Document:

Exhibit 10.23

               FORM OF COMMON STOCK AND WARRANT PURCHASE AGREEMENT

         THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT is dated as of July 1,
2003  (this  "Purchase   Agreement"  or  "Agreement"),   by  and  between  FOCUS
ENHANCEMENTS,  INC.,  a  Delaware  corporation,  having its  principal  place of
business  located  at  1370  Dell  Avenue,   Campbell,   California  95008  (the
"Company"),  and each of the Investors listed on Annex A hereto (the "Investor",
and collectively the "Investors").

                               W I T N E S S E T H

         WHEREAS,  the Company wishes to sell to the respective  Investors,  and
such  respective  Investors are willing to buy from the Company,  subject to the
terms  and  conditions  set forth  herein,  Two  Million  Two  Hundred  Thousand
(2,200,000)  shares  of Common  Stock,  par value  $.01 per share  (the  "Common
Stock") of the Company.

         NOW, THEREFORE, for and in consideration of the premises and the mutual
agreement  contained herein and for other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

         A.  Definitions.  As used herein,  each of the following  terms has the
meaning set forth below, unless the context otherwise requires:

                  (i)  "Closing  Date"  means  the  date of the  closing  of the
purchase and sale of the Shares and Warrants, as provided herein.

                  (ii) "Company  Control Person" means each director,  executive
officer,  promoter,  and such  other  Persons as may be deemed in control of the
Company  pursuant  to Rule 405 under the 1933 Act or  Section 20 of the 1934 Act
(as hereinafter defined).

                  (iii)  "Effective  Date"  means  the  effective  date  of  the
Registration  Statement covering the Registrable  Securities (as those terms are
defined in the Registration Rights Agreement) relating to the Shares.

                  (iv) "Escrow Funds" means the Purchase Price  delivered to the
Escrow Agent as contemplated by Sections 5(b) and (c) hereof.

                  (v) "Last Audited Date" means December 31, 2002.

                  (vi) "Investor Control Person" means each director,  executive
officer,  promoter,  and such  other  Persons as may be deemed in control of the
Investor pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.

                  (vii) "Majority In Interest" means Investors  owning in excess
of 51% of the Common Stock on the relevant date.

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                  (viii) "Material Adverse Effect" means an event or combination
of events, which individually or in the aggregate,  would reasonably be expected
to (w) adversely affect the legality,  validity or  enforceability of the Shares
or any of the Transaction  Agreements,  (x) have or result in a material adverse
effect on the results of  operations,  assets,  or  financial  condition  of the
Company  and its  subsidiaries,  taken  as a whole,  (y)  adversely  impair  the
Company's  ability to perform fully on a timely basis its obligations  under any
of the Transaction  Agreements or the transactions  contemplated thereby, or (z)
materially and adversely affect the value of the rights granted to the Investors
in the Transaction Agreements.

                  (ix)  "Principal  Trading  Market"  means the NASDAQ  SmallCap
Market.

                  (x)  "Registration  Rights  Agreement"  means the Registration
Rights  Agreement  in the form  annexed  hereto as Annex IV, as executed by each
Investor and the Company simultaneously with the execution of this Agreement.

                  (xi)  "Shares"  means the shares of Common Stock issued to the
Investors.

                  (xii) "Transaction  Agreements" means this Purchase Agreement,
the Joint  Escrow  Instructions,  and the  Registration  Rights  Agreement,  and
includes all ancillary documents referred to in those agreements.

                  (xiii) "Warrants" means warrants to purchase 440,000 Shares in
the form attached hereto as Annex VI.

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

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

         1. PURCHASE AND SALE; MUTUAL  DELIVERIES.  (a) Upon the following terms
and  conditions,  the  Company  shall  issue and sell to the  Investors  and the
Investors  shall purchase from the Company that number of shares of Common Stock
equal to Two Million Two Hundred Thousand Dollars  ($2,200,000)  (the "Aggregate
Amount") divided by the Purchase Price (as hereinafter defined), resulting in an
aggregate of 2,200,000  shares (the "Shares") and Warrants to be issued upon the
payment of the  Purchase  Price by the  respective  Investors in the amounts and
denominations  set forth in Annex I. The Purchase Price is $1.00 per share.  The
Company's  obligation  to sell the Shares to each  Investor and each  Investor's
obligation  to purchase  Shares from the  Company is several  and  represents  a
separate agreement.  Upon receipt of the Purchase Price by the Escrow Agent, the
Company  shall  deliver  to the  respective  Investor  one or more  certificates
representing the Shares, bearing substantially the following legend:

         THE  SECURITIES  REPRESENTED  HEREBY (THE  "SECURITIES")  HAVE NOT BEEN
         REGISTERED   UNDER  THE   SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
         "SECURITIES  ACT"),  OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
         SOLD OR OFFERED  FOR SALE IN THE ABSENCE OF AN  EFFECTIVE  REGISTRATION
         STATEMENT FOR THE SECURITIES OR AN

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         OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT
         SUCH REGISTRATION IS NOT REQUIRED.

         (b) (i) The respective  Investor  acknowledges  that (1) the Shares and
         the  Warrants  have not been and are not  being  registered  under  the
         provisions of the 1933 Act and, except as provided in the  Registration
         Rights  Agreement  or otherwise  included in an effective  registration
         statement,  the Shares and the Warrants have not been and are not being
         registered  under the 1933 Act, and may not be  transferred  unless (A)
         subsequently  registered  thereunder  or (B) the  Investor  shall  have
         delivered to the Company an opinion of counsel, reasonably satisfactory
         in form,  scope and  substance to the  Company,  to the effect that the
         Shares  and/or  Warrants  to be  sold  or  transferred  may be  sold or
         transferred  pursuant to an exemption from such  registration;  (2) any
         sale of the  Shares  and/or  Warrants  made  in  reliance  on Rule  144
         promulgated  under the 1933 Act may be made only in accordance with the
         terms of said Rule and  further,  if said Rule is not  applicable,  any
         resale of such Shares and/or Warrants under  circumstances in which the
         seller,  or the Person  through whom the sale is made, may be deemed to
         be an  underwriter,  as that term is used in the 1933 Act,  may require
         compliance  with some other  exemption  under the 1933 Act or the rules
         and regulations of the Securities and Exchange Commission ("Commission"
         or the "SEC")  thereunder;  and (3)  neither  the Company nor any other
         Person is under any  obligation  to  register  the Shares and  Warrants
         (other than pursuant to the  Registration  Rights  Agreement) under the
         1933 Act.

                  (ii) Within three (3) business days (such third  business day,
the "Delivery  Date") after the business day on which the Company has received a
notice of sale (by  facsimile  or other  delivery),  the  original  Common Stock
certificate  (and if the same are not delivered to the Company on the same date,
the date of delivery of the second of such items) from a given Investor, and any
relevant  state  "blue  sky"  information  (if  necessary),  the  Company at its
expense,  (i) shall  deliver,  and shall  cause  legal  counsel  selected by the
Company  to  deliver,  to its  transfer  agent  (with  copies  to  Investor)  an
appropriate  instruction  and  opinion  of such  counsel,  for the  delivery  of
unlegended  Shares  issuable  pursuant  to the  registration  statement  for the
Shares,  provided that such registration  statement at the time of sale has been
declared  effective by the Commission and is current (the "Unlegended  Shares");
and (ii) transmit the certificates representing the Unlegended Shares (together,
unless otherwise instructed by the Investor, with Common Stock not sold), to the
Investor at the address  specified in a notice of sale (which address may be the
Investor's  address  for  notices  as  contemplated  by  Section  9 hereof  or a
different address) via express courier, by electronic transfer or otherwise.

                  (iii) In lieu of delivering physical certificates representing
the Unlegended  Shares, if the Company's  transfer agent is participating in the
Depository  Trust Company ("DTC") Fast Automated  Securities  Transfer  program,
upon request of an Investor and its compliance with the provisions  contained in
this paragraph,  so long as the  certificates  therefor do not bear a legend and
the Investor  holding same is not obligated to return such  certificate  for the
placement of a legend  thereon,  the Company shall use its best efforts to cause
its transfer

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agent to electronically  transmit the Unlegended Shares by crediting the account
of such Investor's  Prime Broker with DTC through its Deposit  Withdrawal  Agent
Commission system.

                  (c) The Company shall also deliver,  or cause to be delivered,
the original or execution copies of this Purchase Agreement.

                  (d) There are no preemptive  rights of any  shareholder of the
Company,  as such,  to acquire the Shares  and/or the  Warrants.  No party has a
currently exercisable right of first refusal which would be applicable to any or
all of the transactions contemplated by the Transaction Agreements.

         2.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.   The  Company
represents and warrants to each respective Investor that:

                  (a) The Company has the corporate power and authority to enter
into this Purchase  Agreement,  and to perform its  obligations  hereunder.  The
execution  and  delivery  by the  Company  of this  Purchase  Agreement  and the
consummation by the Company of the  transactions  contemplated  hereby have been
duly  authorized by all necessary  corporate  action on the part of the Company.
This Purchase  Agreement has been duly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company  enforceable against
it in  accordance  with its  respective  terms,  subject  to the  effects of any
applicable bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
affecting creditors' rights generally and to general equitable principles.

                  (b) Except as set forth in the SEC Documents  (as  hereinafter
defined) or Annex V, there is no pending,  or to the  knowledge  of the Company,
threatened, judicial, administrative or arbitral action, claim, suit, proceeding
or  investigation  which might  affect the  validity or  enforceability  of this
Purchase  Agreement  or which  involves  the  Company  and  which  if  adversely
determined,  could  reasonably be expected to have a material  adverse effect on
the Company and its subsidiaries taken as a whole.

