Document:

EXHIBIT 10.20

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"),  dated as of May
11,  2000,  is made  and  entered  into  by and  between  Diamond  Entertainment
Corporation,  a New Jersey  corporation  (the  "Company"),  and Charles and Jane
Adkins (the "Investor").

                                   WITNESSETH:

         WHEREAS,  the Company and the  Investor  have entered into a Securities
Purchase  Agreement,  dated  as of the date  hereof  (the  "Securities  Purchase
Agreement"),  pursuant to which the Company  issued and sold to the Investor and
certain  other  Investors  identified on Schedule I to the  Securities  Purchase
Agreement,  up to $500,000 worth of the Company's  Series A Preferred  Stock, no
par value per share (the "Preferred Stock"),  which may be converted into shares
of the  Company's  common  stock,  no par value per share (the "Common  Stock"),
pursuant  to the  terms  of  the  Certificate  of  Amendment  to  the  Company's
Certificate of  Incorporation  establishing  the  designations,  preferences and
other rights of the Preferred Stock ("Certificate of Designations"); and

         WHEREAS,  pursuant to the terms of, and in partial  consideration  for,
the Investor's  agreement to enter into the Securities Purchase  Agreement,  the
Company has agreed to provide the Investor with certain registration rights with
respect to the Registrable Securities;

         NOW, THEREFORE,  in consideration of the premises, the representations,
warranties,  covenants and  agreements  contained  herein and in the  Securities
Purchase Agreement,  and for other good and valuable consideration,  the receipt
and sufficiency of which is hereby  acknowledged,  intending to be legally bound
hereby,  the parties hereto agree as follows  (capitalized terms used herein and
not defined  herein shall have the respective  meanings  ascribed to them in the
Securities Purchase Agreement):

                                    ARTICLE I
                               REGISTRATION RIGHTS

         Section 1.1 Form S-1, SB-2 or S-3 Registration Statements.

                  (a) Filing of Registration Statement. Subject to the terms and
conditions of this Agreement,  the Company shall prepare and, within ninety (90)
days following the date hereof (the "Filing Deadline"), file with the Securities
and Exchange  Commission  ("SEC") a  registration  statement on Form S-1 or SB-2
(or, if the Company is then eligible, on Form S-3) under the Securities Act (the
"Initial  Registration  Statement") for the  registration  for the resale by all
Investors who purchased  Preferred  Stock  pursuant to the  Securities  Purchase
Agreement up to  11,875,000  shares of Common  Stock and up to 1,525,000  shares
underlying  the  Warrants  issued  pursuant  to Section  4(k) of the  Securities
Purchase Agreement to May Davis Group, Inc. (the "Placement Agent"),  and Butler
Gonzalez,  LLP  ("Butler  Gonzalez")  (collectively,  the  "Initial  Registrable
Securities"). Prior to the filing of the Initial Registration Statement with the

                                       1
<PAGE>

SEC, the Company shall furnish a copy of the Initial  Registration  Statement to
Investors,  the Placement Agent and Butler Gonzalez for their review and comment
together  with a  Selling  Shareholder  Questionnaire  in form  prepared  by the
Company.  Investors,  the  Placement  Agent and Butler  Gonzalez  shall  furnish
comments  on  the  Initial  Registration   Statement  and  an  executed  Selling
Shareholder  Questionnaire  to the  Company  within five (5) days of the receipt
thereof from the  Company.  Thereafter,  if the Company  desires to issue to the
Investor and/or the Investor  desires to convert any  Registrable  Securities in
addition to the Initial  Registrable  Securities,  the Company  shall first file
with the SEC a registration statement on Form S-1 or SB-2 (or, if the Company is
then eligible,  on Form S-3) under the Securities Act (the Initial  Registration
Statement  and any  subsequent  registration  statement,  each, a  "Registration
Statement").

                  (b) Effectiveness of the Initial Registration  Statement.  The
Company shall use its  commercially  reasonable  efforts (i) to have the Initial
Registration  Statement  declared  effective  by the SEC by no  later  than  one
hundred and fifty (150) days after the date hereof (the "Registration Deadline")
and (ii) to insure that the Initial  Registration  Statement and any  subsequent
Registration  Statement  remains in effect throughout the term of this Agreement
as set  forth in  Section  4.2,  subject  to the terms  and  conditions  of this
Agreement.

                  (c) Failure to File the Initial Registration Statement. In the
event that the Initial  Registration  Statement is not filed by the Company with
the SEC by the Filing Deadline,  then the Applicable Discount (as defined in the
Certificate of Designations)  shall be reduced by an additional 2% for the first
thirty (30) days.

                  (d)  Failure  to  Maintain  Effectiveness  of  a  Registration
Statement.  Subject to Section 1.1(e) hereto,  in the event the Company fails to
maintain the  effectiveness  of any  Registration  Statement (or the  underlying
prospectus)  throughout  the  period set forth in  Section  4.2,  other than any
temporary  suspensions  permitted by Section 1.1(e),  and the Investor holds any
Registrable Securities at any time during the period of such ineffectiveness (an
"Ineffective  Period"),  the Company  shall pay to the  Investor in  immediately
available  funds into an account  designated  by the Investor an amount equal to
one  percent  (1%) of the  aggregate  Purchase  Price of all of the  Registrable
Securities  then held by the Investor  for each thirty (30)  calendar day period
(prorated for partial periods) of such Ineffective Period. The payments required
by this  Section  1.1(d)  shall  be made on the  first  Trading  Day  after  the
expiration of an Ineffective Period (or if an Ineffective Period shall last more
than thirty (30) calendar days, the  expiration of each  additional  thirty (30)
calendar day period of an Ineffective Period).

                  (e) Deferral or Suspension During a Blackout Period.  Sections
1.1(c) and (d)  notwithstanding,  if the Company  shall  furnish to the Investor
notice (a  "Blackout  Notice")  signed by the Chief  Executive  Officer or Chief
Financial  Officer of the Company  stating that he has  determined in good faith
that it would be seriously  detrimental to the Company and its  shareholders for
the  Initial  Registration  Statement  to be  filed  (or  for  any  Registration
Statement to remain in effect) and it is therefore desirable to defer the filing

                                       2
<PAGE>

of such Initial Registration Statement (or temporarily suspend the effectiveness
of any  Registration  Statement or use of the related  prospectus),  the Company
shall have the right (i)  immediately  to defer such  filing for a period of not
more than thirty (30) days  beyond the date by which such  Initial  Registration
Statement  was  otherwise  required  hereunder  to be filed or (ii)  suspend the
effectiveness of any Registration Statement for a period of not more than thirty
(30)  days (any such  deferral  or  suspension  period of up to thirty  days,  a
"Blackout  Period").  The  Investor  acknowledges  that it  would  be  seriously
detrimental to the Company and its  shareholders  for such initial  Registration
Statement  to be filed (or for any  Registration  Statement to remain in effect)
during a  Blackout  Period and  therefore  essential  to defer  such  filing (or
suspend such effectiveness)  during such Blackout Period and agrees to cease any
disposition of Registrable  Securities during such Blackout Period.  The Company
may not utilize any of its rights under this Section  1.1(e) to defer the filing
of a Registration  Statement (or suspend its  effectiveness)  more than twice in
any twelve  (12) month  period.  Following  such  deferral  or  suspension,  the
Investor  shall be  entitled  to the  payment  required  by Section  3(c) of the
Certificate of Designations establishing the designations and preferences of the
Preferred Stock.

                  (f) Liquidated  Damages.  The Company and the Investor  hereto
acknowledge and agree that the sums payable under subsections 1(c) or 1(d) above
shall  constitute  liquidated  damages and not  penalties.  The parties  further
acknowledge  that (i) the amount of loss or  damages  likely to be  incurred  is
incapable or is difficult to precisely  estimate,  (ii) the amounts specified in
such  subsections  bear a  reasonable  relationship  to, and are not  plainly or
grossly  disproportionate  to  the  probable  loss  likely  to  be  incurred  in
connection   with  any  failure  by  the  Company  to  obtain  or  maintain  the
effectiveness  of a  Registration  Statement,  (iii) one of the  reasons for the
Company  and the  Investor  reaching  an  agreement  as to such  amounts was the
uncertainty and cost of litigation regarding the question of actual damages, and
(iv) the Company and the Investor are  sophisticated  business  parties and have
been  represented by  sophisticated  and able legal counsel and negotiated  this
Agreement at arm's length.

                                   ARTICLE II
                             REGISTRATION PROCEDURES

         Section  2.1  Filings;   Information.   The  Company  will  effect  the
registration  and sale of the  Registrable  Securities  in  accordance  with the
intended methods of disposition  thereof.  Without  limiting the foregoing,  the
Company in each such case will do the  following as  expeditiously  as possible,
but in no event later than the  deadline,  if any,  prescribed  therefor in this
Agreement:

                                       3
<PAGE>

                  (a) The  Company  shall  (i)  prepare  and file with the SEC a
Registration Statement on Form S-1 or SB-2 (or, if the Company is then eligible,
Form S-3)  within  ninety (90) days from the date hereof (if use of such form is
then  available to the Company  pursuant to the rules of the SEC and, if not, on
such other form  promulgated  by the SEC for which the Company  then  qualifies,
that  counsel for the  Company  shall deem  appropriate  and which form shall be
available for the sale of the Registrable Securities to be registered thereunder
in accordance  with the provisions of this Agreement and in accordance  with the
intended  method  of  distribution  of such  Registrable  Securities);  (ii) use
commercially  reasonable efforts to cause such filed  Registration  Statement to
become  effective within one hundred and fifty (150) days of the date hereof and
remain  effective during the period set forth in Section 1.1(b) hereof (pursuant
to Rule 415 under the Securities Act or otherwise);  (iii) prepare and file with
the SEC such amendments and supplements to such  Registration  Statement and the
prospectus  used in  connection  therewith  as may be  necessary  to  keep  such
Registration  Statement  effective  for the time  period  prescribed  by Section
1.1(b);  and (iv) comply with the  provisions of the Securities Act with respect
to the  disposition of all  securities  covered by such  Registration  Statement
during such period in accordance with the intended methods of disposition by the
Investor set forth in such Registration Statement.

