EXHIBIT 10.60
FOCUS ENHANCEMENTS, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made as of
April 24, 2001 by and among Focus Enhancements, Inc., a Delaware corporation
(the "COMPANY"), and the holders of the Company's Series B Convertible Preferred
Stock signatory hereto.
R E C I T A L S:
A. Pursuant to a Stock Purchase Agreement dated as of the date hereof
by and between the Company and the Holder (the "PURCHASE AGREEMENT"), such
Holder has acquired, or will acquire in the future, certain shares of Series B
Convertible Preferred Stock, $.01 par value per share (the "SERIES B PREFERRED
STOCK"), which Series B Preferred Stock is convertible into shares of Common
Stock, $.01 par value per share, of the Company (the "COMMON STOCK").
B. The parties desire to set forth herein their agreement on the terms
and subject to the conditions set forth herein related to the granting of
certain registration rights to the Holders relating to the Common Stock issuable
upon conversion of shares of Series B Preferred Stock.
A G R E E M E N T:
The parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"COMMISSION" shall mean the U.S. Securities and Exchange Commission.
"DEMAND REGISTRATION" means a registration by the Company for a public
offering of Registrable Securities on Form S-3 (or any successor form to
FormS-3) or any similar short-form registration statement, or a Form S-1 (or any
successor or equivalent registration form) only if the Company is not eligible
to use Form S-3 for that transaction, the reasonably anticipated aggregate price
to the public of which, net of underwriting discounts and commissions, if any,
would be at least $2,000,000.
"ELIGIBLE HOLDER" means a Holder that beneficially owns $250,000 or
more of Series B Stock (based on the purchase price of Series B Preferred Stock
in the Purchase Agreement) or Common Stock issued upon conversion of such amount
of Series B Preferred Stock.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect from time to time.
"HOLDERS" or "HOLDERS OF REGISTRABLE SECURITIES" shall mean each
purchaser of Series B Preferred Stock who is a party to this Agreement and any
Person who shall have acquired Registrable Securities from such purchaser as
permitted herein in a transaction pursuant to which registration rights are
transferred pursuant to Section 9 hereof.
"INITIATING HOLDERS" means Holders that collectively beneficially own
$1,000,000 or more of Series B Preferred Stock (based on the purchase price of
Series B Preferred Stock in the Purchase Agreement) or Common Stock issued upon
conversion of such amount of Series B Preferred Stock.
"PERSON" shall mean an individual, a partnership, a company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental or quasi-governmental entity, or any department,
agency or political subdivision thereof.
"REGISTRABLE SECURITIES" means (i) any shares of Common Stock issued or
issuable upon conversion of shares of Series B Preferred Stock, and (ii) any
shares of Common Stock issued or issuable in respect of the securities referred
to in clause (i) above upon any stock split, stock dividend, recapitalization or
similar event. The term "REGISTRABLE SECURITIES" EXCLUDES in all cases, however,
(a) Common Stock issued or issuable upon conversion of Series B Preferred Stock
that may be sold under Rule 144(k) promulgated under the Securities Act or
shares held by a Person to whom registration rights are not transferred pursuant
to Section 10 hereof, and (b) shares of Common Stock issued upon conversion of
Series B Preferred Stock that have been sold either in a transaction pursuant to
an effective registration statement under the Securities Act or pursuant to any
provision of Rule 144 promulgated under the Securities Act.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act.
"REGISTRATION EXPENSES" shall mean all expenses, other than Selling
Expenses, incurred by the Company in complying with Sections 2 or 3 hereof,
including without limitation, all registration, qualification and filing fees,
exchange listing fees, printing expenses, escrow fees, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders and the costs and fees of any accountants, attorneys or other
experts retained by the Holders or Holder.
2. DEMAND REGISTRATION.
(a) REQUESTS FOR REGISTRATION. At any time after April 24,
2003, the Initiating Holders may request in writing that the Company engage in
one Demand Registrations. Within 10 days after receipt of any such request, the
Company will give written notice of such requested registration to all other
Eligible Holders. The Company shall include in such offering the Registrable
Securities of the Initiating Holders and those Eligible Holders who have
responded affirmatively within 10 days after the receipt of the Company's
notice. If the Demand Registration is not an underwritten offering, the Company
shall file for a so-called traditional "shelf registration" on Form S-3 (or Form
S-1) pursuant to which the Initiating Holders and Eligible Holders participating
in such registration may sell their Registrable Securities from time to time at
prevailing market prices directly, through agents they designate, or through
dealers.
