Document:

Exhibit 10.1

 

SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Sixth Amendment to Loan and Security Agreement
(this “Amendment”) is entered into as of March 19, 2007, by and between Greater
Bay Venture Banking, a division of Greater Bay Bank N.A. (“Bank”) and Focus
Enhancements, Inc. (“Borrower”).

RECITALS

Borrower and Bank are parties to that certain Loan and
Security Agreement dated as of November 15, 2004, as amended from time to time
(the “Agreement”).  Borrower and Bank
desire to amend certain provisions of the Agreement, all in accordance with the
terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:

1.             Amendments to Agreement.  The Agreement is hereby amended as follows:

(a)           The following defined terms in
Section 1.1 are amended to read as follows:

“Bridge Maturity Date”
means February 23, 2008.

“Revolving Maturity Date”
means February 23, 2008.

(b)           Section
6.9 Maximum Net Loss is hereby amended as detailed in Exhibit E-1.

2.             Conditions
Precedent to Effectiveness.  This
Amendment shall become effective only upon:

(a)           receipt
by the Bank of the following (each of which shall be in form and substance
satisfactory to Bank):

(i)            counterparts
of this Amendment duly executed on behalf of the Borrower and the Bank;

(ii)           copies
of resolutions of the Board of Directors or other authorizing documents of
Borrower, authorizing the execution and delivery of this Agreement;

(iii)          an affirmation of guaranty and
intercreditor agreement by Carl Berg;

(iv)          warrant agreement;

(b)           Bank
shall have received a nonrefundable fee for the Committed Revolving Line in an
amount equal to $10,000 and a nonrefundable fee for the Committed Bridge Line
in an amount equal to $12,500, and all Bank Expenses incurred in connection
with this Amendment; and

(c)           completion
of such other matters and delivery of such other agreements, documents and
certificates as Bank may reasonably request.

3.             Representation and Warranties.  Borrower represents and warrants that the
Representations and Warranties contained in the Agreement are true and correct
as of the date of this Amendment, and that no Event of Default has occurred and
is continuing.

4.             MISCELLANEOUS.

(a)           Successors
and Assigns.  This Amendment shall be
binding upon and shall inure to the benefit of Borrower and Bank and their
respective successors and assigns; provided, however, that the foregoing shall
not authorize any assignment by Borrower of its rights or duties hereunder.

 

(b)           Entire Agreement.  This Amendment and the Loan Documents contain
the entire agreement of the parties hereto and supersede any other oral or
written agreements or understandings.

 

(c)           Course
of Dealing; Waivers.  No course of
dealing on the part of Bank or its officers, nor any failure or delay in the
exercise of any right by Bank, shall operate as a waiver thereof, and any
single or partial exercise of any such right shall not preclude any later
exercise of any such right.  Bank’s
failure at any time to require strict performance by Borrower of any provision
shall not affect any right of Bank thereafter to demand strict compliance and
performance.  Any suspension or waiver of
a right must be in writing signed by an officer of Bank.

(d)           Legal
Effect.  Except as amended by this
Amendment, the Loan Documents remain in full force and effect.  If any provision of this Amendment conflicts
with applicable law, such provision shall be deemed severed from this
Amendment, and the balance of this Amendment shall remain in full force and
effect.  Unless otherwise defined, all
capitalized terms in this Amendment shall have the meaning set forth in the
Agreement.

(e)           Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.

 

IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of the first date above written.

 

	
  FOCUS ENHANCEMENTS, INC.

  
	
   

  
	
   

  
	
  By

  	
  /s/ Gary Williams

  	
   

  
	
   

  
	
  Title

  	
  EVP of Finance &
  CFO

  	
   

  
	
   

  
	
   

  
	
  GREATER BAY
  VENTURE BANKING, .

  
	
  A DIVISION OF
  GREATER BAY BANK N.A

  
	
   

  
	
   

  
	
  By

  	
  /s/ Rob Roland for Tod
  Racine

  	
   

  
	
   

  
	
  Title

  	
  VPExhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration
Rights Agreement (this “Agreement”) is made as of March 19, 2007 by and
between Focus Enhancements, Inc., a Delaware corporation (the “Company”)
and Greater Bay Bancorp (“Bank”).