                  (c)  Except  as  contemplated  by  the   Registration   Rights
Agreement, no consent or approval of, or exemption by, or filing with, any party
or  governmental  or public body or authority is required in connection with the
execution,  delivery and performance under this Purchase Agreement or the taking
of any action contemplated hereunder or thereunder.

                  (d)  The  Company  has  been  duly  organized  and is  validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation.

                  (e) The execution,  delivery and  performance of this Purchase
Agreement by the Company, and the consummation of the transactions  contemplated
hereby,  will not (i) violate any  provision  of the  Company's  certificate  of
incorporation or bylaws, (ii) violate,  conflict with or result in the breach of
any of the terms  of,  result  in a  material  modification  of the  effect  of,
otherwise,  give  any  other  contracting  party  the  right  to  terminate,  or
constitute (or with notice or lapse of time or both constitute) a default under,
any  contract  or other  agreement  to which the  Company is a party or by or to
which the Company or any of the Company's  assets or properties  may be bound or
subject, (iii) violate any order, judgment,  injunction,  award or decree of any
court,  arbitrator or governmental  or regulatory body by which the Company,  or
the assets or

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<PAGE>

properties of the Company are bound and (iv) to the Company's knowledge, violate
any statute, law or regulation.

                  (f) The Shares have been duly  authorized and, when issued and
paid for in accordance  with this  Agreement,  will be duly and validly  issued,
fully  paid  and  nonassessable,   free  and  clear  of  all  liens,  claims  or
encumbrances.  The Company has reserved from its duly  authorized  capital stock
the maximum number of shares of Common Stock issuable pursuant to this Agreement
and the  Warrants in order to issue the full number of Warrant  Shares as are or
may become issuable in accordance with the Warrants.

                  (g)  Assuming  the  accuracy  of  the  Investors'   respective
representations  and  warranties  set forth herein,  no  registration  under the
Securities  Act is  required  for the offer and sale of the Shares  and  Warrant
Shares by the Company to the Investors.  The Company is eligible to register the
resale  of its  Common  Stock  for  resale  by the  Purchasers  under  Form  S-3
promulgated under the Securities Act.

                  (h) The  issuance  and sale of the Shares  hereunder  does not
contravene  the rules and  regulations  of the  Nasdaq  SmallCap  Market  and no
approval of the shareholders of the Company is required for the Company to issue
and deliver to the Investors the maximum number of Shares  contemplated  in this
transaction.

         3.  REPRESENTATIONS  AND  WARRANTIES  OF THE  INVESTORS.  Each Investor
hereby represents and warrants to the Company that:

                  (a) The  Investor  has the  corporate  power and  authority to
enter into this Purchase Agreement and to perform its obligations hereunder. The
execution  and  delivery by the  Investor of this  Purchase  Agreement,  and the
consummation by the Investor of the transactions  contemplated hereby, have been
duly authorized by all necessary  corporate  action on the part of the Investor.
This Purchase Agreement has been duly executed and delivered by the Investor and
constitutes  the valid  and  binding  obligation  of the  Investor,  enforceable
against it in accordance  with its respective  terms,  subject to the effects of
any applicable  bankruptcy,  insolvency,  reorganization,  moratorium or similar
laws affecting creditors' rights generally and to general equitable principles.

                  (b) The execution, delivery and performance by the Investor of
this Purchase Agreement,  and the consummation of the transactions  contemplated
hereby,  do not and will not breach or constitute a default under any applicable
law  or  regulation  or of any  agreement,  judgment,  order,  decree  or  other
instrument binding on the Investor.

                  (c) The  Investor  has such  knowledge  and prior  substantial
investment experience in financial and business matters, including investment in
non-listed and  non-registered  securities,  and has had the opportunity to read
the SEC  Documents  and to evaluate  the merits and risks of  investment  in the
Company and the Shares.

                  (d) The Investor is an  "accredited  investor" as that term is
defined in Rule 501(a) of Regulation D promulgated under the 1933 Act.

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<PAGE>

                  (e)  Prior  to  the  execution  of  this  Purchase  Agreement,
Investors and any affiliates of Investors have not  participated  in any hedging
transactions involving the Company's Common Stock.

                  (f) The Investor is acquiring the Shares and Warrants,  solely
for the Investor's own account for investment and not with a view to or for sale
in connection with a distribution of any of the Shares or the Warrants.

                  (g) Except as set for in the  Registration  Rights  Agreement,
the  Investor  does not have a  present  intention  to sell  the  Shares  or the
Warrants,  nor a present  arrangement or intention to effect any distribution of
any of the Shares or Warrants to or through any person or entity for purposes of
selling,  offering,  distributing or otherwise disposing of any of the Shares or
the Warrants.

                  (h) The Investor may be required to bear the economic  risk of
the investment  indefinitely because none of the Shares or Warrants may be sold,
hypothecated or otherwise disposed of unless  subsequently  registered under the
Securities  Act  and  applicable  state  securities  laws or an  exemption  from
registration  is  available.  Any  resale of any of the  Shares can be made only
pursuant  to (i) a  registration  statement  under the  Securities  Act which is
effective and current at the time of sale or (ii) a specific  exemption from the
registration requirements of the Securities Act. In claiming any such exemption,
the  Investor  will,  prior to any offer or sale or  distribution  of any Shares
advise the Company  and,  if  requested,  provide  the Company  with a favorable
written opinion of counsel, in form and substance satisfactory to counsel to the
Company,  as to the  applicability  of such  exemption to the  proposed  sale or
distribution.

                  (i) The Investor  understands  that the exemption  afforded by
Rule 144  promulgated  by the  Commission  under the Securities Act ("Rule 144")
will not become available for at least one year from the date of payment for the
Shares and any sales in  reliance on Rule 144,  if then  available,  can be made
only in accordance with the terms and conditions of that rule, including,  among
other things, a requirement that the Company then be subject to, and current, in
its periodic  filing  requirements  under the  Exchange  Act,  and,  among other
things, a limitation on the amount of shares of Common Stock that may be sold in
specified time periods and the manner in which the sale can be made; that, while
the Company's  Common Stock is registered under the Exchange Act and the Company
is presently subject to the periodic reporting requirements of the Exchange Act,
there can be no assurance that the Company will remain subject to such reporting
obligations or current in its filing obligations;  and that, in case Rule 144 is
not applicable to a disposition of the Shares,  compliance with the registration
provisions of the Securities Act or some other exemption from such  registration
provisions will be required.

                  (j) The Investor  understands  that legends shall be placed on
the  certificates  evidencing  the Shares to the effect that the Shares have not
been registered under the Securities Act or applicable state securities laws and
appropriate  notations  thereof will be made in the Company's stock books.  Stop
transfer  instructions will be placed with the transfer agent of the Shares. The
Investor understands that the Warrants will bear similar legends.

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                  (k) Except as set forth in the letter  agreement  between  the
Company  and TN  Capital  Equities,  Ltd.  dated June 9, 2003 and the Term Sheet
between  the  Company  and  vFinance  Investments,  Inc.,  dated  June 30,  2003
(collectively,  the "Term Sheets"), the Investor has taken no action which would
give rise to any claim by any person for brokerage commission,  finder's fees or
similar  payments  by  Investor  relating  to  this  Purchase  Agreement  or the
transactions  contemplated  hereby.  The Company shall have no  obligation  with
respect to such fees or with respect to any claims made by or on behalf of other
persons for fees of a type  contemplated in this Section 3(k) that may be due in
connection  with  the  transactions  contemplated  hereby.  The  Investor  shall
indemnify and hold harmless the Company,  its  employees,  officers,  directors,
agents,  and partners,  and their  respective  Affiliates,  from and against all
claims,  losses,   damages,  costs  (including  the  costs  of  preparation  and
attorney's  fees) and  expenses  suffered  in  respect  of any such  claimed  or
existing fees, as and when incurred.

                  (l) The execution,  delivery and  performance of this Purchase
Agreement by the Investor, and the consummation of the transactions contemplated
hereby,  will  not  (i)  violate  any  provision  of  the  Investor's  corporate
organizational documents, (ii) violate, conflict with or result in the breach of
any of the terms  of,  result  in a  material  modification  of the  effect  of,
otherwise,  give  any  other  contracting  party  the  right  to  terminate,  or
constitute  (or with  notice  or lapse of time or  both) a  default  under,  any
contract or other  agreement  to which the Investor is a party or by or to which
the  Investor  or any of the  Investor's  assets or  properties  may be bound or
subject, (iii) violate any order, judgment,  injunction,  award or decree of any
court,  arbitrator or governmental or regulatory body by which the Investor,  or
the assets or  properties  of the Investor are bound and (iv) to the  Investor's
knowledge, violate any statute, law or regulation,  including but not limited to
the USA Patriot Act.

                  (m) Except with respect to sale of the Shares pursuant to Rule
144, prior to having any legend  removed from the Shares,  Investor shall comply
with the applicable state blue sky laws and, to the extent  practicable,  notify
the  Company of the State,  if any, in which the sale of such Shares by Investor
has taken place.

         4. COVENANTS OF THE COMPANY.

                  (a) Registration  Rights Agreement.  The Company covenants and
agrees to enter into a Registration  Rights Agreement governing the registration
of the Shares and the  Warrant  Shares with the  Investors  dated as of the date
hereof.