                  (b) The  Company  shall  file  all  necessary  amendments  and
supplements to any Registration  Statement in order to effectuate the purpose of
this Agreement and the Securities Purchase Agreement.

                  (c) No later than ten (10) days prior to filing any  amendment
or  supplement  to  the  Initial   Registration   Statement  or  any  subsequent
Registration  Statement or  prospectus,  or any amendment or supplement  thereto
(excluding,  in each  case,  amendments  deemed  to  result  from the  filing of
documents  incorporated  by reference  therein),  or such  shorter  period as is
reasonable  under the  circumstances,  the Company shall deliver to the Investor
and one firm of counsel representing the Investor, in accordance with the notice
provisions of Section 4.8, copies of such Registration  Statement as proposed to
be filed,  together with exhibits  thereto,  which  documents will be subject to
review by the Investor and such counsel,  and thereafter deliver to the Investor
and such counsel,  in accordance with the notice provisions of Section 4.8, such
number of copies of the  Registration  Statement,  each amendment and supplement
thereto (in each case including all exhibits thereto),  the prospectus  included
in such Registration Statement (including each preliminary  prospectus) and such
other documents or information as the Investor or counsel may reasonably request
in order to facilitate the disposition of the Registrable Securities.

                  (d) The Company shall deliver,  in accordance  with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by a
Registration  Statement  such number of  conformed  copies of such  Registration
Statement and of each amendment and  supplement  thereto (in each case including
all exhibits and documents incorporated by reference),  such number of copies of
the  prospectus   contained  in  any  Registration   Statement  (including  each
preliminary  prospectus  and any summary  prospectus)  and any other  prospectus
filed  under Rule 424  promulgated  under the  Securities  Act  relating to such
seller's Registrable  Securities,  and such other documents,  as such seller may
reasonably request to facilitate the disposition of its Registrable Securities.

                                       4
<PAGE>

                  (e) After the filing of a Registration Statement,  the Company
shall promptly notify the Investor of any stop order issued or threatened by the
SEC in connection  therewith and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered.

                  (f) The Company shall use its commercially  reasonable efforts
to  (i)  register  or  qualify  the  Registrable  Securities  under  such  other
securities  or blue sky laws of such  jurisdictions  in the United States as the
Investor may  reasonably  request in light of its intended plan of  distribution
and (ii) cause the  Registrable  Securities to be registered with or approved by
such other  governmental  agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do any and
all other acts and things  that may be  reasonably  necessary  or  advisable  to
enable the Investor to consummate the disposition of the Registrable  Securities
in light of its  intended  plan of  distribution;  provided,  however,  that the
Company  will  not be  required  to  qualify  generally  to do  business  in any
jurisdiction  where it would not  otherwise  be required to qualify but for this
paragraph (f), subject itself to taxation in any such  jurisdiction,  or consent
or subject itself to general service of process in any such jurisdiction.

                  (g) The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of a Registration Statement
or related prospectus in respect of an offering of Registrable  Securities:  (i)
receipt  of any  request by the SEC or any other  federal or state  governmental
authority  for  additional  information,   amendments  or  supplements  to  such
Registration  Statement or related  prospectus;  (ii) the issuance by the SEC or
any other federal or state  governmental  authority of any stop order suspending
the  effectiveness  of  such  Registration  Statement  or  notification  of  the
initiation  of  any  proceedings   for  that  purpose;   (iii)  receipt  of  any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction  or the  initiation  or  threatening  of any  proceeding  for  such
purpose;  (iv) the happening of any event that makes any statement  made in such
Registration  Statement or related  prospectus or any document  incorporated  or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Registration Statement,  related
prospectus or documents so that, in the case of such Registration  Statement, it
will not contain any untrue  statement  of a material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  in the light of the circumstances under which they were
made,  and that in the case of the related  prospectus,  it will not contain any
untrue  statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements  therein,  in the light
of the  circumstances  under which they were made, not  misleading;  and (v) the
Company's  reasonable  determination  that a  post-effective  amendment  to such
Registration Statement would be appropriate,  and the Company will promptly make
available  to the  Investor  any such  supplement  or  amendment  to the related
prospectus.

                                       5
<PAGE>

                  (h) The Company shall enter into customary agreements and take
such other customary actions as are reasonably  required in order to expedite or
facilitate  the  disposition  by the  Investor  of such  Registrable  Securities
(whereupon  the  Investor  may,  at its option,  require  that any or all of the
representations, warranties and covenants of the Company also be made to and for
the benefit of the Investor).

                  (i) The Company shall make available to the Investor (and will
deliver to Investor's  counsel),  subject to restrictions  imposed by the United
States federal  government or any agency or instrumentality  thereof,  copies of
all correspondence  between the SEC and the Company, its counsel or its auditors
and will also make  available  for  inspection by the Investor and any attorney,
accountant or other  professional  retained by the Investor  (collectively,  the
"Inspectors"),  all financial and other records,  pertinent  corporate documents
and  properties  of the  Company  (collectively,  the  "Records")  as  shall  be
reasonably   necessary   to  enable  them  to  exercise   their  due   diligence
responsibility,  and cause the  Company's  officers and  employees to supply all
information  reasonably  requested  by  any  Inspectors  in  connection  with  a
Registration Statement.  Records that the Company determines,  in good faith, to
be confidential and that it notifies the Inspectors are  confidential  shall not
be  disclosed by the  Inspectors  unless (i) the  disclosure  of such Records is
necessary  to avoid or correct a  misstatement  or omission in any  Registration
Statement  or (ii) the  disclosure  or release of such  Records is  requested or
required pursuant to oral questions,  interrogatories,  requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other legal  process;  provided,  however,  that prior to any  disclosure  or
release  pursuant to clause (ii), the Inspectors  shall provide the Company with
prompt notice of any such request or requirement so that the Company may seek an
appropriate  protective  order  or  waive  such  Inspectors'  obligation  not to
disclose such Records;  and, provided,  further,  that if failing the entry of a
protective  order or the waiver by the  Company  permitting  the  disclosure  or
release of such Records,  the Inspectors,  upon advice of counsel, are compelled
to disclose  such  Records,  the  Inspectors  may  disclose  that portion of the
Records  that  counsel  has  advised  the  Inspectors  that the  Inspectors  are
compelled to disclose.  The Investor agrees that information obtained by it as a
result of such inspections (not including any information  obtained from a third
party who, insofar as is known to the Investor after reasonable  inquiry, is not
prohibited from providing such information by a contractual,  legal or fiduciary
obligation to the Company) shall be deemed confidential and shall not be used by
it as the basis for any market  transactions  in the  securities  of the Company
unless and until  such  information  has been made  generally  available  to the
public.  The Investor further agrees that it will, upon learning that disclosure
of such Records is sought in a court of competent  jurisdiction,  give notice to
the Company and allow the  Company,  at its expense,  to  undertake  appropriate
action to prevent disclosure of the Records deemed confidential.

                  (j) The Company  shall  otherwise  comply with all  applicable
rules and regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act.

                                       6
<PAGE>

                  (k) The Company may require the  Investor to promptly  furnish
in  writing to the  Company  such  information  as may be  legally  required  in
connection  with  such  registration  including,  without  limitation,  all such
information as may be requested by the SEC or the NASD.  The Investor  agrees to
provide such information  requested in connection with such registration  within
five (5) calendar days after  receiving  such written  request,  or such shorter
period as is reasonable  under the  circumstances,  and the Company shall not be
responsible for any delays in obtaining or maintaining the  effectiveness of any
Registration  Statement caused by the Investor's  failure to timely provide such
information.

                  (l) The  Company  shall use its best  efforts  either:  (i) to
secure the  inclusion  for  quotation  on The  Nasdaq  Stock  Market  Inc.'s OTC
Bulletin Board Bulletin for such  Resgistrable  Securities,  or (ii) if, despite
the Company's  best efforts to satisfy the preceding  clause (i), the Company is
unsuccessful in satisfying the preceding clause (i), to secure the inclusion for
quotation in the "pink sheets" for such  Registrable  Securities,  and,  without
limiting the generality of the foregoing,  in the case of clause (i) or (ii), to
arrange for at least two market makers to register with the National Association
of Securities Dealers,  Inc. ("NASD"),  as such with respect to such Registrable
Securities.  The  Company  shall pay all fees and  expenses in  connection  with
satisfying its obligation under this Section 2(l).

