Document:

Exhibit 10.40

                              EMPLOYMENT AGREEMENT
                                  ("Agreement")

FOCUS Enhancements,  Inc., a Delaware  Corporation  (hereinafter  referred to as
"Employer")  and  Brett  Moyer  (hereinafter  referred  to  as  "Employee"),  in
consideration of the mutual promises made herein, agree as follows:

                                    ARTICLE 1
                               TERM OF EMPLOYMENT

                                Specified Period

Section 1.1

                  Employer hereby employs Employee,  and Employee hereby accepts
employment with Employer for the period  beginning on the effective date of this
Agreement as set forth below (the  "effective  date") and  terminating two years
after the effective date ("Initial Term").

                                 Succeeding Term

Section 1.2

                  This Agreement shall extend on the end of the Initial Term and
annually  thereafter at the annual  anniversary date for an additional  one-year
period (the "Succeeding Term"), unless terminated by either party for any reason
or not  renewed  upon  written  notice  given by one party to the other party at
least thirty (30) days before such applicable anniversary date.

                            "Employment Term" Defined

Section 1.3

                  As used  herein,  the phrase  "employment  term" refers to the
entire period of employment of Employee by Employer  hereunder,  whether for the
periods provided above, or whether terminated earlier as hereinafter provided or
extended automatically or by mutual agreement between Employer and Employee.

                                    ARTICLE 2
                       DUTIES AND OBLIGATIONS OF EMPLOYEE

                                 General Duties
Section 2.1

                  As of the date set forth in Section 8.8,  Employee shall serve
as Employer's  President & Chief Executive Officer, and he shall also serve as a
member of Employer's  Board of  Directors.  Prior to such date,  Employee  shall
continue to serve in his current  capacity as Executive  Vice-President  working
under the direction of and reporting to Michael D'Addio,  the Company's  current
President and Chief Executive Officer.

                  In his  capacity as  President  and Chief  Executive  Officer,
Employee  shall do and perform all services,  acts or things in accordance  with
the policies set by Employer's  Board of Directors.  Employee shall perform such
services primarily in Campbell,  California, which shall serve as the Employer's
principal facility,  except that the parties understand that temporary travel on
Employer's business to other sites shall be required.  The parties may designate
another  location  for  Employee to primarily  perform his  services;  provided,
however,  that Employee's  permanent place of employment  shall not be more than
fifty miles from Campbell, California absent Employee's written consent.

<PAGE>

                         Devotion to Employer's Business

Section 2.2

                  (a) Employee  shall devote  substantially  all his  productive
time,  ability and attention to the business of Employer  during the  employment
term.

                  (b) Employee shall not engage in any other business  duties or
pursuits  whatsoever,  or  directly  or  indirectly  render  any  services  of a
business, commercial or professional nature to any other person or organization,
whether for compensation or otherwise,  without the prior written consent of the
Board of Directors  except for (1) boards of  directors of private  companies on
which  Employee  currently  serves and (2) other  boards of  directors  to which
Employee  shall not devote more than 16 hours of service per month  (measured on
an annual basis).  However,  the  expenditure of reasonable  amounts of time for
education, charitable or professional activities shall not be deemed a breach of
this Agreement if those activities do not materially interfere with the services
required under this Agreement.

                  (c) In addition to Employee's  providing occasional service as
a member of the Board(s) of Directors as provided  above,  this Agreement  shall
not be interpreted to prohibit Employee from making passive personal investments
or conducting  private  business  affairs if those  activities do not materially
interfere with the services required under this Agreement.

       Confidential Information; Tangible Property; Competitive Activities

Section 2.3

                  (a) Employee  shall hold in confidence and not use or disclose
to any person or entity without the express written  authorization  of Employer,
either during the employment term or any time thereafter, secret or confidential
information of Employer.  Information and materials  received in confidence from
third  parties by Employee  with  respect to the  performance  of his duties for
Employer is included  within the meaning of this  section.  If any  confidential
information  described below is sought by legal process,  Employee will promptly
notify   Employer  and  will   cooperate   with  Employer  in   preserving   its
confidentiality in connection with any legal proceeding.

                  The parties hereto hereby  stipulate that, to the extent it is
not known  publicly,  the following  information is important,  material and has
independent  economic value (actual or potential) from not being generally known
to  others  who  could  obtain   economic  value  from  its  disclosure  or  use
("Confidential  Information"),  and that any breach of any terms of this Section
2.3 is a material breach of this Agreement:

                  (i)      The names,  buying habits and practices of Employer's
                           customers or prospective customers;
                  (ii)     Employer's marketing methods and related data;
                  (iii)    The names of Employer's vendors and suppliers;
                  (iv)     Cost of materials / services;
                  (v)      The prices  Employer  obtains or has  obtained or for
                           which it sells or has sold its products or services;
                  (vi)     Production costs;
                  (vii)    Compensation  paid to  employees  or  other  terms of
                           employment;
                  (viii)   Employer's past and projected sales volumes;
                  (ix)     Proposed new products / services;
                  (x)      Enhancements of existing products / services; and
                  (xi)     Any additional  information  deemed by Employer to be
                           confidential by marking or stamping "Confidential" or
                           similar  words on the cover of such  information,  by
                           advising  Employee  orally or in writing that certain
                           information is confidential.

                  All software  code,  methodologies,  models,  samples,  tools,
machinery, equipment, notes, books, correspondence,  drawings and other written,
graphical or electromagnetic records relating to any of the products of Employer
or relating to any of the  Confidential  Information  of Employer which Employee
shall prepare, use, construct,

<PAGE>

observe,  possess,  or control  shall be and shall  remain the sole  property of
Employer and shall be returned by Employee upon termination of employment.

                  (b) During the employment term,  Employee shall not,  directly
or indirectly,  either as an employee,  consultant,  agent, principal,  partner,
stockholder (except in a publicly held company), corporate officer, director, or
in any other individual or representative capacity, engage or participate in any
business that is in competition in any manner  whatsoever with the then business
of Employer.

                  (c) During the employment term,  Employee agrees that Employee
will  not  undertake  planning  for or  organization  of any  business  activity
competitive  with  Employer's  business,  or  combine  or  conspire  with  other
employees  or  representatives  of  Employer's   business  for  the  purpose  of
organizing any competitive business activity.

                  (d)  During  the  employment   term  and  for  two  (2)  years
thereafter,  Employee  agrees  that he will not  directly or  indirectly,  or by
action  in  concert  with  others,  induce  or  influence  (or seek to induce or
influence)  any person who is then engaged (as an employee,  agent,  independent
contractor,  or otherwise) by Employer to terminate his employment or engagement
for the purpose of employing  such person in any enterprise in which Employee is
a member of Management or has a material interest.

                  (e)  Covenants  of this  Section  2.3  shall be  construed  as
separate  covenants  covering  their  subject  matter  in each  of the  separate
counties  and  states in the  United  States  in which  Employer  transacts  its
business.  To the extent that any covenant shall be judicially  unenforceable in
any one or more of said counties or states, said covenants shall not be affected
with respect to each other county and state;  each covenant with respect to each
other county and state being construed as severable and independent.

                  (f) Employee  represents and warrants that Employee is free to
enter into this  Agreement and to perform each of its terms and  covenants,  and
that doing so will not violate the terms or  conditions  of any other  agreement
between Employee and any third party.

                          Inventions and Original Works
Section 2.4

                  (a) Employee  agrees that he will  promptly  make full written
disclosure  to  Employer,  will hold in trust for the sole right and  benefit of
Employer, and hereby assigns to Employer all of his right, title and interest in
and to any and all inventions (and patent rights with respect thereto), original
works of authorship  relating to the business of FOCUS  Enhancements  (including
all  copyrights  with  respect  thereto),  developments,  improvements  or trade
secrets  which  Employee may solely or jointly  conceive or develop or reduce to
practice,  or cause to be conceived or developed or reduced to practice,  during
the course of performing his duties under this Agreement.

