Document:

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Ex-10.32
Employment Agreement with Bonnie Crystal

                                  EXHIBIT 10.32

                              EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into as of October 13,
1998, by and between Telegen, a California corporation (the "Company"), and
Bonnie A. Crystal (the "Executive").

WHEREAS, the Company desires to employ the Executive as of October 11, 1998, or
such other date as the Executive shall first be employed by the Company (the
"Effective Date"), and the Executive desires to accept employment with the
Company on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the foregoing recital and the respective
covenants and agreements of the parties contained in this document, the Company
and the Executive agree as follows:

1.      EMPLOYMENT AND DUTIES. The Executive will serve as the Executive Vice
President and Chief Technology Officer of the Company. The duties and
responsibilities of the Executive shall include the duties and responsibilities
for the Executive's corporate offices and positions as set forth in the
Company's Bylaws from time to time in effect and such other duties and
responsibilities as the Chief Executive Officer or the board of directors of the
Company (the "Board of Directors") may from time to time reasonably assign to
the Executive, in all cases to be consistent with the Executive's corporate
offices and positions. The Executive shall report to the Chief Executive
Officer. The Executive shall perform faithfully the executive duties assigned to
her to the best of her ability.

2.      EMPLOYMENT PERIOD.

        (a)     BASIC RULE. The employment period shall begin upon the Effective
Date and shall continue for a minimum period of five (5) years.

        (b)     TERMINATION

                (i)     DEATH. The Executive's employment will terminate in the
event of her death. The Company shall have no obligation to pay or provide any
compensation or benefits under this Agreement on account of the Executive's
death, or for periods following the Executive's death, other than the Company's
obligations applicable under such circumstance under paragraph 13. The
Executive's rights under the benefit plans of the Company in the event of the
Executive's death will be determined under the provisions of those plans.

                (ii)    CAUSE. The Company may terminate the Executive's
employment only for cause by giving the Executive notice in writing. For all
purposes under this Agreement, "Cause" shall mean (i) willful failure by the
Executive to perform her duties hereunder and not to cure such willful failure
by the Executive, thirty (30) days after receipt of written notice by the
Company of such willful failure, other than a failure resulting from the
Executive's complete or partial incapacity due to physical or mental illness or
impairment (provided that impairment as a result of substance abuse shall be
deemed willful failure hereunder), (ii) a willful act by the Executive which
constitutes gross misconduct and which is demonstrably injurious to the Company,
(iii) a willful breach by the Executive of a material provision of this
Agreement, or (iv) a material and willful violation by the Executive of a
federal or state law or regulation applicable to the business of the Company. No
act, or failure to act, by the Executive shall be considered "willful" unless
committed without good faith or without a reasonable belief that the act or
omission was in the Company's best interest. No compensation or benefits will be
paid or provided to the Executive under this Agreement on account of a
termination for Cause or for periods following the date when such a termination
of employment is effective. The Executive's rights under the benefit plans of
the Company shall be determined under the provisions of those plans.

<PAGE>

                (iii)   DISABILITY. The Company may terminate the Executive's
employment for Disability by giving the Executive thirty (30) days' advance
notice in writing. For all purposes under this Agreement, "Disability" shall
mean that the Executive, at the time notice is given, has been unable to
substantially perform her duties under this Agreement for a period of not less
than ninety (90) days due to physical or mental illness. The determination of
the Executive's Disability hereunder shall be made by a two-thirds (2/3)
majority of the then current members of the Company's Board of Directors
(excluding the Executive) and shall be based upon advice from such medical
professionals and upon such medical and other records as the Company's Board of
Directors may deem appropriate. In the event that the Executive resumes the
performance of substantially all of her duties hereunder before the termination
of her employment under this paragraph 2(b)(iii) becomes effective, the notice
of termination shall automatically be deemed to have been revoked. The
Executive's rights under the benefit plans of the Company shall be determined
under the provisions of those plans.

3.      PLACE OF EMPLOYMENT. The Executive's services shall be performed at the
Company's principal executive offices. The parties acknowledge, however, that
some travel may be required in connection with the performance of the
Executive's duties hereunder.

