Exhibit 10.3

PIGGYBACK REGISTRATION RIGHTS AGREEMENT

THIS PIGGYBACK REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of the
same date as the Warrant to which it is attached as Exhibit 1, is made by and
between FOCUS ENHANCEMENTS, INC., a Delaware corporation, with headquarters
located at 1370 Dell Avenue, Campbell, California 95008 (the “Company”), and
Carl E. Berg. (“Berg.”)

W I T N E S S E T H:

WHEREAS, the Company has agreed to issue the Warrant to the Berg in connection
with the performance of certain services, and the Warrant may be exercised for
the purchase of shares of Common Stock (the “Warrant Shares”) upon certain 
terms and conditions; and

WHEREAS, the Company has agreed to provide certain registration rights under the
Securities Act of 1933 with respect to the Warrant.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Holder hereby
agree as follows:

1.             Definitions.           As used in this Agreement, the following
terms shall have the following meanings:

(a)           “Effective Date” means any  date after the date hereof that  the
SEC declares effective a Registration Statement covering Registrable Securities
and otherwise meeting the conditions contemplated hereby to be effective.

(b)           “Holder” means Berg and any  permitted transferee or assignee who
agrees to become bound by the provisions of this Agreement in accordance with
Section 3 hereof and who holds Registrable Securities, as the context may
require.

(c)           “Register,” “Registered,” and “Registration” refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis (“Rule 415”), and the SEC’s declaration or ordering of
effectiveness of such Registration Statement.

(d)           “Registrable Securities” means the Warrant and the Warrant Shares
purchased upon exercise of the Warrant as  set forth in the document to which
this Agreement is Exhibit 1.

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(e)           “Registration Statement” means a registration statement of the
Company under the Securities Act covering Registrable Securities on Form S-3, if
the Company is then eligible to file using such form, and if not eligible, then
on Form SB-2 or other appropriate form.

2.             Piggy-back Registration Rights.  If, after the date hereof (but
without any obligation to do so), the Company proposes to register (including
for this purpose a registration effected by the Company for persons  other than
the Holders) any of its securities under the 1933 Act in connection with the
public offering of such securities (other than a registration (i) with respect
to an employee benefit plan, or (ii)  in connection with a Rule 145 transaction
under the 1933 Act), the Company shall, each such time, promptly give each
Holder written notice of such registration together with a list of the
jurisdictions in which the Company intends to attempt to qualify such securities
under applicable state securities laws.  Upon the written request of each Holder
given within twenty (20) business days after delivery of such written notice by
the Company to Holder, the Company shall, subject to the provisions hereof, use
its reasonable efforts to cause to be registered under the 1933 Act all of the
Registrable Securities that each such Holder has requested to be registered.  If
a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.

2.1           Obligations of the Company.  Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:

(a)           Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to one hundred twenty (120) days.

(b)           Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
1933 Act with respect to the disposition of all securities covered by such
registration statement for a period set forth in Section 2.1 (a) above.

(c)           Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
1933 Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.

(d)           In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement with terms generally
satisfactory to the managing underwriter of such offering.  Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

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(e)           Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, of the happening of any event as a
result of which 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 light of the circumstances then existing. In such
instance, Company shall use its best efforts to amend or supplement such
prospectus to cure any such statement or omission so as to render such statement
or omission not misleading.

(f)            Use its best efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and
(ii) a letter, dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters.

2.2           Furnish Information.  In connection with any action pursuant to
this Section 2, the selling Holders shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them, and
the intended method of disposition of such securities as shall be required to
effect the registration of their Registrable Securities.  In that connection,
each selling Holder shall be required to represent to the Company that all such
information which is given is both complete and accurate in all material
respects when made.

2.3           Definition of Expenses.

(a)           “Registration Expenses” shall mean all expenses incurred by the
Company, except for “Selling Expenses,” in complying herewith  including,
without limitation, all registration, filing and qualification fees,
underwriters’ expense allowances, printing expenses, fees and disbursements of
counsel for the Company,  blue sky fees and disbursements, and the expense of
any special audits incident to or required by any registration.

(b)           “Selling Expenses” shall mean all underwriting discounts and
selling commissions applicable to the sale of the Registrable Securities in the
registration, all stock transfer taxes and all fees and disbursements of any
additional special counsel   in connection with each such registration
attributable to   the Registrable Securities being registered.