WITNESSETH:

WHEREAS, pursuant
to that certain Warrant to Purchase Stock of even date herewith issued by the
Company to Bank (the “Warrant”), Bank has the right to acquire certain
shares of the common stock of the Company; and

WHEREAS, in
partial consideration for Bank’s agreement to loan certain funds to the
Company, the Company has agreed to issue the Warrant and to provide Bank with
certain registration rights with respect to the common stock issuable upon
exercise of the Warrant.

AGREEMENT

NOW
THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth herein, the Company and Bank
agree as follows:

1.             Definitions.  As used in this Agreement:

a.            “Exchange Act”
means the Securities Exchange Act of 1934, as amended.

b.            “Securities Act”
means the Securities Act of 1933, as amended.

c.            “Form S-3”
means such form under the Securities Act as in effect on the date hereof or any
registration form under the Securities Act subsequently adopted by the SEC
which similarly permits inclusion or incorporation of substantial information
by reference to other documents filed by the Company with the SEC.

d.            “Holder”
means:  (i) Bank, or (ii) a
transferee of Registrable Securities by Bank, to whom registration rights under
this Agreement are assigned pursuant to Section 4 of this Agreement.

e.            “Registrable
Securities” means for each Holder the shares of the Company’s common stock
issued to such Holder upon exercise of the Warrant, together with all other
shares of Company common stock issued in respect thereof (by way of stock
split, dividend or otherwise), and for all Holders the aggregate of all
Registrable Securities held by all such Holders.  Registrable Securities shall not include any
shares of Company common stock transferred by a Holder pursuant to
Section 4 hereof to any person who does not agree to be bound by the terms
of this Agreement.

 

f.              “SEC” means the Securities
and Exchange Commission.

 

Capitalized terms
not otherwise defined herein have the meanings given to them in the Warrant.

2.             Registration of Shares Issuable
Upon Exercise of the Warrant.

(a)           If the Company shall determine to
register any of its securities after the date hereof, whether for its own
account or for the account of any other party, the Company will:

(i)            promptly give to
each Holder written notice thereof (which shall include a list of the
jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws); and

(ii)           include in such
registration, and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made within 20 days
after receipt of such written notice from the Company by any Holders, except as
limited under Section 2(b) below.

Notwithstanding
the foregoing, the Company shall not be required to notify Holders or include
Registrable Securities in any registration (i) on SEC Form S-1,
S-3 or S-8 relating solely to employee stock option or purchase
plans or (ii) on Form S-4 relating solely to a transaction
within the scope of Rule 145.

(b)           If the registration of which the
Company gives notice is for a public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given pursuant
to Section 2(b)(i).  In such event
the right of any Holder to registration pursuant to this Section 2 (“Company
Registration”) 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. 
The Company and all Holders proposing to distribute their securities
through such underwriting (“Participating Holders”) shall enter into an
underwriting agreement in customary form with the underwriters selected by the
Company.  Notwithstanding any other
provision of this Section 2, if the underwriters determine that marketing
factors require a limitation of the number of shares to be underwritten, the
underwriters and the Company may limit the number of Registrable Securities to
be included in the registration and underwriting, or may exclude Registrable
Securities entirely from such registration and underwriting; provided, however,
that no Registrable Securities shall be so excluded unless there are first
excluded all other securities proposed to be included in such registration
(other than securities registered for the account of the Company).  The Company shall advise all Holders of any
such limitation, and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders exercising their registration rights in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders.  In the event of any such
limitation of the number of shares to be underwritten, the Company shall so
advise all Participating Holders, and the number of shares of Registrable
Securities that may be included in the registration and 

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underwriting shall be
allocated among the Participating Holders in proportion, as nearly as
practicable, as the respective amounts of Registrable Securities then held by
each Participating Holder bears to the total number of Registrable Securities
held by all Participating Holders.  If
any Participating Holder disapproves of the terms of any such underwriting, it
may elect to withdraw therefrom by written notice to the Company and the
underwriter.  Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.