4.      SALARY. For all services to be rendered by the Executive pursuant to
this Agreement, the Company agrees to pay the Executive an annual salary (the
"Salary") of $180,000 from the date hereof until the first anniversary of this
Agreement. Thereafter, for each annual period beginning on or after the first
anniversary of the Effective Date, the Salary shall be determined by the Board
of Directors prior to each such anniversary but in no case shall be lower than
$180,000 per annum. The Salary shall be paid in periodic installments in
accordance with the Company's regular payroll practices. The payment of such
Salary to the extent not paid by the Company shall be accrued and the Executive
shall have the right to convert any portion of the accrued salary to common
stock of the Company at a rate twenty percent (20%) below the next offering
price of the Company's stock.

5.      EXPENSES. The Executive shall be entitled to reimbursement by the
Company for all reasonable, ordinary, and necessary travel, entertainment,
and other expenses incurred by the Executive during the term of this Agreement
(in accordance with the policies and procedures established by the Company for
its senior executive officers) in the performance of her duties and
responsibilities under this Agreement; provided, however, that the Executive
shall properly account for such expenses in accordance with the Company's
policies and procedures.

6.      VACATIONS AND HOLIDAYS. The Executive shall be entitled to paid vacation
time and Company holidays in accordance with the Company's policies in effect
from time to time for its senior executive officers.

7.      TERMINATION BENEFITS. In the event the Executive's employment
terminates, then the Executive shall be entitled to receive severance and other
benefits as follows:

         (a)      SALARY.

                (i)     INVOLUNTARY TERMINATION WITHOUT CAUSE. If the Company
                terminates the Executive's employment without Cause, then in
                lieu of any severance benefits to which the Executive may
                otherwise be entitled under any Company severance plan or
                program, the Executive shall be entitled on such date to a
                lump-sum payment of her Salary for five (5) years from the date
                of such termination at the rate applicable on such date;

                (ii)    ADDITIONAL DEFINITION OF INVOLUNTARY TERMINATION WITHOUT
                CAUSE. To the extent the Executive's duties shall be materially
                reduced in nature, character or responsibility from those
                contemplated in paragraph 1, the Executive shall have the option
                for thirty (30) days from such date, to (i) terminate her
                employment with the Company or (ii) enter into an agreement with
                the Company, specifying the Executive's revised duties. To the
                extent the Executive terminates her employment under this
                paragraph and the Company cannot come to an agreement, such
                termination shall be deemed to be for the purposes of this
                paragraph "Involuntary Termination Without Cause."

<PAGE>

8.      PROPRIETARY INFORMATION. The Executive shall not, without the prior
written consent of the Board of Directors, disclose or use for any purpose
(except in the course of her employment under this Agreement and in furtherance
of the business of the Company or any of its affiliates or subsidiaries) any
confidential information or proprietary data of the Company. As an express
condition of the Executive's employment with the Company, the Executive agrees
to execute confidentiality agreements as requested by the Company, including but
not limited to the Company's standard form of proprietary information agreement.
The Executive's obligations under this paragraph 8 shall also be in full force
in effect as to Telegen.

9.      RIGHT TO ADVICE OF COUNSEL. The Executive acknowledges that she has
consulted with counsel and is fully aware of her rights and obligations under
this Agreement.

10.     SUCCESSORS. The Company and Telegen will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Telegen would be required to perform it if no such succession
had taken place. Failure of Telegen to obtain such assumption agreement prior to
the effectiveness of any such succession shall entitle the Executive to the
benefits described in paragraph 7(a)(i) of this Agreement, subject to the terms
and conditions therein.

11.     ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in San Mateo
County, California, in accordance with the rules of the American Arbitration
Association then in effect, with the right of discovery limited to five (5)
depositions, thirty-five (35) interrogatories, and reasonable request for
documents, by any party, by an arbitrator selected by both parties within ten
(10) days after either party has notified the other in writing that it desires a
dispute between them to be settled by arbitration. In the event the parties
cannot agree on such arbitrator within such ten (10) day period, each party
shall select an arbitrator and inform the other party in writing of such
arbitrator's name and address within five (5) days after the end of such ten
(10) day period and the two arbitrators so selected shall select a third
arbitrator within fifteen (15) days thereafter; provided, however, that in the
event of a failure by either party to select an arbitrator and notify the other
party of such selection within the time period provided above, the arbitrator
selected by the other party shall be the sole arbitrator of the dispute. Each
party shall pay its own expenses associated with such arbitration, including the
expense of any arbitrator selected by such party and the Company will pay the
expenses of the jointly selected arbitrator. The decision of the arbitrator or a
majority of the panel of arbitrators shall be binding upon the parties and
judgment in accordance with that decision may be entered in any court having
jurisdiction there over.

