983

	
Ychien Chang
	
32,786
	
16,393

 

Subsequent Closing

	

Stockholder
	
Series C Preferred Converted

                  Common Stock
	

Warrant Shares

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