 

(c)           The costs and expenses of any
registration pursuant to this Section 2, including, without limitation,
printing expenses, legal fees and disbursements of counsel for the Acquiror, “blue
sky” expenses, accounting fees and filing fees, but not including underwriting
commissions or similar charges, legal fees and disbursements of counsel for the
selling Holders, shall be borne by the Company. 
All expenses of any registered offering not otherwise borne by the
Company shall be borne pro rata among the Participating Holders (and the
Company and other holders selling securities in the offering) on the basis of
the number of shares registered.

3.             Indemnification.  In the event of any offering registered
pursuant to this Agreement:

(a)           Indemnification by the Company:  The Company will indemnify each Holder and
each person controlling a Holder, against all claims, losses, damages and
liabilities (and actions in respect thereof), including any of the foregoing
(i) incurred in settlement of any litigation, commenced or threatened,
(ii) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement, final
prospectus, or any amendment or supplement thereto, (iii) incident to any
offering registered pursuant to this Agreement, or (iv) based on
(x) 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
(y) any violation by the Company of any rule or regulation promulgated
under the Securities Act or state securities laws applicable to the Company in
connection with any such registration. 
Subject to Section 3(c), the Company will reimburse each Holder,
and each person controlling a Holder, for any legal and other out-of-pocket
expenses reasonably incurred in connection with investigating, preparing or
defending any claim, loss, damage, liability or action described in the
previous sentence, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage or liability arises out of
or is based on any untrue statement or omission, or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by such Holder or controlling person and stated to be
specifically for use therein.

(b)           Indemnification by Holders:  Each Holder will indemnify the Company, each
of its directors and officers and its legal counsel and independent
accountants, each underwriter, if any, of the Company’s securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and
each other Holder and each person controlling such other Holder, against all
claims, losses, damages and liabilities (or actions in respect thereof)
(i) arising out of or based on

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any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, final prospectus, or any amendment or supplement thereto,
(ii) incident to any offering registered pursuant to this Agreement, or
(iii) based on 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.  Each Holder will
reimburse the Company, such other Holders, such directors, officers, legal
counsel, independent accountants, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating,
preparing or defending any claim, loss, damage, liability or action described
in the previous sentence, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, final prospectus, or
any amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein; provided, however, that the
obligations of each Holder hereunder shall be several and not joint and shall
be limited to an amount equal to the respective gross proceeds (before expenses
and commissions) from the sale of Registrable Securities by such Holder as
contemplated herein.

 

(c)           Defending Claims:  Each party entitled to indemnification under
this Section 3 (the “Indemnified Party”) shall give notice to the
party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party receives written notice 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 be unreasonably 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,
except to the extent, but only to the extent, that the Indemnifying Party’s
ability to defend against such claim or litigation is impaired as a result of
such failure to give notice. 
Notwithstanding the foregoing sentence, the Indemnified Party may retain
its own counsel to conduct the defense of any such claim or litigation, and
shall be entitled to be reimbursed by the Indemnifying Party for expenses
incurred by the Indemnified Party in defense of such claim or litigation, in
the event that the Indemnifying Party does not assume the defense of such claim
or litigation within sixty days after the Indemnifying Party receives notice
thereof from the Indemnified Party. 
Further, an Indemnifying Party shall be liable for amounts paid in
settlement of any such claim or litigation only if the Indemnifying Party
consents in writing to such settlement (which consent shall not be unreasonably
withheld).  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 to release from all
liability with respect to such claim or litigation.