12.     ABSENCE OF CONFLICT. The Executive represents and warrants that her
employment by the Company as described herein shall not conflict with and will
not be constrained by any prior employment or consulting agreement or
relationship.

13.     ASSIGNMENT. This Agreement and all rights under this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective personal or legal representatives, executors,
administrators, heirs, devisees, legatees, successors and assigns. This
Agreement is personal in nature, and neither of the parties to this Agreement
shall, without the written consent of the other, assign or transfer this
Agreement or any right or obligation under this Agreement to any other person or
entity; except Telegen may assign this Agreement to any of its affiliates or
wholly-owned subsidiaries, provided, however that such assignment will not
relieve Telegen of its obligations hereunder. If the Executive should die while
any amounts are still payable to the Executive hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.

14.     NOTICES. For purposes of this Agreement, notices and other
communications provided for in this Agreement shall be in writing and shall be
delivered personally or sent by United States certified mail, return receipt
requested, postage prepaid, addressed as follows:

<PAGE>

If to the Executive:            Bonnie A. Crystal, 204 East Second Avenue, #256,
                                San Mateo, CA 94401

If to the Company:              Telegen Corporation, 101 Saginaw Drive
                                Redwood City, CA 94063
                                Attn: Chief  Executive  Officer

or to such other address or the attention of such other person as the recipient
party has previously furnished to the other party in writing in accordance with
this paragraph. Such notices or other communications shall be effective upon
delivery or, if earlier, three (3) days after they have been mailed as provided
above.

15.     INTEGRATION. This Agreement represents the entire agreement and
understanding between the parties as to the subject matter hereof and supersedes
all prior or contemporaneous agreements whether written or oral. No waiver,
alteration, or modification of any of the provisions of this Agreement shall be
binding unless in writing and signed by duly authorized representatives of the
parties hereto.

16.     WAIVER. Failure or delay on the part of either party hereto to enforce
any right, power, or privilege hereunder shall not be deemed to constitute a
waiver thereof. Additionally, a waiver by either party or a breach of any
promise hereof by the other party shall not operate as or be construed to
constitute a waiver of any subsequent waiver by such other party.

17.     SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or any other jurisdiction.

18.     HEADINGS. The headings of the paragraphs contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of any provision of this Agreement.

19.     APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to agreements
between California residents entered into and to be performed entirely within
California.

20.     COUNTERPARTS. This Agreement may be executed in one or more
counterparts, none of which need contain the signature of more than one party
hereto, and each of which shall be deemed to be an original, and all of which
together shall constitute a single agreement.

21.     TERMINATION OF OBLIGATIONS OF TELEGEN. Any obligations of Telegen
hereunder shall cease upon the fifth anniversary of the Effective Date.

IN WITNESS WHEREOF, each of the parties has executed this Employment Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.

"COMPANY"

TELEGEN CORPORATION

By: /s/ JESSICA L STEVENS
    -----------------------------------------
Jessica L. Stevens, Chief Executive Officer

"EXECUTIVE"

/s/ BONNIE CRYSTAL
---------------------------------------------
Bonnie A. Crystal<PAGE>

                                                                     Exhibit 4.1

                                                                       EXHIBIT A

                          REGISTRATION RIGHTS AGREEMENT

            THIS REGISTRATION RIGHTS AGREEMENT, dated as of December 1, 2000
between Crossover Ventures, Inc. ("Purchaser") and On2.com Inc. (the "Company").

            WHEREAS, simultaneously with the execution and delivery of this
Agreement, pursuant to a Common Stock Purchase Agreement dated as of the date
hereof (the "Purchase Agreement") by and between the Purchaser and the Company,
the Purchaser has committed to purchase up to the Commitment Amount (terms not
defined herein shall have the meanings ascribed to them in the Purchase
Agreement) and Warrants; and

            WHEREAS, the Company desires to grant to the Purchaser the
registration rights set forth herein with respect to the Shares (the
"Securities").

