Document:

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                                                                    Exhibit 10.5

                         RED ROBIN GOURMET BURGERS, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

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                                TABLE OF CONTENTS

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1.    PURPOSE..............................................................    1

2.    DEFINITIONS..........................................................    1

3.    ELIGIBILITY..........................................................    4

4.    STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS........................    4

5.    OFFERING PERIODS.....................................................    4

6.    PARTICIPATION........................................................    5

7.    METHOD OF PAYMENT OF CONTRIBUTIONS...................................    5

8.    GRANT OF OPTION......................................................    7

9.    EXERCISE OF OPTION...................................................    7

10.   DELIVERY.............................................................    8

11.   TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS.................    8

12.   ADMINISTRATION.......................................................    9

13.   DESIGNATION OF BENEFICIARY...........................................   10

14.   TRANSFERABILITY......................................................   11

15.   USE OF FUNDS; INTEREST...............................................   11

16.   REPORTS..............................................................   11

17.   ADJUSTMENTS OF AND CHANGES IN THE STOCK..............................   11

18.   POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS.......................   12

19.   TERM OF PLAN; AMENDMENT OR TERMINATION...............................   12

20.   NOTICES..............................................................   13

21.   CONDITIONS UPON ISSUANCE OF SHARES...................................   13

22.   PLAN CONSTRUCTION....................................................   13

23.   EMPLOYEES' RIGHTS....................................................   14

24.   MISCELLANEOUS........................................................   14

25.   EFFECTIVE DATE.......................................................   15

26.   TAX WITHHOLDING......................................................   15

27.   NOTICE OF SALE.......................................................   16

28.   LOCK-UP..............................................................   16
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                         RED ROBIN GOURMET BURGERS, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

     The following constitute the provisions of the Red Robin Gourmet Burgers,
Inc. Employee Stock Purchase Plan (the "Plan").

1.   PURPOSE

     The purpose of this Plan is to assist Eligible Employees in acquiring a
     stock ownership interest in the Corporation, at a favorable price and upon
     favorable terms, pursuant to a plan which is intended to qualify as an
     "employee stock purchase plan" under Section 423 of the Code. This Plan is
     also intended to encourage Eligible Employees to remain in the employ of
     the Corporation (or a Subsidiary which may be designated by the Committee
     as "Participating Subsidiary") and to provide them with an additional
     incentive to advance the best interests of the Corporation.

2.   DEFINITIONS

     Capitalized terms used herein which are not otherwise defined shall have
     the following meanings.

          "Account" means the bookkeeping account maintained by the Corporation,
          or by a recordkeeper on behalf of the Corporation, for a Participant
          pursuant to Section 7(a).

          "Board" means the Board of Directors of the Corporation.

          "Code" means the Internal Revenue Code of 1986, as amended from time
          to time.

          "Committee" means the committee appointed by the Board to administer
          this Plan pursuant to Section 12.

          "Common Stock" means the Common Stock, par value $0.001 per share, of
          the Corporation, and such other securities or property as may become
          the subject of Options pursuant to an adjustment made under Section
          17.

          "Company" means, collectively, the Corporation, its Parent and its
          Subsidiaries (if any).

          "Compensation" means an Eligible Employee's regular gross pay for a
          40-hour week. Compensation includes any amounts contributed as salary
          reduction contributions to a plan qualifying under Section 401(k), 125
          or 129 of the Code. Any other form of remuneration is excluded from
          Compensation, including (but not limited to) the following: overtime
          payments, commissions, prizes, awards, relocation or housing
          allowances, stock option exercises, stock appreciation rights,
          restricted stock exercises, performance awards, auto allowances,
          tuition reimbursement and other forms of imputed income, bonuses,
          incentive

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          compensation, special payments, fees and allowances. Notwithstanding
          the foregoing, Compensation shall not include any amounts deferred
          under or paid from any nonqualified deferred compensation plan
          maintained by the Company.

          "Contributions" means all bookkeeping amounts credited to the Account
          of a Participant pursuant to Section 7(a).

          "Corporation" means Red Robin Gourmet Burgers, Inc., a Delaware
          corporation, and its successors.

