EXHIBIT 4.1


                       DECLARATION OF REGISTRATION RIGHTS

     THIS  DECLARATION  OF  REGISTRATION  RIGHTS  (this  "Declaration")  is made
effective as of March 29, 2000,  between  PINNACLE  SYSTEMS,  INC., a California
corporation  ("Pinnacle"),  for the benefit of  shareholders  of Puffin Designs,
Inc., a California  corporation  (the  "Company"),  acquiring shares of Pinnacle
Common Stock pursuant to that Agreement and Plan of  Reorganization  dated as of
March 24, 2000 (the  "Reorganization  Agreement"),  among Pinnacle,  Company and
Mont  Dragon  Acquisition,  Inc.,  a  California  corporation  and  wholly-owned
subsidiary  of  Pinnacle   ("Merger  Sub"),   and  in   consideration   of  such
shareholders'  approving  the  Reorganization  Agreement  and  the  transactions
contemplated thereby.

                                    SECTION 1
                                   DEFINITIONS


     1.1 Certain Definitions. As used in this Agreement:

         (a) The term  "Effective  Time"  means  the time of  acceptance  by the
California Secretary of State of the Agreement of Merger.

         (b) The term "Exchange Act" means the Securities  Exchange Act of 1934,
as amended,  or any similar federal statute and the rules and regulations of the
SEC thereunder, all as the same shall be in effect from time to time.

         (c) The term "person" shall mean any person,  individual,  corporation,
partnership,  trust or other non-governmental entity or any governmental agency,
court,  authority  or other body  (whether  foreign,  federal,  state,  local or
otherwise).

         (d) The term "Holder"  means a (i) a shareholder of the Company to whom
shares of Common Stock of Pinnacle are issued at the Effective  Time pursuant to
Section  1.6(a) of the  Reorganization  Agreement,  or (ii) a transferee to whom
registration  rights  granted under this  Declaration  are assigned  pursuant to
Section 2.8 of this Declaration.

         (e) The terms "register,"  "registered" and  "registration"  refer to a
registration  effected  by  preparing  and filing a  registration  statement  in
compliance  with the Securities  Act, and the declaration or ordering by the SEC
of the effectiveness of such registration statement.

         (f) The term "Registrable  Securities" means for each Holder the number
of  shares of  Pinnacle  Common  Stock  issued to such  Holder  pursuant  to the
Reorganization  Agreement,  and  for  all  Holders  the  sum of the  Registrable
Securities held by them.

         (g) The term  "Securities  Act" means the  Securities  Act of 1933,  as
amended, or any similar federal statute and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
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         (h) The term "SEC"  means the United  States  Securities  and  Exchange
Commission or any other federal agency at the time  administering the Securities
Act.

     1.2  Reorganization  Agreement.  Capitalized  terms not  otherwise  defined
herein have the meanings given to them in the Reorganization Agreement.

                                    SECTION 2
                               REGISTRATION RIGHTS

     2.1 Shelf Registration.  As promptly as practicable and in any event within
30 days  after the  issuance  of the  shares  of  Pinnacle  Common  Stock on the
Effective Date and pursuant to Section 1.6(a) of the  Reorganization  Agreement,
Pinnacle  shall file a  registration  statement on Form S-3 under the Securities
Act covering the  Registrable  Securities.  The offerings  made pursuant to such
registration shall not be underwritten.

     2.2 Information by Holder. The Holders whose securities are included in any
registration  effected  pursuant to this  Section 2 shall  furnish in writing to
Pinnacle such information  regarding such persons and the distribution  proposed
by such  persons as Pinnacle  may request in writing and as shall be required in
connection with any  registration,  qualification  or compliance  referred to in
this Section 2. Pinnacle's obligations under this Section 2 are conditioned upon
compliance by such persons with the provisions of this Section 2.2.

     2.3  Obligations  of  Pinnacle.  In  connection  with any  registration  of
Registrable Securities pursuant to this Section 2, Pinnacle shall:

         (a) Use best  efforts  prepare  and file with the SEC the  registration
statement in  accordance  with Section 2 hereof with respect to the  Registrable
Securities and shall use its best efforts to cause such  registration  statement
to become  effective  as promptly as  practicable  after filing and to keep such
registration  statement  effective  until the sooner to occur of (A) the date on
which all Registrable  Securities  included within such  registration  statement
have been sold or (B) the first anniversary of the Effective Date.