            NOW, THEREFORE, the parties hereto mutually agree as follows:

            SECTION 1. REGISTRABLE SECURITIES. As used herein the term
"Registrable Security" means the Securities until (i) all Securities have been
disposed of pursuant to the Registration Statement, (ii) all Securities have
been sold under circumstances under which all of the applicable conditions of
Rule 144 (or any similar provision then in force) under the Securities Act
("Rule 144") are met, (iii) all Securities have been otherwise transferred to
persons who may trade such Securities without restriction under the Securities
Act, and the Company has delivered a new certificate or other evidence of
ownership for such Securities not bearing a restrictive legend or (iv) such time
as, in the opinion of counsel to the Company, all Securities may be sold without
any time, volume or manner limitations pursuant to Rule 144(k) (or any similar
provision then in effect) under the Securities Act. The term "Registrable
Securities" means any and/or all of the securities falling within the foregoing
definition of a "Registrable Security." In the event of any merger,
reorganization, consolidation, recapitalization or other change in corporate
structure affecting the Common Stock, such adjustment shall be deemed to be made
in the definition of "Registrable Security" as is appropriate in order to
prevent any dilution or enlargement of the rights granted pursuant to this
Agreement.

            SECTION 2. RESTRICTIONS ON TRANSFER. The Purchaser acknowledges and
understands that in the absence of an effective Registration Statement
authorizing the resale of the Securities as provided herein, the Securities are
"restricted securities" as defined in Rule 144. The Purchaser understands that
no disposition or transfer of the Securities may be made by Purchaser in the
absence of (i) an opinion of counsel to the Purchaser, in form and substance
reasonably satisfactory to the Company, that such transfer may be made without
registration under the Securities Act or (ii) such registration.

            With a view to making available to the Purchaser the benefits of
Rule 144, the Company agrees to:
<PAGE>

            (a) comply with the provisions of paragraph (c)(1) of Rule 144; and

            (b) file with the Commission in a timely manner all reports and
other documents required to be filed by the Company pursuant to Section 13 or
15(d) under the Exchange Act; and, if at any time it is not required to file
such reports but in the past had been required to or did file such reports, it
will, upon the request of the Purchaser, make available other information as
required by, and so long as necessary to permit sales of, its Registrable
Securities pursuant to Rule 144.

            SECTION 2. REGISTRATION RIGHTS WITH RESPECT TO THE SECURITIES.

            (a) The Company agrees that it will prepare and file with the
Securities and Exchange Commission ("Commission"), within sixty (60) days after
the date hereof, a registration statement (on Form S-3 and/or S-1, or other
appropriate form of registration statement) under the Securities Act (the
"Registration Statement"), at the sole expense of the Company (except as
provided in Section 3(c) hereof), in respect of Purchaser, so as to permit a
public offering and resale of the Securities under the Securities Act by
Purchaser.

            The Company shall use its best efforts to cause the Registration
Statement to become effective within one hundred twenty (120) days (or one
hundred fifty (150) days in the event of a "full review" by the Commission) of
the date hereof or five (5) days of SEC clearance and will within said five (5)
days request acceleration of effectiveness. The Company will notify Purchaser of
the effectiveness of the Registration Statement within one Trading Day of such
event.

            (b) The Company will maintain the Registration Statement or
post-effective amendment filed under this Section 3 hereof effective under the
Securities Act until the earliest of (i) the date that all the Securities have
been disposed of pursuant to the Registration Statement, (ii) the date that all
of the Securities have been sold pursuant to the Registration Statement, (iii)
the date the holders thereof receive an opinion of counsel to the Company, which
opinion shall be reasonably acceptable to the Purchaser, that the Securities may
be sold under the provisions of Rule 144 without limitation as to volume, (iv)
all Securities have been otherwise transferred to persons who may trade such
shares without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such securities
not bearing a restrictive legend, or (v) all Securities may be sold without any
time, volume or manner limitations pursuant to Rule 144(k) or any similar
provision then in effect under the Securities Act in the opinion of counsel to
the Company, which counsel shall be reasonably acceptable to the Purchaser (the
"Effectiveness Period").