                  (b) Current Public  Information.  The Company has furnished or
made  available to each  Investor  true and correct  copies of all  registration
statements,  reports  and  documents,  including  proxy  statements  (other than
preliminary proxy  statements),  filed with the Commission by or with respect to
the Company  since  December  31, 2002 and prior to the date of this  Agreement,
pursuant to the  Securities  Act or the  Exchange  Act  (collectively,  the "SEC
Documents").  The SEC  Documents are the only filings made by or with respect to
the Company since December 31, 2002 pursuant to Sections  13(a),  13(c),  14 and
15(d) of the  Exchange  Act or pursuant to the  Securities  Act. The Company has
filed all reports,  schedules, forms, statements and other documents required to
be filed under  Sections  13(a),  13(c),  14 and 15(d) of the Exchange Act since
December 31, 2002 and prior to the date of this Agreement.

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<PAGE>

                  (c)  SEC  Documents.  Except  pursuant  to  a  confidentiality
agreement,  if any, the Company has not provided to the Investor any information
which  according  to  applicable  law,  rule or  regulation,  should  have  been
disclosed  publicly  prior to the date  hereof by the  Company but which has not
been so disclosed.  As of their  respective dates or their restated dates (if so
restated),  the SEC Documents complied, and all similar documents filed with the
SEC prior to the Closing Date will comply,  in all  material  respects  with the
requirements  of the Securities Act or the Exchange Act, as the case may be, and
rules and regulations of the SEC promulgated thereunder and other federal, state
and local laws, rules and regulations applicable to such SEC Documents, and none
of the SEC Documents contained, nor will any similar document filed with the SEC
prior to the Closing Date  contain,  any untrue  statement of a material fact or
omit to state a material  fact  required to be stated  therein or  necessary  in
order to make the statements  therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC  Documents,  as of the dates  thereof (or the restated  dates,  if so
restated),  complied,  and all similar documents filed with the SEC prior to the
Closing Date will comply,  as to form in all material  respects with  applicable
accounting  requirements  and the published rules and regulations of the SEC and
other  applicable  rules and regulations  with respect  thereto.  Such financial
statements  were  prepared in  accordance  with  generally  accepted  accounting
principles applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial  statements or the notes thereto
or (ii) in the case of unaudited interim statements,  to the extent they may not
include footnotes or may be condensed or summary statements as permitted by Form
10-QSB of the SEC) and fairly  present in all material  respects  the  financial
position  of the  Company  and its  consolidated  subsidiaries  as of the  dates
thereof  and the  consolidated  results  of  operations  and cash  flows for the
periods  then ended  (subject,  in the case of unaudited  statements,  to normal
year-end audit adjustments).

                  (d) Absence of Certain  Changes.  Since the Last Audited Date,
there has been no material adverse change and no Material Adverse Effect, except
as disclosed in the Company's SEC Documents. Since the Last Audited Date, except
as provided in the  Company's  SEC  Documents or  disclosed  in the  Transaction
Documents,  the Company has not (i)  incurred or become  subject to any material
liabilities (absolute or contingent) except liabilities incurred in the ordinary
course of business consistent with past practices;  (ii) discharged or satisfied
any material lien or  encumbrance  or paid any material  obligation or liability
(absolute or contingent),  other than current  liabilities  paid in the ordinary
course of business  consistent with past  practices;  (iii) declared or made any
payment or distribution  of cash or other property to shareholders  with respect
to its capital  stock,  or  purchased  or redeemed,  or made any  agreements  to
purchase or redeem,  any shares of its  capital  stock;  (iv) sold,  assigned or
transferred any other tangible assets,  or canceled any debts or claims,  except
in the ordinary course of business consistent with past practices;  (v) suffered
any substantial losses or waived any rights of material value, whether or not in
the ordinary course of business,  or suffered the loss of any material amount of
existing business; (vi) made any changes in employee compensation, except in the
ordinary course of business consistent with past practices; or (vii) experienced
any material  problems with labor or management in connection with the terms and
conditions of their employment.

                  (e)  Absence  of  Litigation.   Except  as  disclosed  in  the
Company's SEC Documents,  (i) there is no action, suit,  proceeding,  inquiry or
investigation  before or by any court,  public  board or body pending or, to the
knowledge of the Company,  threatened against or

<PAGE>

affecting the Company before or by any governmental authority or nongovernmental
department,  commission,  board, bureau,  agency or instrumentality or any other
Person, wherein an unfavorable decision, ruling or finding would have a Material
Adverse Effect or which would  adversely  affect the validity or  enforceability
of, or the authority or ability of the Company to perform its obligations under,
any of the  Transaction  Agreements;  (ii) the Company is not aware of any valid
basis for any such claim that (either  individually or in the aggregate with all
other such  events and  circumstances)  could  reasonably  be expected to have a
Material  Adverse  Effect;  or (iii)  there are no  outstanding  or  unsatisfied
judgments,  orders,  decrees,  writs,  injunctions or  stipulations to which the
Company  is a party or by  which  it or any of its  properties  is  bound,  that
involve the transaction  contemplated herein or that, alone or in the aggregate,
could reasonably be expect to have a Material Adverse Effect.

                  (f) Public  Announcement.  As soon as practicable  the Company
shall issue a press release  disclosing the material  terms of the  transactions
contemplated  hereby  and  file a  Current  Report  on Form 8-K  disclosing  the
transactions  contemplated hereby. In addition, the Company will make such other
filings and notices in the manner and time  required by the  Commission  and the
Nasdaq SmallCap Market.

                  (g) Maintain Listing/S-3 Qualification.  The Company shall use
commercially  reasonable efforts to maintain the listing of the Shares,  Warrant
Shares and the Common Stock on the Nasdaq SmallCap Market. The Company shall use
commercially reasonable efforts to continue to meet the "registrant eligibility"
requirements for a secondary  offering as set forth in the general  instructions
in Form S-3 to enable the registration of the Registrable Securities (as defined
in the Registration Rights Agreement).

                  (h) No Undisclosed  Liabilities or Events.  The Company has no
liabilities  or  obligations  other  than  those  disclosed  in the  Transaction
Agreements  or the  Company's  SEC  Documents or those  incurred in the ordinary
course  of the  Company's  business  since  the  Last  Audited  Date,  or  which
individually  or in the aggregate,  do not or would not have a Material  Adverse
Effect.  No event or  circumstances  has  occurred or exists with respect to the
Company or its properties, business, operations, financial condition, or results
of operations, which, under applicable law, rule or regulation,  requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly  announced or disclosed.  There are no proposals  currently
under  consideration or currently  anticipated to be under  consideration by the
Board of Directors or the executive officers of the Company which proposal would
(x) change the certificate of incorporation or other charter document or by-laws
of the  Company,  each as  currently  in  effect,  with or  without  shareholder
approval, which change would reduce or otherwise adversely affect the rights and
powers  of  the   shareholders   of  the  Common  Stock  or  (y)  materially  or
substantially change the business,  assets or capital of the Company,  including
its interests in subsidiaries.

                  (i)   Trading  in   Securities.   The   Company   specifically
acknowledges that, except to the extent  specifically  provided herein or in any
of the other Transaction  Agreements (but limited in each instance to the extent
so specified),  and subject to applicable state and federal securities laws, the
Investor  retains the right (but is not  otherwise  obligated)  to buy,  sell or
otherwise  trade in the Shares of the Company,  including,  but not  necessarily
limited to, the Shares,  at any time before,  contemporaneous  with or after the
execution  of this  Purchase

                                       9
<PAGE>

Agreement  or from  time to  time  and in any  manner  whatsoever  permitted  by
applicable federal and state securities laws.

                  (j) Fees to Brokers,  Finders and Others.  Except as set forth
in the Term Sheets, the Company has taken no action which would give rise to any
claim by any person for brokerage commission,  finder's fees or similar payments
by  the  Company  relating  to  this  Purchase  Agreement  or  the  transactions
contemplated hereby. Investor shall have no obligation with respect to such fees
or with respect to any claims made by or on behalf of other  persons for fees of
a type  contemplated in this Section 4(j) that may be due in connection with the
transactions  contemplated hereby. The Company shall indemnify and hold harmless
each of Investor, its employees,  officers, directors, agents, and partners, and
their respective Affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and attorney's  fees) and expenses  suffered
in respect of any such claimed or existing fees, as and when incurred.

                  (k)  Use of  Proceeds.  The  Company  will  use  the  proceeds
received  hereunder  (excluding  amounts  paid by the  Company  for legal  fees,
finder's fees and escrow fees in connection with the sale of the Shares) for the
purposes  contemplated by the schedule attached hereto as Annex VII, and, unless
specifically  consented to in advance in each instance by a majority in interest
of the  Investors,  the  Company  shall not,  directly or  indirectly,  use such
proceeds for any loan to or  investment  in any other  corporation,  partnership
enterprise or other Person, including any of its Affiliates.

         5. DELIVERY OF SHARES.

                  (a) In accordance with the Joint Escrow Instructions, attached
hereto as Annex II and made a part hereof,  promptly  following  the delivery by
the  respective  Investor  of the  respective  Purchase  Price for the Shares in
accordance  with  Section 1 hereof,  the Company will  irrevocably  instruct its
transfer agent to issue to such Investor legended certificates  representing the
Shares and the respective Warrants.

                  (b) Form of Payment; Delivery of Certificates:

                           (i) The  respective  Investor  shall pay the Purchase
Price for the Shares by delivering  immediately  available  good funds in United
States  Dollars to the Escrow  Agent no later than the date prior to the Closing
Date.