                  (b)  Employee   acknowledges   that  all  original   works  of
authorship  relating to the business of FOCUS Enhancements which are made by him
(solely  or jointly  with  others)  within  the scope of his  duties  under this
Agreement and which are  protectable  by copyrights are "works made for hire" as
that term is defined in the United States  Copyright  Act (17 U.S.C.A.,  Section
101),  and that  Employee  is an employee  as defined  under that Act.  Employee
further  agrees from time to time to execute  written  transfers  to Employer of
ownership or specific original works or authorship (and all copyrights  therein)
made by  Employee  (solely or  jointly  with  others)  which  may,  despite  the
preceding sentence,  be deemed by a court of law not to be "works made for hire"
in such form as is acceptable to Employer in its reasonable discretion.

                             Maintenance of Records
Section 2.5

                  Employee  agrees to keep and  maintain  adequate  and  current
written records of all inventions,  original works of authorship,  trade secrets
developed or made by him (solely or jointly with others)  during the  employment
term.  The records  will be in the form of notes,  sketches,  drawings and other
formats that may be specified by Employer.  The records will be available to and
remain the sole property of Employer at all times.

<PAGE>

               Obtaining Letters Patent and Copyright Registration
Section 2.6

                  Employee  agrees to assist Employer to obtain United States or
foreign letters patent, and copyright registrations (as well as any transfers of
ownership thereof) covering inventions and original works of authorship assigned
hereunder to Employer.  Such obligation shall continue beyond the termination of
this Agreement, but after such termination Employer shall compensate Employee at
a reasonable  rate for time actually spent by Employee at Employer's  request on
such assistance.

                  If  Employer  is unable for any reason  whatsoever,  including
Employee's mental or physical incapacity to secure Employee's signature to apply
for or to pursue  any  application  for any United  States or  foreign  letters,
patent  or  copyright  registrations  (or any  document  transferring  ownership
thereof)  covering  inventions  or  original  works or  authorship  assigned  to
Employer  under this  Agreement,  Employee  hereby  irrevocably  designates  and
appoints  Employer and its duly  authorized  officers  and agents as  Employee's
agent and attorney-in-fact to act for and in his behalf and stead to execute and
file any such applications and documents and to do all other lawfully  permitted
acts to further the  prosecution  and  issuance of letters  patent or  copyright
registrations  or  transfers  thereof with the same legal force and effect as if
executed by Employee. This appointment is coupled with an interest in and to the
inventions  and  works of  authorship  and  shall  survive  Employee's  death or
disability. Employee hereby waives and quitclaims to Employer any and all claims
of  any  nature  whatsoever  which  Employee  now  or  may  hereafter  have  for
infringement of any patents or copyrights resulting from or relating to any such
application for letters, patent or copyright registrations assigned hereunder to
Employer.
                                    Article 3
                             OBLIGATIONS OF EMPLOYER

                               General Description
Section 3.1

                  Employer  shall  provide   Employee  with  the   compensation,
incentives and benefits specified in Section 4 of this Agreement.

                                Office and Staff
Section 3.2

                  Employer shall provide Employee with a private office,  office
and technical equipment,  supplies and other facilities,  equipment and services
suitable to Employee's position and adequate for the performance of his duties.

                                    Article 4
                            COMPENSATION OF EMPLOYEE

                                  Annual Salary
Section 4.1

                  As compensation for his services hereunder,  Employee shall be
paid at a base salary rate of $190,000 (one hundred ninety thousand  dollars) in
the first year of the Initial  Term.  For the second  year of the Initial  Term,
Employer  shall pay  Employee at a base salary  rate of  $200,000  (two  hundred
thousand  dollars).  Salary  shall  be  paid  in  equal  installments  not  less
frequently than once per month.

            Bonus Compensation and Relocation Expenses Reimbursement

Section 4.2

                  (a) In addition to his regular base salary,  Employee shall be
entitled to participate  in an incentive  bonus plan to earn up to an additional
$110,000 per year.  $55,000  (fifty five thousand  dollars) of this bonus amount
shall be based upon the  Employer's  quarterly  revenue  growth  year over year;
provided that no revenue  attributable to any existing  written  agreement as of
the effective date between  Employer and its major  undisclosed  OEM (contracted
with in June 2001)  shall be  included  in any  revenue  calculations.  From the
effective date of this Agreement until

<PAGE>

December 31, 2003, the bonus rate will be 1.34% of the quarterly  revenue growth
year over year.  From the effective  date of this  Agreement  until December 31,
2003, up to an additional  $55,000 (fifty five thousand dollars) in bonus amount
shall  be paid  based  upon the  Employer's  quarterly  cash  flow  provided  by
operations (as calculated using the Company's 10-Q and 10-K filings) as follows,
starting in the first full quarter  beginning  after the effective date: if more
than $25,000 and less than $100,000 in cash flow is provided by operations, this
will result in a bonus  payment of $6,000;  if more than  $100,000 and less than
$200,000  in cash flow is provided  by  operations,  this will result in a bonus
payment of $8,500;  if more than $200,000 and less than $500,000 in cash flow is
provided by operations,  this will result in a bonus payment of $13,500; if more
than  $500,000  and less than  $750,000 in cash flow is provided by  operations,
this will result in a bonus  payment of $20,000;  if more than  $750,000 in cash
flow is provided by operations,  this will result in a bonus payment of $25,000.
(For illustrative purposes see table below.)

     ---------------------------------------------------- ----------------------
     If quarterly cash flows from operations are:             Bonus Payment
     ---------------------------------------------------- ----------------------
     Greater than $25,000 but less than $100,000                   $6,000
     ---------------------------------------------------- ----------------------
     Greater than $100,000 but less than $200,000                  $8,500
     ---------------------------------------------------- ----------------------
     Greater than $200,000 but less than $500,000                 $13,500
     ---------------------------------------------------- ----------------------
     Greater than $500,000 but less than $750,000                 $20,000
     ---------------------------------------------------- ----------------------
     Greater than $750,000                                        $25,000
     ---------------------------------------------------- ----------------------

                  From January 1, 2004 through the termination of this Agreement
or  until  otherwise  agreed  to by the  Employee  and the  Board  of  Directors
(excluding  Employee),  whichever  is first,  the  bonus  plan  described  above
(Section 4.2 (a)) shall remain in effect  except that,  if any change is made in
calculating  the bonus,  Employee  shall receive a minimum  guaranteed  bonus of
$6,875 (six thousand eight hundred  seventy five dollars) per quarter under each
bonus  criteria  that is changed.  (Bonus  criteria are defined as (i) quarterly
revenue  growth  and  (ii)   quarterly   increases  in  cash  flow  provided  by
operations.) No change to any bonus criteria shall be effective unless agreed by
Employee  and the Board of  Directors  (excluding  Employee) at least 60 (sixty)
days prior to the start of a quarter.

                  (b)  Employer  shall  reimburse  Employee  for all  relocation
expenses reasonably incurred in moving Employee's  household and family from the
greater  Boston,  Massachusetts  area up to a maximum  of  $85,000  (eighty-five
thousand  dollars).  Relocation  costs include  reasonable  temporary family and
personal  living  expenses  in  California,  transportation,  lodging and living
expenses  while  moving  and  commission  costs  associated  with  the  sale  of
Employee's current home in the greater Boston,  Massachusetts area.  ("Temporary
family and personal living  expenses" as used in the above sentence shall not be
for more than 6 weeks and shall be paid only during the period  Employee and his
family have moved to California from the greater Boston  Massachusetts  area but
Employee has not yet sold his home in the greater Boston, Massachusetts area.)

                  (c)  If  Employer  terminates  Employee's  employment  in  the
Initial  Term other than for Cause as set forth below in Section  6.3,  Employer
shall pay Employee the reasonable  costs to move his family and household to the
greater Boston,  Massachusetts area. If the Employee does not elect to return to
the Boston area within a six-month window from such  termination  without Cause,
then the Employer is not  obligated to pay any  additional  remuneration  to the
Employee for relocation.

