Document:

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                                                                    EXHIBIT 10.3

                             CONSULTING AGREEMENT

  AGREEMENT effective as of April 28, 2000, by and between FOCUS Enhancements,
Inc., a Delaware corporation, having as its principal business address 600
Research Drive, Wilmington, Massachusetts 01887 (hereinafter referred to as the
"Company") and Gary M. Cebula, having a residence at 10 Nicole Circle, East
Hampstead, NH  03826 (hereinafter referred to as "Consultant").

RECITALS:

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

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

TERMS AND CONDITIONS:

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

  1. Retention of Consultant. The Company hereby retains Consultant solely as
     -----------------------
an independent contractor and not as an employee, and Consultant hereby accepts
such retention upon the terms and conditions hereinafter set forth. This
greement shall describe a "business relationship" as that term is used in
Employee Stock Option Agreements with the Company.

  2. Term.  Subject to the provisions for termination as hereinafter
     ----
provided, the term of this Agreement shall begin as set forth above and shall
terminate no later than December 31, 2000. All work performed under such an
extension shall remain subject to these terms and conditions.

  3. Compensation. For all services rendered by Consultant under this
     ------------
Agreement, the Company shall pay Consultant one dollar plus other good and
valuable consideration. Travel costs, if any, must be pre-approved by an officer
of Company and must be documented by receipts showing all expenses over $25.00.
All air travel shall be made by coach or economy class and any hotels must be
pre-approved by Company.

  4. Duties. The Consultant is being retained to provide consultation to
     ------
Company. Consultant shall during the term hereof use his best efforts to assist
the Company in all financial matters for which the Company requests his
assistance. It is required that Consultant be available to perform its duties
under this Agreement at such times as the Company requires from time to time,
except that if Consultant shall accept full-time employment from a third-party
employer then Consultant's obligations to the Company shall be limited to phone
consultation outside of Consultant's normal working hours with the new employer.

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

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

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

  6. Ownership of Work Product. All items, programs, ideas and the like and
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all work product, including source code, table structures, forms, reports and
programming tools created by or with the assistance of Consultant pursuant to
this Agreement, whether prepared on or off Company premises, shall be and remain
the property of the Company alone, and shall be deemed to be works made for
hire. To the extent that any items may not, by operation of law, be works made
for hire, Consultant hereby assigns to Company the ownership of all rights,
titles and interests in such items, including but not limited to copyrights, and
the Company shall have the right to obtain and hold in its own name copyright or
other protection which may be available or become available in the items.
Consultant agrees to give Company, its designees, or assignees all assistance
reasonably required to perfect such rights, titles and interests. Consultant
agrees to disclose promptly to Company all inventions, discoveries, formulas,

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processes, designs, trade secrets and other useful information and know-how
made, discovered or developed by Consultant alone or in conjunction with any
other person or entity during the term of this Agreement that are based on,
derived from or make use of any Confidential Information or any other
information disclosed to or acquired by Consultant during the term of the
Agreement and all such information shall be deemed Confidential Information.

  7. Termination. Consultant may cancel this Agreement forthwith upon written
     -----------
notice.

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

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

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

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

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

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

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

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

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

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

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

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

FOCUS Enhancements, Inc.              Consultant

By: /s/ Christopher P. Ricci          By: /s/ Gary M. Cebula
    ----------------------------         -----------------------
Print: Christopher P. Ricci           Print: Gary M. Cebula
       -------------------------            --------------------
Title: Sr. Vice President             Title:
       -------------------------            --------------------

                                       5<PAGE>

                                                                    EXHIBIT 10.4

                             SEPARATION AGREEMENT

     THIS AGREEMENT is made this first day of May, 2000, by and between FOCUS
Enhancements, Inc., A Delaware Corporation, hereinafter referred to as the
"Company", and Thomas L. Massie, hereinafter referred to as "Employee".

     RECITALS:

     WHEREAS, beginning on or about December 18, 1992, Company and Employee
entered into an employment agreement, which was subsequently amended on
March 22, 1993, December 16, 1993, and restated on January 1, 1998
(collectively, the "Employment Contract"); and

     WHEREAS, Employee owes to Company $140,000, plus interest, pursuant to
promissory notes dated January 6, 1996 and December 1, 1998 (collectively, the
"Notes");

     WHEREAS, Employee has voluntarily chosen to sever the employment
relationship; and

     WHEREAS, Employee and Company now desire to avoid any disputes or
differences regarding any prospective claims which may be asserted by Employee
regarding any entitlement to continuation of his employment with the Company;

     NOW, THEREFORE, in consideration of the above recitals, which are
incorporated herein by this reference, and in further consideration of the
covenants, promises and conditions hereinafter set forth, Employee and Company
agree as follows:

1.   Employee's employment with the Company shall be considered as and was
     terminated effective April 28, 2000 ("Termination Date"). As of the
     Termination Date, the Employment Contract shall be considered terminated by
     Employee. Company acknowledges that termination of the Employment Contract
     shall not contravene any rights that Employee may otherwise have to
     continue to serve as Chairman of Company's Board of Directors for the
     remainder of his elected term. Notwithstanding the foregoing, sections 2.3,
     2.4, 2.5 and 2.6 of the Employment Contract shall survive termination of
     this Agreement.