         Section 2.2 Registration Expenses. In connection with each Registration
Statement,   the  Company  shall  pay  all  registration  expenses  incurred  in
connection  with the  registration  thereunder  (the  "Registration  Expenses"),
including, without limitation: (a) all registration, filing, securities exchange
listing  and  fees  required  by  the  NASD,  (b)  all   registration,   filing,
qualification  and other fees and expenses of compliance with securities or blue
sky  laws  (including  reasonable  fees and  disbursements  of  counsel  for the
Company), (c) all word processing, duplicating, printing, messenger and delivery
expenses,  (d) the Company's internal expenses  (including,  without limitation,
all salaries and expenses of its  officers  and  employees  performing  legal or
accounting duties), and (e) reasonable fees and disbursements of counsel for the
Company  and  customary  fees and  expenses  for  independent  certified  public
accountants retained by the Company; but excluding underwriting fees, discounts,
transfer  taxes  or  commissions,  if  any,  attributable  to  the  sale  of the
Registrable  Securities,  which shall be payable by each  holder of  Registrable
Securities pro rata on the basis of the number of Registrable Securities of each
holder that are included under this Agreement.

                                       7
<PAGE>

                                   ARTICLE III
                        INDEMNIFICATION AND CONTRIBUTION

         Section 3.1       Indemnification.

                  (a)  Indemnification  by the  Company.  The Company  agrees to
indemnify and hold harmless the Investor,  its partners,  Affiliates,  officers,
directors,  employees,  counsel and duly authorized  agents,  and each Person or
entity,  if any, who  controls the Investor  within the meaning of Section 15 of
the  Securities  Act or  Section  20 of the  Exchange  Act,  together  with  the
partners,   Affiliates,   officers,  directors,   employees,  counsel  and  duly
authorized  agents of such  controlling  Person or entity  (collectively,  the "
Controlling  Persons"),  from and against any loss,  claim,  damage,  liability,
costs and expenses (including,  without limitation,  reasonable  attorneys' fees
and disbursements and costs and expenses of investigating and defending any such
claim) (collectively, "Damages"), joint or several, and any action or proceeding
in respect thereof to which the Investor,  its partners,  Affiliates,  officers,
directors, employees and duly authorized agents, and any Controlling Person, may
become subject under the Securities  Act or otherwise,  as incurred,  insofar as
such Damages (or actions or proceedings in respect thereof) arise out of, or are
based upon, any untrue  statement or alleged untrue statement of a material fact
contained in any Registration  Statement,  preliminary  prospectus or prospectus
relating to the Registrable  Securities or arises out of, or are based upon, 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 in
light of the  circumstances  under which they were made,  except  insofar as any
such untrue statement, alleged untrue statement, omission or alleged omission is
made in reliance upon and in conformity  with written  information  furnished to
the Company by the Investor which is  specifically  intended by the Investor for
use  in  the  preparation  of  any  such  Registration  Statement,   preliminary
prospectus  or  prospectus,  and shall  reimburse  the  Investor,  its partners,
Affiliates,  officers, directors, employees, counsel and duly authorized agents,
and each such Controlling  Person,  for any legal and other expenses  reasonably
incurred  by  the  Investor,  its  partners,  Affiliates,  officers,  directors,
employees,  counsel and duly authorized agents, or any such Controlling  Person,
as incurred,  in  investigating  or defending or preparing to defend against any
such  Damages or actions or  proceedings;  provided,  however,  that the Company
shall not be liable to the  Investor to the extent that any such  Damages  arise
out of or are based upon an untrue statement or omission made in any preliminary
prospectus  if (i) the  Investor  failed to send or  deliver a copy of the final
prospectus  delivered  by the  Company  to the  Investor  with or  prior  to the
delivery  of  written  confirmation  of the sale by the  Investor  to the Person
asserting the claim from which such Damages arise, and (ii) the final prospectus
would have corrected such untrue  statement or alleged untrue  statement or such
omission or alleged omission.

                                       8
<PAGE>

                  (b)  Indemnification  by the Investor.  The Investor agrees to
indemnify and hold harmless the Company,  its Affiliates,  officers,  directors,
employees,  counsel and duly authorized agents, and each Controlling  Persons of
the  Company,  from and against any and all Damages,  joint or several,  and any
action or  proceeding in respect  thereof to which the  Investor,  its partners,
Affiliates,  officers, directors, employees, counsel and duly authorized agents,
and any such Controlling  Person, may become subject under the Securities Act or
otherwise,  as incurred,  insofar as such Damages (or actions or  proceedings in
respect  thereof)  arise out of, or are based  upon,  any  untrue  statement  or
alleged  untrue  statement  of a material  fact  contained  in any  Registration
Statement,  preliminary  prospectus  or prospectus  relating to the  Registrable
Securities or arises out of, or are based upon, 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 in light of the circumstances  under
which they were made,  but only to the extent  that any such  untrue  statement,
alleged untrue statement,  omission or alleged omission is made in reliance upon
and in  conformity  with  written  information  furnished  to the Company by the
Investor  which  is  specifically  intended  by  the  Investor  for  use  in the
preparation  of any  such  Registration  Statement,  preliminary  prospectus  or
prospectus, and shall reimburse the Company, its partners, Affiliates, officers,
directors,  employees,  counsel  and  duly  authorized  agents,  and  each  such
Controlling  Person, for any legal and other expenses reasonably incurred by the
Investor, its partners, Affiliates,  officers, directors, employees, counsel and
duly  authorized  agents,  or any  such  Controlling  Person,  as  incurred,  in
investigating  or defending  or preparing to defend  against any such Damages or
actions or proceedings.

         Section  3.2 Conduct of  Indemnification  Proceedings.  Promptly  after
receipt  by any person or entity in  respect  of which  indemnity  may be sought
pursuant to Section 3.1 (an  "Indemnified  Party") of notice of any claim or the
commencement of any action,  the Indemnified  Party shall, if a claim in respect
thereof is to be made against the person or entity  against whom such  indemnity
may be sought  (the  "Indemnifying  Party"),  notify the  Indemnifying  Party in
writing  of the  claim  or the  commencement  of such  action.  In the  event an
Indemnified Party shall fail to give such notice as provided in this Section 3.2
and the  Indemnifying  Party to whom  notice  was not given was  unaware  of the
proceeding  to which such notice  would have related and was  prejudiced  by the
failure to give such  notice,  the  indemnification  provided for in Section 3.1
shall be  reduced  to the extent of any  actual  prejudice  resulting  from such
failure to so notify the Indemnifying Party; provided, however, that the failure
to notify the Indemnifying  Party shall not relieve the Indemnifying  Party from
any liability  that it may have to an  Indemnified  Party  otherwise  than under
Section 3.1. If any such claim or action shall be brought against an Indemnified
Party,  and it shall notify the  Indemnifying  Party thereof,  the  Indemnifying
Party  shall be  entitled  to  participate  therein,  and, to the extent that it
wishes,  jointly with any other similarly notified Indemnifying Party, to assume
the defense  thereof with counsel  reasonably  satisfactory  to the  Indemnified
Party.  After notice from the Indemnifying Party to the Indemnified Party of its

                                       9
<PAGE>

election to assume the defense of such claim or action,  the Indemnifying  Party
shall  not be liable to the  Indemnified  Party for any legal or other  expenses
subsequently  incurred by the  Indemnified  Party in connection with the defense
thereof other than reasonable costs of investigation;  provided,  however,  that
the  Indemnified  Party  shall  have the right to  employ  separate  counsel  to
represent the Indemnified  Party and its Controlling  Persons who may be subject
to  liability  arising  out of any claim in  respect of which  indemnity  may be
sought by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such  counsel  shall be for the account of such  Indemnified  Party,
unless (i) the Indemnifying  Party and the Indemnified Party shall have mutually
agreed to the  retention of such counsel or (ii) in the  reasonable  judgment of
the Indemnifying Party and the Indemnified Party, representation of both parties
by the same counsel would be inappropriate due to actual or potential  conflicts
of interest between them, it being  understood,  however,  that the Indemnifying
Party shall not, in connection with any one such claim or action or separate but
substantially  similar  or related  claims or  actions in the same  jurisdiction
arising out of the same general allegations or circumstances,  be liable for the
fees and expenses of more than one separate  firm of  attorneys  (together  with
appropriate local counsel) at any time for all Indemnified  Parties, or for fees
and expenses that are not reasonable.  No Indemnifying Party shall,  without the
prior written  consent of the  Indemnified  Party,  effect any settlement of any
claim or pending or threatened  proceeding  in respect of which the  Indemnified
Party is or could have been a party and  indemnity  is sought  hereunder by such
Indemnified Party, unless such settlement  includes an unconditional  release of
such  Indemnified  Party  from  all  liability  arising  out of  such  claim  or
proceeding.  Whether or not the defense of any claim or action is assumed by the
Indemnifying Party, such Indemnifying Party will not be subject to any liability
for  any  settlement  made  without  its  consent,  which  consent  will  not be
unreasonably withheld.

         Section  3.3 Other  Indemnification.  Indemnification  similar  to that
specified in the  preceding  paragraphs  of this  Article III (with  appropriate
modifications)  shall be given  by the  Company  with  respect  to any  required
registration or other qualification of securities under any federal or state law
or regulation of any  governmental  authority other than the Securities Act. The
provisions  of this  Article  III shall be in  addition  to any other  rights to
indemnification,  contribution or other remedies which an Indemnified  Party may
have pursuant to law, equity, contract or otherwise.

         Section 3.4  Contribution.  If the  indemnification  and  reimbursement
obligations  provided for in any section of this Article III is  unavailable  or
insufficient to hold harmless the Indemnified  Parties in respect of any Damages
referred to herein,  then the Indemnifying  Party, in lieu of indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party as a result of such Damages as between the Company on the one
hand and the Investor on the other,  in such  proportion  as is  appropriate  to
reflect the relative fault of the Company and of the Investor in connection with
such  statements or omissions,  as well as other equitable  considerations.  The
relative  fault of the Company on the one hand and of the  Investor on the other
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 such party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent such statement or omission.