         (b) Prepare and file with the SEC such  amendments  and  supplements to
such  registration  statement  and the  prospectus  (the  "Prospectus")  used in
connection  therewith as may be necessary to make and to keep such  registration
statement effective and to comply with the provisions of the Securities Act with
respect  to the sale or  other  disposition  of all  securities  proposed  to be
registered in such registration statement.

         (c) Furnish to the  participating  Holders such number of copies of any
Prospectus (including any preliminary Prospectus and any amended or supplemented
Prospectus),  in conformity with the  requirements of the Securities Act, as the
Holders may  reasonably  request in order to effect the offering and sale of the
shares of Registrable Securities to be offered and sold, but only while Pinnacle
shall  be  required  under  the  provisions  hereof  to cause  the  registration
statement to remain effective.

         (d) Use  its  best  efforts  to  register  or  qualify  the  shares  of
Registrable   Securities  covered  by  such  registration  statement  under  the
securities  or Blue Sky laws of such states as the  participating  Holders shall
reasonably  request,  and do any  and all  other  acts or  things  which  may be
necessary or advisable  to enable each Holder to  consummate  the public sale or
other  disposition  of such  Registrable  Securities  in such  state;  provided,
however,  that  Pinnacle  shall not be  required  to take any action  that would
subject it to the  general  jurisdiction  of the courts of any  jurisdiction  in
which  it is not so  subject  or to  qualify  as a  foreign  corporation  in any
jurisdiction where Pinnacle is not so qualified.

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         (e) Notify each Holder, promptly after it shall receive notice thereof,
of the  date  and  time  the  registration  statement  and  each  post-effective
amendment thereto has become effective or a supplement to any prospectus forming
a part of such registration statement has been filed.

         (f)  Cause  all  Registrable  Securities  registered  pursuant  to this
Section 2 to be listed on The Nasdaq  National  Market or such other exchange as
Pinnacle's Common Stock is then listed or quoted.

     2.4 Suspension of Prospectus. Notwithstanding anything else in this Section
2, if, at any time during  which a  Prospectus  is required to be  delivered  in
connection  with the sale of Registrable  Securities,  the Board of Directors of
Pinnacle determines in good faith that a development has occurred or a condition
exists  as a result  of  which  the  registration  statement  or the  Prospectus
contains or incorporates by reference a material  misstatement or omission,  the
correction  of which would  require the  premature  disclosure  of  confidential
information  that  would,  in the  good  faith  determination  of the  Board  of
Directors,  materially and adversely affect Pinnacle,  Pinnacle will immediately
notify the Holders  thereof by  telephone  and in writing.  Upon receipt of such
notification,  Holders  will  immediately  suspend  all  offers and sales of any
Registrable  Securities pursuant to the registration  statement for a period not
to exceed 30 days. Pinnacle may not exercise this delay right more than twice in
any 12-month period.  In the event of the delivery of the notice described above
by  Pinnacle,  Pinnacle  shall use its best  efforts to amend such  registration
statement and/or amend or supplement the related  prospectus if necessary and to
take all other  actions  necessary to allow the  proposed  sale to take place as
promptly  as  possible,  subject,  however,  to the right of  Pinnacle  to delay
further sales of Registrable  Securities  until the conditions or  circumstances
referred to in the notice have ceased to exist or have been disclosed.

     2.5 Expenses.

     (a) All  expenses,  other  than  discounts  and  commissions,  incurred  in
connection  with  any  registration  pursuant  to  Section  2 shall  be borne by
Pinnacle. The costs and expenses of any such registration shall include, without
limitation,  the  reasonable  fees and  expenses of  Pinnacle's  counsel and its
accountants, the reasonable fees and expenses of one counsel for the Holders and
all other costs and expenses of Pinnacle  incident to the preparation,  printing
and  filing  under the  Securities  Act of the  registration  statement  and all
amendments  and  supplements  thereto and the cost of furnishing  copies of each
preliminary  prospectus,  each final prospectus and each amendment or supplement
thereto to  underwriters,  dealers and other  purchasers  of the  securities  so
registered, the costs and expenses incurred in connection with the qualification
of  such  securities  so  registered  under  the  "blue  sky"  laws  of  various
jurisdictions,  the fees and expenses of Pinnacle's transfer agent and all other
costs and  expenses of  complying  with the  provisions  of this  Section 2 with
respect to such registration (collectively, "Registration Expenses").

