Exhibit 4.1
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL
OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
FOCUS ENHANCEMENTS,
INC.
COMMON STOCK PURCHASE
WARRANT
1. Issuance;
Certain Definitions. For good and valuable consideration, the
receipt of which is hereby acknowledged by FOCUS ENHANCEMENTS,
INC. , a Delaware corporation (the “Company”),
R. Keith Fetter, or registered assigns (the
“Holder”) is hereby granted the right to purchase at
any time until 5:00 P.M., New York City time, on June 20,
2013 (the “Expiration Date”), 37,500
(thirty-seven thousand five hundred) fully paid and
non-assessable shares of the Company’s Common Stock, $0.01
par value per share (the “Common Stock”), at an initial
exercise price (the “Exercise Price”) of
$0.50 (fifty cents) per share, subject to
further adjustment as set forth herein. These shares are
exercisable immediately.
(a) This Warrant is
exercisable in whole or in part at any time and from time to
time. Such exercise shall be effectuated by submitting
to the Company (either by delivery to the Company or by facsimile
transmission as provided in Section 8 hereof) a completed and duly
executed Notice of Exercise (substantially in the form attached to
this Warrant) as provided in this paragraph. The date
such Notice of Exercise is faxed to the Company shall be the
“Exercise Date,” provided that the Holder of this
Warrant tenders this Warrant Certificate to the Company within five
(5) business days thereafter and at the time of such Notice of
Exercise the Company has received payment for the shares being
purchased. The Notice of Exercise shall be executed by
the Holder of this Warrant and shall indicate the number of shares
then being purchased pursuant to such exercise. Upon
surrender of this Warrant Certificate, together with appropriate
payment of the Exercise Price for the shares of Common Stock
purchased, the Holder shall be entitled to receive a certificate or
certificates for the shares of Common Stock so
purchased.
The Exercise Price per share of Common Stock for
the shares then being exercised shall be payable in cash by wire,
certified or official bank check. )
Alternatively, at any time after
issuance of the Warrant, the Warrant may also be exercised by means
of a “cashless exercise” in which the Holder shall be
entitled to receive a certificate for the number of shares of
Common Stock equal to the quotient obtained by dividing
[(A-B) multiplied by (X)] by (A), where:
|
|
(A) = the Market Price (as defined
below) of one share of Common Stock on the date that the Holder
delivers a complete Notice of Exercise Form to the Company as
provided herein
|
|
|
(B) = the Exercise Price of this
Warrant, as adjusted; and
|
|
|
(X) = the number of Common Stock
issuable upon exercise of this Warrant in accordance with the terms
of this Warrant by means of a cash exercise rather than a cashless
exercise.
|
(b) The term
“Market Price” as of a particular date (the
“Valuation Date”) shall mean the following: (a) if
the Common Stock is then listed or quoted on a national securities
exchange or Nasdaq (each, a “trading
market”), the closing sale price of one share of Common Stock
on such exchange on the last trading day prior to the Valuation
Date or, if no such closing sale price is available, the average of
the high bid and the low asked price quoted thereon on the last
trading day prior to the Valuation Date; (b) if the Common
Stock is not then listed or quoted on a trading market and if
prices for the Common Stock are then quoted on the OTC Bulletin
Board or such similar exchange or association, the closing sale
price of one share of Common Stock on the OTC Bulletin Board or
such other exchange or association on the last trading day prior to
the Valuation Date or, if no such closing sale price is available,
the average of the high bid and the low asked price quoted thereon
on the last trading day prior to the Valuation Date; or (c) if
the Common Stock is not then listed or quoted on a trading market
or quoted on the OTC Bulletin Board or such other exchange or
association, the fair market value of one share of Common Stock as
of the Valuation Date shall be determined in good faith by the
Board of Directors of the Company and the Holder. If the
Common Stock is not then listed or quoted on a trading market or
quoted on the OTC Bulletin Board or such other exchange or
association, the Board of Directors of the Company shall respond
promptly, in writing, to an inquiry by the Holder prior to the
exercise hereunder as to the fair market value of a share of Common
Stock as determined by the Board of Directors of the Company.
In the event that the Board of Directors of the Company and the
Holder are unable to agree upon the fair market value in respect of
subpart (c) hereof, the Company and the Holder shall jointly
select an appraiser, who is experienced in such matters. The
decision of such appraiser shall be final and conclusive, and the
cost of such appraiser shall be borne equally by the Company and
the Holder. Such adjustment shall be made successively
whenever such a payment date is fixed.
(c) In no event shall
Holder exercise this Warrant for less than one thousand (1,000)
Warrant Shares unless the Holder has a Warrant for less than one
thousand (1,000) Warrant Shares, in which case Holder shall be
req
|