                                       10
<PAGE>

         The  Company  and the  Investor  agree  that it  would  not be just and
equitable if  contribution  pursuant to this Section 3.4 were  determined by pro
rata  allocation or by any other method of allocation that does not take account
of  the  equitable  considerations  referred  to in  the  immediately  preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
Damages  referred to in the immediately  preceding  paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably  incurred by such Indemnified Party in connection with  investigating
or defending any such action or claim.  Notwithstanding  the  provisions of this
Section 3.4, the Investor shall in no event be required to contribute any amount
in excess  of the  amount  by which  the  total  price at which the  Registrable
Securities of the Investor were sold to the public (less underwriting  discounts
and  commissions)  exceeds  the amount of any  damages  which the  Investor  has
otherwise  been  required  to pay by reason of such  untrue  or  alleged  untrue
statement  or  omission  or alleged  omission.  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.

                                   ARTICLE IV
                                  MISCELLANEOUS

         Section 4.1 No Outstanding  Registration Rights. The Company represents
and warrants to the Investor  that there is not in effect on the date hereof any
agreement  by the Company  pursuant to which any  holders of  securities  of the
Company have a right to cause the Company to register or qualify such securities
under the Securities Act or any securities or blue sky laws of any jurisdiction,
except  for  piggyback  registration  rights  granted  to the  holders  of three
convertible  notes in the aggregate  amount of $250,000 issued to Mr. James K.T.
Lu, Balmore Funds and Mr. Jeffrey I. Schillen which notes are  convertible  into
5,000,000 shares of Common Stock of the Company.

         Section  4.2  Term.  The  obligations  of the  Company  and the  rights
provided to the holders of Registrable  Securities  hereunder shall terminate at
such time as all  Registrable  Securities have been issued and have ceased to be
Registrable Securities.  Notwithstanding the foregoing,  Section 1.1(c) and (d),
Article  III,  Section  4.8, and Section 4.9 shall  survive the  termination  or
expiration of this Agreement.

         Section 4.3 Rule 144. The Company will use its commercially  reasonable
efforts  to file in a  timely  manner  information,  documents  and  reports  in
compliance  with  the  Securities  Act and the  Exchange  Act and  will,  at its
expense,  promptly take such further action as holders of Registrable Securities
may reasonably request to enable such holders of Registrable  Securities to sell
Registrable  Securities without registration under the Securities Act within the
limitation of the  exemptions  provided by (a) Rule 144 under the Securities Act
("Rule 144"),  as such Rule may be amended from time to time, or (b) any similar

                                       11
<PAGE>

rule or regulation  hereafter  adopted by the SEC. If at any time the Company is
not required to file such reports,  it will, at its expense,  forthwith upon the
written request of any holder of Registrable Securities, make available adequate
current  public  information  with respect to the Company  within the meaning of
paragraph  (c)(2) of Rule 144 or such other  information  as necessary to permit
sales  pursuant to Rule 144. Upon the request of the Investor,  the Company will
deliver to the Investor a written statement,  signed by the Company's  principal
executive  or  financial  officer,  as to  whether  it has  complied  with  such
requirements.

         Section 4.4  Certificate.  The Company will, at its expense,  forthwith
upon the request of any holder of Registrable Securities, deliver to such holder
a certificate,  signed by the Company's principal financial officer, stating (a)
the Company's name,  address and telephone number (including area code), (b) the
Company's Internal Revenue Service  identification number, (c) the Company's SEC
file number, (d) the number of shares of each class of capital stock outstanding
as shown by the most recent  report or statement  published by the Company,  and
(e) whether  the  Company  has filed the reports  required to be filed under the
Exchange Act for a period of at least ninety (90) days prior to the date of such
certificate  and in addition has filed the most recent annual report required to
be filed thereunder.

         Section 4.5 Amendment and Modification.  No provision of this Agreement
may be waived,  unless  such  waiver is set forth in a writing  executed by both
parties to this  Agreement.  The  provisions  of this  Agreement,  including the
provisions of this sentence, may not be amended,  modified or supplemented,  and
waivers or consents to departures  from the provisions  hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable  Securities.  Notwithstanding the foregoing,
the  waiver of any  provision  hereof  with  respect  to a matter  that  relates
exclusively to the rights of holders of Registrable  Securities whose securities
are being sold  pursuant to a  Registration  Statement  and does not directly or
indirectly  affect the rights of other holders of Registrable  Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such  holders;  provided  that the  provisions  of this  sentence  may not be
amended,  modified or  supplemented  except in accordance with the provisions of
the immediately  preceding  sentence.  No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this  Agreement or any rights or  obligations  of
any person under or by reason of this Agreement.

         Section 4.6 Successors and Assigns;  Entire  Agreement.  This Agreement
and all of the provisions  hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns. The
Investor may assign its rights under this Agreement to any subsequent  holder of
the  Registrable  Securities,  provided that the Company shall have the right to
require any holder of  Registrable  Securities to execute a counterpart  of this
Agreement as a condition to such holder's  claim to any rights  hereunder.  This
Agreement,  together  with the  Securities  Purchase  Agreement,  sets forth the
entire agreement and understanding  between the parties as to the subject matter
hereof  and  merges  and  supersedes  all  prior  discussions,   agreements  and
understandings of any and every nature among them.

                                       12
<PAGE>

         Section  4.7  Severability.  In the event  that any  provision  of this
Agreement  becomes or is declared  by a court of  competent  jurisdiction  to be
illegal,  unenforceable or void, this Agreement shall continue in full force and
effect  without  said  provision;  provided  that  such  severability  shall  be
ineffective if it materially  changes the economic  benefit of this Agreement to
any party.

         Section  4.8  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 (a) personally served,
(b) deposited in the mail,  registered or certified,  return receipt  requested,
postage  prepaid,  (c) delivered by reputable  air courier  service with charges
prepaid, or (d) transmitted by hand delivery, telegram, or facsimile,  addressed
as set forth below or to such other  address as such party shall have  specified
most  recently by written  notice given in  accordance  herewith.  Any notice or
other communication  required or permitted to be given hereunder shall be deemed
effective  (i) upon hand  delivery  or  delivery  by  facsimile,  with  accurate
confirmation  generated by the transmitting facsimile machine, at the address or
number  designated  below (if delivered on a business day during normal business
hours where such notice is to be received),  or the first business day following
such delivery (if delivered  other than on a business day during normal business
hours where such notice is to be  received)  or (ii) on the second  business day
following  the date of  mailing  by  express  courier  service  or on the  fifth
business day after deposited in the mail, in each case, fully prepaid, addressed
to such address,  or upon actual receipt of such mailing,  whichever shall first
occur. The addresses for such communications shall be:

       If to the Company, to:             Diamond Entertainment Corporation
                                          800 Tucker Lane
                                          Walnut, CA 81709
                                          Attention:        President
                                          Telephone:        (909) 839-1989
                                          Facsimile:        (909) 869-1990

       With a copy(which shall not
       constitute notice), to:            De Martino Finkelstein Rosen & Virga
                                          1818 N Street, N.W.
                                          Suite 400
                                          Washington, D.C. 20036
                                          Attention:        Neil R.E. Carr, Esq.
                                          Telephone:        (202) 659-0494
                                          Facsimile:        (202) 659-1290

       If to the Investor, to:            ---------------------------------
                                          ---------------------------------
                                          ---------------------------------
                                          ---------------------------------
                                          Attention:
                                          Telephone:        (---) --------
                                          Facsimile:        (---) --------

                                       13
<PAGE>

         Either  party  hereto  may from  time to time  change  its  address  or
facsimile  number for notices under this Section 4.8 by giving at least ten (10)
days' prior written  notice of such changed  address or facsimile  number to the
other party hereto.

         Section  4.9  Governing  Law,  Jurisdiction.  This  Agreement  shall be
governed by and interpreted in accordance with the laws of the State of New York
without  regard to the principles of conflicts of law. The parties hereto hereby
submit to the  exclusive  jurisdiction  of the United  States  Federal and state
courts located in New York,  New York with respect to any dispute  arising under
this  Agreement,  the  agreements  entered  into in  connection  herewith or the
transactions contemplated hereby or thereby.

         Section 4.10 Title and Subtitles. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.

         Section 4.11  Counterparts.  This Agreement may be executed in multiple
counterparts,  each of which may be executed by less than all of the parties and
shall be deemed to be an original  instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute  one and the same  instrument.  This  Agreement,  once  executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the parties so delivering this
Agreement.

         Section 4.12 Further  Assurances.  Each party shall do and perform,  or
cause to be done and  performed,  all such  further  acts and things,  and shall
execute and deliver all such other  agreements,  certificates,  instruments  and
documents,  as the other party may reasonably  request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

         Section  4.13  No  Strict  Construction.  The  language  used  in  this
Agreement  will be deemed to be the  language  chosen by the  parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

            (THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK.)

                                       14
<PAGE>

         IN WITNESS  WHEREOF,  the parties hereto have caused this  Registration
Rights Agreement to be executed by the  undersigned,  thereunto duly authorized,
as of the date first set forth above.

                  DIAMOND ENTERTAINMENT CORPORATION

                              /s/ James K.T. Lu
                  By:      ----------------------------------------------
                           Name:    James K. T. Lu
                           Title:   President and Chief Executive Officer

                              Charles and Jane Adkins
                           ----------------------------------------------
                                [Name of Investor]

                              /s/ Charles and Jane Adkins
                  By:     ----------------------------------------------
                           Name:  Charles and Jane Adkins
                           Title: ---------------------------------------

                                       15EXHIBIT 10.21

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"),  dated as of May
11,  2000,  is made  and  entered  into  by and  between  Diamond  Entertainment
Corporation, a  New Jersey corporation (the "Company"),  and  Gordon D. Mogerley
(the "Investor").