     (b) Excluding the Registration  Expenses,  the participating  Holders shall
pay all other expenses incurred on their behalf with respect to any registration
pursuant  to Section 2,  including  any counsel  for the  participating  Holders
(other  than  counsel  as  provided  in  Section  2.5(a))  and all  underwriting
discounts and selling  commissions  with respect to the  Registrable  Securities
sold by them pursuant to such registration statement.

     2.6  Indemnification.  In the event of any offering  registered pursuant to
this Declaration:

         (a) To the  extent  permitted  by law,  Pinnacle  will  indemnify  each
Holder,  each of their  respective  officers  and  directors,  and  each  person
controlling such person,  with respect to which  registration,  qualification or
compliance has been effected  pursuant to this Section 2, and each  underwriter,
if any,  and each  person who  controls  any  underwriter,  against  all claims,
losses,  damages and liabilities (or actions in respect  thereof) arising out of
or based on (i) any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other document (including
any related  registration

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statement,  notification  or  the  like)  incident  to  any  such  registration,
qualification or compliance, or (ii) any omission (or alleged omission) to state
therein a material fact  required to be stated  therein or necessary to make the
statements  therein not  misleading,  or (iii) any  violation by Pinnacle of any
rule or regulation  promulgated under the Securities Act or any state securities
laws or rule or  regulation  promulgated  thereunder  applicable to Pinnacle and
relating to action or inaction  required of Pinnacle in connection with any such
registration,  qualification or compliance, and will reimburse each such person,
each of its officers and  directors,  and each person  controlling  such person,
each such underwriter and each person who controls any such underwriter, for any
legal  and  any  other   expenses   reasonably   incurred  in  connection   with
investigating or defending any such claim,  loss,  damage,  liability or action,
provided  that  Pinnacle  will not be liable in any such case to the extent that
any such  claim,  loss,  damage or  liability  arises  out of or is based on any
untrue  statement  or  omission  based upon  written  information  furnished  to
Pinnacle by an instrument duly executed by such person or underwriter and stated
to be specifically for use therein.

         (b) To the extent  permitted by law, each Holder will,  if  Registrable
Securities  held by or issuable to such person are included in the securities as
to which such  registration,  qualification  or  compliance  is being  effected,
indemnify  Pinnacle,  its legal counsel,  each of its directors and officers who
sign such  registration  statement,  each  underwriter,  if any,  of  Pinnacle's
securities  covered by such a registration  statement,  each person who controls
Pinnacle  within the meaning of the  Securities  Act and each other such Holder,
each of its  officers and  directors  and each person  controlling  such Holder,
against  all claims,  losses,  damages  and  liabilities  (or actions in respect
thereof)  arising out of or based on (i) any untrue statement (or alleged untrue
statement)  of a material  fact  contained in any such  registration  statement,
prospectus,  offering  circular  or other  document,  or (ii) any  omission  (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements  therein not misleading,  and will reimburse
Pinnacle,  such Holders, such directors,  officers,  persons or underwriters for
any  legal  or  any  other  expenses  reasonably  incurred  in  connection  with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent,  that such untrue statement (or
alleged  untrue  statement)  or omission  (or alleged  omission) is made in such
registration  statement,  prospectus,  offering  circular  or other  document in
reliance upon and in conformity with written  information  furnished to Pinnacle
by an instrument duly executed by such Holder and stated to be specifically  for
use therein;  provided,  however, that the obligations of such Holders hereunder
shall be limited to an amount equal to the gross  proceeds  before  expenses and
commissions to each such Holder of Registrable  Securities  sold as contemplated
herein.