          "Effective Date" means July 13, 2002, the date this Plan was adopted
          by the Board.

          "Eligible Employee" means any employee of the Corporation, or of any
          Subsidiary which has been designated in writing by the Committee as a
          "Participating Subsidiary" (including any Subsidiaries which have
          become such after the date that this Plan is approved by the
          stockholders of the Corporation). Notwithstanding the foregoing,
          "Eligible Employee" shall not include any employee:

          (a)  who has been employed by the Corporation or a Subsidiary for less
               than one year; or

          (b)  whose customary employment is for 20 hours or less per week.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
          from time to time.

          "Exercise Date" means, with respect to an Offering Period, the last
          day of that Offering Period.

          "Fair Market Value" on any date means:

          (a)  if the Common Stock is listed or admitted to trade on a national
               securities exchange, the closing price of a Share on the
               Composite Tape, as published in The Wall Street Journal, of the
               principal national securities exchange on which such stock is so
               listed or admitted to trade, on such date, or, if there is no
               trading of the Common Stock on such date, then the closing price
               of a Share as quoted on such Composite Tape on the next preceding
               date on which there was trading in the Shares;

          (b)  if the Common Stock is not listed or admitted to trade on a
               national securities exchange, the last/closing price for a Share
               on such date, as furnished by the National Association of
               Securities Dealers, Inc. ("NASD") through the NASDAQ National
               Market Reporting System or a similar organization if the NASD is
               no longer reporting such information;

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          (c)  if the Common Stock is not listed or admitted to trade on a
               national securities exchange and is not reported on the National
               Market Reporting System, the mean between the bid and asked price
               for a Share on such date, as furnished by the NASD or a similar
               organization; or

          (d)  if the Common Stock is not listed or admitted to trade on a
               national securities exchange, is not reported on the National
               Market Reporting System and if bid and asked prices for the
               Common Stock are not furnished by the NASD or a similar
               organization, the value as established by the Committee at such
               time for purposes of this Plan.

          "Grant Date" means the first day of each Offering Period, as
          determined by the Committee and announced to potential Eligible
          Employees.

          "Offering Period" means the six-consecutive month period commencing on
          each Grant Date; provided, however, that the Committee may declare, as
          it deems appropriate and in advance of the applicable Offering Period,
          a shorter (not to be less than three months) Offering Period or a
          longer (not to exceed 27 months) Offering Period; provided further
          that the Grant Date for an Offering Period may not occur on or before
          the Exercise Date for the immediately preceding Offering Period.

          "Option" means the stock option to acquire Shares granted to a
          Participant pursuant to Section 8.

          "Option Price" means the per share exercise price of an Option as
          determined in accordance with Section 8(b).

          "Parent" means any corporation (other than the Corporation) in an
          unbroken chain of corporations ending with the Corporation in which
          each corporation (other than the Corporation) owns stock possessing
          50% or more of the total combined voting power of all classes of stock
          in one or more of the other corporations in the chain.

          "Participant" means an Eligible Employee who has elected to
          participate in this Plan and who has filed a valid and effective
          Subscription Agreement to make Contributions pursuant to Section 6.

          "Plan" means this Red Robin Gourmet Burgers, Inc. Employee Stock
          Purchase Plan, as amended from time to time.

          "Rule 16b-3" means Rule 16b-3 as promulgated by the Commission under
          Section 16, as amended from time to time.

          "Share" means a share of Common Stock.

          "Subscription Agreement" means the written agreement filed by an
          Eligible Employee with the Corporation pursuant to Section 6 to
          participate in this Plan.

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          "Subsidiary" means any corporation (other than the Corporation) in an
          unbroken chain of corporations (beginning with the Corporation) in
          which each corporation (other than the last corporation) owns stock
          possessing 50% or more of the total combined voting power of all
          classes of stock in one or more of the other corporations in the
          chain.

3.   ELIGIBILITY

     Any person employed as an Eligible Employee as of a Grant Date shall be
     eligible to participate in this Plan during the Offering Period in which
     such Grant Date occurs, subject to the Eligible Employee satisfying the
     requirements of Section 6.