(b) PRIORITY ON DEMAND REGISTRATION. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities requested to
be included in such offering exceeds the number of Registrable Securities which
can be sold in such offering without adversely affecting the marketability of
the offering, the Company will include in such registration (subject to the
rights of the holder(s) of the Company's Series A Convertible Exchangeable
Preferred Stock (the "SERIES A PREFERRED STOCK") and to the rights of other
Persons under agreements existing as of the date hereof such number of
Registrable Securities allocated pro rata among the Holders thereof based upon
the number) of Registrable Securities owned by each such Holder and the Company
will provide an additional registration within 6 months thereafter for
Registrable Securities excluded from that offering. No securities other than
Registrable Securities hereunder shall be included in such Demand Registration
without the prior written consent of Initiating and Eligible Holders who
collectively hold Registrable Securities representing at least 50% of the
Registrable Securities subject to the Demand Registration, except for securities
relating to the Company's existing obligations to third party demand or
piggyback rights on a pro rata basis with the Registrable Securities.
(c) RESTRICTIONS ON DEMAND REGISTRATION. The Initiating
Holders in the aggregate will be entitled to request two Demand Registrations
hereunder on or after the dates specified in paragraph (a) above (subject to
paragraph (b) above). A registration will not count as a permitted Demand
Registration until it has become effective (unless such Demand Registration has
not become effective due solely to the fault of the Initiating or Eligible
Holders participating in such registration, including a request by such Holders
that such registration be withdrawn). The Company may postpone the filing or the
effectiveness of a registration statement for a Demand Registration for up to 90
days for any Demand Registration if the Company determines in good faith that
such Demand Registration would reasonably be expected to have a material adverse
effect on any proposal or plan by the Company to engage in any financing,
acquisition or disposition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or similar transaction or
would require disclosure of any information that the board of directors of the
Company determines in good faith the disclosure of which would be detrimental to
the Company; provided, however, that in such event, the Holders initially
requesting such Demand Registration will be entitled to withdraw such request
and, if such request is withdrawn, such Demand Registration will not count as a
permitted Demand Registration hereunder and the Company will pay any
Registration Expenses in connection with such registration.
(d) SELECTION OF UNDERWRITERS. If the Demand Registration is
underwritten, the Initiating Holders will have the right to select the
investment banker(s) and manager(s) to administer an offering pursuant to the
Demand Registration, subject to the prior written approval of the Company, which
will not be unreasonably withheld or delayed.
(e) OTHER REGISTRATION RIGHTS. Except as provided in this
Agreement, so long as any Holder owns any Registrable Securities, the Company
will not grant to any Persons the right to request the Company to register any
equity securities of the Company, or any securities convertible or exchangeable
into or exercisable for such securities, which conflicts with or is superior to
the rights granted to the Holders hereunder, without the prior written
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consent of the Holders of at least 50% of the Registrable Securities, except (i)
for securities relating to the Company's existing obligations to third party
demand or piggyback rights on a pro rata basis with the Registrable Securities,
and (ii) for securities issued (or issuable upon conversion or exercise of
options, warrants, convertible instruments and similar securities that are
currently outstanding) to vendors, licensors, lenders, Persons involved in joint
ventures with the Company or its affiliates, and similar Persons engaged in
commercial relationships with the Company.
3. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. At any time the Company shall propose
to register Common Stock under the Securities Act (other than in a registration
on Form S-3 relating to sales of securities to participants in a Company
dividend reinvestment plan, Forms S-4 or S-8 or any successor forms, or in
connection with an acquisition or exchange offer or an offering of securities
solely to the existing shareholders or employees of the Company), the Company
shall give prompt written notice to all Holders of Registrable Securities of its
intention to effect such a registration and, subject to Section 3(b) and the
other terms of this Agreement, shall include in such registration all
Registrable Securities that are permitted under applicable securities laws to be
included in the form of registration statement selected by the Company and with
respect to which the Company has received written requests for inclusion therein
by the Holders within 10 days after the receipt of the Company's notice (each, a
"PIGGYBACK REGISTRATION").
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. If a Piggyback
Registration is an underwritten registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
marketability of the offering, the Company shall include in such registration,
only as may be permitted in the reasonable business judgment of the managing
underwriters for such registration:
(i) first, up to that number of securities the
Company proposes to sell;
(ii) second, up to that number of registrable
securities requested to be included in such registration by the holders of the
Series A Preferred Stock;
(iii) third, up to that number of Registrable
Securities requested to be included in such registration by the Holders, pro
rata among the Holders of such Registrable Securities, on the basis of the
number of shares owned by each of such Holders, subject to the rights of other
Persons under agreements existing as of the date hereof; and
(iv) fourth, up to that number of other securities
requested to be included in such registration.