2.   On the Termination Date, Company delivered to Employee all salary earned
     and owed to Employee, less appropriate withholdings, through such date. All
     remaining remuneration consisting of vacation pay (11 days totaling
     $6,346.56) and unpaid bonus pay ($14,999.68.00) amounting to twenty-one
     thousand three hundred forty-six dollars ($21,346.24) fifty-seven cents is
     paid in hand herewith.

3.   The Company agrees to and does deliver herewith to Employee in a certain
     Consulting Agreement between Focus Enhancements, Inc., and Employee, dated
     contemporaneously herewith, and is subject to all of the terms and
     provisions of the Consulting Agreement. Company agrees that during the term
     of the Consulting Agreement, all non-qualified stock options held by
     Employee as of the date hereof, shall continue to vest and shall continue
     to do so while Employee is a member of the Board of Directors.

4.   This Separation Agreement is entered into voluntarily by the parties
     without cause. The Company acknowledges that pursuant to extensive
     investigation conducted during February-April 2000 by a Special Committee
<PAGE>

     of the Board of Directors and independent accounting firms, the Special
     Committee made no findings that Employee had personal knowledge of or
     involvement in inventory misstatements made by a company accounting
     manager. The Company further acknowledges that Employee has fully performed
     the duties and obligations of his employment with Company as defined in
     Article 2 of the Employment Contract.

5.   The Company agrees to reimburse Employee for COBRA expenses until (i)
     Employee accepts employment with another company where employee is eligible
     to participate in that company's health plan, or (ii) April 28, 2001,
     whichever is earlier.

6.   Employee shall have the right to retain all Company records currently in
     his possession to assist him in his role as a member of the Board of
     Directors.

7.   The Company agrees to forgive all outstanding balances due to the Company
     under the Notes, including interest, at a rate of one eighth (1/8) per
     Company's fiscal quarter on the last day of each such quarter beginning
     September 30, 2000, and continuing for eight fiscal quarters until such
     Notes are paid in full. Further, as of the date hereof, all interest on the
     Notes shall cease to accrue. Employee agrees, however, that should he
     voluntarily resign from his position as a member of the Company's Board of
     Directors for any reason prior to June 1, 2002, then any remaining
     unforgiven portion of the Notes shall become immediately due and payable
     and all interest that would have accrued but for this Agreement shall
     accelerate and become due. Company agrees that in no event shall the amount
     forgiven under the Note for which Employee shall receive an IRS form 1099
     exceed $168,200.03.

8.   Subject to approval by the Securities and Exchange Commission (SEC), the
     Company agrees to make a public statement via a press release transmitted
     via Business Wire, faxed to the Company's internal database, with a hard
     copy to all employees in substantially the form attached hereto.

9.   Employee acknowledges his continuing duties to maintain Company's
     confidential information pursuant to an Employment Agreement executed
     between the parties, and further expressly agrees that he/she will keep in
     confidence and trust any proprietary information of the Company, which
     includes, but is not limited to, trade secrets, copyrights, ideas,
     techniques, know-how, inventions (whether patentable or not), and/or any
     other information of any type relating to designs, configurations,
     toolings, documentation, recorded data, schematics, source code, object
     code, masterworks, master data bases, algorithms, flowcharts, formulae,
     circuits, works of authorship, mechanisms, research, manufacture,
     improvements, assembly, installation, marketing, forecasts, pricing,
     customers, the salaries, duties, qualifications, performance levels and
     terms of compensation of other employees, and/or costs or other financial
     data concerning any of the foregoing or the Company and its operations,
     generally. Employee further agrees not to use or disclose to any third
     party any such information without the prior written consent of an officer
     of the Company or without actual knowledge that the disclosure will be
     governed by a Non-disclosure Agreement between Company and the third party.
     Employee agrees that the herein covenant of confidentiality is a material
     part of this Agreement.

10.  Except with respect to issues related to pending class action litigation
     and except as expressly provided herein to the contrary, each party hereto,
     on behalf of itself and its respective servants, agents, representatives,
     attorneys, insurers, predecessors, successors, administrators, trustees,
     affiliated and related entities, assignors and assignees, officers,
     directors, shareholders and employees, and each of them, releases the other
     party hereto and its respective servants, agents, representatives,
     attorneys, insurers, predecessors, successors, administrators, trustees,
     affiliated and related entities, assignors and assignees, officers,
     directors, shareholders and employees, and each of them, from any and all

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     claims, demands, expenses, losses, causes of action, liabilities,
     obligations, damages, liens and/or liabilities of any kind or nature
     whatsoever, arising out of or related to Employee's employment with the
     Company to the date of this Agreement, the negotiations preceding such
     employment, and any and all facts, events or circumstances related thereto.
     In addition, Employee agrees not to instigate or otherwise cause a negative
     action to exist against Company, it officers or directors, including, but
     not limited to, judicial actions, administrative actions, or message boards
     relating to Company, except to the extent required by law.

