Exhibit 4.03

                   FIRST AMENDMENT TO HOLDER RIGHTS AGREEMENT

         THIS FIRST AMENDMENT TO HOLDER RIGHTS AGREEMENT (the "First Amendment")
is made and entered into as of February 24, 2000 by and between Videonics, Inc.,
a California  corporation  (the "Company") and Venture Banking Group, a division
of Cupertino National Bank (the "Holder").

         WHEREAS,  the Company and Holder have entered into that certain  Holder
Rights Agreement dated as of September 15, 1999 (the "Agreement").

         WHEREAS,  the Company and Holder  desire to amend the  Agreement as set
forth in this First Amendment.

         NOW,  THEREFORE,  the parties,  intending to be legally bound, agree as
follows:

         1.  Amendment to Section 1.02.  The first  paragraph of Section 1.02 is
hereby amended in its entirety to read as follows:

                  If the Holder  requests  that the Company file a  registration
                  statement on Form S-3 (or any successor  form to Form S-3) for
                  a public offering of the shares of Registrable Securities, and
                  the  Company  is a  registrant  entitled  to use  S-3  (or any
                  successor  form to Form S-3),  the  Company  will use its best
                  commercial  efforts to effect a  registration  on Form S-3 (or
                  any similar  successor form) and any related  qualification or
                  compliance  with  respect  to all the  Registrable  Securities
                  owned by the  Holder so that such  registration  will be filed
                  with the Securities and Exchange Commission within thirty (30)
                  days of the  Company's  receipt  from the  Holder of a written
                  request for such  registration;  provided,  however,  that the
                  Company   shall  not  be   obligated   to   effect   any  such
                  registration,  qualification  or compliance,  pursuant to this
                  Section:  (i) if the Company is not  qualified as a registrant
                  entitled to use Form S-3 (or the applicable  successor  form);
                  (ii) if the Company  shall furnish to the Holder a certificate
                  signed by the Chief  Executive  Officer of the Company stating
                  that in the good faith  judgement of the Board of Directors of
                  the Company, it would be seriously  detrimental to the Company
                  and its  shareholders  for such  Form S-3  registration  to be
                  effected at such time,  in which event the Company  shall have
                  the  right to defer the  filing  of the Form S-3  registration
                  statement  for a period  of not more than one  hundred  twenty
                  (120)  days  after  the  date  of the  certificate;  provided,
                  however,  that the Company  shall not utilize  this right more
                  than once in any  twelve  (12) month  period;  or (iii) in any
                  particular jurisdiction in which the Company would be required
                  to qualify to do business  or to execute a general  consent to
                  service   of   process   in   effecting   such   registration,
                  qualification or compliance.



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2. New Section  1.03.  A new section 1.03 shall be inserted  after  Section 1.02
(and subsequent sections shall be renumbered) as follows:

         1.03 Company Registration.

                  (a)  Notice  of  Registration.  If at any time or from time to
         time the  Company  shall  determine  to register  any of its  equitable
         securities  under the 1933 Act for sale for cash,  whether  for its own
         account or the account of any of its  security  holders or both,  other
         than (i) a registration relating solely to employee benefit plans, (ii)
         a  registration  relating  solely  to a Rule 145  transaction,  (iii) a
         registration  in which the only equity  security  being  registered  is
         Common Stock issuable upon  conversion of convertible  debt  securities
         which are also debt securities which are also being registered, (iv) on
         a Form  S-4,  Form S-8 (or Form  S-3,  if such  registration  covers an
         offering  of the type  contemplated  by Form S-8) or any  successor  or
         similar forms or (iv) a registration pursuant to an agreement which, by
         its terms,  would  prohibit the  inclusion of  Registrable  Securities,
         unless such prohibition is waived, the Company will:

                           (i) give to the Holder written notice thereof; and

                           (ii) subject to the terms of this Agreement,  use its
                  reasonable  efforts to include in such  registration  (and any
                  related   qualification   under   blue   sky   laws  or  other
                  compliance), and in any underwriting involved therein, all the
                  Registrable  Securities  specified in a written request,  made
                  within ten (10)  business  days after  receipt of such written
                  notice  from the  Company,  by the Holder;  provided  that the
                  provisions of this Section  1.03(a) are subject in all respect
                  to the provisions of Section  1.03(b)  regarding  underwritten
                  offerings.