The Holders of any Registrable Securities included in such a
registration shall execute an underwriting agreement in form and substance
satisfactory to the managing underwriters.
(c) RIGHT TO TERMINATE REGISTRATION. If, at any time after
giving written notice of its intention to register any of its securities as set
forth in Section 3(a) and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Securities and thereupon be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
its obligation to pay the Registration Expenses in connection therewith as
provided herein).
(d) SELECTION OF UNDERWRITERS. The Company shall have the
right to select the investment banker(s) and manager(s) to administer an
offering pursuant to a Piggyback Registration.
4. EXPENSES OF REGISTRATION. Except as otherwise provided herein, all
Registration Expenses incurred in connection with registrations pursuant to
Section 2 shall be borne by the Company and all Selling Expenses relating to
securities registered on behalf of the Holders of Registrable Securities shall
be borne by such Holders. All Registration Expenses incurred in connection with
registrations pursuant to Section 3 shall be borne by the Company except for
Selling Expenses which shall be borne by such Holders.
5. HOLDBACK AGREEMENTS.
(a) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, for its own account during the
seven days prior to and during the 90-day period beginning on the effective date
of any underwritten Demand Registration (except (A) as part of such underwritten
registration, (B) pursuant to registration statements on Form S-4 or Form S-8 or
any successor form, (C) pursuant to a registration statement then in effect or
(D) as required under any existing contractual obligation of the Company),
unless the underwriters managing the registered public offering otherwise agree,
and (ii) to use reasonable efforts to cause each holder of at least 5% (on a
fully-diluted basis) of its outstanding Common Stock, or any securities
convertible into or exchangeable or exercisable for Common Stock, purchased from
the Company at any time after the date
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of this Agreement (other than in a registered public offering) to agree not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
any such securities during such periods (except as part of such underwritten
registration, if otherwise permitted), unless the underwriters managing the
registered public offering otherwise agree.
(b) Each Holder agrees, in the event of an underwritten public
offering of Common Stock under a registration statement on Form X-0, X-0 or S-4,
not to effect any offer, sale, distribution or transfer, including a sale
pursuant to Rule 144 (or any similar provision then effect) under the Securities
Act (except as part of such registration), beginning on the date of receipt of a
written notice from the Company setting forth its intention to effect such
registration and ending on the earlier of (i) 180 days from the date of receipt
of such written notice or (ii) 90 days from the effective date of such
Registration Statement.
6. REGISTRATION PROCEDURES. Whenever the Company is under the
obligation to register Registrable Securities hereunder, the Company will use
all reasonable efforts to effect the registration and the sale of such
Registrable Securities, and pursuant thereto the Company will as expeditiously
as possible:
(a) subject to Section 2(c) and 3(a) hereof, prepare and file
with the Commission a registration statement within 45 days of the receipt of
notice from the Holder on any form for which the Company qualifies with respect
to such Registrable Securities and use all reasonable efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will (i) furnish to the one counsel selected by the Holders copies
of all such documents proposed to be filed, which documents will be subject to
the review of such counsel, and (ii) notify each Holder of Registrable
Securities covered by such registration of any stop order issued or threatened
by the Commission);
(b) subject to Section 2(c), 3(b) and 6(e) hereof, 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 equal to the shorter of
(i) the time at which the registered shares are freely saleable under Rule
144(k), or (ii) the time by which all securities covered by such registration
statement have been sold, and all Holders shall comply with Company's reasonable
requests in connection with such termination, 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 sellers thereof set forth in such registration
statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use all reasonable efforts to register or qualify such
Registrable Securities under the securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 6(d), (ii) subject itself
to taxation in any jurisdiction, or (iii) consent to general service of process
in any such jurisdiction);
(e) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company will prepare
a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading; provided, however, that the Company
shall not be required to amend the registration statement or supplement the
Prospectus for a period of up to 90 days if the board of directors determines in
good faith that to do so would reasonably be expected to have a material adverse
effect on any proposal or plan by the Company to engage in any financing,
acquisition or disposition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or similar transaction or
would require the disclosure of any information that the board of directors
determines in good faith the disclosure of which would be detrimental to the
Company, it being understood that the period for which the Company is obligated
to keep the Registration Statement effective shall be extended for a number of
days equal to the number of days the Company delays amendments or supplements
pursuant to this provision. Upon receipt of any notice pursuant to this Section
6(e), the Holders shall suspend all offers and sales of securities of the
Company and all use of any prospectus until advised by the Company that offers
and sales may resume, and shall keep confidential the fact and content of any
notice given by the Company pursuant to this Section 6(e);
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(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the Holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(i) make available for inspection by a representative of the
Holders of Registrable Securities included in the registration statement, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months beginning with the first day of the
Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, use all reasonable efforts promptly to obtain the withdrawal of
such order; and
(l) if the registration is an underwritten offering, use all
reasonable efforts to obtain a so-called "cold comfort" letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters.
