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                                                                    Exhibit 10.7

                             CONSULTING AGREEMENT

     AGREEMENT effective as of July 10, 2000, by and between FOCUS Enhancements,
Inc., a Delaware corporation, having as its principal business address 600
Research Drive, Wilmington, Massachusetts 01887 (hereinafter referred to as the
"Company") and Red & White Enterprises, Inc., a California corporation, with
principal place of business  at 455 La Paz Court, Morgan Hill, CA  95037-5728
(hereinafter referred to as "Consultant").

RECITALS:

     WHEREAS, Consultant has certain skills and abilities that may be useful to
the Company.

     WHEREAS, Consultant is an independent contractor willing to provide
services to the Company for the period contemplated by this Agreement.

TERMS AND CONDITIONS:

     NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and other good and valuable consideration, receipt and
adequacy whereof is hereby acknowledged, the parties hereto hereby agree as
follows:

     1. Retention of Consultant. The Company hereby retains Consultant solely as
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an independent contractor and not as an employee, and Consultant hereby accepts
such retention upon the terms and conditions hereinafter set forth. This
Agreement shall describe a "business relationship" as that term is used in
Employee Stock Option Agreements with the Company, except that if this agreement
should for any reason extend beyond one year, the extended period shall NOT
describe a "business relationship".

     2. Term. Subject to the provisions for termination as hereinafter provided,
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the term of this Agreement shall begin as set forth above and shall terminate no
later than one year from such date unless extended by Company and Consultant.
All work performed under such an extension shall remain subject to these terms
and conditions.

     3. Compensation. For all services rendered by Consultant under this
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Agreement, the Company shall pay Consultant seventy-five ($75) dollars per hour
for work on products, closing Company's Morgan Hill Facility, liquidating
inventory, each as set forth in Work Orders duly executed by an Officer of
Company from time to time which are or shall be attached hereto and shall be a
part hereof ("Work Order(s)"). All Work Orders shall be signed by Company and
Consultant. Work Orders relating to the projects described in Exhibit A to the
Separation Agreement between the Company and J Stephen Wood of even date
herewith ("Separation Agreement") shall be deemed signed by Consultant provided
copies thereof are provided to Consultant in a timely manner. Consultant will be
paid, on a week to week basis, within fifteen (15) business days of receipt of a
correct itemized invoice for services rendered. If Company fails to fully and
timely pay the amount of any invoice from consultant, such invoice shall be
overdue and Consultant shall have no further obligation to provide consulting
services on any Work Order prior to receipt of full payment on all overdue
invoices. However, in the event any overdue invoice results in a delay in
consultant's providing services under a Work Order, the term of the consulting
agreement shall be extended on a day for day basis and should such delay in
services resulting from an overdue invoice result in a delay in providing
services with regard to design problems with the ProAV 1600 Board and the
Quadscan, such delay shall also result in a day-for-day extension of the term of
the escrow created pursuant to Paragraph 5 of the Separation Agreement between
the Company and J Stephen Wood of even date herewith. No additional terms or
conditions on any invoice or time sheet shall have any force or effect, except
if signed by an officer of Company. Travel costs, if any, must be pre-approved
by an officer of Company must be documented by receipts showing all over $25.00.
All air travel shall be made by coach or economy class and any hotels must be
pre-approved by Company. In no event shall invoices hereunder exceed an
aggregate of fifty thousand dollars without specific prior written
authorization. Unless terminated by Consultant or terminated by Company for
cause, Company agrees that during the term hereof, Company will provide Work
Orders that require Consultant to work at least two hundred sixty-six (266)
hours of billable work.
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     4. Duties. The Consultant is being retained to provide consultation to
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Company. Consultant shall during the term hereof use his best efforts to assist
the Company in work on projects, closing Company's Morgan Hill Facility, and
liquidating inventory pursuant to any Work Orders signed by both the Company and
Consultant. It is required that Consultant be available to perform its duties
under this Agreement at such times as the Company requires from time to time,
except that if Consultant shall accept full-time employment from a third-party
employer then Consultant's obligations to the Company shall be limited to phone
consultation outside of Consultant's normal working hours with the new employer.