            (c) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and filing of the
Registration Statement under subparagraph 3(a) and in complying with applicable
securities and Blue Sky laws (including, without limitation, all attorneys' fees
of the Company) shall be borne by the Company. The Purchaser shall bear the cost
of underwriting and/or brokerage discounts, fees and commissions, if any,
applicable to the Securities being registered and the fees and expenses of its
counsel. The
<PAGE>

Purchaser and its counsel shall have a reasonable period, not to exceed five (5)
Trading Days, to review the proposed Registration Statement or any amendment
thereto, prior to filing with the Commission, and the Company shall provide the
Purchaser with copies of any comment letters received from the Commission with
respect thereto within two (2) Trading Days of receipt thereof. The Company
shall make reasonably available for inspection by Purchaser, any underwriter
participating in any disposition pursuant to the Registration Statement, and any
attorney, accountant or other agent retained by the Purchaser or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by the Purchaser or any such underwriter, attorney, accountant or
agent in connection with the Registration Statement, in each case, as is
customary for similar due diligence examinations; PROVIDED, HOWEVER, that all
records, information and documents that are designated in writing by the
Company, in good faith, as confidential, proprietary or containing any material
non-public information shall be kept confidential by the Purchaser and any such
underwriter, attorney, accountant or agent, unless such disclosure is made
pursuant to judicial process in a court proceeding (after first giving the
Company an opportunity promptly to seek a protective order or otherwise limit
the scope of the information sought to be disclosed) or is required by law, or
such records, information or documents become available to the public generally
or through a third party not in violation of an accompanying obligation of
confidentiality; and PROVIDED FURTHER that, if the foregoing inspection and
information gathering would otherwise disrupt the Company's conduct of its
business, such inspection and information gathering shall, to the maximum extent
possible, be coordinated on behalf of the Purchaser and the other parties
entitled thereto by one firm of counsel designed by and on behalf of the
majority in interest of Purchaser and other parties. The Company shall qualify
any of the securities for sale in such states as the Purchaser reasonably
designates and shall furnish indemnification in the manner provided in Section 6
hereof. However, the Company shall not be required to qualify in any state which
will require an escrow or other restriction relating to the Company and/or the
sellers, or which will require the Company to qualify to do business in such
state or require the Company to file therein any general consent to service of
process. The Company at its expense will supply the Purchaser with copies of the
Registration Statement and the prospectus included therein and other related
documents in such quantities as may be reasonably requested by the Purchaser.

            (d) The Company shall not be required by this Section 3 to include a
Purchaser's Securities in any Registration Statement which is to be filed if, in
the opinion of counsel for both the Purchaser and the Company (or, should they
not agree, in the opinion of another counsel experienced in securities law
matters acceptable to counsel for the Purchaser and the Company) the proposed
offering or other transfer as to which such registration is requested is exempt
from applicable federal and state securities laws and would result in all
purchasers or transferees obtaining securities which are not "restricted
securities", as defined in Rule 144 under the Securities Act.

            (e) If at any time or from time to time after the effective date of
the Registration Statement, the Company notifies the Purchaser in writing of the
existence of a Potential Material Event (as defined in Section 3(f) below), the
Purchaser shall not offer or sell
<PAGE>

any Securities or engage in any other transaction involving or relating to
Securities, from the time of the giving of notice with respect to a Potential
Material Event until the Purchaser 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 (the "Suspension Period");
PROVIDED, HOWEVER, that, if a Suspension Period occurs during any periods
commencing on a Trading Day a Draw Down Notice is deemed delivered and ending
ten (10) Trading Days following the end of the corresponding Draw Down Pricing
Period, then the Company must compensate the Purchaser for any net decline in
the market value of any Securities committed to be purchased by the Purchaser
pursuant to any such Draw Down and held by the Purchaser at the end of such
Suspension Period. Net decline in the market value of the Securities shall be
calculated as the difference between the highest VWAP during the applicable
Suspension Period and the VWAP on the Trading Day immediately following a
properly delivered notice to the Purchaser that such Suspension Period has
ended. If a Potential Material Event shall occur prior to the date the
Registration Statement is filed, then the Company's obligation to file the
Registration Statement shall be delayed without penalty for not more than thirty
(30) calendar days. THE COMPANY MUST GIVE PURCHASER NOTICE IN WRITING AT LEAST
TWO (2) TRADING DAYS PRIOR TO THE FIRST DAY OF ANY SUSPENSION PERIOD, IF LAWFUL
TO DO SO.

            (f) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information that is not ripe for
disclosure in a registration statement, as determined in good faith by the Chief
Executive Officer or the Board of Directors of the Company or that disclosure of
such information in the Registration Statement would be detrimental to the
business and affairs of the Company; or (b) any material engagement or activity
by the Company which would, in the good faith determination of the Chief
Executive Officer or the Board of Directors of the Company, be adversely
affected by disclosure in a registration statement at such time, which
determination shall be accompanied by a good faith determination by the Chief
Executive Officer or the Board of Directors of the Company that the Registration
Statement would be materially misleading absent the inclusion of such
information.