                  (d) If the Employee elects to terminate his employment  during
the Initial  Term,  the he is obligated to reimburse the Employer for a prorated
portion of the initial relocation costs.

                                 Tax Withholding
Section 4.3

                  Employer  shall have the right to deduct or withhold  from the
compensation  due to Employee  hereunder  any and all sums  required for federal
income and social  security taxes and all state or local taxes now applicable or
that may be enacted and become  applicable in the future,  for which withholding
is required by law.

<PAGE>

                           Non Qualified Stock Options
Section 4.4

                  Employee  shall be  granted  Non  Qualified  Stock  Options to
purchase 350,000 shares of Employer's  Common Stock under  Employer's  Available
Stock  Option  Plans,  said  grant  to be  made  on the  effective  date  by the
Employer's  Board of Directors.  Said Options shall be  exercisable  at the fair
market value on the day immediately  prior to the effective date,  shall vest in
equal installments at the rate of  one-thirty-sixth  (1/36) per month thereafter
over three (3) years,  and shall expire at the longer of (1) five (5) years from
the date of grant or (2) if  permitted  thereunder,  ten years  from the date of
grant.  The Company  shall  request the approval of an adequate  number of stock
options at the next  Shareholder  Meeting to grant to Employee the 150,000 stock
options immediately following that meeting.

                                    Article 5
                                EMPLOYEE BENEFITS

                                 Annual Vacation
Section 5.1
                  Employee  shall  be  entitled  to 20  business  days  of  paid
vacation  during each year of this  Agreement.  Employee  may be absent from his
employment for vacation only at such times the Employee notifies at a minimum of
10  (ten)  days in  advance  the  Employer's  Board  of  Directors  Compensation
Committee of the planned vacation. Unused vacation will carry over from one year
to the next but the maximum amount of vacation, which can be accrued (unused) at
any one time,  shall not exceed 20 business  days.  Unused  vacation will not be
paid in the form of cash, except upon termination of employment.

                                    Benefits
Section 5.2
                  Employee  shall  be  eligible  to  participate  in any and all
benefit plans provided by Employer, on the same basis as same are made available
to other employees,  including  health,  disability and life insurance  coverage
should Employee elect to participate in any such plans.

                                Business Expenses
Section 5.3
                  Employer shall reimburse Employee for all appropriate expenses
for travel and  entertainment  by Employee  for  legitimate  business  purposes,
provided that they are approved in writing by the Chief Financial Officer of the
Employer and provided that Employee  furnishes to Employer  adequate records and
documentary  evidence  for the  substantiation  of  each  such  expenditure,  as
required by the Internal Revenue Code of 1986, as amended.

                                    Article 6
                            TERMINATION OF EMPLOYMENT

                                   Termination
Section 6.1
                  Employer shall not terminate the Employee's  employment except
as provided in Section 6.3 and/or 6.4.  Employee's  employment  hereunder may be
terminated by Employee for any reason,  without further obligation or liability,
except as expressly provided herein.

                  Resignation, Retirement, Death or Disability
Section 6.2
                  Employee's  employment  hereunder  shall be  terminated at any
time  by  Employee's  resignation,  or by  Employee's  retirement  at  or  after
attainment of age sixty (60) at Employee's option ("Retirement"),  death, or his
inability to perform his duties under this Agreement on a full-time  basis for a
continuous  period of ninety  (90) days or more  because of a physical or mental
illness  ("Disability").  Employer  shall not be  liable  for  payment  of bonus
compensation  during any period of Disability,  though salary and benefits shall
continue to be paid during such period.

<PAGE>

                              Termination for Cause
Section 6.3
                  Employer may terminate Employee for Cause at any time. "Cause"
shall mean personal dishonesty, conflict of interest or breach of fiduciary duty
involving material personal or family profit, willfully engaging in conduct with
the  purpose  and  effect of  materially  injuring  Employer,  the  willful  and
continued failure by the Employee to substantially  perform his duties hereunder
in a reasonably  competent manner expected of similarly situated  executives for
comparable  public companies in the high technology  electronics  industry.  For
purposes of this Section 6.3, no act, or failure to act, on the Employee's  part
shall be considered  "willful" unless done, or omitted to be done, by him not in
good faith and without  reasonable belief that his action or omission was in the
best interest of the Employer. Notwithstanding the foregoing, the Employee shall
not be  terminated  for Cause  without  (i)  reasonable  notice to the  Employee
setting  forth the reasons for the  Employer's  intention to terminate for Cause
and a reasonable period of time to cure such "Cause" if same is capable of being
cured  within  such  period;  (ii) if not  capable  of being  so cured  within a
reasonable  period, an opportunity for the Employee,  together with his counsel,
to be heard  before  the Board of  Directors;  and (iii) if clause  (i) shall be
inapplicable,  then,  after the  opportunity  to be heard as set forth in clause
(ii),  delivery to the Employee of a Notice of Termination as defined in Section
6.6 hereof from the Board finding that in the good faith opinion of the majority
of the Board of Directors,  the Employee has engaged in conduct set forth above,
and specifying the particulars thereof in detail.

                            Termination Without Cause
Section 6.4
                  (a) Employer may terminate Employee without Cause at any time.
For the first year of the Initial Term, if Employer  terminates Employee without
Cause, Employee shall receive, as severance pay for the remainder of the Initial
Term, all regular salary and benefits otherwise which would be due to him on the
same schedule as same were paid at the time of termination,  as if he were still
employed  through such Initial Term. If Employee is terminated  without Cause or
this  Agreement is allowed to expire  without  renewal during the second year of
the Initial Term or in the first  Succeeding Year of the Initial Term,  Employee
shall  receive,  as severance pay for the twelve months  immediately  after such
termination  date,  regular salary and benefits  payable at the same rate he was
earning on the same  schedule as such were paid at the time of  termination.  If
Employee is  terminated  without  Cause or this  Agreement  is allowed to expire
without  renewal during the Initial Term or in the first  Succeeding  Year after
the Initial Term,  as described in this  paragraph,  any unvested  stock options
issued to Employee which have not lapsed and which are not otherwise exercisable
shall vest,  accelerate,  and become  immediately  exercisable  by Employee.  If
Employee is  terminated  without  Cause or this  Agreement  is allowed to expire
without  renewal during any Succeeding  Year which commences one or more year(s)
after the end of the Initial Term,  then Employee shall receive as severance pay
for the twelve months immediately after such termination date regular salary and
benefits payable at the same rate he was earning and on the same schedule at the
time of  termination.  In the event of  Employee's  subsequent  death  after his
termination by Employer  without Cause,  Employer shall continue to pay the same
payments and benefits to Employee's  surviving spouse, or if none, to Employee's
estate as Employee was entitled to at the date of his death.

                  Employee's  employment  hereunder  may be  terminated  without
Cause upon ten (10) business days' notice for any reason.

                  (b)  Employee may  terminate  this  Agreement  with or without
Cause for any reason at any time upon thirty (30) days prior  notice.  Upon such
termination by Employee, Employee shall receive all salary, benefits and options
vested through such termination date.

                                   Expiration
Section 6.5
                  Unless otherwise  renewed in accordance  herewith,  Employee's
employment  shall end upon  expiration  of the  employment  term as  provided in
Section(s) 1.1 and 1.2.

                             Notice for Termination
Section 6.6
                  Any  termination  of the  Employee's  employment  (other  than
termination  by reason of death)  shall be  communicated  by  written  Notice of
Termination  to the other party.  For purposes of this  Agreement,  a "Notice of
Termination"  shall mean a notice which shall  include the specific  termination
provision  in this  Agreement  relied  upon,  and shall set forth in  reasonable
detail the facts and circumstances claimed to provide a basis for termination.