                  (b)  Underwriting.  If the  registration  of which the Company
         gives  notice  is  for  a  registered  public  offering   involving  an
         underwriting,  the Company  shall so advise the Holder as a part of the
         written  notice given  pursuant to Section  1.03(a).  In such event the
         right of the Holder to registration pursuant to this Section 1.03 shall
         be conditioned upon such Holder's  participation in such  underwriting,
         and the inclusion of Registrable  Securities in the underwriting  shall
         be limited to the extent provided herein.

                  The  Company and the Holder  shall enter into an  underwriting
         agreement in customary form with the managing  underwriter selected for
         such underwriting by the Company.  Notwithstanding  any other provision
         of this Section 1.03, if the managing  underwriter of such underwritten
         offering   advises  the  Company  that  marketing   factors  require  a
         limitation of the number of shares to be underwritten,  the Company may
         exclude  some  or  all  of  the   Registrable   Securities   from  such
         registration and  underwriting.  The Company shall so advise the Holder
         of the number of shares that may be included  in the  registration,  if
         any, and the underwriting  shall be allocated first to the Company and,
         if additional shares may be sold, subject to any agreement which by its
         terms would give any other person  priority  over, or rights similar to



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         those held by, the Holder  relating to the  inclusion of shares in such
         registration, such additional shares shall be allocated to the Holder.

                  (c) Right to  Terminate  or Delay  Registration.  The  Company
         shall  have  the  right  to  terminate  or  withdraw  any  registration
         initiated by it under this Section 1.03 prior to the  effectiveness  of
         such  registration  whether or not the  Holder  has  elected to include
         securities in such  registration.  If, at any time after  delivery of a
         notice of  registration  pursuant  to Section  1.03(a) and prior to the
         effective date of the  registration  statement filed in connection with
         such registration,  the Company shall determine for any reason to delay
         registration of its securities,  the Company may in its sole discretion
         delay  such  registration  upon  notice  of such  determination  to the
         Holder,  and the Company  shall be permitted to delay  registering  any
         Registrable  Securities  for  any  period  it  deems  necessary  in its
         reasonable discretion.

3. Amendments to Sections  1.04(a) and (b). Section 1.04(a) is hereby amended in
its entirety to read as follows:

         All Registration Expenses incurred in connection with any registration,
         qualification or compliance  pursuant to Sections 1.02 or 1.03 shall be
         borne  by the  Company.  All  Selling  Expenses  shall  be borne by the
         Holder.

The first sentence of Section  1.03(b) is hereby amended in its entirety to read
as follows:

         Definitions:  "Registration  Expenses" shall mean all expenses incurred
         by the  Company  in  complying  with  Sections  1.02 and  1.03  hereof,
         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 expenses.

         4. Reference to the Agreement.  On and after the effective date of this
First  Amendment,  each  reference in the  Agreement to "the  Agreement,"  "this
Agreement,"  "hereunder,"  and "hereof" or words of like import referring to the
Agreement  shall mean the  Agreement,  as amended by this First  Amendment.  The
Agreement,  as amended by this First  Amendment,  is and shall continue to be in
full force and effect and is hereby in all respects ratified and confirmed. This
First Amendment shall be effective upon execution by the Company and the Holder.

         5.  Counterparts.  This First  Amendment  may be executed in two (2) or
more  original and identical  documents,  signed  simultaneously  or at separate
times by the parties, and each signed original shall be deemed to be an original
for all purposes.

         6. Complete  Agreement.  The Agreement  (together with its Exhibits and
the other documents referred to herein) and this First Amendment are intended by
the parties hereto to be the final  expression of their agreement and constitute
and embody the entire agreement and  understanding of the parties with regard to
the subject matter hereof and is a complete and exclusive statement of the terms
and conditions  thereof,  and shall supersede any and all prior  correspondence,
conversations,  negotiations,  agreements or understandings relating to the same
subject.



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         7. Choice of Law . It is the intention of the parties that the internal
laws of the State  California  (irrespective  of its  choice of law  principles)
shall govern the validity of this First Amendment, the construction of its terms
and the interpretation of the rights and duties of the parties.

         IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
         to be executed by their duly authorized  representatives  as of the day
         and year above.


                                             VIDEONICS, INC.

                                             By: /s/ Gary Williams
                                                 -----------------------
                                             Name: Gary Williams
                                                   ---------------------
                                             Title: V.P. of Finance and CFO
                                                    -----------------------


                                             VENTURE BANKING GROUP

                                             By: /s/ Jason Hartmann
                                                 -----------------------
                                             Name: Jason Hartmann
                                                   ---------------------
                                             Title: Commercial Loan Officer
                                                    -----------------------