EXHIBIT 4.02

                                 VIDEONICS, INC.
                             HOLDER RIGHTS AGREEMENT

         THIS  VIDEONICS,  INC. HOLDER RIGHTS  AGREEMENT  (this  "Agreement") is
entered into as of September 15, 1999 by and among Videonics, Inc., a California
corporation  (the  "Company"),  and the  Venture  Banking  Group,  a division of
Cupertino  National Bank ("Holder")  pursuant to the LOAN AND SECURITY AGREEMENT
dated August 25, 1999 (the "Loan Agreement").  Collectively,  the Holder and the
Company are  referred  to herein as the  parties  and they are the only  parties
hereto.

1.       Registration Rights.

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

                  (a) "1933 Act" means the Securities Act of 1933, as amended.

                  (b) "1934 Act" means the  Securities  Exchange Act of 1934, as
amended.

                  (c) "Common Stock" means the Company's Common Stock.

                  (d) "Form S-3" means such form under the 1933 Act as in effect
on the date  hereof or any  registration  form  under the 1933 Act  subsequently
adopted  by  the  Securities  and  Exchange  Commission  ("SEC")  which  permits
inclusion or  incorporation  of  substantial  information  by reference to other
documents filed by the Company with the SEC.

                  (e) The  terms  "register",  "registered"  and  "registration"
refer  to a  registration  effected  by  preparing  and  filing  a  registration
statement  or  similar  document  in  compliance  with  the  1933  Act,  and the
declaration or ordering of the effectiveness of such  registration  statement or
document by the SEC.

                  (f) The term  "Registrable  Securities"  means: (i) the Common
Stock of the Company  issued or issuable upon exercise of the Warrant;  and (ii)
any Common  Stock of the Company  issued (or  issuable  upon the exercise of the
Warrant) by way of a stock split,  stock dividend,  recapitalization,  merger or
other  distribution  with respect to, or in exchange for, or in replacement  of,
Common Stock issuable upon the exercise of the Warrant.

                  (g) The  number  of  shares of  "Registrable  Securities  then
outstanding"  shall be the number of shares of Common  Stock  outstanding  which
are,  and the  number  of  shares  of Common  Stock  issuable  pursuant  to then
exercisable securities which are, Registrable Securities.

                  (h)  "Equity  securities"  shall  mean  any of  the  Company's
securities.

                  (i) The Term "Warrant"  means that certain  warrant for 95,000
shares of the Company's  common stock being issued to the Holder pursuant to the
Loan Agreement.

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         1.02 Form S-3  Registration.  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 effective on or
before  March  15,  2000;  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  President  of the  Company
stating  that in the  good  faith  judgment  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.

         After  filing the Form S-3,  the Company  shall,  as  expeditiously  as
reasonably possible:

                  (a)  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.

                  (b)  Furnish  to  the  Holder  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 it may  reasonably
request in order to facilitate the disposition of Registrable  Securities  owned
by it.

                  (c) Use its best  commercial  efforts to register  and qualify
the securities covered by such registration  statement under the securities laws
of such jurisdictions as shall be reasonably appropriate for the distribution of
the securities covered by the registration  statement;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto  to qualify to do  business  or to file a general  consent to service of
process in any such  jurisdiction,  and further  provided that (anything in this
Agreement  to the  contrary  notwithstanding  with  respect  to the  bearing  of
expenses) if any  jurisdiction in which the securities  shall be qualified shall
require that  expenses  incurred in  connection  with the  qualification  of the
securities  in that  jurisdiction  be borne by selling  shareholders,  then such
expenses shall be payable by the selling Holder,  to the extent required by such
jurisdiction  if such Holder does not elect to  withdraw  from the  registration
after notice of such requirement.

                  (d)  Notify the 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

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not misleading in light of the  circumstances  then existing.  In such instance,
Company shall use its best efforts to cure any such  statement or omission so as
to render such statement or omission not misleading.

         1.03 Furnish  Information.  In connection  with any action  pursuant to
this  Section  1, the  Holder  shall  furnish to the  Company  such  information
regarding  itself,  its  Registrable  Securities,  and the  intended  method  of
disposition of such  securities as shall be required to effect the  registration
of the Registrable Securities. In that connection,  the 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.

         1.04     Expenses of Registration.

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

                  (b)  Definitions:   "Registration  Expenses"  shall  mean  all
expenses  incurred  by the  Company  in  complying  with  Section  1.02  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.  "Selling  Expenses" shall
mean all underwriting  discounts and selling commissions  applicable to the sale
of the Registrable Securities in the registration, all fees and disbursements of
any special counsel (other than the Company's regular counsel) for the Holder.