4.   STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS

     (a)  Subject to the provisions of Section 17, the capital stock that may be
          delivered under this Plan will be shares of the Corporation's
          authorized but unissued Common Stock and any of its shares of Common
          Stock held as treasury shares. The maximum number of Shares that may
          be delivered pursuant to Options granted under this Plan is 300,000*
          Shares, subject to adjustments pursuant to Section 17 (the "Plan
          Limit").

          In the event that all of the Shares made available under this Plan are
          subscribed prior to the expiration of this Plan, this Plan shall
          terminate at the end of that Offering Period and the Shares available
          shall be allocated for purchase by Participants in that Offering
          Period on a pro-rata basis determined with respect to Participants'
          Account balances.

     (b)  The maximum number of Shares that any one individual may acquire upon
          exercise of his or her Option with respect to any one Offering Period
          is 414*, subject to adjustments pursuant to Section 17 (the
          "Individual Limit"); provided, however, that the Committee may amend
          such Individual Limit, effective no earlier than the first Offering
          Period commencing after the adoption of such amendment, without
          stockholder approval. The Individual Limit shall be proportionately
          adjusted for any Offering Period of less than six months, and may, at
          the discretion of the Committee, be proportionately increased for any
          Offering Period of greater than six months.

5.   OFFERING PERIODS

     During the term of this Plan, the Corporation will offer Options to
     purchase Shares in each Offering Period to all Participants in that
     Offering Period. Unless otherwise specified by the Committee in advance of
     the Offering Period, an Offering Period that commences on or about July 1
     will end the following December 31 and an Offering Period that commences on
     or about January 1 will end the following June 30. Each Option shall become
     effective on the Grant Date. The term of each Option shall be the duration
     of the related Offering Period and shall end on the Exercise Date. The
     first

__________________
* After giving effect to the Corporation's 2002 reverse split to the Common
  Stock.

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     Offering Period shall commence as of a date determined by the Board or
     Committee, but no earlier than the Effective Date. Offering Periods shall
     continue until this Plan is terminated in accordance with Section 18 or 19,
     or, if earlier, until no Shares remain available for Options pursuant to
     Section 4.

6.   PARTICIPATION

     (a)  An Eligible Employee may become a participant in this Plan by
          completing a Subscription Agreement on a form approved by and in a
          manner prescribed by the Committee (or its delegate). To become
          effective, a Subscription Agreement must be signed by the Eligible
          Person and filed with the Corporation at the time specified by the
          Committee, but in all cases prior to the start of the Offering Period
          with respect to which it is to become effective, and must set forth a
          whole percentage (or, if the Committee so provides, a stated amount)
          of the Eligible Employee's Compensation to be credited to the
          Participant's Account as Contributions each pay period.

     (b)  Notwithstanding the foregoing, a Participant's Contribution election
          shall be subject to the following limitations:

                    (i)    the 5% ownership and the $25,000 annual purchase
               limitations set forth in Section 8(c);

                    (ii)   a Participant may not elect to contribute more than
               fifteen percent (15%) of his or her Compensation each pay period
               as Plan Contributions;

                    (iii)  a Participant may not Contribute more than $12,000 to
               the Plan in any one calendar year; and

                    (iv)   such other limits, rules, or procedures as the
               Committee may prescribe.

     (c)  Subscription Agreements shall contain the Eligible Employee's
          authorization and consent to the Corporation's withholding from his or
          her Compensation the amount of his or her Contributions. An Eligible
          Employee's Subscription Agreement, and his or her participation
          election and withholding consent thereon, shall remain valid for all
          Offering Periods until (i) the Eligible Employee's participation
          terminates pursuant to the terms hereof, (ii) the Eligible Employee
          files a new Subscription Agreement that becomes effective, or (iii)
          the Committee requires that a new Subscription Agreement be executed
          and filed with the Corporation.

