EXHIBIT 10.1
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Name of Investor (please print)
STOCK SUBSCRIPTION AGREEMENT
FOCUS Enhancements, Inc.
000 Xxxx Xxxxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Chief Executive Officer
Gentlemen:
1. Subscription. Subject to the terms and conditions hereof, the
undersigned (the "Investor") hereby irrevocably subscribes for and agrees to
purchase __________ shares (the "Securities") of Common Stock of FOCUS
Enhancements, Inc., a Delaware corporation (the "Company") at a price of $4.12
per share. The Investor tenders herewith good funds in the amount of
$______________ payable to the Company by certified check or wire transfer. The
issuance of the Securities to the Investor is pursuant to an offering of up to
243,000 shares of Common Stock to accredited investors only (the "Offering").
2. Acceptance of Subscription. The Investor understands and agrees that
this subscription is made subject to the unconditional right of the Company to
reject any subscription, in whole or in part, for any reason whatsoever.
3. Representations and Warranties of the Undersigned. The Investor
understands and acknowledges that the Securities are being offered and sold
under one or more of the exemptions from registration provided for in Section
4(2) of the Securities Act of 1933, as amended (the "Securities Act"), including
Regulation D promulgated thereunder, and any applicable state securities laws.
The Investor is purchasing the Securities without being offered or furnished any
formal offering literature or prospectus other than the Company's periodic
reports (the "Offering Materials") filed pursuant to the Securities Act of 1934,
as amended (the "Exchange Act"). The Investor understands that this transaction
has not been reviewed and approved by the Securities and Exchange Commission
(the "SEC") or by any state regulatory authority. All documents pertaining to
this investment have been made available to the Investor and his
representatives, and that the books and records of the Company are available
upon reasonable notice for inspection by the Investor during reasonable business
hours at the Company's principal place of business.
3.1. Suitability. The Investor confirms that he understands
and has fully considered the risks of this investment and understands that (i)
this investment is suitable only for an investor who is able to bear the
economic consequences of losing his entire investment, (ii) the purchase of the
Securities is a speculative investment which involves a high degree of risk, and
(iii) there are substantial restrictions on the transferability of, and there
will be no immediate public market for, the Securities, and accordingly, it may
not be possible for him to liquidate his investment in case of emergency. The
Investor's overall commitment to investments which are not readily marketable is
not disproportionate to the undersigned's net worth, and the Investor's
investment in the Company will not cause such overall commitment to become
excessive.
3.2 Lack of Liquidity. The Investor confirms that he is able
(i) to bear the economic risk of this investment, and (ii) to hold the
Securities for an indefinite period of time. The Investor has sufficient liquid
assets so that the illiquidity associated with this investment will not cause
any undue financial difficulties or affect the undersigned's ability to provide
for his current needs and possible financial contingencies, and that his
commitment to all speculative investments is reasonable in relation to his net
worth and annual income.
3.3 Knowledge and Experience. The Investor has such knowledge
and experience in financial and business matters that he is capable of
evaluating the merits and risks of this investment and of making an informed
investment decision.
The investor is an "accredited investor" as defined in Rule
501 of Regulation D of the Securities Act and, if an individual, has a net worth
in excess of $1,000,000 or annual income in excess of $200,000 in each of 1993
and 1994 and reasonably expects such income to be in excess of $200,000 for
1995.
3.4 Access to Management. The Investor confirms that, in
making his decision to purchase the Securities, he has relied solely upon
independent investigations made by him, and that he has been given the
opportunity to ask questions of, and to receive answers from, management and
other persons acting on behalf of the Company concerning the Company and the
terms and conditions of this offering.
3.5 Investment Intent. The Securities are being acquired by
the undersigned solely for his own personal account, for investment purposes
only, and not with a view to, or in connection with, any resale or distribution
thereof. The Investor has no contract, undertaking, understanding, agreement or
arrangement, formal or informal, with any person to sell, transfer or pledge to
any person the Securities for which he hereby subscribes, or any part thereof,
or any interest therein or any rights thereto. The Investor has no present plans
to enter into any such contract, undertaking, agreement or arrangement. The
Investor must bear the economic risk of the investment for an indefinite period
of time because the Securities have not been registered under the Securities Act
and applicable state securities laws and, therefore, cannot be sold unless they
are subsequently registered under the Securities Act and applicable state
securities laws or unless an exemption from such registration is available.
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3.6 Restrictive Legend. The Investor consents to the
placement of a restrictive legend on the certificate(s) for the Securities as
required by applicable securities laws.
4. Registration Rights. The Company hereby grants the following
registration rights with respect to the Securities.
4.1 "Piggy-Back" Registrations. For a period of nine (9)
months from the date hereof, if at any time the Company shall determine to
register in a public offering for its own account (and not the account of
selling stockholders) under the Securities Act any of its Common Stock, it shall
send to the Investor written notice of such determination and, if within 15 days
after receipt of such notice, the Investor shall so request in writing, the
Company shall use its best efforts to include in such registration statement all
or any part of the Securities such holder requests to be registered. This right
shall not apply to a registration of shares of Common Stock on Form S-4 or Form
S-8 (or their then equivalents) relating to shares of Common Stock to be issued
by the Company in connection with any acquisition of any entity or business, or
shares of Common Stock issuable in connection with any stock option or other
employee benefits plan, respectively. In addition, the right shall not apply to
the Form SB-2 Registration Statement, File Number 33-80033, filed with the SEC
on December 5, 1995.
