EXHIBIT 2.1

                           PURCHASE AND SALE AGREEMENT

                                     between


                            FOCUS ENHANCEMENTS, INC.,

                             FOCUS ACQUISITION CORP.


                                       and

                            PC VIDEO CONVERSION, INC.


                                  July 29, 1998


                                    
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                    AGREEMENT FOR PURCHASE AND SALE OF ASSETS


         THIS AGREEMENT,  made and entered into as of this  twenty-nineth day of
July, 1998, by and among FOCUS Enhancements,  Inc., a Delaware  corporation with
its principal place of business at 142 North Road, Sudbury,  Massachusetts 01776
("FOCUS"),  and Focus  Acquisition  Corp.  ("FAC")  (FOCUS  and FAC  hereinafter
referred to  collectively  as the  "Buyer"),  and PC Video  Conversion,  Inc., a
California  corporation  with its  principal  place of business at 16120  Caputo
Drive, Suite A, Morgan Hill, CA 95037 (the "Seller").


                              Preliminary Statement

         This  Agreement  contemplates  a  transaction  in which the Buyer  will
purchase  certain of the assets (and assume certain of the  liabilities)  of the
Seller  for  the  consideration  set  forth  below,  subject  to the  terms  and
conditions of this Agreement.

         NOW,  THEREFORE,  in consideration  of the respective  representations,
warranties,  covenants and agreements  contained herein,  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties agree as follows:

1.       Basic Transaction

1.01.    Purchase of Assets. On the Closing Date, as hereinafter defined,  Buyer
         will purchase and acquire from Seller, and Seller will sell,  transfer,
         convey and  deliver to Buyer,  all of the assets of Seller  integral to
         the operations of Seller (the "Assets"), including, without limitation,
         the following:

         a)       Real Estate.  Buyer agrees to assume the lease of the property
                  located at 16120 Caputo  Drive,  Suite A Morgan Hill, CA 95037
                  (hereinafter referred to as "Lease"), together with all tenant
                  improvements  thereto and all fixtures and other installations
                  within such property and any rights of tenant arising from the
                  use,  occupancy or leasing of such  property and  necessary to
                  continue the operation of the Seller.

         b)       Tangible  Personal  Property.  All tangible  personal property
                  used  in the  operation  of the  Seller,  including,  but  not
                  limited to, all of the following:

                  i)       All equipment,  vehicles,  machinery,  tools, storage
                           racks  and bins,  furniture  and  fixtures,  computer
                           hardware  and  disks,  telephone  systems,   portable
                           phones,  communication devices, Seller forms, display
                           materials,  maintenance machinery and equipment, test
                           equipment,  and other tangible personal property, all
                           of which shall be fully inventoried (collectively the
                           "Fixed Assets"); and

                  ii)      All current  inventory  of the Seller held for resale
                           including  all  components   thereof,   such  as  raw
                           materials,  work-in-process,  finished goods,  office
                           supplies,  maintenance supplies, packaging materials,


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                           spare  parts and  similar  items,  manuals,  computer
                           disks  and  software,  all of  which  shall  be fully
                           inventoried (collectively, the "Inventory").

         c)       Intangible  Property.  All  intangible  property  ("Intangible
                  Property") including, but not limited to:

                  i)       All accounts  (less Three  Hundred  Thousand  Dollars
                           ($300,000)),  accounts  receivable,  notes  and notes
                           receivable   existing   on  the   Closing   Date  (as
                           hereinafter defined), including any security held for
                           the payment thereof (the "Accounts Receivable");

                  ii)      Such contract rights of the Seller as Buyer may elect
                           to  acquire  after  examination  of same,  including,
                           without limitation, all rights arising under purchase
                           orders  placed by Seller with  vendors  and  purchase
                           orders  from  customers  accepted  by Seller,  rights
                           under any  warranty  agreements  and rights under any
                           insurance contract;

                  iii)     All goodwill and going  concern  value of the Seller,
                           including,  without  limitation,  all customer lists,
                           vendor  lists,   pricing  data,   warranty   records,
                           advertising  and marketing  materials and other trade
                           information of whatever type;

                  iv)      All   intellectual   property   including,    without
                           limitation, (i) all inventions (whether patentable or
                           unpatentable and whether or not reduced to practice),
                           all  improvements  thereto,  and all patents,  patent
                           applications,  and patent disclosures,  together with
                           all            reissuances,            continuations,
                           continuations-in-part,   revisions,  extensions,  and
                           reexaminations   thereof   along  with  any   foreign
                           couterparts;   (ii)  all  copyrightable   works,  all
                           copyrights, and all applications,  registrations, and
                           renewals  in  connection  therewith,  (iii)  all mask
                           works  and  all  applications,   registrations,   and
                           renewals  in  connection  therewith,  (iv) all  trade
                           secrets   and   confidential   business   information
                           (including ideas, research and development, know-how,
                           formulas, compositions,  manufacturing and production
                           processes and techniques,  technical  data,  designs,
                           drawings,   specifications,   customer  and  supplier
                           lists, pricing and cost information, and business and
                           marketing  plans  and  proposals),  (v) all  computer
                           software (including data and related  documentation),
                           (vi) customer lists;  (vii) all licenses and goodwill
                           associated    therewith,    sublicenses   and   other
                           agreements (as licensor or licensee)  relating to any
                           of  the  foregoing  kinds  of  property,  and  rights
                           thereunder;  and (vii)  rights to any  "know-how"  or
                           disclosure   or  use  of  ideas,   remedies   against
                           infringements  thereof,  and rights to  protection of
                           interest therein under the laws of all jurisdictions;
                           (viii)  all other  proprietary  rights,  and (ix) all

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                           copies and tangible embodiments thereof (items listed
                           in clauses  (i)-(ix)  shall be  referred to herein as
                           "Intellectual Property");

                  v)       All  rights  of Seller to any  software  licensed  to
                           Seller;  provided  that  if  such  licenses  are  not
                           transferable without licensor's consent, Seller shall
                           obtain such consent and/or a new license agreement in
                           the  name of Buyer on  substantially  the same  terms
                           currently available to Seller;

                  vi)      All licenses and permits of any type  whatsoever used
                           in the Seller or the  release of same so as to permit
                           the  issuance to the Buyer of such  license or permit
                           applicable to the Seller;

                  vii)     all trademarks,  service marks,  trade dress,  logos,
                           and  trade  names,  together  with all  translations,
                           adaptations,  derivations,  and combinations  thereof
                           and including all goodwill associated therewith,  and
                           all  applications,  registrations,  and  renewals  in
                           connection  therewith  related  in any  manner to the
                           Seller; and

                  viii)    all rights under the contracts,  agreements,  leases,
                           licenses and other  instruments that are set forth on
                           Schedule 1.01( c)(viii) attached hereto together with
                           any  consent   necessary   to  transfer  any  of  the
                           foregoing (collectively, the "Contract Rights").

                  ix)      Any  other  assets  integral  to  the  operations  of
                           Seller.