7.   METHOD OF PAYMENT OF CONTRIBUTIONS

     (a)  The Corporation shall maintain on its books, or cause to be maintained
          by a recordkeeper, an Account in the name of each Participant. The
          percentage of Compensation elected to be applied as Contributions by a
          Participant shall be

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          deducted from such Participant's Compensation on each payday during
          the period for payroll deductions set forth below and such payroll
          deductions shall be credited to that Participant's Account as soon as
          administratively practicable after such date. A Participant may not
          make any additional payments to his or her Account. A Participant's
          Account shall be reduced by any amounts used to pay the Option Price
          of Shares acquired, or by any other amounts distributed pursuant to
          the terms hereof.

     (b)  Subject to such other rules as the Committee may adopt, payroll
          deductions with respect to an Offering Period shall commence as of the
          first pay date which coincides with or immediately follows the
          applicable Grant Date and shall end on the last pay date which
          coincides with or immediately precedes the applicable Exercise Date,
          unless sooner terminated by the Participant as provided in this
          Section 7 or until his or her participation terminates pursuant to
          Section 11.

     (c)  A Participant may terminate his or her Contributions during an
          Offering Period (and receive a distribution of the balance of his or
          her Account in accordance with Section 11) by completing and filing
          with the Corporation, in such form and on such terms as the Committee
          (or its delegate) may prescribe, a written withdrawal form which shall
          be signed by the Participant. Such termination shall be effective as
          soon as administratively practicable after its receipt by the
          Corporation. A withdrawal election pursuant to this Section 7(c) with
          respect to an Offering Period shall only be effective, however, if it
          is received by the Corporation prior to the Exercise Date of that
          Offering Period (or such earlier deadline that the Committee may
          reasonably require to process the withdrawal prior to the applicable
          Exercise Date). Partial withdrawals of Accounts, and other
          modifications or suspensions of Subscription Agreements, except as
          provided in Section 7(e) or 7(f), are not permitted.

     (d)  During leaves of absence approved by the Corporation and meeting the
          requirements of Regulation Section 1.421-7(h)(2) under the Code, a
          Participant may continue participation in this Plan by cash payments
          to the Corporation on his normal paydays equal to the reduction in his
          Plan Contributions caused by his leave.

     (e)  A Participant may discontinue, increase, or decrease the level of his
          or her Contributions (within Plan limits) by completing and filing
          with the Corporation, on such terms as the Committee (or its delegate)
          may prescribe, a new Subscription Agreement which indicates such
          election. Subject to any other timing requirements that the Committee
          may impose, an election pursuant to this Section 7(e) shall be
          effective with the first Offering Period that commences after the
          Corporation's receipt of such election.

     (f)  A Participant may discontinue (but not increase or otherwise decrease)
          the level of his or her Contributions, by filing with the Corporation,
          on such terms as the Committee (or its delegate) may prescribe, a new
          Subscription Agreement that indicates such election. Unless otherwise
          provided by the Committee, an election

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          pursuant to this Section 7(f) shall be effective no earlier than the
          first payroll period that starts after the Corporation's receipt of
          such election.

8.   GRANT OF OPTION

     (a)  On each Grant Date, each Eligible Employee who is a participant during
          that Offering Period shall be granted an Option to purchase a number
          of Shares. The Option shall be exercised on the Exercise Date. The
          number of Shares subject to the Option shall be determined by dividing
          the Participant's Account balance as of the applicable Exercise Date
          by the Option Price, subject to the maximum determined pursuant to
          Section 4(b).

     (b)  The Option Price per Share of the Shares subject to an Option for an
          Offering Period shall be the lesser of: (i) 85% of the Fair Market
          Value of a Share on the applicable Grant Date; or (ii) 85% of the Fair
          Market Value of a Share on the applicable Exercise Date.

     (c)  Notwithstanding anything else contained herein, a person who is
          otherwise an Eligible Employee shall not be granted any Option (or any
          Option granted shall be subject to compliance with the following
          limitations) or other right to purchase Shares under this Plan to the
          extent:

                    (i)  it would, if exercised, cause the person to own "stock"
               (as such term is defined for purposes of Section 423(b)(3) of the
               Code) possessing 5% or more of the total combined voting power or
               value of all classes of stock of the Corporation, or of any
               Parent, or of any Subsidiary; or

                    (ii) such Option causes such individual to have rights to
               purchase stock under this Plan and any other plan of the
               Corporation, any Parent, or any Subsidiary which is qualified
               under Section 423 of the Code which accrue at a rate which
               exceeds $25,000 of the fair market value of the stock of the
               Corporation, of any Parent, or of any Subsidiary (determined at
               the time the right to purchase such Stock is granted, before
               giving effect to any discounted purchase price under any such
               plan) for each calendar year in which such right is outstanding
               at any time.

