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|   | (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. |
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|   | (b) | 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. |
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|   | (c) | In      no event shall Holder exercise this Warrant for less than ten thousand      (1,000) Warrant Shares unless the Holder has a Warrant for less than ten      thousand (1,000) Warrant Shares, in which case Holder shall be required to      exercise the Warrant for all remaining Warrant Shares on the Exercise      Date. |
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|   | (d) | The      Holder shall be deemed to be the holder of the shares issuable to it in      accordance with the provisions of this Section 2 only on and after the      Exercise Date. |
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|   | 6.1 | Adjustment      Mechanism.  If an adjustment of the Exercise Price is      required pursuant to this Section 6, the Holder shall be entitled to      purchase such number of shares of Common Stock as will cause (i) the total      number of shares of Common Stock Holder is entitled to purchase pursuant      to this Warrant, multiplied by (ii) the adjusted Exercise Price per share,      to equal (iii) the dollar amount of the total number of shares of Common      Stock Holder is entitled to purchase before adjustment multiplied by the      total Exercise Price immediately before  adjustment. |
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|   | 6.2 | Capital      Adjustments.  In case of any stock split or reverse stock      split, stock dividend, reclassification of the Common Stock,      recapitalization, merger or consolidation, or like capital adjustment      affecting the Common Stock of the Company prior to the exercise of this      Warrant or its applicable portion, the provisions of this Section 6 shall      be applied as if such capital adjustment event had occurred immediately      prior to the exercise date of this Warrant and the original Exercise Price      had been fairly allocated to the stock resulting from such capital      adjustment; and in other respects the provisions of this Section shall be      applied in a fair, equitable and reasonable manner, as determined by the      Company’s Board of Directors in its absolute discretion,  so as      to give effect, as nearly as may be practicable, to the purposes      hereof. |
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|   | 6.3 | Spin      Off.  If, for any reason, prior to the exercise of this      Warrant in full, the Company spins off or otherwise divests itself of a      part of its business or operations or disposes all or of a part of its      assets in a transaction (the “Spin Off”) in which the Company does not      receive compensation for such business, operations or assets, but causes      securities of another entity to be issued to Common Stock security holders      of the Company, then the Company shall  notify the Holder at      least twenty (20) days prior to the record date with respect to such      Spin-Off. |
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|   | 7.1 | Transfer.  This      Warrant has not been registered under the Securities Act of 1933, as      amended, (the “Act”) and has been issued to the Holder for investment and      not with a view to the distribution of either the Warrant or the Warrant      Shares.  Neither this Warrant nor any of the Warrant Shares or      any other security issued or issuable upon exercise of this Warrant may be      sold, transferred, pledged or hypothecated in the absence of an effective      registration statement under the Act relating to such security or an      opinion of counsel satisfactory to the Company that registration is not      required under the Act.  Each certificate for the Warrant, the      Warrant Shares and any other security issued or issuable upon exercise of      this Warrant shall contain a legend on the face thereof, in form and      substance satisfactory to counsel for the Company, setting forth the      restrictions on transfer contained in this  Section. |
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|   | 7.2 | Registration Rights.      As set forth in Exhibit 1, Holder shall have piggy-back      registration rights with respect to the Warrant Shares then held by the      Holder or then subject to issuance upon exercise of this Warrant      (collectively, the “Remaining WarrantShares”). |
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|   | (ii)      if to the Holder, to: |   |
|--------|---------------------------------|--------|
|   |                            |   |
|   |                            |   |
|   |                            |   |
|   |                            |   |
|   |                            |   |
|   | Fax      No.:                   |   |
|   |                            |   |

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|   | FOCUS      ENHANCEMENTS, INC.        |
|--------|--------------------------------------|
|   |                                 |
|   | By:      /s/ Gary      Williams      |
|   |                                 |
|   | Name:      Gary Williams             |
|   | Title:      EVP of Finance & CFO |

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| CASH:      $ |                                          |   |                | =        (Exercise Price x Exercise Shares) |
|--------------|-----------------------------------------------|--------|---------------------|-------------------------------------------------------|
|         |
|         | Payment      is being made by:                |
|         |
|         |                                          |   | enclosed      check |
|         |                                          |   |                |
|         |                                          |   | wire      transfer  |
|         |                                          |   |                |
|         |                                          |   | other               |
|         |
|         | Please      deliver the stock certificate to: |

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