If, in connection with any offering involving an underwriting
of Common Stock to be issued by the Company for the account of the Company, the
managing underwriter shall impose a limitation on the number of shares of such
Common Stock which may be included in any such registration statement because,
in its judgment, such limitation is necessary to effect any orderly public
distribution of the Common Stock and to maintain a stable market for the
securities of the Company, then the Company shall be obligated to include in
such registration statement only such limited portion (which may be none) of the
Securities with respect to which the Investor and all other selling stockholders
have requested inclusion thereunder.
4.2 Required Registration. Commencing nine (9) months from the
date of completion of the Offering, the Company will use its best efforts to
effect qualification and registration of the Securities under the Securities Act
on Form S-3, or any similar form promulgated by the SEC; provided, however, that
the Company may in its discretion delay such registration for up to 90 days
based on market conditions and disclosure requirements. The Company shall not be
required to effect a registration pursuant to this Section 4.2 unless the market
value of all securities to be sold in any such registration by all selling
stockholders shall be estimated to be at least $500,000 at the time of filing of
such registration statement. The Company shall not be required to effect more
than one registration pursuant to this Section 4.2 for the benefit of all
investors participating in the Offering.
4.3 Expenses. In the case of a registration under Sections 4.1
and 4.2, the Company shall bear all costs and expenses of each such
registration, including, but not limited to, printing, legal and accounting
expenses, SEC and NASD filing fees and all related "Blue Sky" fees and expenses;
provided, however, that the Company shall have no obligation to pay or otherwise
bear any portion of the underwriters' commissions or discounts attributable to
the
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Securities being offered and sold by the Investor or the fees and expenses of
any counsel for the Investor in connection with any registration of the
Securities.
4.4 Lock-Up Agreement. The Investor agrees not to sell,
pledge, transfer or otherwise dispose of, or grant any option or purchase right
with respect to, any shares of capital stock then owned by him and not otherwise
offered in the public offering, or engage in any short sale, hedging transaction
or other derivative security transaction involving the Securities, or other
shares of Common Stock of the Company held by him, for a period of nine (9)
months from the date hereof.
4.5 Expiration of Registration Rights. The obligations of the
Company under this Section 4 to register the Securities shall expire and
terminate at such time as the Investor shall be entitled to sell such securities
without restriction and without a need for the filing of a registration
statement under the Securities Act, including, without limitation, for any
resales of restricted securities made pursuant to Rule 144 as promulgated by the
SEC, or a sale made pursuant to Sections 4(1) and/or 4(2) under the Securities
Act.
5. Transferability. The undersigned agrees not to transfer or assign
this Agreement, or any of his interest herein, and further agrees that the
assignment and transfer of the Securities acquired pursuant hereto shall be made
only in accordance with all applicable laws. The registration rights provided in
Section 4 are personal to the Investor and are not transferable without the
prior consent of the Company.
6. Miscellaneous. This Agreement constitutes the entire Agreement
between the parties relative to the subject matter hereof, and supersedes all
proposals or agreements, written or oral, and all other communications between
the parties relating to the subject matter of this Agreement. No provision of
this Agreement shall be waived, amended, modified, superseded, canceled,
terminated, renewed or extended except in a written instrument signed by the
party against whom any of the foregoing actions is asserted. Any waiver shall be
limited to the particular instance and for the particular purpose when and for
which it is given. The invalidity, illegality or unenforceability of any
provision of this Agreement shall in no way effect the validity, legality or
enforceability of any other provision of this Agreement. This Agreement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the internal laws of the Commonwealth of Massachusetts. All
notices provided for in this Agreement shall be given in writing and shall be
effective when either served by personal delivery, express overnight courier
service, electronic facsimile transmission, or by first class mail, postage
prepaid, addressed to the parties at their respective addresses herein set
forth, or to such other address or addresses as either party may later specify
by written notice to the other. This Agreement may be executed in duplicate
counterparts, which, when taken together, shall constitute one instrument and
each of which shall be deemed to be an original instrument.
7. Continuing Effect of Representations, Warranties and
Acknowledgments. The representations and warranties of the Investor contained in
Section 3 are true and accurate as of the date of this Subscription Agreement
and shall be true and accurate as of the date of delivery
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to and acceptance by the Company, and shall survive such delivery and
acceptance. If in any respect such representations, warranties and
acknowledgments shall not be true and accurate prior to such delivery and
acceptance, the undersigned Investor shall give immediate written notice of such
fact to the Company and to his purchaser representative(s), if any, specifying
which representations and warranties and acknowledgments are not true and
accurate and the reasons therefor.
IN WITNESS WHEREOF, the undersigned has hereby executed this Stock
Subscription Agreement as of this _____ day of _______________, 1995.
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Signature of Investor Street Address
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Print Name of Investor City or Town
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State Zip Code
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Social Security Number Telephone Number
The Company hereby accepts the foregoing Subscription Agreement,
subject to the terms and conditions set forth herein, as of this _____ day of
_______________, 1995.
FOCUS ENHANCEMENTS, INC.
By:_________________________________
Its:_________________________________
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