<PAGE>

                               Date of Termination
Section 6.7
                  The "Date of Termination" shall be:

                  (a) if the  Employee's  employment is terminated by his death,
the date of his death;

                  (b) if the  Employee's  employment  is terminated by reason of
Employee's  Disability,  thirty (30) days after Notice of  Termination  is given
(provided  that the Employee  shall not have returned to the  performance of his
duties on a full-time basis during such thirty (30) day period);

                  (c) if the  Employee's  employment  is  terminated  for Cause,
subject to Section 6.3 above,  the date of the Notice of Termination is given or
after if so specified in such Notice of Termination;

                  (d) if the Employee's employment is terminated by either party
for any other reason than those set forth in clauses  6.7(a)-(c) above, the date
on which the Notice of Termination specifies.

                                    Article 7
                      PAYMENTS TO EMPLOYEE UPON TERMINATION

                         Death, Disability or Retirement
Section 7.1
                  Upon Employee's Retirement,  Death or Disability, all benefits
generally  available  to  Employer's  employees  as of the date of such an event
shall be  payable  to  Employee  or  Employee's  estate  without  reduction,  in
accordance with the terms of any plan,  contract,  understanding  or arrangement
forming  the basis for such  payment.  Employee  shall be entitled to such other
payments  as might  arise  from  any  other  plan,  contract,  understanding  or
arrangement between Employee and Employer at the time of any such event.

                      Termination for Cause or Resignation
Section 7.2
                  If  Employer   terminates   Employee  for  Cause  or  Employee
voluntarily  resigns  for reasons  other than  constructive  discharge,  neither
Employer nor any affiliate  shall have any further  obligation to Employee under
this  Agreement or otherwise,  except to the extent  provided in any other plan,
contract, understanding or arrangement, or as may be expressly required by law.

                                    Article 8
                               GENERAL PROVISIONS

                                     Notices
Section 8.1
                  Any notices to be given hereunder by either party to the other
shall be in writing  and may be  transmitted  by  personal  delivery or by mail,
registered or certified,  postage prepaid with return receipt requested.  Mailed
notices shall be addressed to the parties at:

                  "Employee"
                                            Brett Moyer
                                            38 Heritage Lane
                                            Stow, MA 01775

                  "Employer"
                                            FOCUS Enhancements, Inc.
                                            1370 Dell Avenue
                                            Campbell, California 95008

Each party may change that address or addressee by written  notice in accordance
with this section.  All notices delivered shall be deemed communicated as of the
date of actual receipt.

<PAGE>

                                   Arbitration
Section 8.2
                  (a) Any controversy  between  Employer and Employee  involving
the construction or application of any of the terms, provisions or conditions of
this  Agreement or the breach  thereof  shall be settled by binding  arbitration
before a single arbitrator selected by the American Arbitration Association,  in
accordance  with its then  current  commercial  rules.  Judgment  upon the award
rendered by the arbitrator(s)  may be entered in any court having  jurisdiction.
Arbitration  shall comply with and be governed by the provisions of the American
Arbitration Association, Commercial Division. No discovery shall be permitted in
such  arbitration  other than an exchange of documents,  and the parties  hereby
agree to limit the number of hearing days in  arbitration  to two (2) days.  The
arbitrator shall issue a written decision listing findings of fact,  reasons for
the decision,  and conclusions of law in any arbitration.  The arbitration award
shall be specifically enforceable.

<PAGE>

                  (b) The cost of arbitration  (including the prevailing party's
reasonable  attorneys'  fees)  shall  be borne  by the  non-prevailing  party as
determined by the arbitrator or in such proportions as the arbitrator decides.

                  (c) Such  arbitration  and any  litigation  shall  take  place
solely in Santa Clara County, California.

                            Attorneys' Fees and Costs
Section 8.3

         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 obtain
from the non-prevailing  party,  reasonable attorneys' fees, costs and necessary
disbursements  in  addition  to any  other  relief  to which  that  party may be
entitled.  This  provision  shall be  construed  as  applicable  to this  entire
Agreement.

                                Entire Agreement
Section 8.4

                  This Agreement supersedes,  merges and voids any and all other
agreements,  either oral or in writing,  between the parties hereto with respect
to its subject matter and no other covenants and agreements  between the parties
exist with respect thereto.  Each party to this Agreement  acknowledges  that no
representations,  inducements, promises or agreements, orally or otherwise, have
been made by any party,  or anyone acting on behalf of any party,  which are not
embodied herein, and that no other agreement, statement or promise not contained
in this Agreement shall be valid or binding on either party.

                                  Modifications
Section 8.5

                  Any  modification  of this Agreement will be effective only if
it is in  writing  and  signed  by  the  Employee  and  properly  authorized  by
Employer's Board of Directors and signed by a  representative  thereof (who may,
but need not be, Chairman).

                                Effect of Waiver
Section 8.6

         The failure of either party to insist on strict  compliance with any of
the terms,  covenants or conditions  of this  Agreement by the other party shall
not be deemed a waiver of that term, covenant or condition, nor shall any waiver
or  relinquishment  of any  right or power at any one time or times be  deemed a
waiver or  relinquishment  of that right or power for all or any other times. No
waiver shall be effective  unless in a writing and signed by the person  charged
with making such waiver

                               Partial Invalidity
Section 8.7

        If any  provision  in this  Agreement  is held by a court  of  competent
jurisdiction  to be invalid,  void or  unenforceable,  the remaining  provisions
shall nevertheless  continue in full force without being impaired or invalidated
in any way.

<PAGE>

                                 Effective Date

Section 8.8

         The effective date of this Agreement  shall be the date it is signed by
both parties.  However,  Employee  shall become  President  and Chief  Executive
Officer and a member of the Company's Board of Directors on the earlier to occur
of (i) three (3) days after the  Company's  public  announcement  that  purchase
orders  for   commercial   quantities  of  units  have  been  placed  under  the
above-described undisclosed June 2001 OEM agreement or (ii) September 30, 2002.

IN WITNESS WHEREOF,  the parties have executed this Agreement on August 6, 2002,
at Campbell, California.

"Employer"                                           "Employee"

FOCUS Enhancements, Inc.

By:  /s/ Michael D'Addio                             By: /s/ Brett Moyer
     ------------------------                            ----------------------
       Michael D'Addio                                      Brett Moyer
       CEO

      Gary Williams
       WitnessRegistration Rights Agreement

 EXHIBIT 10.7 
  
 REGISTRATION RIGHTS AGREEMENT 
  
 THIS REGISTRATION RIGHTS AGREEMENT (the
“Agreement”) is entered into as of this      day of                 , 2002, by and between CONSTAR INTERNATIONAL INC., a Delaware
corporation (“Constar”) and CROWN CORK & SEAL COMPANY, INC., a Pennsylvania corporation (“Crown”). 
  
 RECITALS 
  
 A.  Crown owns all of the issued and outstanding Common
Stock of Constar. 
  
 B.  Crown and Constar are contemplating that an initial public offering will be made
of the capital stock of Constar (the “Initial Public Offering”). 
  
 C.  The parties
desire to enter into this Agreement to set forth their agreement regarding certain registration rights with respect to the Common Stock of the Constar acquired or held directly or indirectly by Crown and its assigns from time to time. 

 
 AGREEMENTS 
  
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Constar and Crown, for themselves and their successors and assigns, hereby agree as
follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 1.  Definitions. 
  
 As used in this Agreement, the following capitalized terms
shall have the following meanings: 
  
 “AAA” has the meaning set forth in Section 9(g)(iii) of this
Agreement. 
  
 “Affiliate” has the meaning set forth in Rule 12b-2 of the Rules promulgated under
the Exchange Act. 
  
 “Agreement” has the meaning set forth in the preamble of this Agreement.

  
 “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banks in New
York city are authorized or obligated by law or executive order to not open or remain closed. 

  
 “Common Stock” means the common stock, par value $.01 per share,
of Constar, and any other class of Constar’s capital stock representing the right to vote generally for the election of directors. 
  
 “Commission” means the Securities and Exchange Commission. 
  
 “Constar” has the meaning set forth in the preamble of this Agreement. 
  