                           (ii) No later than the Closing Date, but in any event
promptly following payment by the respective Investor to the Escrow Agent of the
Purchase Price, the Company shall deliver the Shares and the Warrants, each duly
executed  on  behalf of the  Company  and  issued in the name of the  respective
Investor, to the Escrow Agent.

                           (iii) By  signing  this  Agreement,  each  respective
Investor and the Company,  subject to acceptance by the Escrow Agent,  agrees to
all of the terms and  conditions  of, and  becomes a party to, the Joint  Escrow
Instructions,  all of the  provisions of which are  incorporated  herein by this
reference as if set forth in full.

                                       10
<PAGE>

                  (c) Method of Payment.  Payment of the Purchase Price shall be
made by wire transfer wire transfer of funds to:

                      Bank of New York
                      350 Fifth Avenue
                      New York, New York 10001

                      ABA# 021000018
                      For  credit to the  account  of  Krieger & Prager LLP
                      Account No.: 637-2993136

                      Re: FOCUS Transaction

                  (d) [RESERVED]

                  (e) [RESERVED]

         6. CLOSING DATE.

                  (a) The  Closing  Date  shall  occur on the date  which is the
first NYSE trading day after each of the conditions  contemplated  by Sections 7
and 8 hereof  shall have  either been  satisfied  or been waived by the party in
whose favor such conditions run.

                  (b) The closing of the purchase and issuance of the Shares and
the Warrants  shall occur on the Closing Date at the offices of the Escrow Agent
and shall take place no later than 3:00 P.M., New York time, on such day or such
other time as is mutually  agreed upon by the Company and a majority in interest
of the Investors.

                  (c) Notwithstanding anything to the contrary contained herein,
the Escrow Agent will be  authorized  to release the Escrow Funds to the Company
and to others and to release the other Escrow  Property on the Closing Date upon
satisfaction  of the  conditions  set forth in  Sections  7 and 8 hereof  and as
provided in the Joint Escrow Instructions.

         7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

         Each Investor  understands  that the  Company's  obligation to sell the
Shares and issue the Warrants to such Investor pursuant to this Agreement on the
Closing Date is conditioned upon:

                  (a) The execution and delivery of this Purchase  Agreement and
the Registration Rights Agreement by such Investor;

                  (b)  Delivery  by such  Investor  to the Escrow  Agent of good
funds as payment in full of an amount equal to the Purchase Price for the Shares
in accordance with this Purchase Agreement;

                  (c) The accuracy on such  Closing Date of the  representations
and warranties of such Investor contained in this Purchase Agreement, each as if
made on such date,  and the

                                       11
<PAGE>

performance  by such  Investor  on or  before  such  date of all  covenants  and
agreements of the Investor required to be performed on or before such date; and

                  (d) There shall not be in effect any law,  rule or  regulation
prohibiting or restricting the transactions  contemplated  hereby,  or requiring
any consent or approval which shall not have been obtained.

         8. CONDITIONS TO THE INVESTORS' OBLIGATION TO PURCHASE.

         The Company  understands that the respective  Investor's  obligation to
purchase the Shares and receive the Warrants on the Closing Date is  conditioned
upon:

                  (a) The execution and delivery of this Purchase  Agreement and
the other Transaction Agreements by the Company;

                  (b)  Delivery  by the  Company  to  the  Escrow  Agent  of the
Certificates and Warrants in accordance with this Purchase Agreement;

                  (c) The accuracy in all material respects on such Closing Date
of the  representations and warranties of the Company contained in this Purchase
Agreement,  each as if made on such date, and the  performance by the Company on
or before such date of all covenants and  agreements of the Company  required to
be performed on or before such date;

                  (d) On such Closing Date, the  Registration  Rights  Agreement
shall be in full  force and  effect  and the  Company  shall  not be in  default
thereunder;

                  (e) On such Closing Date, the  respective  Investor shall have
received  an opinion of counsel  for the Company  (and  delivered  to the Escrow
Agent),  dated  the  Closing  Date,  in form,  scope  and  substance  reasonably
satisfactory to the Investor, substantially to the effect set forth in Annex III
attached hereto;

                  (f) There shall not be in effect any law,  rule or  regulation
prohibiting or restricting the transactions  contemplated  hereby,  or requiring
any consent or approval which shall not have been obtained; and

                  (g) From and  after  the date  hereof  to and  including  such
Closing Date, each of the following  conditions  will remain in effect:  (i) the
trading of the Common  Stock shall not have been  suspended by the SEC or on the
Principal  Trading  Market;  (ii) no minimum prices shall been  established  for
Shares traded on the Principal  Trading  Market;  and (iii) there shall not have
been any material adverse change in any financial market that, in the reasonable
judgment of the Investor,  makes it impracticable or inadvisable to purchase the
Shares.  In  addition,  on the  Closing  Date,  trading  in  Common  Stock or in
securities  generally  on the  Principal  Trading  Market  shall  not have  been
suspended or limited.

         9. NOTICES.  Any notice required or permitted  hereunder shall be given
in writing (unless otherwise  specified herein) and shall be deemed  effectively
given upon  personal  delivery or seven (7) business  days after  deposit in the
United States Postal Service,  by (a) advance copy by fax, and/or (b) mailing or
delivery by express  courier or  registered  or certified  mail with

                                       12
<PAGE>

postage  and fees  prepaid,  addressed  to each of the other  parties  thereunto
entitled at the following  addresses,  or at such other addresses as a party may
designate  by ten days  advance  written  notice  to each of the  other  parties
hereto.

            COMPANY                        FOCUS ENHANCEMENTS, INC.
                                           1370 Dell Avenue
                                           Campbell, California 95008
                                           ATTN: Brett Moyer, President & CEO
                                           Telephone No.: (408) 866-8300
                                           Facsimile No.:  (408) 866-1748

            with a copy to:                Manatt, Phelps & Phillips, LLP
                                           1001 Page Mill Road, Bldg. 2
                                           Palo Alto, California 94304
                                           Attn: Jerrold F. Petruzzelli, Esq.
                                           Telephone No.: (650) 812-1335
                                           Telecopier No.: (650) 213-0260

            Investor:                      As set forth in Annex I hereto.

            with a copy to (with respect   Krieger & Prager, LLP
            to Investors provided by       39 Broadway, Suite 1440
            vFinance only) :               New York, New York  10006
                                           ATTN:  Samuel Krieger, Esq.
                                           Telephone No.:  (212) 363-2900
                                           Facsimile No.:  (212) 363-2999

         10. SEVERABILITY.  If a court of competent jurisdiction determines that
any provision of this Purchase  Agreement is invalid,  unenforceable  or illegal
for any  reason,  such  determination  shall not affect or impair the  validity,
legality and  enforceability of the other provisions of this Purchase  Agreement
in  any  other  jurisdiction.  If  any  such  invalidity,   unenforceability  or
illegality of a provision of this Purchase  Agreement  becomes known or apparent
to any of the parties hereto,  the parties shall negotiate  promptly and in good
faith  in an  attempt  to  make  appropriate  changes  and  adjustments  to such
provision  specifically  and this  Purchase  Agreement  generally  to achieve as
closely as possible,  consistent  with  applicable law, the intent and spirit of
such provision specifically and this Purchase Agreement generally.

         11. EXECUTION IN COUNTERPARTS.  This Purchase Agreement may be executed
in  counterparts,  each of which shall be deemed an  original,  but all of which
together shall constitute the same Purchase Agreement.  A facsimile signature of
this Agreement shall be legal and binding on all parties hereto.

         12. JURY TRIAL  WAIVER.  The Company and the  Investors  hereby waive a
trial by jury in any action,  proceeding  or  counterclaim  brought by any Party
hereto  against  any of the others in respect  of any matter  arising  out or in
connection with the Transaction Agreements.

                                       13
<PAGE>

         13. GOVERNING LAW: MISCELLANEOUS.

                  (a) This Purchase  Agreement  shall be deemed to be a contract
made  under  the laws of the  State  of  Delaware  for  contracts  to be  wholly
performed  in such State and without  giving  effect to the  principles  thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the  federal  courts  whose  districts  encompass  any  part of the  State of
California, Santa Clara County in connection with any dispute arising under this
Purchase  Agreement and hereby waives,  to the maximum extent  permitted by law,
any objection,  including any objection  based on forum non  conveniens,  to the
bringing of any such proceeding in such jurisdictions.

                  (b) Failure of any party to exercise any right or remedy under
this  Purchase  Agreement or otherwise,  or delay by a party in exercising  such
right or remedy, shall not operate as a waiver thereof.

                  (c) This Purchase  Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties hereto.

                  (d) All  pronouns  and any  variations  thereof  refer  to the
masculine, feminine or neuter, singular or plural, as the context may require.

                  (e)  The  headings  of  this   Purchase   Agreement   are  for
convenience   of   reference   and  shall  not  form  part  of,  or  affect  the
interpretation of, this Purchase Agreement.

                  (f) This  Agreement  may be amended only by an  instrument  in
writing  signed by both parties;  no waiver shall be effective  unless signed by
the person charged with making such waiver.

                  (g)  This  Agreement   supersedes  all  prior  agreements  and
understandings  among the  parties  hereto with  respect to the  subject  matter
hereof.

         14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  The Company's and each
Investor's representations and warranties herein shall survive the execution and
delivery of this Purchase Agreement and the delivery of the Certificates and the
payment of the Purchase Price, and shall inure to the benefit of each respective
Investor and the Company and their respective successors and assigns.