1.02.    Purchase Price. In full  consideration  for the conveyance and transfer
         to Buyer of the Acquired Assets, at the Closing FOCUS shall:

         (i)      issue to Seller  within five (5) business  days  following the
                  Closing Date one hundred  twenty-two  thousand  seven  hundred
                  ninety-six  (122,796)  shares (the  "Shares") of common stock,
                  $0.01 par value per share of the FOCUS (the  "Common  Stock"),
                  which  Shares  will  not  have  been   registered   under  the
                  Securities Act of 1933, as amended (the "Securities Act"), and
                  will bear legends restricting  transfer in accordance with the
                  Securities Act.;


         (ii)     pay to Seller Seven Hundred Thousand Dollars ($700,000);

         (iii)    tender a promissory  note  ("Note") to Seller in the amount of
                  One  Million  Dollars  ($1,000,000)  payable  over a period of
                  thirty-six   (36)  months   together   with  interest  on  the
                  outstanding principal balance payable at the rate of three and
                  one half (3 1/2%) percent interest per annum.  Payments on the
                  note  shall  be  made  on a  monthly  basis  for  a  total  of
                  thirty-six (36)  installments,  the first installment of which
                  shall be due on the first day of the first  month  immediately
                  following the Closing Date.  Payment of principal and interest
                  under the  above-described  Note and interest shall be secured

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                  by  assets  in  accordance   with  a  Security   Agreement  in
                  substantially the form attached hereto as Exhibit F;

         (iv)     assume  certain  accounts  payable of Seller,  as specified on
                  Schedule  1.02(iv)  attached  hereto  (the  "Assumed  Accounts
                  Payable"),     totaling     __________________________________
                  Thousand  Dollars  ($_____,000)  (The  amounts  identified  in
                  clauses  (i)-(iv)  of this  Section  1.02 shall be referred to
                  herein as the "Purchase Price".).

1.03     Employment.  Steve  Wood shall  enter into a three (3) year  employment
         agreement  with  FAC in a form  substantially  equivalent  to  that  of
         Exhibit C.

1.04.    Allocation.  The Purchase  Price shall be allocated by the Buyer,  with
         the  concurrence of the Seller,  among the Assets within 120 days after
         the Closing Date.

1.05.    Liabilities of Seller.  Except for the Assumed Accounts Payable,  Buyer
         is not assuming any liabilities or obligations of Seller and Buyer will
         have no  responsibility  with  respect to any  obligation  or liability
         (whether  known  or  unknown,  asserted  or  unasserted,   absolute  or
         contingent, accrued or unaccrued, liquidated or unliquidated, or due or
         to become due)  (collectively,  "Liability") not  specifically  assumed
         pursuant to this Agreement.

1.06.    The Closing Date. The closing (the "Closing")  shall occur on July 29 ,
         1998 at 10 a.m. at the offices of Focus  Enhancements,  Inc., 142 North
         Road, Sudbury, Massachusetts,  01776, or such other date, time or place
         as shall be mutually  agreed upon by Buyer and Seller.  The transfer of
         the Assets by Seller to Buyer shall be deemed to occur, and the payment
         of the Purchase Price shall occur, at 10 a.m., Boston time, on the date
         of the Closing (the "Closing Date").

1.07.    Sales Taxes. Seller shall pay all sales, transfer and documentary taxes
         and expenses, if any, payable in connection with the sale, transfer and
         deliveries to be made to Buyer hereunder.

1.08.    Further  Assurances.  At any  time  and  from  time to time  after  the
         Closing, at Buyer's request and without further  consideration,  Seller
         promptly shall execute and deliver such instruments of sale,  transfer,
         conveyance, assignment and confirmation, and take such other action, as
         Buyer may reasonably request to more effectively  transfer,  convey and
         assign to Buyer, and to confirm Buyer's title to, all of the Assets, to
         put Buyer in actual possession and operating control thereof, to assist
         Buyer in  exercising  all rights with respect  thereto and to carry out
         the purpose and intent of this Agreement.

2.       Representations  and  Warranties of Seller.  Seller makes the following
         representations  and warranties to Buyer, each of which shall be deemed
         to be independently material and to have been relied upon by Buyer.

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2.01.    Organization  and Authority.  Seller is a corporation  duly  organized,
         validly  existing and in good standing under the corporate and tax laws
         of the  State  of  California  and has the  corporate  power to own its
         properties  and to carry on its  business  as and where it is now being
         conducted,  to execute and deliver this  Agreement  and the  agreements
         contemplated  herein,  and to consummate the transactions  contemplated
         thereby. Seller is duly licensed or qualified and in good standing as a
         foreign  corporatio  in all  jurisdictions  where the  character of the
         properties owned by Seller or the nature of the business  transacted by
         it make such  license  or  qualification  necessary,  except  where the
         failure to so qualify would not have a material  adverse  effect on the
         operations or financial condition of Buyer.

2.02.    Authorization.  Seller has taken all actions necessary to authorize and
         permit the  execution,  delivery and  performance of this Agreement and
         the agreements  contemplated  herein by Seller, and the consummation by
         Seller  of the  transactions  contemplated  hereby  and  thereby.  This
         Agreement  constitutes  the valid and  binding  obligation  of  Seller,
         enforceable  against  it  in  accordance  with  its  terms,  except  as
         enforcement  may  be  subject  to  applicable  bankruptcy,  insolvency,
         moratorium and other laws affecting  creditors generally and by general
         equitable principles.

2.03     Noncontravention.  The execution and delivery of this  Agreement or the
         agreements  contemplated  herein, and the consummation by Seller of the
         transactions  contemplated hereby or thereby, will not, with or without
         the giving of notice or the passage of time or both,  (i) conflict with
         the Articles of  Organization  or Bylaws of Seller,  (ii) conflict with
         any  agreement or instrument to which the Seller is a party or by which
         it may be bound,  or (iii)  violate the  provisions of any law, rule or
         regulation  applicable to Seller.  Schedule  2.03 attached  hereto sets
         forth a true,  correct and complete list of all consents,  assignments,
         waivers and/or  approvals of third parties  required in connection with
         the  consummation  by Seller of the  transactions  contemplated by this
         Agreement and the sale, transfer,  conveyance and/or delivery by Seller
         of the Assets to Buyer.