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

                  (a) To the extent permitted by law, the Company will indemnify
and hold  harmless  the Holder,  the  officers,  directors  and  partners of the
Holder,  any  underwriter  (as  defined in the 1933 Act) for the Holder and each
person, if any, who controls the 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 the Holder,  officer,  director or partner,
underwriter  or controlling  person for any legal or other  expenses  reasonably
incurred by them, as incurred, 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 1.05(a) shall not apply to

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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 written information furnished in writing and expressly stated
for use in  connection  with such  registration  by the Holder,  or the Holder's
officers, directors or partners, underwriter, or controlling person. The Company
shall not be required to indemnify any person against any liability  arising (i)
from any untrue or misleading statement or omission contained in any preliminary
prospectus if such  deficiency is corrected in the final  prospectus or (ii) out
of the  failure of any person to deliver a  prospectus  as  required by the 1933
Act. The  indemnity  provided for in this Section  1.05(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,  the 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,  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 the Holder  expressly stated in a writing for
use in  connection  with such  registration;  and the 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  1.05(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  1.05(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 the Holder under this
Section  1.05(b)  shall be limited to an amount equal to the  proceeds  from the
public offering received by such Holder.

                  (c) Promptly after receipt by an indemnified  party under this
Section  1.05  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 1.05, 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

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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 1.05,  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 1.05.

                  (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  1.05 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  1.05  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 1.05;  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  so that such  person is  responsible  for the
portion  represented  by the  percentage  that the public  offering price of the
Registrable Securities offered by the registration statement bears to the public
offering price of all securities offered by such registration statement, and the
Company is responsible for the remaining portion;  provided,  however,  that, in
any such case,  (A) no such person shall be required to contribute any amount in
excess of the amount of the proceeds received by it in such offering; 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.

         1.06 Reports  Under  Securities  Exchange  Act of 1934.  With a view to
making  available to the Holder 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
the Holder to sell securities of the Company to the public without registration,
the Company agrees to:

                  (a) use its best  efforts to make and keep public  information
available, as those terms are understood and defined in Rule 144, at all times;

                  (b) use its  best  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 the  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, the
1933  Act and the 1934 Act (at any time  after  it has  become  subject  to such
reporting  requirements),  or that it qualifies as a registrant whose securities
may be resold  pursuant to Form S-3 (at any time after it so qualifies);  (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 the Holder to avail itself of
any  rule or  regulation  of the SEC or any  state  securities  authority  which
permits the selling of any such securities  without  registration or pursuant to
such form.

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2.       General Provisions.

         2.01 Further Assurances.  Each party agrees to cooperate fully with the
other parties and to execute such further instruments,  documents and agreements
and to give such further written assurances,  as may be reasonably  requested by
any other party to better evidence and reflect the transactions described herein
and contemplated hereby, and to effect the intent and purpose of this Agreement.

         2.02 Rights Cumulative.  Each and all of the various rights, powers and
remedies of the parties hereto shall be considered to be cumulative  with and in
addition to any other rights, powers and remedies which such parties may have at
law or in  equity  in the  event  of the  breach  of any of the  terms  of  this
Agreement.  The exercise or partial exercise of any right, power or remedy shall
neither  constitute the exclusive  election  thereof nor the waiver of any other
right, power or remedy available to such party.

         2.03 Pronouns.  All pronouns and any variations thereof shall be deemed
to refer to the  masculine,  feminine  or neuter,  singular  or  plural,  as the
identity of the person, persons, entity or entities may require.

         2.04  Notices.  All notices,  consents or demands of any kind which any
party to this  Agreement  may be  required  or may  desire to serve on any other
party hereto in connection  with this  Agreement  shall be in writing and may be
delivered  by personal  service or  overnight  delivery,  by telex or  facsimile
transfer  addressed  to the  address on the  signature  page of this  Agreement.
Service of any such  notice or demand  shall be deemed  complete  on the date of
actual  delivery or at the expiration of the fourth (4th) business day after the
date sent,  whichever is earlier in time. Any party hereto may from time to time
by notice in writing served upon the others as aforesaid,  designate a different
mailing  address  or a  different  person to which such  notices or demands  are
thereafter  to be  addressed  or  delivered.  Facsimile  transmissions  shall be
followed up by personal or overnight  delivery and shall not be effective unless
receipt confirmation has been acknowledged.