            SECTION 4. COOPERATION WITH COMPANY. Purchaser will cooperate with
the Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company (which shall
include all information regarding the Purchaser and proposed manner of sale of
the Registrable Securities required to be disclosed in the Registration
Statement) and executing and returning all documents reasonably requested in
connection with the registration and sale of the Registrable Securities and
entering into and performing its obligations under any underwriting agreement,
if the offering is an underwritten offering, in usual and customary form, with
the managing underwriter or underwriters of such underwritten offering. The
Purchaser shall consent to be named as an underwriter in the Registration
Statement. Purchaser acknowledges that in accordance with current Commission
policy, the Purchaser will be named as the underwriter of the Securities in the
Registration Statement.

            SECTION 5. REGISTRATION PROCEDURES. If and whenever the Company is
required by any of the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Securities Act, the Company shall
(except as otherwise provided in this Agreement), as
<PAGE>

expeditiously as possible, subject to the Purchaser's assistance and cooperation
as reasonably required:

            (a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary 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 covered by such registration statement
whenever the Purchaser of such Registrable Securities shall desire to sell or
otherwise dispose of the same (including prospectus supplements with respect to
the sales of securities from time to time in connection with a registration
statement pursuant to Rule 415 promulgated under the Securities Act) and (ii)
take all lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an 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 not misleading and
(B) the prospectus forming part of the Registration Statement, and any amendment
or supplement thereto, does not at any time during the Effectiveness Period on
the date thereof include an 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 under which they were made,
not misleading.

            (b) prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any prospectus (including any supplements thereto), provide draft copies thereof
to the Purchaser and reflect in such documents all such comments as the
Purchaser (and its counsel) reasonably may propose and (ii) furnish to the
Purchaser such numbers of copies of a prospectus including a preliminary
prospectus or any amendment or supplement to any prospectus, as applicable, in
conformity with the requirements of the Securities Act, and such other
documents, as the Purchaser may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by the Purchaser;

            (c) register and qualify the Registrable Securities covered by the
Registration Statement under New York blue sky laws (subject to the limitations
set forth in Section 3(c) above), and do any and all other acts and things which
may be reasonably necessary or advisable to enable the Purchaser to consummate
the public sale or other disposition in such jurisdiction of the securities
owned by the Purchaser, except that the Company shall not for any such purpose
be required to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified or to file therein any general
consent to service of process or to subject itself to taxation in any such
jurisdiction;

            (d) list such Registrable Securities on the Principal Market, and
any other exchange on which the Common Stock of the Company is then listed, if
the listing of such Registrable Securities is then permitted under the rules of
such exchange or the Nasdaq Stock Market;

            (e) notify the Purchaser at any time when a prospectus relating
thereto covered by the Registration Statement is required to be delivered under
the Securities Act, of the
<PAGE>

happening of any event of which it 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 not
misleading in the light of the circumstances then existing, and the Company
shall prepare and file a curative amendment under Section 5(a) as quickly as
commercially possible;

            (f) as promptly as practicable after becoming aware of such event,
notify the Purchaser who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the Commission or any state authority of any stop order or other suspension of
the effectiveness of the Registration Statement at the earliest possible time
and take all lawful action to effect the withdrawal, recission or removal of
such stop order or other suspension;

            (g) cooperate with the Purchaser 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 Purchaser reasonably may request and registered in such names as
the Purchaser may request; and, within three (3) Trading Days after a
Registration Statement which includes Registrable Securities is declared
effective by the Commission, deliver and cause legal counsel selected by the
Company to deliver to the transfer agent for the Registrable Securities (with
copies to the Purchaser whose Registrable Securities are included in such
Registration Statement) an appropriate instruction and, to the extent necessary,
an opinion of such counsel;

            (h) take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Purchaser of its Registrable
Securities in accordance with the intended methods therefor provided in the
prospectus which are customary for issuers to perform under the circumstances;

            (i) in the event of an underwritten offering, promptly include or
incorporate in a prospectus supplement or post-effective amendment to the
Registration Statement such information as the managing underwriters reasonably
agree should be included therein and to which the Company does not reasonably
object and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such prospectus supplement or
post-effective amendment; and

            (j) maintain a transfer agent for its Common Stock.