     5. Extent of Services: Confidentiality. Consultant shall devote such time,
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attention and energies to its duties hereunder as are required. In connection
with the performance of consulting services for Company, it is understood that
the Company may disclose to Consultant, or Consultant may have access to
Company's "Confidential Information" (as hereinafter defined). As used herein,
the term "Confidential Information" shall mean any and all proprietary or
confidential information, whether or not developed by Consultant, including,
without limitation: (i) any and all software programs, derivative works,
products and other results of the services performed by Consultant on a Company
project (together the "Work Product"); (ii) any and all technical information of
Company, including, without limitation, product data and specifications, know-
how, formulae, the source code, and other software information, processes,
inventions, research projects, and product development; (iii) any and all
business information of or relating to Company that is not known to the general
public, including, without limitation, accounting and financial information,
sales and marketing information, research, investment analyses, investment
strategies and techniques, investment transactions and holdings, clients,
personnel, shareholders, and information concerning funds and clients advised by
Company, "know-how" and information, data and material used or licensed by the
Company, including, but not limited to computer software, programming, research,
financial information and analyses, and the like and documentation relating
thereto; (iv) any and all employee information of Company; and (v) confidential
information disclosed to Company by third parties. Consultant acknowledges and
agrees that the Confidential Information constitutes valuable trade secrets of
Company. Company and Consultant agree that a separate confidentiality agreement
has been executed between the parties and that to the extent there is a conflict
between the provisions of this Agreement and the confidentiality agreement, the
terms of the confidentiality agreement shall apply.

     Consultant shall not disclose any Confidential Information to any third
party, nor shall Consultant use any Confidential Information for any purpose
other than the performance of Consultant's services for the Company. All
materials furnished to Consultant by the Company shall be considered
Confidential Information, shall remain the property of the Company and shall be
returned to the Company promptly upon the termination of this Agreement or at
the Company's earlier request. Consultant shall not copy, reproduce or
appropriate for its benefit or the benefit of any third party, any of the
Confidential Information.

     Consultant's obligations under this section will continue for each item of
Confidential Information until such time as Consultant can show that such item
of Confidential Information (i) is or becomes publicly available other than as a
result of any act or failure to act by Consultant; (ii) was known to Consultant,
without an obligation to keep it confidential, prior to Consultant's receipt of
such item of Confidential Information from Company; or (iii) has legally and
properly been received by Consultant from a person other than Company, through
no breach of any agreement with Consultant or Company and without an obligation
to keep it confidential.  Consultant acknowledges that the Company or any other
owner of any Confidential Information may suffer irreparable harm if Consultant
were to violate any of the foregoing undertakings and therefore agrees that, in
addition to any other remedies such party may have, it shall be entitled
(without the requirement of posting any bond) to seek from a court of competent
jurisdiction an injunction restraining the violation of any such undertaking (or
any participation therein).

     6. Ownership of Work Product. All items, programs, ideas and the like and
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all work product, including source code, table structures, forms, reports and
programming tools created by or with the assistance of Consultant pursuant to
this Agreement, whether prepared on or off Company premises, shall be and remain
the property of the Company alone, and shall be deemed to be works made for
hire. To the extent that any items may not, by operation of law, be works made
for hire, Consultant hereby assigns to Company the ownership of all rights,
titles and interests in such items, including but not limited to copyrights, and
the Company shall have the right to obtain and hold in its own name copyright or
other protection which may be available or become available in the items.
Consultant agrees to give Company, its designees, or assignees all assistance
reasonably required to perfect such rights, titles and interests. Consultant
agrees to disclose promptly to Company all inventions, discoveries, formulas,
processes, designs, trade secrets and other useful information and know-how
made, discovered or developed by Consultant alone or in conjunction with any
other person or entity during the term of this Agreement that are based on,
derived from or make use of any Confidential Information or any other
information disclosed to or acquired by Consultant during the term of the
Agreement and all such information shall be deemed Confidential Information.

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     7. Termination. After ninety (90) days of the date hereof, either Company
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or Consultant may cancel this Agreement upon 30 days prior written notice to the
other; however, no additional billable work will be performed by Consultant once
notice of termination has been given. Company may terminate any particular Work
Order at any time upon written notice. Upon receipt of any termination notice,
consultant shall immediately discontinue services to the extent specified in the
notice. In addition upon termination, all unbilled time will be immediately
invoiced and presented for payment. At such time as Company has made such final
payment, Company will have no further obligation or liability to Consultant,
under this Agreement. Consultant agrees that Company may in its sole discretion,
require Consultant to replace any of its personnel performing work for Company.

     8. Insurance. Consultant covenants and agrees that it has, in full force
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and effect, Workers' Compensation, Public Liability and Property Damage
insurance, and that Consultant further indemnifies Company against loss
resulting from injury to Consultant during the course of performance of service
work under this Agreement. Consultant further assumes full responsibility for
any acts of damage or destruction, including personal injury, caused by the
Consultant during the course of such work. Consultant is not responsible for and
shall not indemnify Company for injury or damage caused by negligence of
Company.

     9. Notices. All notices under this Agreement shall be made in writing and
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shall be deemed properly delivered when (i) delivered personally, or (ii) by the
mailing of such notice to the parties entitled thereto, registered or certified
mail, postage prepaid to the parties at the addresses set forth above, and in
the case of Company, to the attention of the General Counsel.