         2.05 Captions.  Captions are provided herein for  convenience  only and
they  form no  part of this  Agreement  and  are  not to  serve  as a basis  for
interpretation  or  construction  of  this  Agreement,  nor as  evidence  of the
intention of the parties hereto.

         2.06 Severability.  The provisions of this Agreement are severable. The
invalidity,  in whole or in part, of any provision of this  Agreement  shall not
affect the validity or enforceability of any other of its provisions.  If one or
more  provisions  hereof  shall be so  declared  invalid or  unenforceable,  the
remaining  provisions  shall  remain  in full  force  and  effect  and  shall be
construed in the broadest possible manner to effectuate the purposes hereof. The
parties further agree to replace such void or  unenforceable  provisions of this
Agreement  with valid and  enforceable  provisions  which will  achieve,  to the
extent  possible,  the  economic,  business  and other  purposes  of the void or
unenforceable provisions.

         2.07 Attorneys'  Fees. In any action at law or in equity to enforce any
of the provisions or rights under this Agreement, the unsuccessful party to such
litigation,  as determined by the

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court  in a final  judgment  or  decree,  shall  pay the  successful  party  all
reasonable costs,  expenses and attorneys' fees incurred by the successful party
(including,  without  limitation,  costs,  expenses and fees on any appeal) with
respect to such action.

         2.08   Counterparts.   This  Agreement  may  be  executed  in  separate
counterparts,  each of which  shall be deemed an  original,  and when  executed,
separately or together, shall constitute a single original instrument, effective
in the same  manner  as if the  parties  hereto  had  executed  one and the same
instrument.

         2.09 Waiver. Any party hereto may, as to itself, by a writing signed by
an  authorized  representative  of such  party:  (i)  extend  the  time  for the
performance  of any  of  the  obligations  of  another  party;  (ii)  waive  any
inaccuracies in  representations  and warranties made by another party contained
in this Agreement or in any documents  delivered  pursuant  hereto;  (iii) waive
compliance  by  another  party  with  any of the  covenants  contained  in  this
Agreement or the  performance of any  obligations  of such other party;  or (iv)
waive the  fulfillment of any condition that is precedent to the  performance by
such  party of any of its  obligations  under this  Agreement.  No waiver of any
term, provision or condition of this Agreement, whether by conduct or otherwise,
in any one or more  instances,  shall be  deemed to be,  or be  construed  as, a
further or  continuing  waiver of any such term,  provision or condition or as a
waiver of any other term, provision or condition of this Agreement.

         2.10 Entire Agreement.  This Agreement  (together with its Exhibits and
the other documents  referred to herein) is intended by the parties hereto to be
the final  expression of their agreement and constitutes and embodies 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.

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

         2.12 Binding on Heirs,  Successors and Assigns;  Assignment of Specific
Rights.

                  (a)  This  Agreement  and  all of its  terms,  conditions  and
covenants  are  intended  to be  fully  effective  and  binding,  to the  extent
permitted  by law,  on the  heirs,  executors,  administrators,  successors  and
permitted assigns of the parties hereto.

                  (b) The  rights  held by the  Holder  under  Section 1 of this
Agreement shall not be assignable.

         2.13 Survival.  The respective  representations and warranties given by
each of the parties,  as contained  herein shall survive  without  regard to any
investigation  made by any party. All statements as to factual matters contained
in any certificates,  exhibits or other instruments delivered by or on behalf of
any party  pursuant to the terms hereto or in connection  with the  transactions
contemplated   hereby  shall  be  deemed,   for  all  purposes,   to  constitute
representations

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and warranties by such party under the terms of this  Agreement  given as of the
date of such certificate or instrument.

         2.14  Amendment.  Any provision of this Agreement may be amended or the
observance thereof may be waived upon the written consent of the Company and the
Holder.

         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Agreement
with the intent and agreement that the same shall be effective as of the day and
year first above written.

THE COMPANY:      Videonics, Inc.


                                         By: /s/ Gary Williams
                                             -----------------------------------

                                         Name: Gary Williams
                                               ---------------------------------

                                         Title: V.P. Finance and CFO
                                                --------------------------------

                                         Address: ___________________________

                                                  ___________________________

HOLDER:           Venture Banking Group


                                         By: /s/ Jason Hartmann
                                             -----------------------------------

                                         Name: Jason Hartmann
                                               ---------------------------------

                                         Title: Commercial Loan Officer
                                                --------------------------------

                                         Address:  ___________________________

                                                   ___________________________

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