(d)           Contribution:  If the indemnification provided for in this
Section 3 from the Indemnifying Party is unavailable to an Indemnified
Party hereunder in respect of any claim, loss, damage or liability referred to
herein, then the Indemnifying Party, to the extent such

 4
 

 

indemnification is
unavailable, in lieu of indemnifying such Indemnified Party, shall contribute
to the amount paid or payable by such Indemnified Party as a result of such
claims, losses, damages or liabilities in such proportion as is appropriate to
reflect the relative benefit to or fault of the Indemnifying Party and
Indemnified Parties in connection with the actions that resulted in such
claims, losses, damages and liabilities. 
The relative benefit of such Indemnifying Party and Indemnified Parties
shall be determined by reference to, among other things, the gross proceeds
received by each such party from the sale of Registrable Securities in the
manner contemplated hereby.  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.  The amount paid or
payable by a party as a result of the claims, losses, damages or liabilities
referred to above shall be deemed to include any legal fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.  The parties hereto agree
that it would not be just and equitable if contribution pursuant to this
paragraph were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above in this paragraph.  No party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any party.

 

(e)           The obligations of the Company and
each Holder under this Section 3 shall survive the completion of any
offering of stock in a registration statement under this Agreement.

4.             Assignment of Registration
Rights.  Subject to compliance with
any applicable securities laws, the rights of a Holder pursuant to this
Agreement may be assigned by a Holder to a transferee of Registrable Securities
only if:  (a) the Company is, within
a reasonable time after such transfer, furnished with written notice of the
name and address of such transferee and a copy of a duly executed written instrument
in form reasonably satisfactory to the Company pursuant to which such
transferee (i) assumes all of the obligations and liabilities of its
transferor hereunder, (ii) agrees itself to be bound hereby and
(iii) provides the Company with such reasonable information as the Company
may request to permit the transferee to sell such Registrable Securities
pursuant to the registration statement filed in accordance with Section 2
hereof, and (b) immediately following such transfer, the disposition of
such Registrable Securities by the transferee is restricted under the
Securities Act.

5.             Amendment of Registration Rights.  The Holders of a majority of the Registrable
Securities then outstanding may, with the consent of the Company, amend the
registration rights granted hereunder.

6.             Termination.  The registration rights set forth in this
Agreement shall terminate with respect to a Holder (and the shares held by such
Holder shall cease to constitute Registrable Securities) upon the earlier of
(i) such time as all of the Registrable Securities then held by such
Holder can be sold by such Holder in a three-month period in accordance with

 5
 

 

Rule 144 under the
Securities Act and (ii) one year following the date hereof.

 

7.             Obligations of Holders.  By exercising any rights hereunder, each
Holder shall be deemed to assume all obligations of a Holder hereunder as
though such Holder were a signatory hereto. 
The Company may require Holders to execute an instrument whereby such
Holders expressly assume all obligations of Holders hereunder as a condition
precedent to any obligations of the Company hereunder.

8.             Counterparts.  This Agreement may be executed in two or more
counterparts, all of which together shall be considered one and the same
document.

9.             Entire Agreement. This Agreement, together with the Warrant, contains the
entire understanding and agreement of the parties, and may not be modified or
terminated except by a written agreement signed by both parties.

10.           Governing Law. This Agreement
and the validity and performance of the terms hereof shall be governed by and
construed in accordance with the laws of the State of California.

11.           Notices.  Any notice or other communication required or
permitted to be given hereunder shall be in writing by facsimile, mail or
personal delivery and shall be effective upon actual receipt of such notice.

12.           Headings.  The titles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.

[rest
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IN WITNESS WHEREOF, the Company
and Bank have duly executed this Registration Rights Agreement, as of the date
and year first above written.

 

	
  “COMPANY”

  	
   

  	
  “BANK”

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  FOCUS
  ENHANCEMENTS, INC.

  	
   

  	
  GREATER BAY BANCORP

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  By:

  	
  /s/ Gary Williams

  	
   

  	
   

  	
  By:

  	
  /s/ Rob Roland for Tod
  Racine

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed:

  	
  Gary Williams

  	
   

  	
   

  	
  Printed:

  	
  Rob Roland

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Title:

  	
  EVP of Finance & CFO

  	
   

  	
   

  	
  Title:

  	
  VP

  	
   

  	 

														

 

 7

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