     Employee understands and expressly agrees that this Agreement extends to
     all claims of every nature and kind whatsoever related to Employee's
     employment with Company, known or unknown, suspected or unsuspected, past
     or present, which existed before the date of execution of this Agreement,
     including, but not limited to, any claims in tort or contract related to
     Employee's employment or to any acts or omissions of the Company involving
     Employee.

     Nothing herein shall contravene Employee's rights to indemnity for prior
     acts pursuant to the indemnity provisions of the Articles of Incorporation
     nor shall this Agreement limit any coverage to which Employee would
     otherwise be entitled under the Company's Directors and Officers Insurance.

11.  The parties agree that the terms and provisions of this agreement shall
     remain confidential, and each party hereto shall use their best efforts to
     preserve such confidentiality.

12.  The parties hereby agree that in any legal action or proceeding instituted
     to enforce the terms of this Agreement, to seek a declaration of rights in
     conjunction herewith, or otherwise relating to or arising out of this
     Agreement, whether in tort or in contract, the prevailing or successful
     party shall be entitled to recovery of its reasonable attorneys' fees,
     costs, and other expenses, notwithstanding whether the action or proceeding
     proceeds to trial or hearing, unless otherwise required by law.

13.  This Agreement represents and contains the entire agreement and
     understanding among parties hereto with respect to the subject matter of
     this Agreement, and supersedes any and all prior oral and written
     agreements and understandings. This Agreement may not be amended or
     modified except by an agreement in writing signed by the party against whom
     the enforcement of any modification or amendment is sought.

     Each party to the Agreement represents that it has executed this Agreement
     voluntarily and declares, warrants and represents that no promises,
     inducements, or other agreements not expressly contained and set forth in
     this Agreement have been made, and further, that the terms of this
     Agreement are contractual and not merely a recital, and shall be construed
     and enforced as such.

14.  Each party hereto has been specifically advised of its right to counsel in
     conjunction with the negotiation and formulation of this Agreement, and,
     accordingly, this Agreement shall be construed as if negotiated and drafted
     jointly by each of the parties hereto, and shall be interpreted and
     construed accordingly.

     Each of the parties to this Agreement, and/or their attorneys and
     representatives, agree to execute any and all documents necessary to
     effectuate the terms, conditions and purposes of this Agreement.

15.  In the event that one or more of the provisions, or portions thereof, of
     this Agreement is determined to be illegal or unenforceable, the remainder
     of this Agreement shall not be affected thereby and each remaining
     provision or portion thereof shall continue to be valid and effective and
     shall be enforceable to the fullest extent permitted by law.

16.  This Agreement shall bind and inure to the benefit of each party and each
     party's agents, representatives, successors, heirs and assigns.

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17.  This Agreement may be executed in any number or counterparts, each of which
     shall be deemed to be an original, and all of which together shall be
     deemed one and the same instrument.

18.  This Agreement is the result of a compromise and settlement of claims
     presently asserted or potentially assertable by Employee and Company, and
     the consideration paid and received therefore is not to be construed as an
     admission of any obligation or liability by any party hereto or by persons
     not a part of this Agreement. Notwithstanding the foregoing, Company
     acknowledges that no competent finder of fact has adjudged Employee as
     having participated in any intentional misconduct.

19.  Notwithstanding any other provision of this Agreement, each party hereto,
     as a part of the consideration for this Agreement, agrees that any
     controversy or claim arising out of this agreement or a breach thereof
     shall, on written request or either party served on the other, be submitted
     to binding arbitration. Judgment on the award rendered by the arbitrators
     may be entered in any court having jurisdiction. The parties shall each
     appoint one person to hear and determine the dispute, and if they shall be
     unable to agree, then the two persons so chosen shall select a third
     impartial arbitrator whose decision shall be final and conclusive upon both
     parties. The cost of such arbitration shall be borne by the losing party,
     or in such proportions as the arbitrators shall decide. Arbitration shall
     take place in Boston, Massachusetts and shall be conducted in accordance
     with the Rules of the American Arbitration Association.

     Each party warrants and represents that this Agreement is executed by
individuals or entities on its behalf by a duly authorized partner, officer or
representative.

"Company"                                    "Employee"
FOCUS Enhancements, Inc.                     Thomas L. Massie

By: /s/ William B. Coldrick                  By: /s/ Thomas L. Massie
    ---------------------------                  ------------------------
Printed: William B. Coldrick                 Printed: Thomas L. Massie
         ----------------------                       -------------------
Vice Chairman of the Board
Date: May  ____, 2000                        Date: May 1, 2000

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