                                   WITNESSETH:

         WHEREAS,  the Company and the  Investor  have entered into a Securities
Purchase  Agreement,  dated  as of the date  hereof  (the  "Securities  Purchase
Agreement"),  pursuant to which the Company  issued and sold to the Investor and
certain  other  Investors  identified on Schedule I to the  Securities  Purchase
Agreement,  up to $500,000 worth of the Company's  Series A Preferred  Stock, no
par value per share (the "Preferred Stock"),  which may be converted into shares
of the  Company's  common  stock,  no par value per share (the "Common  Stock"),
pursuant  to the  terms  of  the  Certificate  of  Amendment  to  the  Company's
Certificate of  Incorporation  establishing  the  designations,  preferences and
other rights of the Preferred Stock ("Certificate of Designations"); and

         WHEREAS,  pursuant to the terms of, and in partial  consideration  for,
the Investor's  agreement to enter into the Securities Purchase  Agreement,  the
Company has agreed to provide the Investor with certain registration rights with
respect to the Registrable Securities;

         NOW, THEREFORE,  in consideration of the premises, the representations,
warranties,  covenants and  agreements  contained  herein and in the  Securities
Purchase Agreement,  and for other good and valuable consideration,  the receipt
and sufficiency of which is hereby  acknowledged,  intending to be legally bound
hereby,  the parties hereto agree as follows  (capitalized terms used herein and
not defined  herein shall have the respective  meanings  ascribed to them in the
Securities Purchase Agreement):

                                    ARTICLE I
                               REGISTRATION RIGHTS

         Section 1.1 Form S-1, SB-2 or S-3 Registration Statements.

                  (a) Filing of Registration Statement. Subject to the terms and
conditions of this Agreement,  the Company shall prepare and, within ninety (90)
days following the date hereof (the "Filing Deadline"), file with the Securities
and Exchange  Commission  ("SEC") a  registration  statement on Form S-1 or SB-2
(or, if the Company is then eligible, on Form S-3) under the Securities Act (the
"Initial  Registration  Statement") for the  registration  for the resale by all
Investors who purchased  Preferred  Stock  pursuant to the  Securities  Purchase
Agreement up to  11,875,000  shares of Common  Stock and up to 1,525,000  shares
underlying  the  Warrants  issued  pursuant  to Section  4(k) of the  Securities
Purchase Agreement to May Davis Group, Inc. (the "Placement Agent"),  and Butler
Gonzalez,  LLP  ("Butler  Gonzalez")  (collectively,  the  "Initial  Registrable
Securities"). Prior to the filing of the Initial Registration Statement with the

                                       1
<PAGE>

SEC, the Company shall furnish a copy of the Initial  Registration  Statement to
Investors,  the Placement Agent and Butler Gonzalez for their review and comment
together  with a  Selling  Shareholder  Questionnaire  in form  prepared  by the
Company.  Investors,  the  Placement  Agent and Butler  Gonzalez  shall  furnish
comments  on  the  Initial  Registration   Statement  and  an  executed  Selling
Shareholder  Questionnaire  to the  Company  within five (5) days of the receipt
thereof from the  Company.  Thereafter,  if the Company  desires to issue to the
Investor and/or the Investor  desires to convert any  Registrable  Securities in
addition to the Initial  Registrable  Securities,  the Company  shall first file
with the SEC a registration statement on Form S-1 or SB-2 (or, if the Company is
then eligible,  on Form S-3) under the Securities Act (the Initial  Registration
Statement  and any  subsequent  registration  statement,  each, a  "Registration
Statement").

                  (b) Effectiveness of the Initial Registration  Statement.  The
Company shall use its  commercially  reasonable  efforts (i) to have the Initial
Registration  Statement  declared  effective  by the SEC by no  later  than  one
hundred and fifty (150) days after the date hereof (the "Registration Deadline")
and (ii) to insure that the Initial  Registration  Statement and any  subsequent
Registration  Statement  remains in effect throughout the term of this Agreement
as set  forth in  Section  4.2,  subject  to the terms  and  conditions  of this
Agreement.

                  (c) Failure to File the Initial Registration Statement. In the
event that the Initial  Registration  Statement is not filed by the Company with
the SEC by the Filing Deadline,  then the Applicable Discount (as defined in the
Certificate of Designations)  shall be reduced by an additional 2% for the first
thirty (30) days.

                  (d)  Failure  to  Maintain  Effectiveness  of  a  Registration
Statement.  Subject to Section 1.1(e) hereto,  in the event the Company fails to
maintain the  effectiveness  of any  Registration  Statement (or the  underlying
prospectus)  throughout  the  period set forth in  Section  4.2,  other than any
temporary  suspensions  permitted by Section 1.1(e),  and the Investor holds any
Registrable Securities at any time during the period of such ineffectiveness (an
"Ineffective  Period"),  the Company  shall pay to the  Investor in  immediately
available  funds into an account  designated  by the Investor an amount equal to
one  percent  (1%) of the  aggregate  Purchase  Price of all of the  Registrable
Securities  then held by the Investor  for each thirty (30)  calendar day period
(prorated for partial periods) of such Ineffective Period. The payments required
by this  Section  1.1(d)  shall  be made on the  first  Trading  Day  after  the
expiration of an Ineffective Period (or if an Ineffective Period shall last more
than thirty (30) calendar days, the  expiration of each  additional  thirty (30)
calendar day period of an Ineffective Period).

                  (e) Deferral or Suspension During a Blackout Period.  Sections
1.1(c) and (d)  notwithstanding,  if the Company  shall  furnish to the Investor
notice (a  "Blackout  Notice")  signed by the Chief  Executive  Officer or Chief
Financial  Officer of the Company  stating that he has  determined in good faith
that it would be seriously  detrimental to the Company and its  shareholders for
the  Initial  Registration  Statement  to be  filed  (or  for  any  Registration
Statement to remain in effect) and it is therefore desirable to defer the filing

                                       2
<PAGE>

of such Initial Registration Statement (or temporarily suspend the effectiveness
of any  Registration  Statement or use of the related  prospectus),  the Company
shall have the right (i)  immediately  to defer such  filing for a period of not
more than thirty (30) days  beyond the date by which such  Initial  Registration
Statement  was  otherwise  required  hereunder  to be filed or (ii)  suspend the
effectiveness of any Registration Statement for a period of not more than thirty
(30)  days (any such  deferral  or  suspension  period of up to thirty  days,  a
"Blackout  Period").  The  Investor  acknowledges  that it  would  be  seriously
detrimental to the Company and its  shareholders  for such initial  Registration
Statement  to be filed (or for any  Registration  Statement to remain in effect)
during a  Blackout  Period and  therefore  essential  to defer  such  filing (or
suspend such effectiveness)  during such Blackout Period and agrees to cease any
disposition of Registrable  Securities during such Blackout Period.  The Company
may not utilize any of its rights under this Section  1.1(e) to defer the filing
of a Registration  Statement (or suspend its  effectiveness)  more than twice in
any twelve  (12) month  period.  Following  such  deferral  or  suspension,  the
Investor  shall be  entitled  to the  payment  required  by Section  3(c) of the
Certificate of Designations establishing the designations and preferences of the
Preferred Stock.

                  (f) Liquidated  Damages.  The Company and the Investor  hereto
acknowledge and agree that the sums payable under subsections 1(c) or 1(d) above
shall  constitute  liquidated  damages and not  penalties.  The parties  further
acknowledge  that (i) the amount of loss or  damages  likely to be  incurred  is
incapable or is difficult to precisely  estimate,  (ii) the amounts specified in
such  subsections  bear a  reasonable  relationship  to, and are not  plainly or
grossly  disproportionate  to  the  probable  loss  likely  to  be  incurred  in
connection   with  any  failure  by  the  Company  to  obtain  or  maintain  the
effectiveness  of a  Registration  Statement,  (iii) one of the  reasons for the
Company  and the  Investor  reaching  an  agreement  as to such  amounts was the
uncertainty and cost of litigation regarding the question of actual damages, and
(iv) the Company and the Investor are  sophisticated  business  parties and have
been  represented by  sophisticated  and able legal counsel and negotiated  this
Agreement at arm's length.

                                   ARTICLE II
                             REGISTRATION PROCEDURES

         Section  2.1  Filings;   Information.   The  Company  will  effect  the
registration  and sale of the  Registrable  Securities  in  accordance  with the
intended methods of disposition  thereof.  Without  limiting the foregoing,  the
Company in each such case will do the  following as  expeditiously  as possible,
but in no event later than the  deadline,  if any,  prescribed  therefor in this
Agreement:

                                       3
<PAGE>

                  (a) The  Company  shall  (i)  prepare  and file with the SEC a
Registration Statement on Form S-1 or SB-2 (or, if the Company is then eligible,
Form S-3)  within  ninety (90) days from the date hereof (if use of such form is
then  available to the Company  pursuant to the rules of the SEC and, if not, on
such other form  promulgated  by the SEC for which the Company  then  qualifies,
that  counsel for the  Company  shall deem  appropriate  and which form shall be
available for the sale of the Registrable Securities to be registered thereunder
in accordance  with the provisions of this Agreement and in accordance  with the
intended  method  of  distribution  of such  Registrable  Securities);  (ii) use
commercially  reasonable efforts to cause such filed  Registration  Statement to
become  effective within one hundred and fifty (150) days of the date hereof and
remain  effective during the period set forth in Section 1.1(b) hereof (pursuant
to Rule 415 under the Securities Act or otherwise);  (iii) prepare and file with
the SEC such amendments and supplements to such  Registration  Statement and the
prospectus  used in  connection  therewith  as may be  necessary  to  keep  such
Registration  Statement  effective  for the time  period  prescribed  by Section
1.1(b);  and (iv) comply with the  provisions of the Securities Act with respect
to the  disposition of all  securities  covered by such  Registration  Statement
during such period in accordance with the intended methods of disposition by the
Investor set forth in such Registration Statement.