         15.  INDEPENDENT  NATURE OF  INVESTORS'  OBLIGATIONS  AND  RIGHTS.  The
obligations  of each Investor are several and not joint with the  obligations of
any other  Investor,  and no Investor  shall be  responsible  in any way for the
performance of the obligations of any other Investor.

         [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       14
<PAGE>

         IN  WITNESS  WHEREOF,  this  Agreement  has been duly  executed  by the
respective  Investor  (if an  entity,  by one of  its  officers  thereunto  duly
authorized) as of the date set forth below.

         AMOUNT AND PURCHASE PRICE OF COMMON STOCK:  $   *
                                                     ----------

                                  NUMBER OF SHARES:      *
                                                     ----------

                                NUMBER OF WARRANTS:      *
                                                     ----------

                            SIGNATURES FOR ENTITIES

         IN WITNESS  WHEREOF,  the  undersigned  represents  that the  foregoing
statements  are true  and  correct  and that it has  caused  this  Common  Stock
Purchase  Agreement  to be duly  executed  on its behalf  this 30th day of June,
2003.

                                                         *
                                               --------------------------------
                                               Printed Name of Investor

                                               By:       *
                                                  -----------------------------
                                               (Signature of Authorized Person)

                                                         *
                                               --------------------------------
                                               Printed Name and Title

         If Investor is a partnership, corporation, limited liability company or
other entity:

         I.       Jurisdiction where Investor's  investment decision was made:

                  - Jurisdiction  of  mailing  address  listed in Annex I
                  - Other: ____________________________

         II.      Jurisdiction of Incorporation or Organization: _____________

         As of the date set forth below,  the  undersigned  hereby  accepts this
Purchase  Agreement and  represents  that the foregoing  statements are true and
correct and that it has caused this  Purchase  Agreement to be duly  executed on
its behalf.

         FOCUS ENHANCEMENTS, INC.

         By:      /s/ Brett Moyer
                  ----------------------------
                  Brett Moyer
         Title:   President & CEO
         Date:    July 1, 2003

-------------
* Investors:      White Investments Ltd.
                  SF Capital Partners Ltd.

<PAGE>

         ANNEX I           SCHEDULE OF INVESTORS

         ANNEX II          JOINT ESCROW INSTRUCTIONS **

         ANNEX III         OPINION OF COUNSEL **

         ANNEX IV          REGISTRATION RIGHTS AGREEMENT **

         ANNEX V           COMPANY DISCLOSURE MATERIALS **

         ANNEX VI          FORM OF WARRANT **

         ANNEX VII         USE OF PROCEEDS SCHEDULE **

         ---------------
         ** Not Included

<PAGE>

                                                                         ANNEX I
                                                                              TO
                                     COMMON STOCK AND WARRANT PURCHASE AGREEMENT
                                                           SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>
Name and Address of Investor (including                       Number of Shares
contact for Notices and telecopier number)                       Purchased              Number of Warrants
------------------------------------------                       ---------              ------------------
<S>                                                               <C>                         <C>
SF Capital Partners Ltd.                                          1,100,000                   220,000
c/o Staro Asset Management, LLC
3600 South Lake Drive
St. Francis, Wisconsin 53235 Phone: 414-294-7587
Fax:  414-294-4416

White Investments Ltd.                                            1,100,000                   220,000
c/o International First Secretarial Group, Ltd
POB 65
Grand Turk
Turks & Caicos, BWI
Phone:  649-946-2133
Fax:  649-946-2933
</TABLE>Exhibit 10.24

                          REGISTRATION RIGHTS AGREEMENT

         THIS  REGISTRATION  RIGHTS  AGREEMENT,  dated as of July 1, 2003  (this
"Agreement"),  is made by and  between  FOCUS  ENHANCEMENTS,  INC.,  a  Delaware
corporation, with headquarters located at 1370 Dell Avenue, Campbell, California
95008 (the  "Company"),  and each entity named on a signature page hereto (each,
an  "Investor")  (each  agreement  with an Investor  being deemed a separate and
independent  agreement  between the Company and such Investor,  except that each
Investor  acknowledges and consents to the rights granted to each other Investor
under such agreement).

                              W I T N E S S E T H:

         WHEREAS,  upon the terms and  subject to the  conditions  of the Common
Stock and  Warrant  Purchase  Agreement,  dated as of July 1, 2003,  between the
Investor and the Company (the "Purchase  Agreement," terms not otherwise defined
herein shall have the meanings ascribed to them in the Purchase Agreement),  the
Company has agreed to issue and sell to the  Investors  the Common  Stock of the
Company (the "Common Stock"); and

         WHEREAS,  the Company has agreed to issue the  Warrants to Investors in
connection  with the  issuance  of the Common  Stock,  and the  Warrants  may be
exercised for the purchase of shares of Common Stock (the "Warrant Shares") upon
the terms and conditions of the Warrants; and

         WHEREAS,  to induce the Investor to execute and deliver the  Securities
Purchase  Agreement,  the  Company  has agreed to provide  certain  registration
rights under the Securities Act of 1933.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the Company and the
Investor hereby agree as follows:

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

                  (a)  "Effective  Date"  means  the  date  the SEC  declares  a
Registration Statement covering Registrable Securities and otherwise meeting the
conditions contemplated hereby to be effective.

                  (b) "Held Shares Value" means the Purchase Price for shares of
Common Stock acquired by the Investor and not yet sold.

                  (c) "Investor" means the Investor and any permitted transferee
or assignee who agrees to become bound by the  provisions  of this  Agreement in
accordance with Section 9 hereof and who holds Registrable Securities.

                  (d) "Potential Material Event" means any of the following: (i)
the possession by the Company of material information not ripe for disclosure in
a registration  statement,  which shall be evidenced by a determination  in good
faith  by the  Board  of  Directors  of the  Company  that  disclosure  of  such
information in the  registration  statement would be detrimental to the business
and affairs of the Company or (ii) any  material  engagement  or activity by the
Company which would, in the good faith

<PAGE>

determination of the Board of Directors of the Company, be adversely affected by
disclosure  in a  registration  statement at such time;  in each case where such
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the  registration  statement  would be  materially
misleading absent the inclusion of such information.

                  (e) "Register,"  "Registered," and  "Registration"  refer to a
registration  effected  by  preparing  and filing a  Registration  Statement  or
Statements in compliance  with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering  securities on a
continuous  basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the Commission.

                  (f)  "Registrable  Securities"  means the  Common  Stock,  the
Warrants, and the Warrant Shares.

                  (g) "Registration Statement" means a registration statement of
the Company under the  Securities  Act covering  Registrable  Securities on Form
S-3,  if the  Company is then  eligible  to file  using  such  form,  and if not
eligible, on Form SB-2 or other appropriate form.

                  (h)  "Required  Filing Date" means five (5) business days from
the date of the filing of the  Company's  Quarterly  Report on Form 10-Q for the
quarter ended June 30, 2003.

                  (i) "Restricted  Sale Date" means the first date, other than a
date  during a Permitted  Suspension  Period (as  defined  below),  on which the
Investor is restricted  from making sales of Registrable  Securities  covered by
any previously effective Registration Statement.

         Capitalized  terms used herein and not otherwise  defined  herein shall
have the respective meanings set forth in the Common Stock Purchase Agreement or
in the Rules of the SEC.

         2. Registration.

                  (a) Mandatory Registration.

                           (i) The Company  shall prepare and file with the SEC,
no later than the Required  Filing Date (or the next  business day following the
Required  Filing Date should such date fall on a weekend),  an  amendment  to an
existing Registration Statement or a new Registration Statement, in either event
registering  for resale by the Investor a sufficient  number of shares of Common
Stock  for  the  Investors  to  sell  all of  the  Registrable  Securities.  The
Registration  Statement  shall also state that, in accordance with Rules 416 and
457 under the  Securities  Act,  it also  covers  such  indeterminate  number of
additional  shares of Common Stock as may become  issuable  upon exercise of the
Warrants to prevent  dilution  resulting from stock splits,  or stock dividends.
The Company will use its reasonable  best efforts to respond to any SEC comments
as soon as practicable and to cause such  Registration  Statement to be declared
effective on a date (the "Initial  Required  Effective  Date") which is no later
than five (5) days  after  receipt by the  Company of written  notice by the SEC
that the Registration Statement may be declared effective.

                           (ii) The aggregate  number of shares  registered  for
the  Investors in each  Registration  Statement or  amendment  thereto  shall be
allocated  among the Investors on a pro rata basis among them according to their
relative Registrable Shares included in such Registration Statement.

                                      -2-
<PAGE>

                  (b) Payments by the Company.

                           (i) [RESERVED]

                           (ii)  If  the  Registration  Statement  covering  the
Registrable Securities is not filed with the SEC by the relevant Required Filing
Date or if there is a  Restricted  Sale Date  within  ninety (90) days after the
Initial  Required  Effective  Date,  then the Company will make  payments to the
Investor in such  amounts and at such times as shall be  determined  pursuant to
this Section 2(b).