         (c) Each party entitled to indemnification  under this Section 2.6 (the
"Indemnified  Party")  shall  give  notice  to the  party  required  to  provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has written notice of any claim as to which  indemnity may be sought,  and shall
permit the  Indemnifying  Party to assume  the  defense of any such claim or any
litigation  resulting  therefrom,  provided  that  counsel for the  Indemnifying
Party,  who shall  conduct  the  defense of such claim or  litigation,  shall be
approved by the  Indemnified  Party (whose  approval  shall not be  unreasonably
withheld),  and the  Indemnified  Party may  participate in such defense at such
party's expense,  and provided further that the failure of any Indemnified Party
to give notice as provided  herein shall not relieve the  Indemnifying  Party of
its obligations  under this Declaration,  except to the extent,  but only to the
extent,  that the  Indemnifying  Party's ability to defend against such claim or
litigation  is  impaired  as a  result  of  such  failure  to  give  notice.  No
Indemnifying  Party,  in the  defense  of any such claim or  litigation,  shall,
except  with the  consent  of each  Indemnified  Party,  consent to entry of any
judgment or enter any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff  to the  Indemnified  Party of a
release from all liability in respect to such claim or  litigation.  If any such
Indemnified Party shall have reasonably  concluded that there may be one or more
legal defenses  available to such Indemnified  Party which are different from or
additional to those available to the  Indemnifying  Party, or that such claim or
litigation involves or could have an effect upon matters beyond the scope of the
indemnity  agreement  provided in this Section 2.6, the Indemnifying Party shall
not have the right to assume the defense of such action on behalf of

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such  Indemnified  Party  and  such  Indemnifying  Party  shall  reimburse  such
Indemnified  Party and any person  controlling such  Indemnified  Party for that
portion of the fees and  expenses  of any counsel  retained  by the  Indemnified
Party  which are  reasonably  related to the  matters  covered by the  indemnity
agreement provided in this Section 2.6.

         (d) In order to provide  for just and  equitable  contribution  between
Pinnacle  and  such  Holders  in  circumstances  in  which  the  indemnification
provisions of this Section 2.6 are for any reason  insufficient or inadequate to
hold the indemnified party harmless,  Pinnacle and such Holders shall contribute
to the aggregate Losses (including any  investigation,  legal and other fees and
expenses  reasonably  incurred  in  connection  with,  and  any  amount  paid in
settlement of, any action, suit or proceeding or any claims asserted,  but after
deducting any  contribution  actually  received from persons other than Pinnacle
and such  Holders) to which  Pinnacle  and one or more of its  directors  or its
officers who sign such Registration Statement or such Holders or any controlling
person of any of them, or their respective officers,  directors or employees may
become subject, under the Securities Act, under any other statute, at common law
or otherwise, insofar as such Losses or actions in respect thereof arise out of,
or are based upon,  any untrue  statement  or alleged  untrue  statement  of any
material fact contained in such  Registration  Statement or arise out of, or are
based upon,  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. Such contributions shall be in such amounts that the portion of such
Losses for which each such Holder shall be responsible under this Section 2.6(d)
shall be limited to the portion of such Losses which are  directly  attributable
to an untrue  statement  of a material  fact or an  omission to state a material
fact in said  Registration  Statement in reliance upon, and in conformity  with,
written  information  furnished  to  Pinnacle by or on behalf of any such Holder
specifically for use therein,  and Pinnacle shall be responsible for the balance
of such Losses;  provided,  however,  that the  liability of each such Holder to
make such  contribution  shall be limited to an amount  equal to the proceeds of
the sale of shares of  Registrable  Securities  by such  Holder in the  offering
which  gives  rise  to  the  liability  (net  of  underwriting  commissions  and
disbursements) paid or incurred in connection with the registration, if any, and
sale). As among themselves,  such Holders agree to contribute to amounts payable
by other such Holders in such manner as shall,  to the extent  permitted by law,
give effect to the provisions in Section 2.6(b). Pinnacle and such Holders agree
that it would  not be just and  equitable  if their  respective  obligations  to
contribute pursuant to this Section were to be determined by pro rata allocation
(other than as set forth  above) of the  aggregate  Losses by  reference  to the
proceeds  realized  by such  Holders  in a sale  pursuant  to said  Registration
Statement or said Prospectus or by any other method of allocation which does not
take account of the  considerations  set forth in this Section 2.6(d). No Person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  under this Section from
any person who was not guilty of such fraudulent misrepresentation.