2.04.    Title to Assets; Condition and Location;  Sufficiency.  Seller has good
         and  marketable  title to all of the Assets,  free and clear of any and
         all liens,  security  interests,  encumbrances  and claims.  All of the
         Assets are located in 16120  Caputo  Drive,  Suite A, Morgan  Hill,  CA
         95037, except as set forth on Schedule 2.04 attached hereto. The Assets
         are adequate to conduct the business operations  currently conducted by
         Seller.

2.05.    Financial Statements.  Seller has previously delivered to Buyer (i) its
         unaudited  balance  sheet,  statement of income and cash flow as of and
         for the fiscal year ended  December 31, 1997 (the  "Year-End  Financial
         Statements"),  and (ii)  its  unaudited  balance  sheet  (the  "Current
         Balance Sheet"), statement of income and cash flow for the seven months
         ended July 31, 1998  (together  with the  Current  Balance  Sheet,  the
         "Current Financial Statements").  The Year-End Financial Statements and
         the Current Financial  Statements have been prepared in accordance with

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         generally  accepted  accounting   principles  and  fairly  present  the
         financial condition of Seller in all material respects.

2.06     Accounts  Receivable.  Schedule 2.06 attached hereto sets forth a true,
         correct and  complete  list of the  Accounts  Receivable,  including an
         aging  thereof  as of the  date of the  Current  Financial  Statements.
         Schedule 2. 06, as updated  pursuant to Section 6.08 hereof,  shall set
         forth a true,  correct and complete  list of Accounts  Receivable as of
         the Closing Date,  including an aging thereof.  All accounts receivable
         shown on  Schedule  2. 06  constitute  bona  fide  accounts  receivable
         resulting  from  the sale of the  Company's  products  in the  ordinary
         course of business.  Such Accounts  Receivable were and are not subject
         to any conditions to payment or to any offsets, counterclaims, defenses
         or returns except as shown as an allowance for doubtful accounts on the
         Financial  Statements.  No account  debtors or note  debtors  have been
         delinquent in payment by more than ninety (90) days except as otherwise
         reflected on the books and records maintained by Seller or have refused
         or threatened to refuse to make payment  except as disclosed in writing
         to Buyer.

2.07     Inventory.  The Inventory  reflected on the June 30, 1998 Balance Sheet
         was  purchased or acquired in the  ordinary  and regular  course of the
         Company's  business  and are  maintained  for resale to  customers in a
         manner substantially similar to past practices. Such inventory has been
         consistently  valued  at the  lower  of cost  consistently  with  prior
         periods. The Inventory consists,  and will at the Closing Date consist,
         of those items as described in Schedule  2.07,  subject to use and sale
         in the ordinary course of business of Seller, from the date of Schedule
         2.07 to the Closing.  The phrase "the ordinary  course of business," as
         used in this  Agreement,  shall  mean the  conduct of the  business  of
         Seller in the manner in which Seller  conducted its business during the
         year preceding execution of this Agreement,  following usual accounting
         practices, making ordinary accruals,  incurring ordinary liabilities or
         expenditures, and making ordinary contract commitments.

2.08.    Fixed Assets.  Schedule 2.08 attached hereto sets forth a true, correct
         and complete  list of all Fixed Assets with an  individual  fair market
         value in excess of One Thousand Dollars ($1,000) as of the date hereof,
         including a description thereof.  Schedule 2.08, as updated pursuant to
         Section 6.08 hereof,  shall set forth a true, correct and complete list
         of all Fixed  Assets as of the Closing  Date,  including a  description
         thereof.  Except as set forth on Schedule 2.08, all of the Fixed Assets
         (i) are in good  operating  condition and repair,  normal wear and tear
         excepted,  (ii) taken in their entirety,  are suitable and adequate for
         the  conduct  of the  operations  of  Seller as  conducted  on the date
         hereof,  and (iii) have been  maintained  normally  and on a consistent
         basis.

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2.09     Intangible Property.

         (a)      Schedule 2.09 attached  hereto sets forth a true,  correct and
                  complete list and, where  appropriate,  a description  of, all
                  Intangible  Property.  Except as set forth on  Schedule  2.09,
                  true,  correct and  complete  copies of all licenses and other
                  agreements  relating  to the  Intangible  Property  have  been
                  previously delivered by the Seller to the Buyer.

         (b)      Except as otherwise  disclosed in Schedule 2.09, the Seller is
                  the sole and exclusive  owner of all  Intangible  Property and
                  all  designs,  permits,  labels  and  packages  used  on or in
                  connection therewith.  The Intangible Property owned by Seller
                  is sufficient  to conduct its business as presently  conducted
                  and  as  conducted   during  the  past  two  years  and,  when
                  transferred  to  Buyer  pursuant  to this  Agreement,  will be
                  sufficient  to permit  Buyer to conduct the business of Seller
                  as presently conducted.  There is no litigation pending or, to
                  Seller's  knowledge,  threatened that might result in a denial
                  of the right of Seller to use any of the Intangible  Property.
                  Seller has not  received  notice of, nor has  knowledge of any
                  basis for, a claim against Seller that any of its  operations,
                  activities,   products  or   publications   infringes  on  any
                  Intellectual  Property  right of a third party,  or that it is
                  illegally or otherwise using the Intellectual  Property rights
                  of others.  Seller has no disputes with or claims  against any
                  third  party  for  infringement  by such  third  party  of any
                  Intangible  Property.  Seller  has taken all steps  reasonably
                  necessary  to protect its right,  title and interest in and to
                  the Intangible  Property.  To the best of Seller's  knowledge,
                  there are no Intellectual Property rights owned or held by any
                  officer, agent, employee or any person associated with Seller,
                  or in which any such person has an  exclusive  or  protectable
                  right, that are valuable to or useful in Seller's business.

2.10     Assumed Liabilities;  Third-Party Consents.  None of the obligations of
         Seller to be assumed by Buyer  pursuant  to Sections 1. 05 hereof is in
         default by any party  thereto,  and none  involves an obligation on the
         part of Seller to perform  more than six months  following  the Closing
         Date.  With the exception of those  contracts  listed on Schedule 2.10,
         which  require the consent of the party  identified  on Schedule  2.10,
         there are no contracts  being assigned  pursuant to this Agreement that
         require the consent of a third party.

2.11.    Condition of Business.  Except as set forth on Schedule  2.11  attached
         hereto,  since  December  31,  1997  Seller  has not  entered  into any
         transaction that is not in the ordinary course of business, and for the
         12 months  preceding  the date  hereof,  the business of Seller has not
         been  subject  to any  strikes,  picketing  or  other  organized  labor
         activity.