          For purposes of the foregoing, a right to purchase stock accrues when
          it first become exercisable during the calendar year. In determining
          whether the stock ownership of an Eligible Employee equals or exceeds
          the 5% limit set forth above, the rules of Section 424(d) of the Code
          (relating to attribution of stock ownership) shall apply, and stock
          which the Eligible Employee may purchase under outstanding options
          shall be treated as stock owned by the Eligible Employee.

9.   EXERCISE OF OPTION

     Unless a Participant's Plan participation is terminated as provided in
     Section 11, his or her Option for the purchase of Shares shall be exercised
     automatically on the Exercise

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     Date for that Offering Period, without any further action on the
     Participant's part, and the maximum number of whole Shares subject to such
     Option (subject to the Individual Limit set forth in Section 4(b) and the
     limitations contained in Section 8(c)) shall be purchased at the Option
     Price with the balance of such Participant's Account.

     If any amount which is not sufficient to purchase a whole Share remains in
     a Participant's Account after the exercise of his or her Option on the
     Exercise Date: (i) such amount shall be credited to such Participant's
     Account for the next Offering Period, if he or she is then a Participant;
     or (ii) if such Participant is not a Participant in the next Offering
     Period, or if the Committee so elects, such amount shall be refunded to
     such Participant as soon as administratively practicable after such date.
     If the Share limit of Section 4(a) is reached, any amount that remains in a
     Participant's Account after the exercise of his or her Option on the
     Exercise Date to purchase the number of Shares that he or she is allocated
     shall be refunded to the Participant as soon as administratively
     practicable after such date.

     If any amount which exceeds the Individual Limit set forth in Section 4(b)
     or one of the limitations set forth in Section 8(c) remains in a
     Participant's Account after the exercise of his or her Option on the
     Exercise Date, such amount shall be refunded to the Participant as soon as
     administratively practicable after such date.

10.  DELIVERY

     As soon as administratively practicable after the Exercise Date, the
     Corporation shall deliver to each Participant a certificate representing
     the Shares purchased upon exercise of his or her Option. The Corporation
     may make available an alternative arrangement for delivery of Shares to a
     recordkeeping service. The Committee (or its delegate), in its discretion,
     may either require or permit Participants to elect that such certificates
     representing the Shares purchased or to be purchased under the Plan be
     delivered to such recordkeeping service. In the event the Corporation is
     required to obtain from any commission or agency authority to issue any
     such certificate, the Corporation will seek to obtain such authority. If
     the Corporation is unable to obtain from any such commission or agency
     authority which counsel for the Corporation deems necessary for the lawful
     issuance of any such certificate, or if for any other reason the
     Corporation can not issue or deliver Shares and satisfy Section 21, the
     Corporation shall be relieved from liability to any Participant except that
     the Corporation shall return to each Participant the amount of the balance
     credited to his or her Account.

11.  TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS

     (a)  Except as provided in the next paragraph, if a Participant ceases to
          be an Eligible Employee for any reason, or if the Participant elects
          to terminate Contributions pursuant to Section 7(c), at any time prior
          to the last day of an Offering Period in which he or she participates,
          such Participant's Account shall be paid to him or her or in cash (or,
          in the event of the Participant's death, to the person or persons
          entitled thereto under Section 13 in cash), and such Participant's
          Option and participation in the Plan shall be automatically
          terminated.