2.4           Expenses of Registration.  The Company shall bear all Registration
Expenses incurred in connection with any registration, qualification or
compliance, All Selling Expenses shall be borne by the Holders of the securities
so registered, pro rata on the basis of the number of Registrable Securities so
registered.

2.5           Underwriting Requirements in Piggy-back Registration.  The right
of any Holder to registration pursuant to an underwriting  shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the

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underwriting to the extent provided herein.  All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
any other persons distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected by the Company.  Notwithstanding any other provision of
this Agreement, if the underwriter determines that market factors require a
limitation of the number of shares to be underwritten, the underwriter may 
exclude some or all Registrable Securities from such registration and
underwriting.  Notwithstanding anything to the contrary herein, no reduction
shall be made with respect to securities offered by the Company for its own
account in connection with any Company offering. If any Holder disapproves of
the terms of any such underwriting, he 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.

2.6           Delay of Registration.  No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
a result of any controversy that might arise with respect to the interpretation
or implementation of this Section 2.

2.7           Indemnification.  In the event any Registrable Securities are
included in a registration statement under this Section 2:

(a)           To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the officers, directors and partners of each Holder,
any underwriter (as defined in the 1933 Act) for such Holder and each person, if
any, who controls such Holder or underwriter within the meaning of the 1933 Act
or the 1934 Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the 1933 Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
“Violation”): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto; (ii) 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; or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the 1933 Act, the 1934 Act or any state securities
law; and the Company will reimburse each such Holder, officer, director or
partner, underwriter or controlling person for any reasonable legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the Company’s indemnity contained in this Section 2.7(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with  information furnished in writing and expressly stated for
use in connection with such registration by any such Holder, or such Holder’s
officers, directors or partners, underwriter, or controlling person.  The
Company shall not be required to indemnify any person against any liability
arising  out of the failure of any Holder or person acting on

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behalf of a Holder to deliver a prospectus as required by the 1993 Act.  The
indemnity provided for in this Section 2.7(a) shall remain in full force and
effect regardless of any investigation made by or on behalf of such seller,
underwriter, participating person or controlling person and shall survive
transfer of such securities by such seller.

(b)           To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the registration statement, each person, if any, who controls the
Company within the meaning of the 1933 Act, any underwriter (within the meaning
of the 1933 Act) for the Company, any person who controls such underwriter, and
any other Holder selling securities in such registration statement or any of its
partners, directors or officers or any person who controls such Holder, against
any losses, claims, damages or liabilities (joint or several) to which any of
the foregoing persons may become subject, under the 1933 Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly stated in a writing for use in connection
with such registration; and each such Holder will reimburse any legal or other
expenses, as incurred, where same are reasonably incurred by any person intended
to be indemnified pursuant to this Section 2.7(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 2.7(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld.  Notwithstanding the
foregoing, the liability of each Holder under this Section 2.7(b) shall be
limited to an amount equal to the net proceeds from the offering price of the
shares sold by such Holder.

(c)           Promptly after receipt by an indemnified party under this Section
2.7 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.7, notify the
indemnifying party in writing of the commencement thereof, and the indemnifying
party shall have the right to participate in and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the reasonable fees and expenses to be paid by the
indemnifying party if the indemnified party reasonably determines that
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding.  The failure to notify an indemnifying party within
a reasonable time of the commencement of any such action, to the extent
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2.7, but the omission so to notify the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this Section 2.7.

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(d)           In order to provide for just and equitable contribution to joint
liability under the 1933 Act in any case in which either (i) any indemnified
party makes a claim under this Section 2.7 or any controlling person of such
indemnified party makes such a claim but is judicially determined (by entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 2.7 provides for indemnification in such case, or (ii) contribution
under the 1933 Act may be required on the part of any such person seeking
indemnity under the terms of this Section 2.7; then, and in each such case, the
Company and such person will contribute to the aggregate losses, claims,
damages, or liabilities to which they may be subject (after contribution from
others) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations.  The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission; provided, however, that, in any such case, (A) no such
person shall be required to contribute any amount in excess of the net proceeds
from the offering price of all such Registrable Securities sold by it pursuant
to such registration statement and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.