2.12.    Bulk Transfer.  Buyer waives all of its rights that it would  otherwise
         have pursuant to the bulk transfer laws of the State of California  and
         Seller shall  indemnify  Buyer and hold Buyer  harmless  against and in
         respect of any claim for undisclosed payables or other liabilities, and

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         also in respec of all expenses of any character  (including  attorney's
         fees)  incurred  by  Buyer  in  connection   with  the  defense  and/or
         settlement of actions or claims related thereto. Seller agrees that any
         amounts owing to Buyer due to the indemnity  granted hereunder shall be
         deductible  from the balance of the Note upon written notice to Seller.
         Seller will not be responsible for any settlement made by Buyer without
         Seller's  consent,  which  consent will not be  unreasonably  withheld,
         conditioned or delayed.

2.13.    Undisclosed  Liabilities.  Except as and to the extent (i)  incurred in
         the  ordinary  course  of  business  after  the  date  of the  Year-End
         Financial  Statements and not material,  either  individually or in the
         aggregate, or (ii) representing ordinary course purchases of inventory,
         there are no Liabilities of Seller affecting any of the Assets.  Seller
         further   represents   that  no  promises  with  respect  to  financial
         obligations have been made to Seller's employees.

2.14.    Litigation. Except as set forth on Schedule 2.14 attached hereto, there
         is no  action  or  suit  in  law  or  equity,  nor  proceeding  by  any
         administrative  or  governmental   agency,  now  pending  nor,  to  the
         knowledge  of Seller,  threatened,  nor any  outstanding  order,  writ,
         injunction  or decree of any court or  administrative  or  governmental
         agency,  affecting  any of the  Assets  or the  business  or  condition
         (financial or otherwise) of Seller.

2.15.    Product Warranty. Each product manufactured,  sold, leased or delivered
         by  Seller  has  been in  conformity  with all  applicable  contractual
         commitments and all express and implied  warranties,  and Seller has no
         known  Liability (and there is no known basis for any present or future
         action, suit, proceeding,  hearing,  investigation,  charge, complaint,
         claim or  demand  against  Seller  giving  rise to any  Liability)  for
         replacement or repair thereof or other damages in connection therewith,
         subject  only to the reserve for product  warranty  claims set forth on
         the  face of the  Current  Balance  Sheet  (rather  than  in any  notes
         thereto) as adjusted  for the passage of time  through the Closing Date
         in accordance  with the past custom and practice of Seller.  No product
         manufactured,  sold,  leased or  delivered  by Seller is subject to any
         guaranty,  warranty or other indemnity  beyond the applicable  standard
         terms and  conditions of sale or lease.  Schedule 2.15 attached  hereto
         includes  copies of the standar  terms and  conditions of sale or lease
         for Seller  (containing  applicable  guaranty,  warranty and  indemnity
         provisions).

2.16.    Compliance with Laws.  Seller is not to the best of Seller's  knowledge
         in  violation of any federal,  state or local law,  including,  without
         limitation,   wage  and  hour,   employment  and  occupational   safety
         legislation and environmental protection legislation.

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2.17.    Indebtedness, Powers of Attorney and Guarantees. Except as set forth in
         Schedule 2.17 attached hereto,  Seller has no outstanding  indebtedness
         affecting the Assets, other than trade or business obligations incurred
         in the ordinary course of business on usual credit terms. Seller has no
         general or special powers of attorney  outstanding  (whether as grantor
         or  grantee)  nor is a party to any  contract  of surety,  guaranty  or
         similar  engagement  by which it may be made to answer  for the debt of
         another person.

2.18.    Taxes and  Payroll.  Seller  has paid all real and  personal  property,
         franchise, income and other taxes due or payable in connection with its
         business,  has  collected  or paid all sales  taxes,  has  withheld all
         amounts required to be withheld from the payroll of its employees,  and
         has paid all  salaries,  bonuses and other  payments due to each of its
         employees.  Seller has timely  filed all  federal,  state and local tax
         returns  required  to be filed by it,  and such tax  returns  are true,
         correct and complete.  No  examination of such tax returns is currently
         in  progress,  no  requests  for  waiver of the time to assess any such
         taxes are pending,  and no deficiencies  have been asserted or assessed
         as a  result  of any  audit  by the  Internal  Revenue  Service  or any
         national,  state or local taxing  authority  and no such  deficiency or
         audit has been  proposed  or  threatened.  Seller  has not  waived  any
         statute  of  limitations  in respect of any such taxes or agreed to any
         extension of time with respect to a tax assessment or deficiency.

2.19.    Insurance.  The Assets are  insured  against  loss or damage by fire or
         other casualty at such levels as is customary for businesses engaged in
         the same business as Seller.

2.20.    Employee  Relations.  Seller  is not a  party  to any  written  or oral
         agreement  with any labor  union in  connection  with the  business  of
         Seller,  and there is not  currently,  nor has there been within the 12
         months prior to this Agreement, any effort to organize any employees of
         Seller.

2.21.    Accuracy of Schedules. All schedules, certificates,  exhibits and other
         documents which have been furnished pursuant to this Agreement to Buyer
         or its counsel are true, correct and complete in all material respects.

2.22.    Diligence  Request.   All  documents,   certificates,   and  statements
         requested  described  on the due  diligence  list,  attached  hereto as
         Schedule  2.22,  has been  furnished  to Buyer or its  counsel and such
         documents,  certificates, and statements are true, correct and complete
         in all material respects.

2.23.    Disclosure.  No  representation  or warranty by the Seller contained in
         this  Agreement  or in any  certificate,  schedule,  exhibit  or  other
         document  delivered to Buyer  pursuant to this  Agreement  contains any
         untrue  statement of a material  fact or omits to state a material fact
         required to make the  statements  contained in this Agreement or in any
         said certificate,  schedule,  annex, exhibit or document not materially
         misleading,  and all such  representations  and  warranties  considered
         together are not materially misleading in any respect.

                                    10 of 22
<PAGE>
3.       Representations  and  Warranties  of Buyer.  Buyer makes the  following
         representations  and  warranties to the Seller,  each of which shall be
         deemed to be independently material and to have been relied upon by the
         Seller:

3.01.    Organization  and  Authority.  Buyer is a corporation  duly  organized,
         validly  existing and in good standing under the corporate and tax laws
         of the  State  of  Delaware  and has  the  corporate  power  to own its
         properties  and to carry on its  business  as and where it is now being
         conducted,  to execute and deliver this  Agreement  and the  agreements
         contemplated  herein,  and to consummate the transactions  contemplated
         thereby.  Buyer is duly licensed or qualified and in good standing as a
         foreign  corporation  in all  jurisdictions  where the character of the
         properties  owned by Buyer or the nature of the business  transacted by
         it make such  license  or  qualification  necessary,  except  where the
         failure to so qualify would not have a material  adverse  effect on the
         operations or financial condition of Buyer.