            SECTION 6. INDEMNIFICATION.

            (a) The Company agrees to indemnify and hold harmless the Purchaser
and each person, if any, who controls the Purchaser within the meaning of the
Securities Act ("Distributing Purchaser") against any losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this Agreement,
include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees), to which the Distributing
Purchaser may become subject, under the Securities Act or otherwise, insofar as
such losses,
<PAGE>

claims, damages or liabilities (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 the Registration Statement, or any related preliminary
prospectus, final prospectus or amendment or supplement thereto, in each case as
of the respective dates thereof, 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, in each case
as of the respective dates thereof; PROVIDED, HOWEVER, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
preliminary prospectus, final prospectus or amendment or supplement thereto in
reliance upon, and in conformity with, written information furnished to the
Company by the Distributing Purchaser specifically for use in the preparation
thereof. This Section 6(a) shall not inure to the benefit of any Distributing
Purchaser with respect to any person asserting such loss, claim, damage or
liability who purchased the Registrable Securities which are the subject thereof
if the Distributing Purchaser failed to send or give (in violation of the
Securities Act or the rules and regulations promulgated thereunder) a copy of
the prospectus contained in such Registration Statement to such person at or
prior to the written confirmation to such person of the sale of such Registrable
Securities, where the Distributing Purchaser was obligated to do so under the
Securities Act or the rules and regulations promulgated thereunder. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.

            (b) Each Distributing Purchaser agrees that it will indemnify and
hold harmless the Company, and each officer, director of the Company or person,
if any, who controls the Company within the meaning of the Securities Act,
against any losses, claims, damages or liabilities (which shall, for all
purposes of this Agreement, include, but not be limited to, all reasonable costs
of defense and investigation and all reasonable attorneys' fees) to which the
Company or any such officer, director or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (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 the Registration Statement, or any related preliminary prospectus, final
prospectus or amendment or supplement thereto, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, preliminary prospectus, final prospectus or amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company by such Distributing Purchaser specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which the Distributing Purchaser may otherwise have. Notwithstanding
anything to the contrary herein, the Distributing Purchaser shall not be liable
under this Section 6(b) for any amount in excess of the gross proceeds to such
Distributing Purchaser as a result of the sale of Registrable Securities
pursuant to the Registration Statement.

            (c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect
<PAGE>

thereof is to be made against the indemnifying party under this Section 6,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve the indemnifying party from
any liability which it may have to any indemnified party except to the extent of
actual prejudice demonstrated by the indemnifying party. In case any such action
is brought against any 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 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 party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by such
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 party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and 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 party;
provided that if the indemnified party is the indemnified party, the fees and
expenses of such counsel shall be at the expense of the indemnifying party if
(i) the employment of such counsel has been specifically authorized in writing
by the indemnifying party, or (ii) the named parties to any such action
(including any impleaded parties) include both the indemnified party and the
indemnifying party and the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any legal defenses which
may be available to the indemnified party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of the
indemnified party, it being understood, however, that the indemnifying party
shall, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable only for the reasonable fees and
expenses of one separate firm of attorneys for the indemnified party, which firm
shall be designated in writing by the indemnified party and be approved by the
indemnifying party). No settlement of any action against an indemnified party
shall be made without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld.

            All fees and expenses of the indemnified party (including reasonable
costs of defense and investigation in a manner not inconsistent with this
Section and all reasonable attorneys' fees and expenses) shall be paid to the
indemnified party, as incurred, within ten (10) Trading Days of written notice
thereof and reasonably supporting documentation related thereto to the
indemnifying party; provided, that the indemnifying party may require such
indemnified party to undertake to reimburse all such fees and expenses to the
extent it is finally judicially determined that such indemnified party is not
entitled to indemnification hereunder.

            SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
<PAGE>

the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that the express provisions of Section 6 hereof
provide for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any indemnified party, then the
Company and the applicable Distributing Purchaser shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(which shall, for all purposes of this Agreement, include, but not be limited
to, all reasonable costs of defense and investigation and all reasonable
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the applicable Distributing Purchaser
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Distributing Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

            Notwithstanding any other provision of this Section 7, in no event
shall any (i) Purchaser be required to undertake liability to any person under
this Section 7 for any amounts in excess of the dollar amount of the gross
proceeds to be received by the Purchaser from the sale of the Purchaser's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Registration Statement under which such
Registrable Securities are to be registered under the Securities Act and (ii)
underwriter be required to undertake liability to any person hereunder for any
amounts in excess of the aggregate discount, commission or other compensation
payable to such underwriter with respect to the Registrable Securities
underwritten by it and distributed pursuant to the Registration Statement.