                           (iii) The amount (the  "Periodic  Amount") to be paid
by the Company to the Investor shall be determined as of each  Computation  Date
(as  defined  below)  and such  amount  shall be  equal to the  Periodic  Amount
Percentage (as defined below) of the Purchase Price for the Common Stock for the
period from the date  following  the Required  Filing Date or a Restricted  Sale
Date, as the case may be, to the first relevant Computation Date, and thereafter
to each subsequent  Computation Date. The "Periodic Amount Percentage" means (A)
with respect to the Required Filing Date, one percent (1%) of the Purchase Price
of the Common Stock each Computation  Date, and (b) with respect to a Restricted
Sale Date, one and one-half (1 1/2%) percent of the Purchase Price of the Common
Stock not previously sold by the Investor after the Restricted Sale Date to each
Computation  Date  thereafter.  Anything  in the  preceding  provisions  of this
paragraph (iii) to the contrary notwithstanding,  after the relevant Filing Date
the Purchase Price shall be deemed to refer to the sum of the Held Shares Value.
By  way  of  illustration  and  not  in  limitation  of  the  foregoing,  if the
Registration  Statement  is not filed  forty-five  (45) days after the  Required
Filing Date, the Periodic Amount  (assuming no Periodic  Amounts were previously
paid) will aggregate one and one-half (1-1/2%) percent of the Purchase Price.

                           (iv) Each  Periodic  Amount  will be  payable  by the
Company,  except as provided in the other provisions of this subparagraph  (iv),
in cash or other  immediately  available  funds to the  Investor (1) thirty (30)
days after the Required  Filing Date or a Restricted  Sale Date, as the case may
be, and (2) on the earlier of (A) each thirtieth day  thereafter,  (B) the third
business day after the date the  Registration  Statement is filed or is declared
effective,  or (C) the third business day after the  Registration  Statement has
its restrictions removed after the relevant Effective Date, in each case without
requiring demand therefor by the Investor. Notwithstanding the provisions of the
first sentence of this subparagraph (iv), at the mutual agreement of the Company
and the Investor,  any time before the Periodic Amount is paid, all or a portion
of the  Periodic  Amount can be paid by the  issuance  of  additional  shares of
Common Stock to the Investor  ("Periodic  Amount  Shares") in an amount equal to
the Periodic Amount being paid thereby divided by 90% of the average Closing Bid
Price for the last five (5) trading days prior to the Computation Date.

                           (v) The parties  acknowledge  that the damages  which
may be  incurred  by the  Investor if the  Registration  Statement  has not been
declared  effective by the Required Filing Date,  including if the right to sell
Registrable  Securities under a previously effective  Registration  Statement is
suspended or the shares of the  Company's  stock are not listed on the Principal
Trading  Market,  may be  difficult  to  ascertain.  The parties  agree that the
Periodic Amounts represent a reasonable  estimate on the part of the parties, as
of the date of this Agreement, of the amount of such damages.

                           (vi)  Notwithstanding  the  foregoing,   the  amounts
payable by the Company  pursuant to this  provision  shall not be payable to the
extent  any delay in the  effectiveness  of the  Registration  Statement  occurs
because of an act of, or a failure to act or to act  timely by the  Investor  or
its counsel.

                                      -3-
<PAGE>

                           (vii)  "Computation Date" means (A) the date which is
the earlier of thirty (30) days after the  Required  Filing Date or a Restricted
Sale  Date,  or when the  shares of Common  Stock  are  listed on the  Principal
Trading  Market  (with  respect  to  payments  due as  contemplated  by  Section
2(b)(iii) hereof), as the case may be, and (B) each date which is the earlier of
(1) thirty (30) days after the previous  Computation  Date or (2) the date after
the previous  Computation Date on which the  Registration  Statement is declared
effective  or has its  restrictions  removed or the  shares of Common  Stock are
listed  on the  Principal  Trading  Market  (with  respect  to  payments  due as
contemplated by Section 2(b)(iii) hereof), as the case may be.

                  (c)  Warrant  Shares -  Extended  Registration.  In the  event
Investors  have  unexercised  Warrants two years after the Effective Date of the
Registration Statement and no piggy back registration rights are available,  the
Company  shall  use its  best  efforts  to  maintain  the  effectiveness  of the
Registration Statement for one additional year.

         3.  Obligations of the Company.  In connection with the registration of
the Registrable Securities, the Company shall do each of the following:

                  (a) Prepare and file, with the SEC by the Required Filing Date
a Registration Statement with respect to not less than the number of Registrable
Securities  provided in Section 2(a) above,  and  thereafter  use its reasonable
best  efforts to cause  such  Registration  Statement  relating  to  Registrable
Securities to become effective by the Initial  Required  Effective Date and keep
the  Registration  Statement  effective  at all times  during  the  period  (the
"Registration  Period")  continuing  until the  earlier of (i) the date when the
Investors may sell all Registrable  Securities  under Rule 144(k) without volume
or other  restrictions or limits,  (ii) the date the Investors no longer own any
of the  Registrable  Securities,  which  Registration  Statement  (including any
amendments or supplements thereto and prospectuses  contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the circumstances in which they were made, not misleading, or (iii) two
(2) years after the Effective Date of the Registration Statement;

                  (b) Prepare and file with the SEC such  amendments  (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus  used  in  connection  with  the  Registration  Statement  as  may be
necessary to keep the Registration  Statement  effective at all times during the
Registration  Period,  and,  during the  Registration  Period,  comply  with the
provisions  of  the  Securities  Act  with  respect  to the  disposition  of all
Registrable  Securities  of the Company  covered by the  Registration  Statement
until such time as all of such  Registrable  Securities have been disposed of in
accordance  with the intended  methods of  disposition  by the seller or sellers
thereof as set forth in the Registration Statement;

                  (c)  Permit  a  single  firm  of  counsel  designated  by  the
Investors (which,  until further notice,  shall be deemed to be in-house counsel
for SF Capital  Partners  and/or Krieger & Prager,  LLP, Attn:  Samuel  Krieger,
Esq.)  ("Investor's  Counsel") (which  Investor's  Counsel has agreed to receive
such  notification) to review the Registration  Statement and all amendments and
supplements thereto for a reasonable period of time (but not less than three (3)
business  days) prior to their filing with the SEC, and not file any document in
a form to which such counsel reasonably objects;

                  (d) Notify the Investors  and, if  applicable,  the Investors'
Counsel  immediately  (and, in the case of (i)(A) below, not less than three (3)
business  days  prior to such  filing)  and (if  requested  by any such  person)
confirm such notice in writing no later than one (1) business day  following the
day

                                       -4-
<PAGE>

(i)(A)  when  a  Prospectus  or  any  Prospectus  supplement  or  post-effective
amendment to the  Registration  Statement is proposed to be filed;  (B) whenever
the  SEC  notifies  the  Company  whether  there  will  be a  "review"  of  such
Registration  Statement;  (C) whenever the Company receives (or a representative
of the Company receives on its behalf) any oral or written comments from the SEC
in respect of a Registration Statement, copies or, in the case of oral comments,
summaries of such  comments (as such comments  relate to the Investor)  shall be
promptly furnished by the Company to the Investors;  and (D) with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective;  (ii)  of any  request  by the  SEC or any  other  Federal  or  state
governmental  authority  for  amendments  or  supplements  to  the  Registration
Statement or Prospectus or for additional information;  (iii) of the issuance by
the SEC of any stop  order  suspending  the  effectiveness  of the  Registration
Statement covering any or all of the Registrable Securities or the initiation of
any proceedings for that purpose; (iv) if at any time any of the representations
or  warranties  of  the  Company  contained  in  any  agreement  (including  any
underwriting agreement) contemplated hereby ceases to be true and correct in all
material  respects;  (v) of the receipt by the Company of any notification  with
respect to the suspension of the  qualification or exemption from  qualification
of any of the  Registrable  Securities  for  sale  in any  jurisdiction,  or the
initiation or threatening  of any  proceeding for such purpose;  and (vi) of the
occurrence  of any event that to the best  knowledge  of the  Company  makes any
statement  made in the  Registration  Statement  or  Prospectus  or any document
incorporated  or deemed to be  incorporated  therein by reference  untrue in any
material respect or that requires any revisions to the  Registration  Statement,
Prospectus or other documents so that, in the case of the Registration Statement
or the Prospectus,  as the case may be, it will not contain any untrue statement
of a material  fact or omit to state any  material  fact  required  to be stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances  under which they were made,  not  misleading.  In  addition,  the
Company shall furnish the Investor's Counsel with copies of all intended written
responses to the comments  contemplated  in clause (C) of this Section 3(d) that
relate to Investors not later than one (1) business day in advance of the filing
of such responses with the SEC so that the Investors  shall have the opportunity
to comment thereon;

                  (e)  Furnish  to  Investors  and/or  Investors'   Counsel  (i)
promptly  after the same is prepared  and publicly  distributed,  filed with the
SEC, or received by the  Company,  one (1) copy of the  Registration  Statement,
each  preliminary  prospectus and  prospectus,  and each amendment or supplement
thereto,  all  correspondence to, with, or from the SEC, and (ii) such number of
copies  of  a  prospectus,  and  all  amendments  and  supplements  thereto  (as
contemplated in Section 3(d) above) and such other  documents,  as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;

                  (f) As promptly as  practicable  after becoming aware thereof,
notify  each  Investor  of the  happening  of any event of which the Company has
knowledge,  as a result of which the  prospectus  included  in the  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material  fact  required to be stated  therein or  necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading,  and use its best efforts promptly to prepare a supplement
or amendment to the Registration  Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;

                  (g) As promptly as  practicable  after becoming aware thereof,
notify each  Investor who holds  Registrable  Securities  being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the SEC of a Notice of  Effectiveness or any notice of effectiveness or

                                      -5-
<PAGE>

any stop order or other  suspension  of the  effectiveness  of the  Registration
Statement at the earliest possible time;