3.02.    Authorization.  Buyer has taken all actions  necessary to authorize and
         permit the  execution,  delivery and  performance of this Agreement and
         the agreements  contemplated  herein by Buyer,  and the consummation by
         Buyer  of  the  transactions  contemplated  hereby  and  thereby.  This
         Agreement  constitutes  the  valid  and  binding  obligation  of Buyer,
         enforceable  against  it  in  accordance  with  its  terms,  except  as
         enforcement  may  be  subject  to  applicable  bankruptcy,  insolvency,
         moratorium and other laws affecting  creditors generally and by general
         equitable principles.

3.03.    Noncontravention.  The execution and delivery of this  Agreement or the
         agreements  contemplated  herein,  and the consummation by Buyer of the
         transactions  contemplated hereby or thereby, will not, with or without
         the giving of notice or the passage of time or both,  (i) conflict with
         the Articles of Organization or Bylaws of the Buyer, (ii) conflict with
         any  agreement or  instrument  to which Buyer is a party or by which it
         may be bound,  or (iii)  violate  the  provisions  of any law,  rule or
         regulation applicable to Buyer.

3.04.    Organization. Buyer agrees that all current employees of Seller will be
         offered a comparable  position with FAC performing similar duties. Each
         employee shall be compensated as he/she was  compensated  one (1) month
         prior to the Closing  Date and each  employee  shall be  credited  with
         their current seniority for the calculation of benefits.  Seller agrees
         to remain liable for all pension benefits due to each employee prior to
         the Closing Date.

4.       Covenants of Seller. Seller covenants and agrees with Buyer as follows:

4.01.    Conduct  of  Business.  From and  after the date  hereof  and until the
         Closing  Date,  Seller  shall  carry  on its  business  diligently  and
         substantially  in the same manner as  heretofore  conducted,  except as
         agreed to in writing by Buyer.  All of the  property of Seller shall be
         used,  operated,  repaired and maintained in a normal  business  manner
         consistent with past practice.

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<PAGE>
4.02.    Compliance  with  Laws.  From and after the date  hereof  and until the
         Closing Date, Seller will comply in all material respects with all laws
         and regulations  that are applicable to it, the ownership of the Assets
         or to the conduct of its business, and will perform and comply with all
         contracts, commitments and obligations by which it is bound.

4.03.    Preservation of Business. For a period of one hundred eighty (180) days
         after the Closing  Date,  Seller  shall assist and  cooperate,  to such
         extent as is reasonable under the circumstances, with Buyer to preserve
         for Buyer the goodwill of  suppliers,  customers,  employees and others
         having business  relations with Seller prior to the Closing Date. After
         said 180-day period,  Seller agrees not to interfere with Buyer and its
         relations with suppliers, customers, employees and others.

4.04.    Curing Defaults. Promptly upon discovery of any breach or default under
         any  representation,  warranty  or  agreement  made by the  Seller  and
         contained in this Agreement of such a nature that it can be cured prior
         to the Closing Date,  the Seller will make  reasonable  efforts to cure
         such breach or default.

4.05.    Cooperation;  Further Assurances.  Seller will cooperate in the orderly
         consummation  of  the  transactions  contemplated  by  this  Agreement,
         including, without limitation, permitting Buyer and its representatives
         full  access,  at all  reasonable  times  and in a manner  so as not to
         interfere  with  the  normal  business  operations  of  Seller,  to all
         premises,   properties,   personnel,   books,  records,  contracts  and
         documents  of Seller  pertaining  to the Assets,  and will  execute all
         documents and perform all acts  reasonably  necessary or appropriate to
         carry out the intent of this Agreement.

4.06.    Proprietary Information.

         (a)      Seller shall hold in  confidence,  and use its best efforts to
                  have all of the  officers,  directors  and personnel of Seller
                  hold in confidence,  all knowledge and information of a secret
                  or confidential nature with respect to the business of Seller,
                  and  shall  not  disclose,  publish  or make  use of the  same
                  without the  consent of Buyer,  except to the extent that such
                  information  shall have become public  knowledge other than by
                  breach of this Agreement by Seller.

         (b)      Seller  agrees  that the  remedy at law for any breach of this
                  Section  4.06 would be  inadequate  and that such breach would
                  cause  irreparable harm to Buyer, and therefore Buyer shall be
                  entitled  (without  the  requirement  of posting  any bond) to
                  injunctive  relief in addition to any other remedy it may have
                  upon breach of any provision of this Section 4.06.

4.07.    No  Solicitation or Hiring of Former  Employees.  Except as provided by
         law,  for a period of five years after the Closing  Date,  Seller shall
         not solicit any person who was an employee of Buyer on the Closing Date

                                    12 of 22
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         to terminate his or her employment  with Buyer or to become an employee
         of Seller or hire any person who was an  employee  of Buyer on the date
         hereof or on the Closing Date.

4.08.    Non-Competition Agreement.

         (a)      In further  consideration  of the Purchase Price, for a period
                  of two ( 2) years  following  the  termination  of  employment
                  under Section 1.03 above , Seller  agrees that neither  Seller
                  nor any affiliate of Seller  shall,  without the prior written
                  consent  of the  Buyer,  (i)  manufacture,  market or sell any
                  product  that has the  same or  substantially  the same  form,
                  function and primary  application  as any existing or proposed
                  product manufactured by Seller on or prior to the Closing Date
                  or (ii) engage in any business  competitive  with the business
                  of Seller as  conducted  on the date  hereof or on the Closing
                  Date,  in the United States of America or any other country in
                  which Seller conducted its business during the two years prior
                  to the Closing Date. (The agreement  contained in this Section
                  4.08(a)  shall be referred  to herein as the  "Non-Competition
                  Agreement".)

         (b)      The parties hereto agree that the consideration,  duration and
                  scope of the Non-Competition  Agreement are reasonable. In the
                  event  that any  court  determines  that the  duration  or the
                  geographic  scope,  or both,  are  unreasonable,  the  parties
                  hereto agree that the provision shall remain in full force and
                  effect for the greatest  time period and in the greatest  area
                  that would not render it  unenforceable.  The  parties  intend
                  that this  Non-Competition  Agreement  shall be deemed to be a
                  series of separate covenants, one for each and every county of
                  each and every state of the United  States of America and each
                  and every  political  subdivision  of each and  every  country
                  outside the United States of America  where this  provision is
                  intended to be  effective.  Seller  agrees that damages are an
                  inadequate  remedy for any breach of this  provision  and that
                  Buyer  shall,  whether  or not it is  pursuing  any  potential
                  remedies at law, be entitled to  equitable  relief in the form
                  of preliminary and permanent injunctions without bond or other
                  security   upon   actual   or   threatened   breach   of  this
                  Non-Competition Agreement.