 “Control,” “controlled by” and “under common control with,” as applied to any Person, means the possession, directly or indirectly, of the power to direct the vote of a majority of
the votes that may be cast in the election of directors (or other Persons acting in similar capacities) of such Person or otherwise to direct or cause the direction of the management and policies of such Person, whether through the ownership of
voting securities or by contract or otherwise. 
  
 “Crown” has the meaning ascribed thereto in the
preamble hereto. 
  
 “Damages” has the meaning set forth in Section 6(a) of this Agreement.

  
 “Demand Registration” has the meaning set forth in Section 4(a) of this Agreement. 

 
 “Demand Registration Request” has the meaning set forth in Section 4(a) of this Agreement. 

 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. 

 
 “Holder” means Crown or any of its assigns from time to time, as the case may be. 
  
 “Incidental Registration” has the meaning set forth in Section 3(a) of this Agreement. 
  
 “Information Blackout” has the meaning set forth in Section 4(d) of this Agreement. 
  
 “Initial Public Offering” has the meaning set forth in the preamble of this Agreement. 
  
 “Inspector” has the meaning set forth in Section 5(l) of this Agreement. 
  
 “NASD” has the meaning set forth in the definition of “Registration Expenses” in Section 1 of this Agreement.

  
 “Notice” has the meaning set forth in Section 3(a) of this Agreement. 
  
 “Participating Holders” has the meaning set forth in Section 5(a) of this Agreement. 

 
 2 

  
 “Person” means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision thereof. 
  
 “Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus. 
  
 “Records” has the meaning set forth in Section 5(l) of this Agreement. 
  
 “Registration Expenses” means (i) all registration and filing fees, (ii) fees and expenses relating to compliance with
securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the securities registered), (iii) printing expenses, (iv) internal expenses of Constar (including, without limitation,
all salaries and expenses of its officers and employees performing legal or accounting duties), (v) fees and disbursements of counsel for Constar and fees and expenses for independent certified public accountants retained by Constar (including the
expenses of any comfort letters or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters requested pursuant to Section 5(g) hereof), (vi) fees and expenses of any special experts
retained by Constar in connection with such registration, (vii) fees and expenses in connection with any review of underwriting arrangements by the National Association of Securities Dealers, Inc. (the “NASD”), including fees and
expenses of any “qualified independent underwriter” and (viii) fees and disbursements of underwriters customarily paid by issuers or sellers of securities or any fees and expenses of underwriter’s counsel. 
  
 “Registration Statement” means any registration statement of Constar which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration
Statement. 
  
 “Registrable Securities” has the meaning set forth in Section 2 of this Agreement.

  
 “Sales Blackout Period” has the meaning set forth in Section 4(d) of this Agreement.

  
 “Securities Act” means the Securities Act of 1933, as amended from time to time. 

 
 “Shelf Registration Statement” has the meaning set forth in Section 4(a) of this Agreement. 

 
 “Underwritten Registration” or “Underwritten Offering” means a registration in which
securities of Constar are sold to an underwriter for reoffering to the public. 
  
 2.  Registrable
Securities.    The securities entitled to the benefits of this Agreement are the Registrable Securities. As used herein, “Registrable Securities” means all shares of Common Stock owned by each Holder from
time to time; provided, however, that each 

 
 3 

 
share of Common Stock shall cease to be a Registrable Security when (i) it has been effectively registered under the Securities Act and disposed of in accordance with the registration statement
covering it; (ii) it has been distributed to the public pursuant to Rule 144 (or any similar provision then in force) under the Securities Act; or (iii) it has otherwise been transferred and a new certificate or other evidence of ownership for it
not bearing a legend restricting transfer under the Securities Act and not subject to any stop transfer order has been delivered by or on behalf of Constar and no other restriction on transfer exists under the Securities Act. 

 
 3.  Incidental Registration. 
  
 (a)  Right to Include Common Stock.    If Constar at any time proposes to register any of its Common Stock under the Securities Act
(other than in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans, stock option or other employee benefit plans, or other registrations on Form S-4 or Form S-8 or successor forms thereto),
whether or not for sale for its own account, it will each such time give at least 30 days prior written notice (the “Notice”) to each Holder of its intention to file a registration statement under the Securities Act and of such
Holder’s rights under this Section 3. Upon the written request of a Holder, made within 15 days of the date of delivery of the Notice to such Holder (which request shall specify the aggregate number of the Registrable Securities owned by such
Holder that such Holder elects to be registered), Constar will, subject to the terms hereof, use its best efforts to effect the registration under the Securities Act of all Registrable Securities which Constar has been so requested to register by
such Holder (an “Incidental Registration”); provided, however, that (i) if, any time after giving written notice of its intention to register shares of Common Stock and prior to the effective date of the registration
statement filed in connection with such registration, Constar shall determine for any reason not to register any shares of its Common Stock, Constar shall give written notice of such determination to each Holder and, thereupon, shall be relieved of
its obligation under this Section 3 to register any Registrable Securities in connection with such aborted registration (but not from its obligation to pay the Registration Expenses in connection therewith) and (ii) if a registration requested
pursuant to this Section 3 shall involve an underwritten public offering, a Holder may elect, in writing at least 15 days prior to the effective date of the registration statement filed in connection with such registration, to withdraw all or part
of its Registrable Securities from such registration. 
  
 (b)  Priority in Incidental
Registrations.    If a registration that is not a Demand Registration involves an underwritten offering and the managing underwriter advises Constar that, in its opinion, the total number of shares of Common Stock to be
included in such registration, including the Registrable Securities requested to be included pursuant to this Section 3, exceeds the maximum number of shares of Common Stock specified by the managing underwriter that may be distributed without
materially adversely affecting the price, timing or distribution of such shares of Common Stock, then Constar shall include in such registration only such maximum number of shares of Common Stock which, in the reasonable opinion of such managing
underwriter, can be sold in the following order of priority: (i) first, all of the shares of Common Stock that Constar proposes to sell for its own account, if any; (ii) second, the Registrable Securities of Holders requested to be included in such
registration, pro rata in accordance with the number of Registrable Securities of each such Holder requested to be included in such registration; and (iii) third, any other securities proposed to be included in such registration.

 
 4 

  
  
 (c)  Expenses.    Constar will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 3, provided that each Holder will pay
any underwriting discounts or commissions with respect to Registrable Securities sold by it in any Incidental Registration. 
  
 4.  Demand Registration. 
  
 (a)  Right to Demand
Registration.    Subject to Section 4(b) below, at any time a Holder shall be entitled to make a written request (“Demand Registration Request”) to Constar for registration under the Securities Act of all or
part of the Registrable Securities owned by it (a “Demand Registration”) (which Demand Registration Request shall specify the intended number of Registrable Securities to be disposed of), and Constar shall use its best efforts to
effect such registration in accordance with the terms hereof; provided, however, that (x) prior to the effective date of a registration statement with respect to a Demand Registration Request, if the Board of Directors of Constar
determines in the exercise of its reasonable judgment that due to a pending or contemplated material acquisition or disposition or public offering or other material event it would be inadvisable to effect such Demand Registration at such time (which
facts the Participating Holders will keep confidential and not trade upon), Constar may defer such Demand Registration for a period not to exceed 120 days, which right to defer may not be exercised more than once during any twelve month period, and
(y) if Constar elects not to effect the Demand Registration pursuant to the terms of this sentence, no Demand Registration shall be deemed to have occurred for purposes of this Agreement. A Holder shall be entitled in its Demand Registration Request
to request Constar to effect, and Constar shall effect, such Demand Registration under a registration statement pursuant to Rule 415 under the Securities Act (or any successor rule) (a “Shelf Registration Statement”), if Constar is
then entitled to use such a registration statement. 
  