2.8           Reports Under Securities Exchange Act of 1934.  With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
1933 Act and any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without registration,
the Company agrees to:

(a)           use its reasonable  efforts to make and keep public information
available, as those terms are understood and defined in Rule 144, at all times
after ninety (90) days after the closing date of the first registration
statement filed by the Company;

(b)           use its reasonable efforts to file with the SEC in a timely manner
all reports and other documents required of the Company under the 1933 Act and
the 1934 Act; and

(c)           furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request: (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 (at any time after
ninety (90) days after the closing date of the first registration statement
filed by the Company), the 1933 Act and the 1934 Act (at any time after it has
become subject to such reporting requirements); (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company; and (iii) such other information as may be reasonably
requested in order to permit any Holder to avail itself of any rule or
regulation of the SEC or any state securities

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authority which permits the selling of any such securities without registration
or pursuant to such form.

3.             Assignment of Registration Rights.

The piggyback registration rights hereunder may be assigned by a Holder to a
transferee or assignee of such securities: (i) if such transfer is made in
connection with the transfer of all Registrable Securities held by the
transferor;  (ii) if such transferee or assignee acquires at least ten thousand
(10,000) shares of the then outstanding Registrable Securities held by such
Holder, (iii) to any Affiliate (as defined in Regulation D of the 1933 Act) of
such Holder; (iv) to any family member or trust established for the benefit of
an individual Holder; or (v) in connection with a distribution by such Holder to
any partner, member, former partner, or member or the estate of such partner or
member; provided in each case that the Company is, within a reasonable time
after such transfer, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned; provided, however, that such assignment
shall be effective only if the transferee agrees in writing at the time of
transfer to be  bound by the terms and conditions of this Agreement and such
transfer of any Registrable Securities is lawful under all applicable securities
laws.

4.             Termination of the Company’s Obligations.

The Company shall have no obligations hereunder  with respect to any
registration request or requests made by any Holder (a) more than one year
following the date of the Warrants are issued or (b) all Registrable Securities
held by and issuable to such Holder (and its affiliates) may be sold under Rule
144 during any ninety (90) day period.

5.             Obligations of the Investors.  In connection with the
registration of the Registrable Securities, any Holder  shall have the following
obligations:

(a)           Such Holder shall  cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any
respective  Registration Statement hereunder, unless such Holder has notified
the Company in writing of such Holder’s election to exclude all of such Holder’s
Registrable Securities from the Registration Statement; and

(b)           Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any material event which, in the Company’s opinion
justifies the cessation of the distribution of the Registrable Securities,  such
Holder will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Holder’s receipt of the copies of any supplemented or amended
prospectus which addresses  such material event,  and, if so directed by the
Company, such Holder shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

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6.             Amendment of Registration Rights.

Any provision of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Holders who
hold a fifty (50%) percent interest of the Shares as of such date.  Any
amendment or waiver effected in accordance with this Section 6 shall be binding
upon each Holder and the Company.

7.             Miscellaneous.

(a)           A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities.  If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

(b)           Notices required or permitted to be given hereunder shall be given
in the manner contemplated by the Warrant:   if to the Company or to the Holder,
to their respective address contemplated by the Warrant  or at such other
address as each such party furnishes by notice given in accordance with this
clause (b).

(c)           Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

(d)           This Agreement shall be deemed to be a contract made under the
laws of the State of Delaware for contracts to be wholly performed in such state
and without giving effect to the principles thereof regarding the conflict of
laws.  Each of the parties consents to the exclusive jurisdiction of the federal
courts whose districts encompass any part of the State of California, Santa
Clara County in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdiction.

(e)           The Company and the Holder hereby waive a trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other in respect of any matter arising out of or in connection with
this Agreement.

(f)            If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.

(g)           This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto.

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(h)           All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

(i)            The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.

(j)            This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement.  This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

(k)           This Agreement constitutes the entire agreement among the parties
hereto with respect to the Holder’s registration rights with respect to the
Warrant and Warrant Shares.  There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein.  This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to its subject matter.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective officers thereunto duly authorized as of the day and year
first above written.

 

COMPANY:

 

 

 

 

 

 

 

FOCUS ENHANCEMENTS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Gary Williams

 

 

 

 

 

 

 

Name:

 

Gary Williams

 

 

Title:

 

EVP of Finance & CFO

 

 

 

 

 

 

 

Carl E. Berg

 

 

 

 

 

 

 

By:

 

/s/ Carl E Berg

 

 

 

 

 

 

 

Name:

 

Carl E Berg

 

 

Title:

 

 

 

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