4.09.    Best Efforts to Obtain Satisfaction of Conditions. Seller shall use its
         best efforts to obtain the satisfaction of the conditions  specified in
         this Agreement.

5.       Covenants of Buyer.

5.01.    Current  Public  Information.  Buyer shall use its best efforts to make
         all filings when required  under the  Securities Act and the Securities
         and Exchange Act of 1934, as amended.

5.02.    Best Efforts to Obtain Satisfaction of Conditions.  Buyer shall use its
         best efforts to obtain the satisfaction of the conditions  specified in
         this Agreement.

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<PAGE>
6.       Conditions Precedent to Buyer's  Obligations.  The obligations of Buyer
         to be performed  under this  Agreement are subject to the  fulfillment,
         prior to or at the Closing, of the following conditions precedent, each
         of which may be waived in writing in the sole discretion of Buyer:

6.01.    Representations  and Warranties.  The representations and warranties of
         Seller  made in this  Agreement  shall  be true and  correct  as of the
         Closing in all material respects.

6.02.    Compliance  with  Agreement.  Seller shall have  performed and complied
         with all  agreements  and  conditions  required by this Agreement to be
         performed or complied with by it prior to or at the Closing,  and Buyer
         shall  have  been   furnished  with  a  certificate  of  an  authorized
         representative of Seller, dated the Closing Date, to that effect.

6.03.    Opinion of Counsel  for Seller.  Buyer  shall have  received an opinion
         from the Law Office of John Teter,  dated the Closing Date, in form and
         substance  satisfactory to counsel for Buyer, and in substantially  the
         form annexed hereto as Exhibit A.

6.04.    Governmental Approvals.  Any governmental agency,  department,  bureau,
         commission and similar body, the consent,  authorization or approval of
         which is necessary under any applicable law, rule,  order or regulation
         for the consummation by Seller of the transactions contemplated by this
         Agreement and the sale, transfer, conveyance and delivery of the Assets
         to Buyer shall have  consented  to,  authorized,  permitted or approved
         such transactions.

6.05.    Consents  of Lenders  and Other Third  Parties.  The Seller  shall have
         received all requisite  consents and approvals of all lenders and other
         third parties whose consent or approval is required in order for Seller
         to  consummate  the   transactions   contemplated  by  this  Agreement,
         including, without limitation, those set forth on Schedule 2.03.

6.06.    Adverse Proceedings.  No action or proceeding by or before any court or
         other governmental body shall have been instituted or threatened by any
         governmental  body or person  whatsoever  that shall seek to  restrain,
         prohibit or invalidate the transactions  contemplated by this Agreement
         or that  might  affect  the right of the Buyer to own or use the Assets
         after the Closing.

6.07.    Certificate  of  Examination.  Seller  shall  have  submitted  to Buyer
         certificates   of  examination   by  a  reputable   company  or  lawyer
         satisfactory  to  Buyer  of the  indices  in the  State  of  California
         applicable to the appropriate  recording files of financial statements,
         conditional  sales  agreement,  chattel  mortgages,  lease  agreements,
         notices  of  assignment  of loans and  mortgages  receivable,  factors'
         liens,  trust  receipts,  and  federal tax liens  showing  there are no
         liens,  mortgages,  encumbrances,  charges  or  other  rights  of third
         parties of record with respect to any of the Assets.  Seller  agrees to
         provide a certificate of examination from the Secretary of State of the

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<PAGE>

         State  of  California  that  are  consistent  with  the  aforementioned
         certificates  of  examination  by a reputable  company or lawyer within
         fifteen (15) business days of the Closing.

6.08     Update.  Seller  shall have  provided  Buyer with a true,  correct  and
         complete list and amount, as of the Closing Date, of:

         (a)      Accounts Receivable, including an aging thereof;

         (b)      Inventory;

         (c)      Fixed Assets;

         (d)      all unfilled orders with respect to customers of Seller; and

         (e)      all  shipments  by Seller made during the period from the date
                  of this Agreement to the Closing Date,

         none of  which  information  shall  be  materially  different  from the
         information supplied by Seller as of the date hereof on Schedules 2.06,
         2.07 and 2.08.

6.09     Closing  Deliveries.  Buyer  shall  have  received  at or  prior to the
         Closing each of the following:

         (a)      A bill of sale pertaining to the Assets  substantially  in the
                  form annexed hereto as Exhibit B;

         (b)      Such instruments of conveyance,  assignment and transfer,  and
                  such  other  deeds,   conveyances  and  documents  as  may  be
                  necessary  and  appropriate  to effect the transfer to, and to
                  vest in, Buyer,  good,  clear,  record and marketable title to
                  the  Assets and all rights of use and  ownership  therein  and
                  thereto;

         (c)      All documents  contemplated  by Sections  6.02-6.05,  6.07 and
                  6.08;

         (d)      All  technical   data,   formulations,   product   literature,
                  contracts,  files and other data and  documents  pertaining to
                  the Assets;

         (e)      A  certificate  of the Secretary of the State of California as
                  to the  legal  existence  and good  standing  (including  with
                  respect to the payment of tax) of Seller in California;

         (f)      A  certificate  of the  Secretary  of Seller  attesting to the
                  incumbency of Seller's officers, the authenticity of the votes
                  authorizing the  transactions  contemplated by this Agreement,
                  and the  authenticity  and continuing  validity of the charter
                  documents of Seller; and

         (g)      Such other documents, instruments or certificates as Buyer may
                  reasonably request.

7.       Conditions Precedent to Seller's Obligations. The obligations of Seller
         to be  performed  under this  Agreement  on or before the  Closing  are

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<PAGE>
         subject  to  the  fulfillment,  prior  to or at  the  Closing,  of  the
         following conditions precedent,  each of which may be waived in writing
         in the sole discretion of Seller:

7.01.    Representations  and Warranties.  The representations and warranties of
         Buyer  made in this  Agreement  shall  be true  and  correct  as of the
         Closing in all material respects.

7.02.    Compliance with Agreement. Buyer shall have performed and complied with
         all  agreements  and  conditions  required  by  this  Agreement  to  be
         performed  or complied  with by Buyer prior to or at the  Closing,  and
         Seller shall have been  furnished  with a certificate  of an authorized
         representative of Buyer, dated the Closing Date, to that effect.

7.03.    Governmental Approvals.  Any governmental agency,  department,  bureau,
         commission and similar body, the consent,  authorization or approval of
         which is necessary under any applicable law, rule,  order or regulation
         for the consummation by Buyer of the transactions  contemplated by this
         Agreement and the sale, transfer, conveyance and delivery of the Assets
         to Buyer shall have  consented  to,  authorized,  permitted or approved
         such transactions.