 (b)   Number of Demand
Registrations.     The Holders shall be entitled to (i) three Demand Registration Requests to be effected on Form S-1 under the Securities Act, or any similar or successor long form, in connection with which Constar will pay
all Registration Expenses; (ii) an unlimited number of Demand Registration Requests to be effected on Form S-2 or Form S-3 under the Securities Act, or any similar or successor short form, in connection with which Constar will pay all Registration
Expenses; and (iii) following the three Demand Registration Requests to which the Holders are entitled under clause (i) above, an unlimited number of Demand Registration Requests to be effected on Form S-1 under the Securities Act, or any similar or
successor long form, in connection with which the Participating Holders will pay all Registration Expenses (other than (x) any expenses described in clause (iv) of the definition of “Registration Expenses” and (y) notwithstanding clause
(v) of the definition of “Registration Expenses”, any expenses of any annual audit), pro rata in accordance with the number of Registrable Securities of each such Participating Holder requested to be included in such registration
(including those Registrable Securities requested to be included in such registration pursuant to Section 3(a)). Notwithstanding the foregoing, each Holder will pay, in all cases, any underwriting discounts or commissions with respect to Registrable
Securities sold by it pursuant to any Demand Registration Request. Demand Registration Requests will be effected on Form S-3 (or any similar or successor short form), if Constar is eligible to use such Form in connection with such registration; if
Constar is not eligible to use Form S-3 (or any similar or successor short form) in connection with such registration, then the registration will be effected on Form S-
 

 
 5 

 
2 (or any similar or successor short form), if Constar is eligible to use such Form in connection with such registration; and if Constar is not eligible to use Form S-2 (or any similar or
successor short form) in connection with such registration, then the registration will be effected on Form S-1 (or any similar or successor long form). 
  
 (c)  Priority.    The Company may register Common Stock for sale for its own account under a registration statement filed pursuant to a Demand Registration.
However, if the Demand Registration involves an underwritten offering and the managing underwriter advises Constar that, in its opinion, the total number of shares of Common Stock to be included in such registration, including any Registrable
Securities requested to be included pursuant to Section 3, exceeds the maximum number of shares of Common Stock specified by the managing underwriter that may be distributed without materially adversely affecting the price, timing or distribution of
such shares of Common Stock, then Constar shall include in such registration only such maximum number of shares of Common Stock which, in the reasonable opinion of such managing underwriter, can be sold in the following order of priority: (i) first,
the Registrable Securities of Holders requested to be included in such registration (whether pursuant to Section 3 or this Section 4); and (ii) second, the shares of Common Stock that Constar proposes to sell for its own account. No other securities
may be included in a Demand Registration. 
  
 (d)  At any time when a Shelf Registration Statement effected
pursuant to this Section 4 is effective, upon written notice from Constar to the Participating Holders that the Board of Directors of Constar has determined in the exercise of its reasonable judgment that disclosure under such Shelf Registration
Statement of a pending or contemplated material acquisition or disposition or public offering or other material event it would be required and inadvisable (an “Information Blackout”) (which facts the Participating Holders shall keep
confidential and not trade upon), the Participating Holders shall suspend sales pursuant to such Shelf Registration Statement until the earlier of (i) one day following the date upon which such material information is disclosed to the public or
ceases to be material (of which fact Constar will promptly inform the Participating Holders), (ii) 120 days after Constar makes such good faith determination or (iii) such time as Constar notifies the Participating Holders that sales pursuant to
such Shelf Registration Statement may be resumed (the number of days from such suspension of sales until the day when such sales may be resumed hereunder, the “Sales Blackout Period”). If there is an Information Blackout and the
Participating Holders do not notify Constar in writing of their desire to cancel such Shelf Registration Statement, the period set forth in Section 5(b)(ii) shall be extended for a number of days equal to the number of days in the Sales Blackout
Period. 
  
 5.  Registration Procedures.    If and whenever Constar is required
to effect or cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement, Constar will, as expeditiously as reasonably possible: 
  
 (a)  prepare and file with the Commission a registration statement with respect to such Registrable Securities, and use its best efforts to cause
such registration statement to become effective and to keep Holders of Registrable Securities registered under such registration statement (“Participating Holders”) advised in writing of the initiation and progress of proceedings
regarding such registration, provided, however, that Constar may discontinue, in
 

 
 6 

 accordance with Sections 3 or 4 hereof, as the case may be, any registration of its securities which is being effected pursuant to Sections 3 or
4 hereof at any time prior to the effective date of the registration statement relating thereto, and provided, further, that Constar shall not file any Registration Statement pursuant to Sections 3 or 4 or any amendment thereto or any
Prospectus or any supplement thereto (including such documents incorporated by reference) to which any Participating Holder or the underwriters, if any, shall reasonably object in light of the requirements of the Securities Act or any other
applicable laws or regulations; 
  
 (b)(i)  except in the case of a Demand Registration on
a Shelf Registration Statement, prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for
a period of not less than 180 days or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold (but not before the expiration of the 90-day period referred to in Section 4(3) of
the Securities Act and Rule 174 thereunder, if applicable) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the
intended methods of disposition by the Participating Holders thereof set forth in such registration statement; 
  
 (ii)  in the case of a Demand Registration on a Shelf Registration Statement, prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for a period of not less than 24 months or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold
(but not before the expiration of the 90-day period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable) and comply with the provisions of the Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in accordance with the intended methods of disposition by the Participating Holders thereof set forth in such registration statement; 
  

(c)  furnish to the Participating Holders and each managing underwriter, without charge, at least one signed copy of the Registration
Statement and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference) and a reasonable number of conformed
copies of all such documents; 
  
 (d)  furnish to the Participating Holders such number of
copies of such registration statement and of each such amendment and supplement thereof (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and
summary prospectus), in conformity with the requirements of the Securities Act, and such other documents as a Participating Holder may reasonably request in order to facilitate the disposition of the Registrable Securities by such seller;

 
 7 

  
 (e)  use its best efforts to register or qualify such
Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as a Participating Holder shall request, and do any and all other acts and things which may be necessary or advisable to
enable the Participating Holders to consummate the disposition in such jurisdictions of the Registrable Securities; provided, however, that Constar shall not be required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject or subject itself to general taxation in any jurisdiction where it is not then so subject;

  
 (f)  cooperate with the Participating Holders and the managing underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as
the managing underwriters may request at least two business days prior to any sale of Registrable Securities to the underwriters; 
  
 (g)  immediately notify each seller of any Registrable Securities covered by such registration statement, at any time when the registration statement is required to be kept effective under
clause (b) of this Section 4, of Constar becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the circumstances then existing (which facts the Participating Holders shall keep confidential and not trade upon), and within ten days prepare and furnish to each
Participating Holder a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; 
  
 (h)  make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest
possible moment; 
  
 (i)  use its best efforts to list such Registrable Securities on any
securities exchange on which the Common Stock is then listed or NASDAQ if the Common Stock is then quoted on NASDAQ, if such Registrable Securities are not already so listed or quoted and if such listing is then permitted under the rules of such
exchange or NASDAQ, and provide an independent transfer agent and registrar for such Registrable Securities covered by such registration statement not later than the effective date of such registration statement; 
  
 (j)  provide a transfer agent and registrar for all Registrable Securities; 
  
 (k)  furnish each Participating Holder a signed counterpart, addressed to such seller (and the underwriters, if
any) of: 
  
 (i)  an opinion of counsel for Constar, dated the effective date of such
registration statement (or, if such registration involves an underwritten 

 
 8 

 
public offering, dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to each Participating Holder and the managing underwriter, if any;
and 
  
 (ii)  a “comfort” letter, dated the effective date of such registration
statement (or, if such registration involves an underwritten public offering, dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified Constar’s financial statements
included in such registration statement, covering such matters with respect to such registration statement as are customarily covered in accountants’ letters delivered to the underwriters in underwritten offerings of securities as may
reasonably be requested by Holder and the managing underwriter, if any; and 
  
 (l)  make
available for inspection by each Participating Holder, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any Participating Holder or
any such underwriter (individually, an “Inspector” and collectively, the “Inspectors”), all pertinent financial and other records, pertinent corporate documents and properties of Constar as shall be reasonably
necessary to enable them to exercise their due diligence responsibilities (collectively, the “Records”), and cause all of Constar’s officers, directors and employees to supply all information reasonably requested by any
Participating Holder or any such underwriter, attorney, accountant or agent in connection with such registration statement; provided that such Participating Holder agrees that non-public information obtained by it as a result of such
Inspections shall be deemed confidential and acknowledges its obligations under the Federal securities laws not to trade any securities of Constar on the basis of material non-public information; 
  

(m)  enter into a customary underwriting agreement if such registration is to be underwritten; 
  
 (n)  otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make
generally available to its security holders, earnings statements satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of any 12-month period (1) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm or best efforts underwriting offering, and (2) beginning with the first month of Constar’s first fiscal quarter commencing after the effective date of the Registration Statement, which
statements shall cover said 12-month periods; and 
  
 (o)  take such other reasonable steps
that are necessary or advisable to permit the sale of such Registrable Securities. 
  