                  (h) Notwithstanding the foregoing, if at any time or from time
to time  after the date of  effectiveness  of the  Registration  Statement,  the
Company  notifies  the  Investors  in writing of the  existence  of a  Potential
Material  Event,   the  Investors  shall  not  offer  or  sell  any  Registrable
Securities,  or engage in any other  transaction  involving  or  relating to the
Registrable Securities,  from the time of the giving of notice with respect to a
Potential  Material Event until such Investor  receives  written notice from the
Company that such  Potential  Material  Event  either has been  disclosed to the
public or no longer constitutes a Potential Material Event;  provided,  however,
that the  Company may not so suspend  the right to such  holders of  Registrable
Securities  during the periods the  Registration  Statement is required to be in
effect  other than during a  Permitted  Suspension  Period  (and the  applicable
provisions of Section 2(b) shall apply with respect to any such suspension other
than during a  Permitted  Suspension  Period).  The term  "Permitted  Suspension
Period" means up to two such suspension periods, each of which suspension period
shall not either (i) be for more than fifteen (15)  business  days or (ii) begin
less than ten (10) business days after the last day of the preceding  suspension
(whether  or not  such  last day was  during  or  after a  Permitted  Suspension
Period);  provided  further that the Company shall,  if lawful to do so, provide
the Investor with at least two (2) business  days' notice of the existence  (but
not the  substance  of) a Potential  Material  Event.  Investor  shall treat any
information  with  respect to  Potential  Material  Event as  confidential.  The
Investor shall indemnify and hold harmless the Company, its employees, officers,
directors,  agents,  and partners,  and their  respective  Affiliates,  from and
against all claims,  losses,  damages, costs (including the costs of preparation
and attorney's fees) and expenses suffered regarding any trades by the Investor,
its  affiliates or any person(s)  acquiring  information  from the Investor as a
tippee or otherwise.

                  (i) Use its  reasonable  efforts  to secure and  maintain  the
designation  and  listing  of all  the  Registrable  Securities  covered  by the
Registration  Statement on the  Principal  Trading  Market within the meaning of
Rule  11Aa2-1  of the SEC  under  the  Exchange  Act and  the  quotation  of the
Registrable Securities on the Principal Trading Market;

                  (j)  Provide a transfer  agent and  registrar,  which may be a
single  entity,  for the  Registrable  Securities  not  later  than the  initial
Effective Date;

                  (k)  Cooperate   with  the  Investors  who  hold   Registrable
Securities  being offered to facilitate the timely  preparation  and delivery of
certificates  for the  Registrable  Securities  to be  offered  pursuant  to the
Registration   Statement  and  enable  such  certificates  for  the  Registrable
Securities  to be in such  denominations  or  amounts as the case may be, as the
Investors may  reasonably  request,  and,  within five (5) business days after a
Registration   Statement  which  includes  Registrable   Securities  is  ordered
effective by the SEC, the Company shall  deliver,  and shall cause legal counsel
selected by the Company to deliver,  to the transfer  agent for the  Registrable
Securities  (with  copies to the  Investors  whose  Registrable  Securities  are
included in such Registration  Statement) an appropriate instruction and opinion
of such counsel,  which shall  include,  without  limitation,  directions to the
transfer  agent to  issue  certificates  of  Registrable  Securities  (including
certificates  for  Registrable  Securities to be issued after the Effective Date
and replacement  certificates  for  Registrable  Securities  previously  issued)
without  legends or other  restrictions,  except as required  by any  applicable
state securities laws;

                  (l) Take all other  reasonable  actions  necessary to expedite
and  facilitate  disposition  by  the  Investor  of the  Registrable  Securities
pursuant to the Registration Statement; and

                                      -6-
<PAGE>

                  (m) Comply with all  applicable  rules and  regulations of the
Commission  and  make  generally  available  to  its  security  holders  earning
statements  satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 not later than 45 days after the end of any 12-month period (or 90 days
after  the end of any  12-month  period  if such  period  is a fiscal  year) (i)
commencing at the end of any fiscal quarter in which Registrable  Securities are
sold to underwriters in a firm commitment or best efforts underwritten  offering
and (ii) if not sold to  underwriters  in such an  offering,  commencing  on the
first day of the first fiscal quarter of the Company after the effective date of
the Registration Statement, which statement shall cover said 12-month period, or
end shorter periods as is consistent with the requirements of Rule 158.

         4. Obligations of the Investors. In connection with the registration of
the Registrable Securities, the Investors shall have the following obligations:

                  (a)  Each  Investor,  by  such  Investor's  acceptance  of the
Registrable  Securities,  agrees to  cooperate  with the  Company as  reasonably
requested by the Company in connection  with the  preparation  and filing of the
Registration Statement hereunder,  unless such Investor has notified the Company
in  writing  of such  Investor's  election  to  exclude  all of such  Investor's
Registrable Securities from the Registration Statement; and

                  (b) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind  described in Section 3(f)
or 3(g),  above,  such  Investor will  immediately  discontinue  disposition  of
Registrable  Securities  pursuant to the  Registration  Statement  covering such
Registrable  Securities  until  such  Investor's  receipt  of the  copies of the
supplemented or amended prospectus  contemplated by Section 3(f) or 3(g) and, if
so directed by the Company,  such Investor  shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate  of
destruction)  all  copies  in  such  Investor's  possession,  of the  prospectus
covering  such  Registrable  Securities  current  at the time of receipt of such
notice.

                  (c)  Investor  specifically   acknowledges  that  the  Company
reserves  the  right  (but  is  not  otherwise  obligated)  to  sell  additional
securities  on terms  determined by the board of directors of the Company at any
time  before,  contemporaneous  with or after  the  execution  of this  Purchase
Agreement  or  from  time to  time  and in any  manner  whatsoever  pursuant  to
applicable federal and state securities laws.

         5.  Expenses  of  Registration.  All  reasonable  expenses  (other than
underwriting  discounts and commissions of the Investor)  incurred in connection
with  registrations,  filings  or  qualifications  pursuant  to  Section  3, but
including,  without limitation,  all registration,  listing,  and qualifications
fees,  printers and accounting  fees, the fees and  disbursements of counsel for
the Company shall be borne by the Company.

         6.  Indemnification.  In  the  event  any  Registrable  Securities  are
included in a Registration Statement under this Agreement:

                  (a) To the extent permitted by law, the Company will indemnify
and hold  harmless  each  Investor who holds such  Registrable  Securities,  the
directors,  if any, of such  Investor,  the officers,  if any, of such Investor,
each  person,  if any,  who  controls  any  Investor  within the  meaning of the
Securities  Act  or  the  Exchange  Act  (each,  an   "Indemnified   Person"  or
"Indemnified  Party"),  against  any losses,  claims,  damages,  liabilities  or
expenses (joint or several)  incurred  (collectively,  "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,

                                      -7-
<PAGE>

insofar  as such  Claims  (or  actions  or  proceedings,  whether  commenced  or
threatened,  in  respect  thereof)  arise  out of or are  based  upon any of the
following statements,  omissions or violations in the Registration Statement, or
any post-effective  amendment thereof, or any prospectus  included therein:  (i)
any untrue statement or alleged untrue statement of a material fact contained in
the  Registration  Statement  or any  post-effective  amendment  thereof  or the
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements therein not misleading,  (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the final  prospectus  (as amended or  supplemented,  if the  Company  files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state  therein any material  fact  necessary to make the  statements
made therein,  in light of the circumstances  under which the statements therein
were made,  not  misleading or (iii) any  violation or alleged  violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or  regulation  under the  Securities  Act,  the  Exchange Act or any state
securities  law (the matters in the  foregoing  clauses (i) through (iii) being,
collectively,  "Violations").  Subject  to  clause  (b) of this  Section  6, the
Company shall  reimburse the  Investors,  promptly as such expenses are incurred
and  are due and  payable,  for any  legal  fees or  other  reasonable  expenses
incurred by them in connection with  investigating  or defending any such Claim.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained in this Section 6(a) shall not (I) apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with  information  furnished  in writing  to the  Company by or on behalf of any
Indemnified  Person  expressly for use in connection with the preparation of the
Registration  Statement or any such  amendment  thereof or  supplement  thereto,
after such prospectus was made available by the Company pursuant to Section 3(c)
hereof;  (II) be available to the extent such Claim is based on a failure of the
Investor to deliver or cause to be delivered the  prospectus  made  available by
the  Company or the  amendment  or  supplement  thereto  made  available  by the
Company; (III) be available to the extent such Claim is based on the delivery of
a  prospectus  by the Investor  after  receiving  notice from the Company  under
Section 3(f), (g) or (h) hereof (other than a notice regarding the effectiveness
of the Registration  Statement or any amendment or supplement thereto),  or (IV)
apply to amounts paid in settlement of any Claim if such  settlement is effected
without the prior  written  consent of the Company,  which  consent shall not be
unreasonably  withheld or delayed.  Each Investor will indemnify the Company and
its  officers,   directors  and  agents  (each,  an   "Indemnified   Person"  or
"Indemnified Party") against any claims arising out of or based upon a Violation
which occurs in reliance upon and in conformity  with  information  furnished in
writing to the Company,  by or on behalf of such Investor,  expressly for use in
connection with the preparation of the  Registration  Statement or the amendment
or  supplement  thereto,  subject  to such  limitations  and  conditions  as are
applicable  to the  indemnification  provided by the Company to this  Section 6.
Such  indemnity  shall  remain  in  full  force  and  effect  regardless  of any
investigation  made by or on behalf of the Indemnified  Person and shall survive
the transfer of the Registrable  Securities by the Investors pursuant to Section
9.