                  (b) The  Company  shall  file  all  necessary  amendments  and
supplements to any Registration  Statement in order to effectuate the purpose of
this Agreement and the Securities Purchase Agreement.

                  (c) No later than ten (10) days prior to filing any  amendment
or  supplement  to  the  Initial   Registration   Statement  or  any  subsequent
Registration  Statement or  prospectus,  or any amendment or supplement  thereto
(excluding,  in each  case,  amendments  deemed  to  result  from the  filing of
documents  incorporated  by reference  therein),  or such  shorter  period as is
reasonable  under the  circumstances,  the Company shall deliver to the Investor
and one firm of counsel representing the Investor, in accordance with the notice
provisions of Section 4.8, copies of such Registration  Statement as proposed to
be filed,  together with exhibits  thereto,  which  documents will be subject to
review by the Investor and such counsel,  and thereafter deliver to the Investor
and such counsel,  in accordance with the notice provisions of Section 4.8, such
number of copies of the  Registration  Statement,  each amendment and supplement
thereto (in each case including all exhibits thereto),  the prospectus  included
in such Registration Statement (including each preliminary  prospectus) and such
other documents or information as the Investor or counsel may reasonably request
in order to facilitate the disposition of the Registrable Securities.

                  (d) The Company shall deliver,  in accordance  with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by a
Registration  Statement  such number of  conformed  copies of such  Registration
Statement and of each amendment and  supplement  thereto (in each case including
all exhibits and documents incorporated by reference),  such number of copies of
the  prospectus   contained  in  any  Registration   Statement  (including  each
preliminary  prospectus  and any summary  prospectus)  and any other  prospectus
filed  under Rule 424  promulgated  under the  Securities  Act  relating to such
seller's Registrable  Securities,  and such other documents,  as such seller may
reasonably request to facilitate the disposition of its Registrable Securities.

                                       4
<PAGE>

                  (e) After the filing of a Registration Statement,  the Company
shall promptly notify the Investor of any stop order issued or threatened by the
SEC in connection  therewith and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered.

                  (f) The Company shall use its commercially  reasonable efforts
to  (i)  register  or  qualify  the  Registrable  Securities  under  such  other
securities  or blue sky laws of such  jurisdictions  in the United States as the
Investor may  reasonably  request in light of its intended plan of  distribution
and (ii) cause the  Registrable  Securities to be registered with or approved by
such other  governmental  agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do any and
all other acts and things  that may be  reasonably  necessary  or  advisable  to
enable the Investor to consummate the disposition of the Registrable  Securities
in light of its  intended  plan of  distribution;  provided,  however,  that the
Company  will  not be  required  to  qualify  generally  to do  business  in any
jurisdiction  where it would not  otherwise  be required to qualify but for this
paragraph (f), subject itself to taxation in any such  jurisdiction,  or consent
or subject itself to general service of process in any such jurisdiction.

                  (g) The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of a Registration Statement
or related prospectus in respect of an offering of Registrable  Securities:  (i)
receipt  of any  request by the SEC or any other  federal or state  governmental
authority  for  additional  information,   amendments  or  supplements  to  such
Registration  Statement or related  prospectus;  (ii) the issuance by the SEC or
any other federal or state  governmental  authority of any stop order suspending
the  effectiveness  of  such  Registration  Statement  or  notification  of  the
initiation  of  any  proceedings   for  that  purpose;   (iii)  receipt  of  any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction  or the  initiation  or  threatening  of any  proceeding  for  such
purpose;  (iv) the happening of any event that makes any statement  made in such
Registration  Statement or related  prospectus or any document  incorporated  or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Registration Statement,  related
prospectus or documents so that, in the case of such Registration  Statement, it
will not contain any untrue  statement  of a material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  in the light of the circumstances under which they were
made,  and that in the case of the related  prospectus,  it will not contain any
untrue  statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements  therein,  in the light
of the  circumstances  under which they were made, not  misleading;  and (v) the
Company's  reasonable  determination  that a  post-effective  amendment  to such
Registration Statement would be appropriate,  and the Company will promptly make
available  to the  Investor  any such  supplement  or  amendment  to the related
prospectus.

                                       5
<PAGE>

                  (h) The Company shall enter into customary agreements and take
such other customary actions as are reasonably  required in order to expedite or
facilitate  the  disposition  by the  Investor  of such  Registrable  Securities
(whereupon  the  Investor  may,  at its option,  require  that any or all of the
representations, warranties and covenants of the Company also be made to and for
the benefit of the Investor).

                  (i) The Company shall make available to the Investor (and will
deliver to Investor's  counsel),  subject to restrictions  imposed by the United
States federal  government or any agency or instrumentality  thereof,  copies of
all correspondence  between the SEC and the Company, its counsel or its auditors
and will also make  available  for  inspection by the Investor and any attorney,
accountant or other  professional  retained by the Investor  (collectively,  the
"Inspectors"),  all financial and other records,  pertinent  corporate documents
and  properties  of the  Company  (collectively,  the  "Records")  as  shall  be
reasonably   necessary   to  enable  them  to  exercise   their  due   diligence
responsibility,  and cause the  Company's  officers and  employees to supply all
information  reasonably  requested  by  any  Inspectors  in  connection  with  a
Registration Statement.  Records that the Company determines,  in good faith, to
be confidential and that it notifies the Inspectors are  confidential  shall not
be  disclosed by the  Inspectors  unless (i) the  disclosure  of such Records is
necessary  to avoid or correct a  misstatement  or omission in any  Registration
Statement  or (ii) the  disclosure  or release of such  Records is  requested or
required pursuant to oral questions,  interrogatories,  requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other legal  process;  provided,  however,  that prior to any  disclosure  or
release  pursuant to clause (ii), the Inspectors  shall provide the Company with
prompt notice of any such request or requirement so that the Company may seek an
appropriate  protective  order  or  waive  such  Inspectors'  obligation  not to
disclose such Records;  and, provided,  further,  that if failing the entry of a
protective  order or the waiver by the  Company  permitting  the  disclosure  or
release of such Records,  the Inspectors,  upon advice of counsel, are compelled
to disclose  such  Records,  the  Inspectors  may  disclose  that portion of the
Records  that  counsel  has  advised  the  Inspectors  that the  Inspectors  are
compelled to disclose.  The Investor agrees that information obtained by it as a
result of such inspections (not including any information  obtained from a third
party who, insofar as is known to the Investor after reasonable  inquiry, is not
prohibited from providing such information by a contractual,  legal or fiduciary
obligation to the Company) shall be deemed confidential and shall not be used by
it as the basis for any market  transactions  in the  securities  of the Company
unless and until  such  information  has been made  generally  available  to the
public.  The Investor further agrees that it will, upon learning that disclosure
of such Records is sought in a court of competent  jurisdiction,  give notice to
the Company and allow the  Company,  at its expense,  to  undertake  appropriate
action to prevent disclosure of the Records deemed confidential.

                  (j) The Company  shall  otherwise  comply with all  applicable
rules and regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act.

                                       6
<PAGE>

                  (k) The Company may require the  Investor to promptly  furnish
in  writing to the  Company  such  information  as may be  legally  required  in
connection  with  such  registration  including,  without  limitation,  all such
information as may be requested by the SEC or the NASD.  The Investor  agrees to
provide such information  requested in connection with such registration  within
five (5) calendar days after  receiving  such written  request,  or such shorter
period as is reasonable  under the  circumstances,  and the Company shall not be
responsible for any delays in obtaining or maintaining the  effectiveness of any
Registration  Statement caused by the Investor's  failure to timely provide such
information.

                  (l) The  Company  shall use its best  efforts  either:  (i) to
secure the  inclusion  for  quotation  on The  Nasdaq  Stock  Market  Inc.'s OTC
Bulletin Board Bulletin for such  Resgistrable  Securities,  or (ii) if, despite
the Company's  best efforts to satisfy the preceding  clause (i), the Company is
unsuccessful in satisfying the preceding clause (i), to secure the inclusion for
quotation in the "pink sheets" for such  Registrable  Securities,  and,  without
limiting the generality of the foregoing,  in the case of clause (i) or (ii), to
arrange for at least two market makers to register with the National Association
of Securities Dealers,  Inc. ("NASD"),  as such with respect to such Registrable
Securities.  The  Company  shall pay all fees and  expenses in  connection  with
satisfying its obligation under this Section 2(l).