7.04.    Adverse Proceedings.  No action or proceeding by or before any court or
         other governmental body shall have been instituted or threatened by any
         governmental  body or person  whatsoever  that shall seek to  restrain,
         prohibit or invalidate the transactions  contemplated by this Agreement
         or that  might  affect  the right of the Buyer to own or use the Assets
         after the Closing.

7.05.    Registration  Rights.  At or prior to Closing,  Buyer and Seller  shall
         have entered into  registration  rights agreement  substantially in the
         form annexed hereto as Exhibit D.

7.06.    Closing  Deliveries.  Seller  shall  have  received  at or prior to the
         Closing each of the following:

         (a)      Payment of the Purchase Price, including,  without limitation,
                  certificates representing the Shares registered in the name of
                  Seller and the promissory note;

         (b)      An assumption  agreement pertaining to the Assumed Liabilities
                  substantially in the form annexed hereto as Exhibit E;

         (c)      All documents contemplated by Sections 7.02-7.03 and 7.05; and

         (d)      Such other  documents,  instruments or  certificates as Seller
                  may reasonably request.

                                    16 of 22
<PAGE>

8.       Warranty.

                  In connection  with any products or services of Seller shipped
         or performed prior to the Closing,  Buyer does not assume any Liability
         or  obligation  for (i) any  warranty  (express or  implied),  (ii) any
         damage,  injury or loss,  consequential  or otherwise,  resulting  from
         product  defects  or  defects in the  services  provided,  or (iii) any
         warranty of merchantability or fitness for a particular purpose.

9.       Expenses; Brokers and Finders.

9.01.    Expenses. Except as otherwise provided in Sections 1. 07 and 11, Buyer,
         on the one hand, and Seller,  on the other hand, shall each pay its own
         expenses  in  connection  with  this  Agreement  and  the  transactions
         contemplated hereby.

9.02.    Brokers and Finders. Seller represents to Buyer and Buyer represents to
         Seller,  that no fee is due to any broker or finder in connection  with
         the  transactions  contemplated  by this Agreement and each party shall
         indemnify the other and hold it harmless  against and in respect of any
         claim for brokerage or other commissions relative to this Agreement, or
         to the  transactions  contemplated  hereby,  and also in respect of all
         expenses of any character  incurred by Seller in  connection  with this
         Agreement or such transactions.

10.      Termination of Agreement.

10.1.    Termination by Lapse of Time. This Agreement shall terminate at 5 p.m.,
         Boston time, on July 31, 1998 if the transactions  contemplated  hereby
         have not been consummated,  unless such date is extended by the written
         consent of all of the parties hereto.

10.2.    Termination  by  Agreement  of  the  Parties.  This  Agreement  may  be
         terminated by the mutual written  agreement of the parties  hereto.  In
         the event of such termination by agreement, Buyer shall have no further
         obligation  or  Liability to Seller  under this  Agreement,  and Seller
         shall have no  further  obligation  or  Liability  to Buyer  under this
         Agreement;  provided,  however,  that this Section 10, the survival and
         indemnification  provisions  set forth in  Section  11  hereto  and the
         expenses  provisions set forth in Section 9 hereto shall remain in full
         force and effect.

10.3.    Termination  by Reason of Breach.  This  Agreement may be terminated by
         Seller,  if at any  time  prior  to the  Closing  there  shall  occur a
         material breach of any of the representations,  warranties or covenants
         of Buyer or the failure by Buyer to perform any condition or obligation
         hereunder;  and may be terminated by Buyer, if at any time prior to the
         Closing   there   shall   occur  a  material   breach  of  any  of  the
         representations,  warranties  or  covenants of Seller or the failure of
         Seller to perform any condition or obligation hereunder.

11.      Survival and Indemnification.

11.01.   Survival and  Materiality  of  Covenants.  All  covenants,  agreements,
         representations   and  warranties   made  herein  and  in  certificates

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<PAGE>
         delivered  pursuant  hereto  shall be deemed to have been  material and
         relied upon by the party to which made,  and shall  survive the Closing
         Date. All representations, warranties, covenants and agreements made by
         Seller  in  this   Agreement   shall  survive  the  Closing,   and  any
         investigation  at any time made by or on  behalf  of  Buyer;  provided,
         however,  that the representations and warranties of the parties hereto
         shall terminate two years from the date of this Agreement.  The parties
         acknowledge that in entering into this Agreement,  they have not relied
         on any representations, warranties or covenants other than as expressed
         or referred to or incorporated herein.

11.02.   Indemnification.

         (a)      By Buyer.  Buyer covenants and agrees with Seller that it will
                  defend and hold Seller  harmless  from and against any and all
                  losses,   damages,   costs,  expenses  or  other  Liabilities,
                  including reasonable  attorneys' fees, arising from the breach
                  of  any  one  or  more  of  the  representations,  warranties,
                  obligations,  covenants and  agreements  made by Buyer in this
                  Agreement,  and Buyer will reimburse Seller in the full amount
                  of  any  sum  (including   reasonable   costs,   expenses  and
                  attorneys' fees) that Seller pays or becomes  obligated to pay
                  at any time as a result of such breach.

         (b)      By Seller. Seller covenants and agrees with Buyer that it will
                  defend and hold Buyer  harmless  from and  against any and all
                  losses,   damages,   costs,  expenses  or  other  Liabilities,
                  including reasonable  attorneys' fees, arising from any of the
                  following:

                  (i)      the breach of any one or more of the representations,
                           warranties,  obligations,  covenants  and  agreements
                           made by Seller;

                  (ii)     any claims against, or Liabilities or obligations of,
                           Seller,   or  any  claims   against  the  Assets  not
                           specifically  assumed  by Buyer  pursuant  to Section
                           1.04 of this Agreement;

                  (iii)    any warranty  claim,  product  repair or  replacement
                           relating  to (y)  products  manufactured  or  sold by
                           Seller  prior  to the  Closing  Date or (z)  Seller's
                           business  or  operation  prior to the  Closing  Date,
                           other than an Assumed Liability;

                  (iv)     any product  liability  claim related to (y) products
                           manufactured  or sold by Seller  prior to the Closing
                           Date or (z) the Seller's  business or operation prior
                           to the Closing  Date,  whether  arising  from alleged
                           negligence, breach of warranty or otherwise; and

                  (v)      any tax  Liabilities  or  obligations  of any kind or
                           nature whatsoever of Seller,  whether relating to any
                           period prior to or after the Closing Date.

         (c)      Amount of  Indemnification.  In the  performance of any of the
                  foregoing indemnities,  the indemnifying party will pay to, or

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<PAGE>
                  reduce any claim against,  the other party in the amount which
                  would then be  required  to  establish  the other party in the
                  position that it would have held had each such  representation
                  or warranty  been true,  complete and  correct,  had each such
                  obligation  been  fulfilled,  and had each such  covenant  and
                  agreement been fully performed. The foregoing notwithstanding,
                  the   aggregate   amount   of   indemnification   paid  by  an
                  indemnifying party shall not exceed the Purchase Price.