                  (b)  Promptly  after  receipt  by  an  Indemnified  Person  or
Indemnified  Party  under this  Section 6 of notice of the  commencement  of any
action  (including  any  governmental   action),   such  Indemnified  Person  or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying  party under this  Section 6, deliver to the  indemnifying  party a
written notice of the commencement thereof and the indemnifying party shall have
the right to  participate  in,  and,  to the  extent the  indemnifying  party so
desires,  jointly with any other indemnifying party similarly noticed, to assume
control  of the  defense  thereof  with  counsel  mutually  satisfactory  to the
indemnifying  party and the Indemnified  Person or the Indemnified Party, as the
case may be. In case any such action is brought against any  Indemnified  Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof,  the indemnifying party will be entitled to participate in, and, to the
extent

                                      -8-
<PAGE>

that it may wish, jointly with any other indemnifying party similarly  notified,
assume the defense  thereof,  subject to the provisions  herein stated and after
notice from the  indemnifying  party to such  Indemnified  Person or Indemnified
Party of its election so to assume the defense thereof,  the indemnifying  party
will not be liable to such  Indemnified  Person or Indemnified  Party under this
Section 6 for any legal or other reasonable  out-of-pocket expenses subsequently
incurred by such Indemnified  Person or Indemnified Party in connection with the
defense  thereof  other  than  reasonable  costs of  investigation,  unless  the
indemnifying  party  shall not pursue the  action to its final  conclusion.  The
Indemnified  Person or Indemnified Party shall have the right to employ separate
counsel in any such action and to  participate in the defense  thereof,  but the
fees and reasonable  out-of-pocket  expenses of such counsel shall not be at the
expense of the  indemnifying  party if the  indemnifying  party has  assumed the
defense of the action with counsel  reasonably  satisfactory  to the Indemnified
Person or  Indemnified  Party  provided  such counsel is of the opinion that all
defenses   available  to  the  Indemnified  Party  can  be  maintained   without
prejudicing the rights of the indemnifying party. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such  indemnifying  party of any  liability to
the Indemnified  Person or Indemnified Party under this Section 6, except to the
extent that the  indemnifying  party is prejudiced in its ability to defend such
action. The indemnification required by this Section 6 shall be made by periodic
payments  of the  amount  thereof  during  the  course of the  investigation  or
defense,  as such expense,  loss, damage or liability is incurred and is due and
payable.

         7. Contribution.  To the extent any  indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable  under  Section  6 to the  fullest  extent  permitted  by law;  provided,
however,  that (a) no contribution shall be made under  circumstances  where the
maker would not have been liable for  indemnification  under the fault standards
set  forth in  Section  6; (b) no  seller of  Registrable  Securities  guilty of
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities  who was not  guilty of such  fraudulent  misrepresentation;  and (c)
except where the seller has committed fraud (other than a fraud by reason of the
information included or omitted from the Registration  Statement as to which the
Company  has not  given  notice as  contemplated  under  Section  3  hereof)  or
intentional  misconduct,  contribution  by any seller of Registrable  Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.

         8. Reports under Securities Act and Exchange Act. With a view to making
available to Investor the benefits of Rule 144 promulgated  under the Securities
Act or any  other  similar  rule or  regulation  of the SEC that may at any time
permit  Investor  to  sell  securities  of the  Company  to the  public  without
Registration ("Rule 144"), the Company agrees to:

                  (a) make and keep public information available, as those terms
are understood and defined in Rule 144;

                  (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and

                  (c) furnish to Investor so long as Investor  owns  Registrable
Securities,  promptly upon request,  (i) a written statement by the Company that
it has complied with the reporting  requirements  of the  Securities Act and the
Exchange Act,  (ii) a copy of the most recent annual or quarterly  report of the
Company and such other  reports and  documents so filed by the Company and

                                      -9-
<PAGE>

(iii) such other  information as may be reasonably  requested to permit Investor
to sell such securities pursuant to Rule 144 without Registration.

                  (d)  The  Company  will,  at  the  request  of any  Holder  of
Registrable  Securities,   upon  receipt  from  such  Holder  of  a  certificate
certifying  (i) that such  Holder  has held such  Registrable  Securities  for a
period  of not less than one (1) year,  (ii)  that such  Holder  has not been an
affiliate  (as defined in Rule 144) of the company for more than the ninety (90)
preceding  days,  and (iii) as to such other  matters as may be  appropriate  in
accordance with such Rule, remove from the stock  certificate  representing such
Registrable  Securities that portion of any restrictive  legend which relates to
the registration provisions of the Securities Act.

         9.  Assignment  of the  Registration  Rights.  The  rights  to have the
Company  register  Registrable  Securities  pursuant to this Agreement  shall be
automatically  assigned by the Investors to any  transferee  of the  Registrable
Securities  only if the Company is, within a reasonable time after such transfer
or assignment, furnished with written notice of (a) the name and address of such
transferee  or  assignee  and (b) the  securities  with  respect  to which  such
registration rights are being transferred or assigned.

         10. Amendment of Registration  Rights.  Any provision of this Agreement
may be amended and the observance  thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively),  only with the
written  consent of the Company  and  Investors  who hold a fifty (50%)  percent
interest  of the Held  Shares  Value as of such date.  Any  amendment  or waiver
effected in accordance  with this Section 10 shall be binding upon each Investor
and the Company.

         11. Miscellaneous.

                  (a) A person or entity is deemed to be a holder of Registrable
Securities  whenever  such  person or entity  owns of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or more  persons  or  entities  with  respect  to the  same
Registrable  Securities,  the Company shall act upon the basis of  instructions,
notice  or  election  received  from the  registered  owner of such  Registrable
Securities.

                  (b) Notices  required or permitted to be given hereunder shall
be given in the manner  contemplated  by the Purchase  Agreement,  (i) if to the
Company or to the Investor,  to their  respective  address  contemplated  by the
Purchase Agreement,  and (ii) if to any other Investor,  at such address as such
Investor shall have provided in writing to the Company, or at such other address
as each such party  furnishes  by notice given in  accordance  with this Section
11(b).

                  (c) Failure of any party to exercise any right or remedy under
this  Agreement or otherwise,  or delay by a party in  exercising  such right or
remedy, shall not operate as a waiver thereof.

                  (d) This Agreement shall be deemed to be a contract made under
the laws of the State of Delaware for  contracts to be wholly  performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. Each of the parties  consents to the jurisdiction of the federal courts
whose  districts  encompass  any part of the State of  California,  Santa  Clara
County in connection  with any dispute  arising under this  Agreement and hereby
waives,  to the maximum extent  permitted by law, any  objection,  including any
objection based on forum non conveniens,  to the bringing of any such proceeding
in such jurisdictions.

                                      -10-
<PAGE>

                  (e) The Company and each Investor hereby waive a trial by jury
in any  action,  proceeding  or  counterclaim  brought by either of the  parties
hereto  against  the  other  in  respect  of  any  matter  arising  out of or in
connection with this Agreement or any of the other Transaction Agreements.

                  (f) If any  provision  of this  Agreement  shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or  enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.

                  (g)  Subject to the  requirements  of  Section 9 hereof,  this
Agreement  shall inure to the benefit of and be binding upon the  successors and
assigns of each of the parties hereto.

                  (h) All  pronouns  and any  variations  thereof  refer  to the
masculine, feminine or neuter, singular or plural, as the context may require.

                  (i) The  headings in this  Agreement  are for  convenience  of
reference only and shall not limit or otherwise affect the meaning thereof.

                  (j)  This   Agreement   may  be   executed   in  one  or  more
counterparts,  each of which shall be deemed an original  but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be  delivered  to  the  other  party  hereto  by  telephone  line  facsimile
transmission  of a copy of this Agreement  bearing the signature of the party so
delivering this Agreement.

                  (k) The Company  acknowledges  that any failure by the Company
to perform its  obligations  under  Section  3(a)  hereof,  or any delay in such
performance could result in loss to the Investors,  and the Company agrees that,
in  addition  to any  other  liability  the  Company  may have by reason of such
failure or delay,  the Company shall be liable for all direct  damages caused by
any such  failure  or delay,  unless  the same is the  result of force  majeure.
Neither party shall be liable for consequential damages.

                  (l) This Agreement  constitutes the entire agreement among the
parties  hereto  with  respect  to  the  subject  matter  hereof.  There  are no
restrictions,  promises, warranties or undertakings,  other than those set forth
or  referred to herein.  This  Agreement  supersedes  all prior  agreements  and
understandings  among the  parties  hereto with  respect to the  subject  matter
hereof. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -11-
<PAGE>

         IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly
executed by their  respective  officers  thereunto duly authorized as of the day
and year first above written.

                             COMPANY:

                             FOCUS ENHANCEMENTS, INC.
                             By:      /s/ Brett Moyer
                                ------------------------------------------------
                             Name:    Brett Moyer
                             Title:   President & CEO

                             INVESTORS:

                             Name of Investor:  /s/ White Investments Ltd.
                             By:      /s/ C.B. Williams
                                ------------------------------------------------
                             Name:  C.B. Williams
                             Title:  International First Secretarial Group Ltd.
                                     Secretary

                             Name of Investor:  SF Capital Partners Ltd.
                             By:      /s/ Brian H. Davidson
                                ------------------------------------------------
                             Name:    Brian H. Davidson
                             Title:   Authorized Person

                                      -12-

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