 Each Participating Holder agrees that, upon receipt
of any notice from Constar of the happening of any event of the kind described in clause (g) of this Section 5, such Participating Holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Participating Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by clause (g) of this Section 5, and, if so directed by Constar, such Participating Holder will
deliver to Constar (at
 

 
 9 

 
Constar’s expense) all copies, other than permanent file copies then in such Participating Holder’s possession, of the prospectus covering such Registrable Securities current at the
time of receipt of Constar’s notice. In the event Constar shall give any such notice, the periods mentioned in clause (b) of this Section 5 shall be extended by the number of days during the period from and including the date of the giving of
such notice pursuant to clause (g) of this Section 5 to the date when such Participating Holder shall have received the copies of the supplemented or amended prospectus contemplated by clause (g) of this Section 5. 
  

	6.  Indemnification.
	 
	
 

  
 (a)  Indemnification by Constar.    Constar hereby agrees to indemnify and hold harmless each Participating Holder and each Participating Holder’s officers, directors, shareholders,
employees, agents and Affiliates and each other Person (including underwriters) who participates in the offering of such Registrable Securities against any losses, claims, damages, liabilities, reasonable attorneys’ fees, costs or expenses
(collectively, the “Damages”), joint or several, to which such Participating Holder and its Affiliates or such participating Person may become subject under the Securities Act or otherwise, insofar as such Damages (or proceedings in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which Registrable Securities are registered under the
Securities Act, in any preliminary prospectus or final prospectus contained therein, or in any amendment or supplement thereof, or arise out of or are based upon the 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 such Participating Holder, its Affiliates or such participating Person for their expenses (as incurred) in connection with investigating or defending any such
Damages or proceeding; provided, however, that Constar will not be liable in any such case to the extent that any such Damages arise out of or are based upon (i) an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, said preliminary or final prospectus or said amendment or supplement in reliance upon and in conformity with written information furnished after the completion of the Initial Public Offering to Constar
by a Participating Holder, its Affiliates or a participating Person, as the case may be, specifically for use in the registration statement or prospectus; or (ii) an untrue statement or alleged untrue statement, omission or alleged omission in a
prospectus if such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the prospectus which amendment or supplement is delivered to the indemnified party in a timely manner and
such party thereafter fails to deliver such prospectus as so amended or supplemented prior to or concurrently with the sale of such Registrable Securities to the Person asserting such Damages. 
  

(b)  Indemnification by Holder.    Each Participating Holder agrees to indemnify and hold harmless Constar, its directors,
officers, agents and Affiliates against any Damages, joint or several, to which Constar, or such other Person or Affiliate may become subject under the Securities Act or otherwise, insofar as such Damages (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which such Registrable Securities are registered under the Securities Act,
in any preliminary prospectus or final prospectus contained therein or in any amendment or supplement thereto, or arise out of 

 
 10 

 
or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, which, in each such
case, has been made in or omitted from such registration statement, said preliminary or final prospectus or said amendment or supplement in reliance upon, and in conformity with, written information furnished after the completion of the Initial
Public Offering to Constar by such Participating Holder specifically for use in the registration statement or prospectus. 
  
 (c)   Conduct of Indemnification Proceedings.    Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of the commencement of any action
or proceeding involving a claim referred to in the preceding paragraphs of this Section 6 (provided the failure of any indemnified party to give such notice shall not relieve the indemnifying party of its obligations under this Section 6 except to
the extent of any Damages caused solely by such failure); and (ii) unless the indemnified party has been advised by its counsel that a conflict of interest exists between such indemnified and indemnifying parties under applicable standards of
professional responsibility, with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. Whether or not such defense is assumed by the indemnifying
party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). No indemnifying party will consent to the 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 of such claim or litigation; provided, however, that no
indemnifying party will consent to the entry of any judgment or enter into any settlement (other than for the payment of money only) without the consent of the indemnified party (which consent will not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the defense of the claim, will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in
the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the
fees and expenses of such additional counsel or counsels. 
  
 (d)  Contribution.    If for any reason the indemnification provided for in the preceding Sections 6(a) or 6(b) is unavailable to an indemnified party in respect of any Damages referred to
therein, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Damages in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying
party, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such action; provided, however, that in no event shall the liability of any Participating Holder hereunder be greater in amount than the difference between the
dollar amount of the proceeds received by such Participating Holder upon the sale of the Registrable Securities giving rise to such contribution obligation and all amounts previously contributed by Holder with respect to such Damages. No Person
guilty of fraudulent
 

 
 11 

 
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of fraudulent misrepresentation. 

 
 7.   Restrictions on Public Sale by Constar. 
  
 (a)  Constar shall not directly or indirectly effect any public sale or distribution of any of its capital stock or securities convertible into or exchangeable
for its capital stock for its own account or the account of third parties during the 10-day period prior to and the 90 day period beginning on the effective date of a Registration Statement filed pursuant to Sections 3 or 4 (except pursuant to such
Registration Statement or as part of a Registration Statement on Form S-8), and, in connection with an underwritten offering, Constar shall agree to such further lock-up arrangements as the managing underwriter(s) may reasonably request. Constar
will not permit any third party to register and sell securities in an offering described in Section 3 hereof unless such person agrees to enter into a lock-up agreement on the same terms. 
  
 (b)  If any Holders of Registrable Securities notify Constar in writing that they intend to effect an underwritten sale of Registrable Securities registered
pursuant to a Shelf Registration Statement, Constar shall not directly or indirectly effect any public sale or distribution of any of its capital stock or securities convertible into or exchangeable for its capital stock for its own account or the
account of third parties during the 10-day period prior to and the 90 day period beginning on the date such notice is received, except pursuant to registrations on Form S-8 or any successor form. 
  

(c)  If Constar completes an underwritten registration with respect to any of its securities (whether offered for sale by Constar or any other Person) on a
form and in a manner that would have permitted registration and sale of the Registrable Securities, regardless of whether any Holder actually elected to participate in such registration, each Holder shall not directly or indirectly effect any public
sale or distribution of any of its capital stock or securities convertible into or exchangeable for its capital stock for its own account or the account of third parties other than pursuant to such registration during the lock-up period required of
Constar by any underwriters managing any such public offering, not to exceed 90 days. 
  
 8.  Underwritten Registration. 
  
 In the case of a Demand Registration, if any of
the Registrable Securities to be registered under this Agreement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Participating
Holders and shall be subject to Constar’s consent, such consent not to be unreasonably withheld. 
  
 9.  Miscellaneous. 
  
 (a)  Amendment and
Modification.    This Agreement may not be amended or modified except by written instrument duly executed by the parties hereto. No course of dealing between or among any persons having any interest in this Agreement will be
deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any person under or by reason of this Agreement. 

 
 12 

  
 (b)  Entire Agreement.    This Agreement
constitutes the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes any prior agreement or understanding, written or oral, relating to the subject matter of this Agreement. 
  
 (c)  Assignment.    This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and permitted assigns and executors, administrators and heirs. Crown may assign all or, from time to time, any portion of its rights and obligations hereunder. 