7. OBLIGATIONS OF HOLDERS. Whenever the Holders of Registrable
Securities sell any Registrable Securities pursuant to a Demand Registration,
such Holders shall be obligated to comply with the applicable provisions of the
Securities Act, including the prospectus delivery requirements thereunder, and
any applicable state securities or blue sky laws.
(a) In connection with any registration statement for a Demand
Registration in which a Holder of Registrable Securities is participating, the
Company agrees to indemnify, to the fullest extent permitted by applicable law,
each such Holder of Registrable Securities, its officers and directors and each
Person who controls such Holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities, expenses or any amounts paid
in settlement of any litigation, investigation or proceeding commenced or
threatened to which each such indemnified party may become subject under the
Securities Act (collectively, "CLAIMS") insofar as such Claim arose out of (i)
any untrue or alleged untrue statement of material fact contained, on the
effective date thereof, in any such registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or (ii)
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,
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such Holder expressly for use therein, by
such Holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such Holder with a sufficient number of copies of the same or by such
Holder's failure to comply with applicable securities laws. In connection with
an underwritten offering, the Company will indemnify the underwriters, their
officers and directors and each Person who controls the underwriters (within the
meaning of the Securities Act) to the same extent as provided above with respect
to the indemnification of the Holders of Registrable Securities.
(b) In connection with any registration statements for a
Demand Registration in which a Holder of Registrable Securities is
participating, each such Holder will furnish to the Company in writing such
customary information as the Company reasonably requests for use in connection
with any such registration statement or prospectus (the "SELLER'S INFORMATION")
and, to the fullest extent permitted by applicable law, will indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any and all Claims to which
each such indemnified party may become subject under the Securities Act insofar
as such Claim arose out of (i) any untrue or alleged untrue statement of
material fact contained, on the effective date thereof, in any such registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
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statements regarding Seller's Information therein not misleading or (iii) any
failure on the part of the Holder to comply with applicable securities laws;
provided that with respect to a Claim arising pursuant to clause (i) or (ii)
above, the material misstatement or omission is contained in such Seller's
Information; provided, further, that the obligation to indemnify will be
individual to each Holder and will be limited to the amount of proceeds received
by such Holder from the sale of Registrable Securities pursuant to such
registration statement.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (but the failure to provide such notice shall
not release the indemnifying party of its obligation under paragraphs (a) and
(b), unless and then only to the extent that, the indemnifying party has been
prejudiced by such failure to provide such notice) and (ii) unless in such
indemnified party's reasonable judgment, based on written advice of counsel, a
conflict of interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a 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, based on
written advice of counsel, a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnifying party shall not be liable to indemnify an
indemnified party for any settlement, or consent to judgment of any such action
effected without the indemnifying party's written consent (but such consent will
not be unreasonably withheld). Furthermore, the indemnifying party shall not,
except with the prior written approval 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 each
indemnified party of a release from all liability in respect of such claim or
litigation without any payment or consideration provided by each such
indemnified party.