         Section 2.2 Registration Expenses. In connection with each Registration
Statement,   the  Company  shall  pay  all  registration  expenses  incurred  in
connection  with the  registration  thereunder  (the  "Registration  Expenses"),
including, without limitation: (a) all registration, filing, securities exchange
listing  and  fees  required  by  the  NASD,  (b)  all   registration,   filing,
qualification  and other fees and expenses of compliance with securities or blue
sky  laws  (including  reasonable  fees and  disbursements  of  counsel  for the
Company), (c) all word processing, duplicating, printing, messenger and delivery
expenses,  (d) the Company's internal expenses  (including,  without limitation,
all salaries and expenses of its  officers  and  employees  performing  legal or
accounting duties), and (e) reasonable fees and disbursements of counsel for the
Company  and  customary  fees and  expenses  for  independent  certified  public
accountants retained by the Company; but excluding underwriting fees, discounts,
transfer  taxes  or  commissions,  if  any,  attributable  to  the  sale  of the
Registrable  Securities,  which shall be payable by each  holder of  Registrable
Securities pro rata on the basis of the number of Registrable Securities of each
holder that are included under this Agreement.

                                       7
<PAGE>

                                   ARTICLE III
                        INDEMNIFICATION AND CONTRIBUTION

         Section 3.1       Indemnification.

                  (a)  Indemnification  by the  Company.  The Company  agrees to
indemnify and hold harmless the Investor,  its partners,  Affiliates,  officers,
directors,  employees,  counsel and duly authorized  agents,  and each Person or
entity,  if any, who  controls the Investor  within the meaning of Section 15 of
the  Securities  Act or  Section  20 of the  Exchange  Act,  together  with  the
partners,   Affiliates,   officers,  directors,   employees,  counsel  and  duly
authorized  agents of such  controlling  Person or entity  (collectively,  the "
Controlling  Persons"),  from and against any loss,  claim,  damage,  liability,
costs and expenses (including,  without limitation,  reasonable  attorneys' fees
and disbursements and costs and expenses of investigating and defending any such
claim) (collectively, "Damages"), joint or several, and any action or proceeding
in respect thereof to which the Investor,  its partners,  Affiliates,  officers,
directors, employees and duly authorized agents, and any Controlling Person, may
become subject under the Securities  Act or otherwise,  as incurred,  insofar as
such Damages (or actions or proceedings in respect thereof) arise out of, or are
based upon, any untrue  statement or alleged untrue statement of a material fact
contained in any Registration  Statement,  preliminary  prospectus or prospectus
relating to the Registrable  Securities or arises out of, or are based upon, 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 in
light of the  circumstances  under which they were made,  except  insofar as any
such untrue statement, alleged untrue statement, omission or alleged omission is
made in reliance upon and in conformity  with written  information  furnished to
the Company by the Investor which is  specifically  intended by the Investor for
use  in  the  preparation  of  any  such  Registration  Statement,   preliminary
prospectus  or  prospectus,  and shall  reimburse  the  Investor,  its partners,
Affiliates,  officers, directors, employees, counsel and duly authorized agents,
and each such Controlling  Person,  for any legal and other expenses  reasonably
incurred  by  the  Investor,  its  partners,  Affiliates,  officers,  directors,
employees,  counsel and duly authorized agents, or any such Controlling  Person,
as incurred,  in  investigating  or defending or preparing to defend against any
such  Damages or actions or  proceedings;  provided,  however,  that the Company
shall not be liable to the  Investor to the extent that any such  Damages  arise
out of or are based upon an untrue statement or omission made in any preliminary
prospectus  if (i) the  Investor  failed to send or  deliver a copy of the final
prospectus  delivered  by the  Company  to the  Investor  with or  prior  to the
delivery  of  written  confirmation  of the sale by the  Investor  to the Person
asserting the claim from which such Damages arise, and (ii) the final prospectus
would have corrected such untrue  statement or alleged untrue  statement or such
omission or alleged omission.

                                       8
<PAGE>

                  (b)  Indemnification  by the Investor.  The Investor agrees to
indemnify and hold harmless the Company,  its Affiliates,  officers,  directors,
employees,  counsel and duly authorized agents, and each Controlling  Persons of
the  Company,  from and against any and all Damages,  joint or several,  and any
action or  proceeding in respect  thereof to which the  Investor,  its partners,
Affiliates,  officers, directors, employees, counsel and duly authorized agents,
and any such Controlling  Person, may become subject under the Securities Act or
otherwise,  as incurred,  insofar as such Damages (or actions or  proceedings in
respect  thereof)  arise out of, or are based  upon,  any  untrue  statement  or
alleged  untrue  statement  of a material  fact  contained  in any  Registration
Statement,  preliminary  prospectus  or prospectus  relating to the  Registrable
Securities or arises out of, or are based upon, 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 in light of the circumstances  under
which they were made,  but only to the extent  that any such  untrue  statement,
alleged untrue statement,  omission or alleged omission is made in reliance upon
and in  conformity  with  written  information  furnished  to the Company by the
Investor  which  is  specifically  intended  by  the  Investor  for  use  in the
preparation  of any  such  Registration  Statement,  preliminary  prospectus  or
prospectus, and shall reimburse the Company, its partners, Affiliates, officers,
directors,  employees,  counsel  and  duly  authorized  agents,  and  each  such
Controlling  Person, for any legal and other expenses reasonably incurred by the
Investor, its partners, Affiliates,  officers, directors, employees, counsel and
duly  authorized  agents,  or any  such  Controlling  Person,  as  incurred,  in
investigating  or defending  or preparing to defend  against any such Damages or
actions or proceedings.

         Section  3.2 Conduct of  Indemnification  Proceedings.  Promptly  after
receipt  by any person or entity in  respect  of which  indemnity  may be sought
pursuant to Section 3.1 (an  "Indemnified  Party") of notice of any claim or the
commencement of any action,  the Indemnified  Party shall, if a claim in respect
thereof is to be made against the person or entity  against whom such  indemnity
may be sought  (the  "Indemnifying  Party"),  notify the  Indemnifying  Party in
writing  of the  claim  or the  commencement  of such  action.  In the  event an
Indemnified Party shall fail to give such notice as provided in this Section 3.2
and the  Indemnifying  Party to whom  notice  was not given was  unaware  of the
proceeding  to which such notice  would have related and was  prejudiced  by the
failure to give such  notice,  the  indemnification  provided for in Section 3.1
shall be  reduced  to the extent of any  actual  prejudice  resulting  from such
failure to so notify the Indemnifying Party; provided, however, that the failure
to notify the Indemnifying  Party shall not relieve the Indemnifying  Party from
any liability  that it may have to an  Indemnified  Party  otherwise  than under
Section 3.1. If any such claim or action shall be brought against an Indemnified
Party,  and it shall notify the  Indemnifying  Party thereof,  the  Indemnifying
Party  shall be  entitled  to  participate  therein,  and, to the extent that it
wishes,  jointly with any other similarly notified Indemnifying Party, to assume
the defense  thereof with counsel  reasonably  satisfactory  to the  Indemnified
Party.  After notice from the Indemnifying Party to the Indemnified Party of its

                                       9
<PAGE>

election to assume the defense of such claim or action,  the Indemnifying  Party
shall  not be liable to the  Indemnified  Party for any legal or other  expenses
subsequently  incurred by the  Indemnified  Party in connection with the defense
thereof other than reasonable costs of investigation;  provided,  however,  that
the  Indemnified  Party  shall  have the right to  employ  separate  counsel  to
represent the Indemnified  Party and its Controlling  Persons who may be subject
to  liability  arising  out of any claim in  respect of which  indemnity  may be
sought by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such  counsel  shall be for the account of such  Indemnified  Party,
unless (i) the Indemnifying  Party and the Indemnified Party shall have mutually
agreed to the  retention of such counsel or (ii) in the  reasonable  judgment of
the Indemnifying Party and the Indemnified Party, representation of both parties
by the same counsel would be inappropriate due to actual or potential  conflicts
of interest between them, it being  understood,  however,  that the Indemnifying
Party shall not, in connection with any one such claim or action or separate but
substantially  similar  or related  claims or  actions in the same  jurisdiction
arising out of the same general allegations or circumstances,  be liable for the
fees and expenses of more than one separate  firm of  attorneys  (together  with
appropriate local counsel) at any time for all Indemnified  Parties, or for fees
and expenses that are not reasonable.  No Indemnifying Party shall,  without the
prior written  consent of the  Indemnified  Party,  effect any settlement of any
claim or pending or threatened  proceeding  in respect of which the  Indemnified
Party is or could have been a party and  indemnity  is sought  hereunder by such
Indemnified Party, unless such settlement  includes an unconditional  release of
such  Indemnified  Party  from  all  liability  arising  out of  such  claim  or
proceeding.  Whether or not the defense of any claim or action is assumed by the
Indemnifying Party, such Indemnifying Party will not be subject to any liability
for  any  settlement  made  without  its  consent,  which  consent  will  not be
unreasonably withheld.

         Section  3.3 Other  Indemnification.  Indemnification  similar  to that
specified in the  preceding  paragraphs  of this  Article III (with  appropriate
modifications)  shall be given  by the  Company  with  respect  to any  required
registration or other qualification of securities under any federal or state law
or regulation of any  governmental  authority other than the Securities Act. The
provisions  of this  Article  III shall be in  addition  to any other  rights to
indemnification,  contribution or other remedies which an Indemnified  Party may
have pursuant to law, equity, contract or otherwise.

         Section 3.4  Contribution.  If the  indemnification  and  reimbursement
obligations  provided for in any section of this Article III is  unavailable  or
insufficient to hold harmless the Indemnified  Parties in respect of any Damages
referred to herein,  then the Indemnifying  Party, in lieu of indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party as a result of such Damages as between the Company on the one
hand and the Investor on the other,  in such  proportion  as is  appropriate  to
reflect the relative fault of the Company and of the Investor in connection with
such  statements or omissions,  as well as other equitable  considerations.  The
relative  fault of the Company on the one hand and of the  Investor on the other
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 such party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent such statement or omission.