            SECTION 8. NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be delivered as set forth
in the Purchase Agreement.

            SECTION 9. ASSIGNMENT. Neither this Agreement nor any rights of the
Purchaser or the Company hereunder may be assigned by either party to any other
person. Notwithstanding the foregoing, (a) the provisions of this Agreement
shall inure to the benefit of, and be enforceable by, any transferee of any of
the Common Stock purchased by the Purchaser pursuant to the Purchase Agreement
other than through open-market sales who agree to be bound by the terms hereof,
and (b) upon the prior written consent of the Company, which consent shall not
be unreasonably withheld or delayed in the case of an assignment to an affiliate
of the Purchaser, the
<PAGE>

Purchaser's interest in this Agreement may be assigned at any time, in whole or
in part, to any other person or entity (including any affiliate of the
Purchaser) who agrees to be bound hereby.

            SECTION 10. COUNTERPARTS/FACSIMILE. This Agreement may be executed
in two or more counterparts, each of which shall constitute an original, but all
of which, when together shall constitute but one and the same instrument, and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to the other party. In lieu of the original, a
facsimile transmission or copy of the original shall be as effective and
enforceable as the original.

            SECTION 11. REMEDIES AND SEVERABILITY. The remedies provided in this
Agreement are cumulative and not exclusive of any remedies provided by law. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of those that may be hereafter declared
invalid, illegal, void or unenforceable.

            SECTION 12. CONFLICTING AGREEMENTS. The Company shall not enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the purchasers of Registrable Securities in this Agreement or
otherwise prevents the Company from complying with all of its obligations
hereunder.

            SECTION 13. HEADINGS. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

            SECTION 14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made in New York by persons domiciled in New York City and without
regard to its principles of conflicts of laws. The Company and the Purchaser
agree to submit itself to the IN PERSONAM jurisdiction of the state and federal
courts situated within the Southern District of the State of New York with
regard to any controversy arising out of or relating to this Agreement. Any
party shall have the right to seek injunctive relief from any court of competent
jurisdiction in any case where such relief is available. Any dispute under this
Agreement shall be submitted to arbitration under the American Arbitration
Association (the "AAA") in New York City, New York, and shall be finally and
conclusively determined by the decision of a board of arbitration consisting of
three (3) members (hereinafter referred to as the "Board of Arbitration")
selected as according to the rules governing the AAA. The Board of Arbitration
shall meet on consecutive business days in New York City, New York, and shall
reach and render a decision in writing (concurred in by a majority of the
members of the Board of Arbitration) with respect to the amount, if any, which
the losing party is required to pay to the other party in respect of a claim
filed. In connection
<PAGE>

with rendering its decisions, the Board of Arbitration shall adopt and follow
the laws of the State of New York. To the extent practical, decisions of the
Board of Arbitration shall be rendered no more than thirty (30) calendar days
following commencement of proceedings with respect thereto. The Board of
Arbitration shall cause its written decision to be delivered to all parties
involved in the dispute. The Board of Arbitration shall be authorized and is
directed to enter a default judgment against any party refusing to participate
in the arbitration proceeding within thirty days of any deadline for such
participation. Any decision made by the Board of Arbitration (either prior to or
after the expiration of such thirty (30) calendar day period) shall be final,
binding and conclusive on the parties to the dispute, and entitled to be
enforced to the fullest extent permitted by law and entered in any court of
competent jurisdiction. The prevailing party shall be awarded its costs,
including attorneys' fees, from the non-prevailing party as part of the
arbitration award. Any party shall have the right to seek injunctive relief from
any court of competent jurisdiction in any case where such relief is available.
The prevailing party in such injunctive action shall be awarded its costs,
including attorney's fees, from the non-prevailing party.
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed, on this 1st day of December, 2000

                                  ON2.COM INC.

                                  By:
                                     -------------------------------
                                     Douglas McIntyre, President & CEO

                                  CROSSOVER VENTURES, INC.

                                  By:
                                     -------------------------------
                                     Name:
                                     Title:

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