(e) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under clauses (a) and (b) above in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the Company
(if any), the underwriters, the sellers of Registrable Securities and any other
sellers participating in the registration statement from the sale of shares
pursuant to the registered offering of securities for which indemnity is sought
but also the relative fault of the Company, the underwriters, the sellers of
Registrable Securities and any other sellers participating in the registration
statement in connection with the statement or omission which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company (if any), the
underwriters, the sellers of Registrable Securities and any other sellers
participating in the registration statement shall be deemed to be based on the
relative relationship of the total net proceeds from the offering (before
deducting expenses) to the Company (if any), the total underwriting commissions
and fees from the offering (before deducting expenses) to the underwriters and
the total net proceeds from the offering (before deducting expenses) to the
sellers of Registrable Securities and any other sellers participating in the
registration statement. The relative fault of the Company, the underwriters, the
sellers of Registrable Securities and any other sellers participating in the
registration statement shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the sellers of Registrable Securities and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person
of such indemnified party and will survive the transfer of the Registrable
Securities.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may
participate in any registration hereunder which is underwritten unless such
Holder (a) agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Holder or Holders entitled hereunder
to approve such arrangements, (b) as expeditiously as possible notifies the
Company of the occurrence of any event as a result of which any prospectus
contains an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (c) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. TRANSFER OF REGISTRATION RIGHTS. The rights granted to any Holder
under this Agreement may be assigned to any permitted transferee of Registrable
Securities, in connection with any transfer or assignment of Registrable
Securities by a Holder; provided, however, that: (a) such transfer is otherwise
effected in accordance with
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applicable securities laws, (b) if not already a party hereto, the assignee or
transferee agrees in writing prior to such transfer to be bound by the
provisions of this Agreement applicable to the transferor, and (c) such
transferee shall own Registrable Securities representing at least 25,000 shares
of Common Stock (as adjusted for any combinations, consolidations, stock
distributions, stock dividends or other recapitalizations with respect to such
shares).
10. INFORMATION BY HOLDER. Each Holder shall furnish to the Company
such written information regarding such Holder and any distribution proposed by
such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement and shall promptly notify the Company
of any changes in such information.
11. EXCHANGE ACT COMPLIANCE. The Company shall comply with all of the
reporting requirements of the Exchange Act then applicable to it and shall
comply with all other public information reporting requirements of the
Commission which are conditions to the availability of Rule 144 for the sale of
the Registrable Securities. The Company shall cooperate with each Holder in
supplying such information as may be necessary for such Holder to complete and
file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of Rule 144.
12. TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Agreement shall terminate and be of no further force and effect, as
to any particular Holder, at such time as all shares of Common Stock issuable
upon conversion of Series B Preferred Stock held by such Holder are saleable
under Rule 144(k).
13. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the Holders of Registrable Securities in
this Agreement without the prior written consent of the Initiating Holders who
hold at least 50% of the Registrable Securities collectively held by the
Initiating Holders.
(b) REMEDIES. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The remedy for any breach of the
provisions of this Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction (without posting any
bond or other security) for specific performance and for other injunctive relief
in order to enforce or prevent violation of the provisions of this Agreement;
provided, however, that in no event shall any Holder have the right to enjoin,
delay or interfere with any offering of securities by the Company.
(c) AMENDMENTS AND WAIVERS. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only with the
prior written consent of the Company and Initiating Holders who hold at least
50% of the Registrable Securities collectively held by the Initiating Holders
(in which case, such amendment shall be binding upon all Holders, including
Holders that did not specifically consent to the amendment); provided, however,
that without the prior written consent of all the Holders, no such amendment or
waiver shall reduce the foregoing percentage required to amend or waive any
provision of this Agreement.
(d) SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto,
and shall inure to the benefit and be enforceable by each Holder of Registrable
Securities from time to time. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
Holders of Registrable Securities are also for the benefit of, and enforceable
by, any permitted transferee of Registrable Securities in accordance with
Section 9 hereof.
(e) SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(f) COUNTERPARTS; FAX SIGNATURES. This Agreement may be
executed in two or more counterparts, any one of which need not contain the
signatures of more than one party, but all such counterparts taken together will
constitute one and the same Agreement. This Agreement may be executed by a
signature page delivered by fax transmission, which shall have the same effect
as if the signature page was an original.
(g) DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
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(h) GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the laws of
the State of California without regard to principles of conflicts of laws,
except that all issues concerning the relative rights of the Company and its
shareholders shall be governed by Delaware State Law, without giving effect to
the principles thereof relating to conflicts of laws.
(i) NOTICES. All notices, demands and requests of any kind to
be delivered to any party in connection with this Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered or if sent
by nationally-recognized overnight courier or by registered or certified
airmail, return receipt requested and postage prepaid or by facsimile
transmission, addressed as follows:
(j) if to the Company, to:
Focus Enhancements, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxx Xxxxxxxx
Facsimile: (000) 0000000
with a copy to:
Manatt Xxxxxx &Phillips, LLP
Xxxxx 000
0000 X Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(ii) if to a Holder, to such Holder's most recent address
in the stock records of the Company.
(k) ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
FOCUS ENHANCEMENTS, INC.
By: /s/ Xxxxxxx D'Addio
----------------------
Name: Xxxxxxx D'Addio
Title: President
HOLDER
By: /s/ Xxxx Xxxx
------------------------
Name: Xxxx Xxxx
Title:
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