                                       10
<PAGE>

         The  Company  and the  Investor  agree  that it  would  not be just and
equitable if  contribution  pursuant to this Section 3.4 were  determined by pro
rata  allocation or by any other method of allocation that does not take account
of  the  equitable  considerations  referred  to in  the  immediately  preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
Damages  referred to in the immediately  preceding  paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably  incurred by such Indemnified Party in connection with  investigating
or defending any such action or claim.  Notwithstanding  the  provisions of this
Section 3.4, the Investor shall in no event be required to contribute any amount
in excess  of the  amount  by which  the  total  price at which the  Registrable
Securities of the Investor were sold to the public (less underwriting  discounts
and  commissions)  exceeds  the amount of any  damages  which the  Investor  has
otherwise  been  required  to pay by reason of such  untrue  or  alleged  untrue
statement  or  omission  or alleged  omission.  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.

                                   ARTICLE IV
                                  MISCELLANEOUS

         Section 4.1 No Outstanding  Registration Rights. The Company represents
and warrants to the Investor  that there is not in effect on the date hereof any
agreement  by the Company  pursuant to which any  holders of  securities  of the
Company have a right to cause the Company to register or qualify such securities
under the Securities Act or any securities or blue sky laws of any jurisdiction,
except  for  piggyback  registration  rights  granted  to the  holders  of three
convertible  notes in the aggregate  amount of $250,000 issued to Mr. James K.T.
Lu, Balmore Funds and Mr. Jeffrey I. Schillen which notes are  convertible  into
5,000,000 shares of Common Stock of the Company.

         Section  4.2  Term.  The  obligations  of the  Company  and the  rights
provided to the holders of Registrable  Securities  hereunder shall terminate at
such time as all  Registrable  Securities have been issued and have ceased to be
Registrable Securities.  Notwithstanding the foregoing,  Section 1.1(c) and (d),
Article  III,  Section  4.8, and Section 4.9 shall  survive the  termination  or
expiration of this Agreement.

         Section 4.3 Rule 144. The Company will use its commercially  reasonable
efforts  to file in a  timely  manner  information,  documents  and  reports  in
compliance  with  the  Securities  Act and the  Exchange  Act and  will,  at its
expense,  promptly take such further action as holders of Registrable Securities
may reasonably request to enable such holders of Registrable  Securities to sell
Registrable  Securities without registration under the Securities Act within the
limitation of the  exemptions  provided by (a) Rule 144 under the Securities Act
("Rule 144"),  as such Rule may be amended from time to time, or (b) any similar

                                       11
<PAGE>

rule or regulation  hereafter  adopted by the SEC. If at any time the Company is
not required to file such reports,  it will, at its expense,  forthwith upon the
written request of any holder of Registrable Securities, make available adequate
current  public  information  with respect to the Company  within the meaning of
paragraph  (c)(2) of Rule 144 or such other  information  as necessary to permit
sales  pursuant to Rule 144. Upon the request of the Investor,  the Company will
deliver to the Investor a written statement,  signed by the Company's  principal
executive  or  financial  officer,  as to  whether  it has  complied  with  such
requirements.

         Section 4.4  Certificate.  The Company will, at its expense,  forthwith
upon the request of any holder of Registrable Securities, deliver to such holder
a certificate,  signed by the Company's principal financial officer, stating (a)
the Company's name,  address and telephone number (including area code), (b) the
Company's Internal Revenue Service  identification number, (c) the Company's SEC
file number, (d) the number of shares of each class of capital stock outstanding
as shown by the most recent  report or statement  published by the Company,  and
(e) whether  the  Company  has filed the reports  required to be filed under the
Exchange Act for a period of at least ninety (90) days prior to the date of such
certificate  and in addition has filed the most recent annual report required to
be filed thereunder.

         Section 4.5 Amendment and Modification.  No provision of this Agreement
may be waived,  unless  such  waiver is set forth in a writing  executed by both
parties to this  Agreement.  The  provisions  of this  Agreement,  including the
provisions of this sentence, may not be amended,  modified or supplemented,  and
waivers or consents to departures  from the provisions  hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable  Securities.  Notwithstanding the foregoing,
the  waiver of any  provision  hereof  with  respect  to a matter  that  relates
exclusively to the rights of holders of Registrable  Securities whose securities
are being sold  pursuant to a  Registration  Statement  and does not directly or
indirectly  affect the rights of other holders of Registrable  Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such  holders;  provided  that the  provisions  of this  sentence  may not be
amended,  modified or  supplemented  except in accordance with the provisions of
the immediately  preceding  sentence.  No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this  Agreement or any rights or  obligations  of
any person under or by reason of this Agreement.

         Section 4.6 Successors and Assigns;  Entire  Agreement.  This Agreement
and all of the provisions  hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns. The
Investor may assign its rights under this Agreement to any subsequent  holder of
the  Registrable  Securities,  provided that the Company shall have the right to
require any holder of  Registrable  Securities to execute a counterpart  of this
Agreement as a condition to such holder's  claim to any rights  hereunder.  This
Agreement,  together  with the  Securities  Purchase  Agreement,  sets forth the
entire agreement and understanding  between the parties as to the subject matter
hereof  and  merges  and  supersedes  all  prior  discussions,   agreements  and
understandings of any and every nature among them.

                                       12
<PAGE>

         Section  4.7  Severability.  In the event  that any  provision  of this
Agreement  becomes or is declared  by a court of  competent  jurisdiction  to be
illegal,  unenforceable or void, this Agreement shall continue in full force and
effect  without  said  provision;  provided  that  such  severability  shall  be
ineffective if it materially  changes the economic  benefit of this Agreement to
any party.

         Section  4.8  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 (a) personally served,
(b) deposited in the mail,  registered or certified,  return receipt  requested,
postage  prepaid,  (c) delivered by reputable  air courier  service with charges
prepaid, or (d) transmitted by hand delivery, telegram, or facsimile,  addressed
as set forth below or to such other  address as such party shall have  specified
most  recently by written  notice given in  accordance  herewith.  Any notice or
other communication  required or permitted to be given hereunder shall be deemed
effective  (i) upon hand  delivery  or  delivery  by  facsimile,  with  accurate
confirmation  generated by the transmitting facsimile machine, at the address or
number  designated  below (if delivered on a business day during normal business
hours where such notice is to be received),  or the first business day following
such delivery (if delivered  other than on a business day during normal business
hours where such notice is to be  received)  or (ii) on the second  business day
following  the date of  mailing  by  express  courier  service  or on the  fifth
business day after deposited in the mail, in each case, fully prepaid, addressed
to such address,  or upon actual receipt of such mailing,  whichever shall first
occur. The addresses for such communications shall be:

       If to the Company, to:             Diamond Entertainment Corporation
                                          800 Tucker Lane
                                          Walnut, CA 81709
                                          Attention:        President
                                          Telephone:        (909) 839-1989
                                          Facsimile:        (909) 869-1990

       With a copy(which shall not
       constitute notice), to:            De Martino Finkelstein Rosen & Virga
                                          1818 N Street, N.W.
                                          Suite 400
                                          Washington, D.C. 20036
                                          Attention:        Neil R.E. Carr, Esq.
                                          Telephone:        (202) 659-0494
                                          Facsimile:        (202) 659-1290

       If to the Investor, to:            ---------------------------------
                                          ---------------------------------
                                          ---------------------------------
                                          ---------------------------------
                                          Attention:
                                          Telephone:        (---) --------
                                          Facsimile:        (---) --------

                                       13
<PAGE>

         Either  party  hereto  may from  time to time  change  its  address  or
facsimile  number for notices under this Section 4.8 by giving at least ten (10)
days' prior written  notice of such changed  address or facsimile  number to the
other party hereto.

         Section  4.9  Governing  Law,  Jurisdiction.  This  Agreement  shall be
governed by and interpreted in accordance with the laws of the State of New York
without  regard to the principles of conflicts of law. The parties hereto hereby
submit to the  exclusive  jurisdiction  of the United  States  Federal and state
courts located in New York,  New York with respect to any dispute  arising under
this  Agreement,  the  agreements  entered  into in  connection  herewith or the
transactions contemplated hereby or thereby.

         Section 4.10 Title and Subtitles. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.

         Section 4.11  Counterparts.  This Agreement may be executed in multiple
counterparts,  each of which may be executed by less than all of the parties and
shall be deemed to be an original  instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute  one and the same  instrument.  This  Agreement,  once  executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the parties so delivering this
Agreement.

         Section 4.12 Further  Assurances.  Each party shall do and perform,  or
cause to be done and  performed,  all such  further  acts and things,  and shall
execute and deliver all such other  agreements,  certificates,  instruments  and
documents,  as the other party may reasonably  request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

         Section  4.13  No  Strict  Construction.  The  language  used  in  this
Agreement  will be deemed to be the  language  chosen by the  parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

            (THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK.)

                                       14
<PAGE>

         IN WITNESS  WHEREOF,  the parties hereto have caused this  Registration
Rights Agreement to be executed by the  undersigned,  thereunto duly authorized,
as of the date first set forth above.

                  DIAMOND ENTERTAINMENT CORPORATION

                              /s/ James K. T. Lu
                  By:      ----------------------------------------------
                           Name:    James K. T. Lu
                           Title:   President and Chief Executive Officer

                              Gordon D. Mogerley
                           ----------------------------------------------
                                         [Name of Investor]

                              /s/ Gordon D. Mogerley
                  By:     ----------------------------------------------
                           Name:  Gordon D. Mogerley
                           Title: ---------------------------------------

                                       15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]