         (d)      Notice of Right to  Indemnification.  If at any time after the
                  Closing any party has reason to believe that it is entitled to
                  indemnification under this Agreement,  or any claim or dispute
                  exists that could, unless successfully defended,  entitle such
                  party   to    indemnification,    the   party    entitled   to
                  indemnification  shall give  notice to the other  party of the
                  facts entitling such party to  indemnification  and the nature
                  of the claim or dispute. The party receiving notice shall have
                  the  right,  a its own  expense  and  through  counsel  of its
                  choice,  to defend,  settle or compromise any claim or dispute
                  that would entitle the other party to indemnification.  If the
                  party receiving  notice refuses or fails to promptly defend or
                  compromise any such claim or dispute,  the party giving notice
                  shall  have the right to  defend,  settle or  compromise  such
                  claim and may seek  indemnification from the other party under
                  this Agreement.

         (e)      Security for  Indemnification;  Right of Offset. To secure the
                  indemnifications  and obligations set forth in or contemplated
                  in this  Agreement,  a party  to this  Agreement  entitled  to
                  indemnification  from the other  party to this  Agreement,  or
                  entitled to payment of any sum from the other party,  shall be
                  entitled  to offset  against and deduct from any amount due to
                  such other party the amount of any damages, costs, expenses or
                  other   liabilities   against  which  the  party  entitled  to
                  indemnification  has been  indemnified  and/or any payment due
                  from the other party.

12.      Confidentiality. All information not previously disclosed to the public
         or generally known to persons  engaged in the respective  businesses of
         Seller or Buyer that shall  have been  furnished  by Buyer or Seller to
         the other party in connection with the transactions contemplated hereby
         shall not be  disclosed  to any  person  other  than  their  respective
         employees,  directors,  attorneys,   accountants  or  other  designated
         representatives, including certain financial institutions and advisors,
         or  other  than  as  contemplated   herein.   In  the  event  that  the
         transactions  contemplated  by this Agreement shall not be consummated,
         all such  information  that is in documentary form shall be returned to
         the party  furnishing  the same,  including,  to the extent  reasonably
         practicable,  all copies or  reproductions  thereof which may have been
         prepared,  and neither party shall at any time  thereafter  disclose to
         third parties, or use, directly or indirectly, for its own benefit, any
         such  information,  written or oral,  about the  business  of the other
         party hereto.

                                    19 of 22
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13.      Miscellaneous.

13.01.   Notices.  All notices  required or permitted to be given in  connection
         with  the  transactions  contemplated  by this  Agreement  shall  be in
         writing  and  shall  be  deemed  to have  been  sufficiently  given  if
         delivered  personally,  sent  by  facsimile  or  nationally  recognized
         overnight  delivery  service,  or mailed  by  certified  mail,  postage
         prepaid, addressed to:

               If to Seller:        
                                    Steve Wood
                                    455 La Paz Court
                                    Morgan Hill, CA 95122



               With a copy to:
                                    John Teter, Esq.
                                    Suite 301
                                    1550 The Alameda
                                    San Jose, CA 95126

               If to Buyer: 
                                    Attention: Thomas L. Massie
                                               Chairman of the Board & CEO
                                    Focus Enhancements, Inc.
                                    142 North Road
                                    Sudbury, MA  01776

               With a copy to:
                                    Attention:  General Counsel
                                    Focus Enhancements, Inc.
                                    142 North Road
                                    Sudbury, MA  01776

         or to such other  address or addresses as either party shall notify the
         other of in  writing.  Notice  shall be deemed to have been  given upon
         delivery if  delivered  personally  or by  facsimile,  one business day
         after being sent by overnight  delivery  with a  nationally  recognized
         overnight delivery service, or if mailed, three business days following
         deposit in the mail.

13.02.   Modification of Agreement. This Agreement,  including the Schedules and
         Exhibits hereto, contains the entire agreement and understanding of the
         parties  hereto  and may not be  altered,  modified  or  changed in any
         manner whatsoever except by a writing signed by authorized  officers of
         Seller and Buyer.

13.03.   Governing  Law.  This  Agreement is intended to take effect as a sealed
         instrument  and shall be governed by and construed in  accordance  with
         the laws of the Commonwealth of Massachusetts.

13.04.   Headings.  The Section  headings in this Agreement are for  convenience
         only and shall not affect the construction hereof.

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<PAGE>

13.05.   Counterparts.  This Agreement may be executed and delivered in a number
         of counterparts,  each of which, when so executed and delivered,  shall
         be deemed an original and all of which shall  together  constitute  one
         and the same agreement.

13.06.   Exhibits. All Schedules,  Exhibits and documents referred to herein are
         hereby incorporated herein by this reference and shall become a part of
         this Agreement.

13.07.   Assigns.  Any purported assignment of this Agreement by any party shall
         have no force or effect  whatsoever unless the prior written consent of
         the other party to this Agreement is first obtained; provided, however,
         that Buyer may assign this  Agreement,  and its rights and  obligations
         hereunder, to a parent, subsidiary or affiliate.

13.08.   Specific Performance.  Each of the parties acknowledges and agrees that
         the  consideration  relating hereto is unique and that either party may
         have no adequate  remedy at law if the other party fails to perform its
         obligations hereunder and further acknowledges that the aggrieved party
         will be entitled in such event to require specific  performance of this
         Agreement  in addition to any other  rights and  remedies  which it may
         have at law or in equity, without limitation.

13.09.   Severability. If any provision of this Agreement shall be held invalid,
         illegal  or  unenforceable  as  applied to any  particular  case,  such
         circumstance  shall not affect the enforceability of any such provision
         in any other case,  nor shall it affect the validity or  enforceability
         of any other provision of this Agreement.

13.10.   Jurisdiction. Any action to enforce, arising out of, or relative in any
         way to the  provisions of this  Agreement may be brought and prosecuted
         in  such  court  or  courts   located   within  the   Commonwealth   of
         Massachusetts  as is  provided  by  law,  and  Seller  consents  to the
         jurisdiction  of said  court or courts  and to  service  of  process by
         registered  mail,  return  receipt  requested,  or by any other  manner
         provided by law.

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<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on
the day and year first above written.

                                    FOCUS ENHANCEMENTS, INC.



                                    By: ________________________
                                    Name: Thomas L. Massie
                                    Title: Chief Executive Officer


                                    PC VIDEO CONVERSION, INC.



                                    By: ________________________
                                    Name: Steve Wood
                                    Title: President



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