     10. Nonassignability. Consultant shall not subcontract or assign the
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Agreement, or otherwise dispose of its right, title, or interest therein or any
part thereof to any third party, without obtaining the prior written consent of
the Company. Consent by the Company to any assignment or subcontract of the
Agreement shall not be deemed to create a contractual relationship between the
Company and the subcontracting party or assignee.

     11. Compliance with Law and Company Policies; Personal Securities
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Transactions. Consultant shall perform its duties hereunder in accordance with
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all applicable federal, state and local laws, rules, regulations and codes.
Consultant shall comply with all Company standards, rules, procedures and
policies relating to or affecting the conduct of Consultant's personnel.

     Without limiting the foregoing, Consultant will comply with Company's rules
and policies with respect to security of and access to Company's premises and
telephone and electronic mail facilities. Any software Consultant wishes to load
onto Company's computers or computer system must be approved in writing by
Company prior to Consultant loading such software. Company agrees to inform
Consultant of and Consultant agrees to follow all Company standards and policies
related to the Company computer systems (e.g., security, environmental, disaster
recovery, virus detection and removal). Consultant shall use Company software,
hardware and data solely for the purposes contemplated hereby.

     Without limiting the foregoing, Consultant will comply with Company's Code
of Ethics which restricts personal securities transactions executed, directly or
indirectly, by or on behalf of any person (including Consultant and Consultant's
directors, officers, employees, agents, consultants and representatives) with
access to Company's Confidential Information. In the event Consultant desires to
engage in any personal securities transaction within the scope of Company's Code
of Ethics during the term of this Agreement, it shall first contact Company's
General Counsel in order to ensure that Consultant is in full compliance with
Company's Code of Ethics.

     Consultant shall indemnify Company for any loss or damage that may be
sustained by Company by reason of Consultant's failure to comply with this
Section 12.

     12. Subcontracting, Responsibility for Employees and Agents. The hiring or
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use of outside services, subcontractors or consultants by Consultant in
connection with this Agreement shall not be permitted without the prior written
approval of Company. Consultant shall be fully responsible for all acts or
omissions of its employees, officers, directors, agents, consultants and
representatives, including without limitation their compliance with the terms of
this Agreement.

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     13. Consultant's Employees. Consultant represents, warrants and covenants
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that all personnel used by Consultant in performing its duties hereunder shall
be employees of Consultant. In no event shall such personnel be deemed in any
way to be employees of Company. Consultant acknowledges and agrees that this
consulting arrangement shall not give or extend to Consultant any rights with
respect to contributions by the Company to any deferred compensation plan, bonus
plans, or fringe benefits (including, but in no way limited to holiday pay,
medical or life insurance benefits, sick pay or paid vacation), and further
agrees to hold the Company harmless from any employment, income or other taxes
or any other damages which may be assessed in connection with payments to
Consultant or which may be suffered by Company due to any breach of the
foregoing warranties.

     14. Miscellaneous. This Agreement and the Confidentiality Agreement contain
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the entire agreement between the parties hereto and supersedes all prior and
contemporaneous agreements, arrangements, negotiations and understandings
between the parties hereto, relating to the subject matter hereof. There are no
other understandings, statements, promises or inducements, oral or otherwise,
contrary to the terms of these agreements. 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 shall constitute, a waiver of any other
provision hereof, whether or not similar, nor shall such waiver constitute a
continuing waiver, and no waiver shall be binding unless executed in writing by
the party making the waiver. Consultant's obligations in Sections 5, 6 and 7
shall survive termination of this Agreement.

     No supplement, modification or amendment of any term, provision or
condition of these agreements shall be binding or enforceable unless executed in
writing by the parties hereto. The subject headings of the articles, paragraphs
and subparagraphs of this Agreement are included solely for purposes of
convenience and reference only, and shall not be deemed to explain, modify,
limit, amplify or aid in the meaning, construction or interpretation of any of
the provisions of this Agreement. Should any part, term or provision of this
Agreement or any document required herein to be executed be declared invalid,
void or unenforceable, all remaining parts, terms and provisions hereof shall
remain in full force and effect and shall in no way be invalidated, impaired or
affected thereby. These agreements shall be governed by and construed and
enforced in accordance with and subject to the internal laws of the Commonwealth
of Massachusetts. Each party hereby submits to the exclusive jurisdiction of the
appropriate state or federal courts in Massachusetts

   15. Counterparts/Facsimile.  This Agreement may be executed in multiple
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counterparts, each of which may be executed by less than all of the parties and
shall be deemed to be an original instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument.  Except as otherwise stated herein, in
lieu of the original documents, a facsimile transmission or copy of the original
documents shall be as effective and enforceable as the original.



     IN WITNESS WHEREOF, the undersigned have executed this Agreement by duly
authorized officers thereof as of the date first above written.

FOCUS Enhancements, Inc.            Consultant


By:                                   By:
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Print: Brett A. Moyer                 Print:
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Title: Executive V.P. & COO           Title:
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