         (e) The  obligations of Pinnacle and each Holder under this Section 2.6
shall  survive the  completion  of any offering of  Registrable  Securities in a
registration statement under this Declaration and otherwise.

     2.7 Sale without  Registration.  The Holder of a  certificate  representing
Registrable Securities required to bear the legend in substantially the form set
forth in Section 1.8(g) of the Reorganization  Agreement (or any similar legend)
by acceptance  thereof  agrees to comply in all respects with the  provisions of
this Section 2.7. Prior to any proposed  transfer of any Registrable  Securities
which shall not be registered under the Securities Act, the holder thereof shall
give  written  notice to  Pinnacle  of such  holder's  intention  to effect such
transfer,  accompanied  by: (a) such  information as is reasonably  necessary in
order to establish that such transfer may be made without registration under the
Securities  Act; and (b) except for transfers  proposed to be made in accordance
with SEC Rule 144 (as in effect at the date  hereof and as amended  from time to
time  thereafter)  or to any  constituent  partner  of any of the  New  Pinnacle
Shareholders, at the expense of the Holder or transferee, an unqualified written
opinion of legal counsel, satisfactory in form and substance to Pinnacle, to the
effect that such transfer may be made without  registration under the Securities

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Act;  provided that nothing contained in this Section 2.7 shall relieve Pinnacle
from complying with any request for  registration,  qualification  or compliance
made pursuant to the other provisions of this Section 2.

     2.8  Transfer  of  Registration  Rights.  The rights to cause  Pinnacle  to
register  securities  granted by Pinnacle under this Declaration may be assigned
by any of the New Pinnacle  Shareholders only if: (i) Pinnacle is, prior to such
transfer,  furnished  with  written  notice  of the  name  and  address  of such
transferee  and  the   Registrable   Securities   with  respect  to  which  such
registration  rights are being  assigned and a copy of a duly  executed  written
instrument in form reasonably  satisfactory to Pinnacle by which such transferee
assumes all of the obligations  and liabilities of its transferor  hereunder and
agrees  itself to be bound  hereby;  (ii) such  assignment  includes  all of the
Registrable  Securities  originally  issued to the  transferee,  or such  lesser
amount  if not less than  10,000  shares of  Registrable  Securities;  provided,
however,  that such 10,000  share  limitation  shall not apply to transfers by a
Holder to  shareholders,  partners,  retired  partners of the Holder  (including
spouses and  ancestors,  lineal  descendants,  and siblings of such  partners or
spouses  who  acquire  Registrable  Securities  by  right,  will,  or  intestate
succession) if all such  transferees or assignees  agree in writing to appoint a
single representative as their attorney-in-fact for the purpose of receiving any
notices and exercising their rights under this Declaration.

                                    SECTION 3
                                  MISCELLANEOUS

     3.1 Governing  Law. This  Declaration  shall be governed in all respects by
the laws of the State of California as applied to contracts  entered into solely
between residents of, and to be performed entirely within, such state.

     3.2 Third Party Beneficiaries.  It is intended that the shareholders of the
Company shall be third party beneficiaries to this Declaration.

     3.3  Successors  and Assigns.  This  Declaration  shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.

     3.4  Amendment  of  Registration  Rights.  Holders  of a  majority  of  the
Registrable  Securities from time to time  outstanding  may, with the consent of
Pinnacle, amend the registration rights granted hereunder.

     3.5 Notices  and Dates.  All  notices or other  communications  required or
permitted under this Declaration shall be made in the manner provided in Section
9.3 of the Reorganization  Agreement. In the event that any date provided for in
this Declaration falls on a Saturday,  Sunday or legal holiday,  such date shall
be deemed extended to the next business day.

     3.6  Severability.  If any provision of this Declaration or portion thereof
is  held  by  a  court  of  competent   jurisdiction  to  be  invalid,  void  or
unenforceable,   the   remainder  of  the  terms,   provisions,   covenants  and
restrictions of this Declaration shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

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     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their respective authorized officers as of the date aforesaid.




"PINNACLE"                                  PINNACLE SYSTEMS, INC.,
                                            a California corporation

                                            By: /s/ ARTHUR D. CHADWICK
                                                --------------------------------
                                                Arthur D. Chadwick
                                                Vice President, Finance and
                                                Chief Finance Officer

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