 
 (d)  No Third Party Beneficiaries.    Nothing in this Agreement, express or implied, is
intended to or shall (a) confer on any person other than the parties hereto and their respective successors or permitted assigns any rights (including third party beneficiary rights), remedies, obligations or liabilities under or by reason of this
Agreement, or (b) constitute the parties hereto as partners or as participants in a joint venture. This Agreement shall not provide third parties with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those
existing without reference to the terms of this Agreement. 
  
 (e)  Severability.    If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be held invalid or unenforceable by a court of
competent jurisdiction, the remainder of this Agreement or the application of any such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. If any of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, scope, activity or subject,
it shall be construed by limiting and reducing it, so as to be valid and enforceable to the extent compatible with applicable law or the determination by a court of competent jurisdiction. 
  
 (f)  Notices.    All notices and other communications required or permitted hereunder shall be in writing, shall be deemed duly given
upon actual receipt, and shall be delivered (a) in person, (b) by registered or certified mail, postage prepaid, return receipt requested or (c) by facsimile or other generally accepted means of electronic transmission (provided that a copy of any
notice delivered pursuant to this clause (c) shall also be sent pursuant to clause (b)), addressed as follows: 
  
 If to Constar, to: 
  
 One Crown Way 
 Philadelphia, PA 19154-4599 
 Attention:    Mr. Michael J. Hoffman 
 Fax:    (215) 552-3715 

 
 13 

  
 If to Crown, to: 
  
 Crown Cork & Seal Company, Inc. 
 One Crown Way 
 Philadelphia, PA 19154 
 Attention:    Mr. Timothy J. Donahue 
 Fax:    (215) 676-6011 
  
 With a copy to: 

 
 Dechert 
 4000 Bell Atlantic Tower 
 1717 Arch Street 
 Philadelphia, PA 19103-2793 
 Attention:    William G. Lawlor, Esq.

 Fax:    (215) 994-2222 
  
 If to a Holder other than Crown, to such address or facsimile number as the Holder may designate in writing to the other parties. 
  
 or to such other addresses or telecopy numbers as may be specified by like notice to the other parties. 
  

(g)  Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania. 
  
 (h)  Dispute Resolution: Negotiation and Arbitration. 
  
 (i)  The parties shall attempt to resolve any dispute arising out of or relating to this Agreement promptly by
negotiation in good faith between executives who have authority to settle the dispute. A party shall give the other parties written notice of any dispute not resolved in the ordinary course of business. Within ten Business Days after delivery of
such notice, the party receiving notice shall submit to the others a written response thereto. The notice and the response shall include: (i) a statement of each party’s position(s) regarding the matter(s) in dispute and a summary of arguments
in support thereof, and (ii) the name and title of the executive who will represent that party and any other Person who will accompany that executive. 
  
 (ii)  Within 10 Business Days after delivery of the notice, the designated executives shall meet at a mutually acceptable time and place, and
thereafter, as often as they reasonably deem necessary, to attempt to resolve the dispute. All reasonable requests for information made by one party to any other shall be honored in a timely fashion. All negotiations conducted pursuant to this
Section 9(g) (and any of the parties’ submissions in contemplation hereof) shall be deemed confidential shall be treated by the parties and their representatives as 

 
 14 

 
compromise and settlement negotiations under the United States Federal Rules of Evidence and any similar state rules. 
  
 (iii)  If the matter in dispute has not been resolved within 30 days after the first meeting of the executives to attempt to resolve the dispute,
either party may submit the dispute to binding arbitration to the Philadelphia, Pennsylvania office of the American Arbitration Association (“AAA”) in accordance with the procedures set forth in the Commercial Arbitration Rules of
the AAA. 
  
 (iv)  The Commercial Arbitration Rules of the AAA, as modified or revised by
the provisions of this Section 9(g), shall govern any arbitration proceeding hereunder. The arbitration shall be conducted by three arbitrators selected pursuant to Rule 13 of the Commercial Arbitration Rules, and pre-hearing discovery shall be
permitted if and only to the extent determined by the arbitrator to be necessary in order to effectuate resolution of the matter in dispute. The arbitrator’s decision shall be rendered within 30 days of the conclusion of any hearing hereunder
and the arbitrator’s judgment and award may be entered and enforced in any court of competent jurisdiction. 
  
 (v)  Resolution of disputes under the procedures of this Section 9(g) shall be the sole and exclusive means of resolving disputes arising out of or relating to this Agreement; provided, however, that nothing
herein shall preclude the Parties from seeking in any court of competent jurisdiction temporary or interim injunctive relief to the extent necessary to preserve the subject matter of the dispute pending resolution under this Section 9(g).

  
 (i)  Consent to Jurisdiction.    Both parties hereby agree and consent to be
subject to the exclusive jurisdiction of the United States District Court for the Eastern District of Pennsylvania, and in the absence of such Federal jurisdiction, the parties consent to be subject to the exclusive jurisdiction of any state court
located in the City of Philadelphia and hereby waive the right to assert the lack of personal or subject matter jurisdiction or improper venue in connection with any such suit, action or other proceeding. In furtherance of the foregoing, each of the
parties (i) waives the defense of inconvenient forum, (ii) agrees not to commence any suit, action or other proceeding arising out of this Agreement or any transactions contemplated hereby other than in any such court (other than the mandatory
submission to arbitration in accordance with Section 9(g), and (iii) agrees that a final judgment in any such suit, action or other proceeding shall be conclusive and may be enforced in other jurisdictions by suit or judgment or in any other manner
provided by law. 
  
 (j)  Section Headings; Interpretive Issues.    The section
and paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. The parties have participated jointly in the drafting and negotiation of this
Agreement. In the event any ambiguity or question of interpretation or intent arises, this Agreement shall be construed as if drafted jointly by Crown and Constar and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement. 

 
 15 

  
 (k)  Counterparts.    This Agreement and any
amendments hereto may be executed in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by facsimile shall be as effective as delivery of a manually executed counterpart of this Agreement. 
  
 (l)  Further Assurances.    The parties shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such instruments and take such other action as may be necessary
or advisable to carry out their obligations under this Agreement and under any exhibit, document or other instrument delivered pursuant hereto. 
  
 (m)  Specific Performance.    The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that they shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which they may be entitled at law or equity. 
  
 (n)  Holders No Longer Owning Securities.    The term of this Agreement shall terminate if the
Holders cease to own any Registrable Securities; provided that the indemnification rights and obligations set forth in Section 6 hereof shall survive any such cessation of ownership. 
  
 (o)  Pronouns.    Whenever the context may require, any pronouns used herein shall be deemed also to include the corresponding neuter,
masculine or feminine forms. 
  
 (p)  Attorneys’ Fees.    In the event any
party hereto commences any action to enforce any rights of such party hereunder, the prevailing party in such action shall be entitled to recover such party’s costs and expenses incurred in such action, including, without limitation, reasonable
attorneys’ fees. 
  
 (q)  Current Public Information.    At all times after
Constar has filed a registration statement with the Commission pursuant to the requirements of either the Securities Act or the Exchange Act, Constar will file all reports required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the Commission thereunder, and will take such further action as any Holder may reasonably request, all to the extent required to enable such Holder to sell Registrable Securities pursuant to Rule 144 under the
Securities Act (as such rule may be amended from time to time) or any similar rule or regulation hereafter adopted by the Commission. 
  
 (r)  Other Registration Rights.    Constar will not, on or after the date of this Agreement, enter into any agreement with respect to its securities which is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Constar has not previously entered into any agreement with respect to its securities granting any registration rights to any Person. 

 
 16 

  
 (s)  Effectiveness.    The terms of this
Agreement shall not become effective until the completion of Constar’s Initial Public Offering. 
  

 
 17 

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

  
 CONSTAR INTERNATIONAL INC. 

 
 
	 By:
 	 	 

	  	 	 Name:
 
	  	 	 Title:
 

 
  
 CROWN CORK &
SEAL COMPANY, INC. 
  
 
	 By:
 	 	 

	  	 	 Name:
 
	  	 	 Title:
 
	 
	 By:
 	 	 

	  	 	 Name:
 
	  	 	 Title:

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