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          If a Participant (i) ceases to be an Eligible Employee during an
          Offering Period but remains an employee of the Company through the
          Exercise Date, or (ii) during an Offering Period commences a sick
          leave, military leave, or other leave of absence approved by the
          Company, and the leave meets the requirements of Treasury Regulation
          Section 1.421-7(h)(2) and the Participant is an employee of the
          Company or on such leave as of the applicable Exercise Date, such
          Participant's Contributions shall cease (subject to Section 7(d)), and
          the Contributions previously credited to the Participant's Account for
          that Offering Period shall be used to exercise the Participant's
          Option as of the applicable Exercise Date in accordance with Section 9
          (unless the Participant makes a timely election to terminate
          Contributions in accordance with Section 7(c), in which case such
          Participant's Account shall be paid to him or her in cash in
          accordance with the foregoing paragraph).

     (b)  A Participant's termination from Plan participation precludes the
          Participant from again participating in this Plan during that Offering
          Period. However, such termination shall not have any effect upon his
          or her ability to participate in any succeeding Offering Period,
          provided that the applicable eligibility and participation
          requirements are again then met. A Participant's termination from Plan
          participation shall be deemed to be a revocation of that Participant's
          Subscription Agreement and such Participant must file a new
          Subscription Agreement to resume Plan participation in any succeeding
          Offering Period.

     (c)  For purposes of this Plan, if a Participating Subsidiary ceases to be
          a Subsidiary, each person employed by that Subsidiary will be deemed
          to have terminated employment for purposes of this Plan and will no
          longer be an Eligible Employee, unless the person continues as an
          Eligible Employee in respect of another Company entity.

12.  ADMINISTRATION

     (a)  The Board shall appoint the Committee, which shall be composed of not
          less than two members of the Board. The Board may, at any time,
          increase or decrease the number of members of the Committee, may
          remove from membership on the Committee all or any portion of its
          members, and may appoint such person or persons as it desires to fill
          any vacancy existing on the Committee, whether caused by removal,
          resignation, or otherwise. The Board may also, at any time, assume the
          administration of this Plan, in which case references to the
          "Committee" shall be deemed to be references to the Board.

     (b)  The Committee shall supervise and administer this Plan and shall have
          full power and discretion to adopt, amend and rescind any rules deemed
          desirable and appropriate for the administration of this Plan and not
          inconsistent with the terms of this Plan, and to make all other
          determinations necessary or advisable for the administration of this
          Plan. The Committee shall act by majority vote or by unanimous written
          consent. No member of the Committee shall be entitled to act on or
          decide any matter relating solely to himself or herself or solely to
          any of his

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          or her rights or benefits under this Plan. The Committee shall have
          full power and discretionary authority to construe and interpret the
          terms and conditions of this Plan, which construction or
          interpretation shall be final and binding on all parties including the
          Company, Participants and beneficiaries. The Committee may delegate
          ministerial non-discretionary functions to third parties, including
          individuals who are officers or employees of the Corporation.

     (c)  Subject only to compliance with the express provisions hereof, the
          Board and Committee may act in their absolute discretion in matters
          within their authority related to this Plan. Any action taken by, or
          inaction of, the Corporation, any Participating Subsidiary, the Board
          or the Committee relating or pursuant to this Plan shall be within the
          absolute discretion of that entity or body and will be conclusive and
          binding upon all persons. In making any determination or in taking or
          not taking any action under this Plan, the Board or Committee, as the
          case may be, may obtain and may rely on the advice of experts,
          including professional advisors to the Corporation. No member of the
          Board or Committee, or officer or agent of the Company, will be liable
          for any action, omission or decision under the Plan taken, made or
          omitted in good faith.

13.  DESIGNATION OF BENEFICIARY

     (a)  A Participant may file, on a form and in a manner prescribed by the
          Committee (or its delegate), a written designation of a beneficiary
          who is to receive any Shares or cash from such Participant's Account
          under this Plan in the event of such Participant's death. If a
          Participant's death occurs subsequent to the end of an Offering Period
          but prior to the delivery to him or her of any Shares deliverable
          under the terms of this Plan, such Shares and any remaining balance of
          such Participant's Account shall be paid to such beneficiary (or such
          other person as set forth in Section 13(b)) as soon as
          administratively practicable after the Corporation receives notice of
          such Participant's death and any outstanding unexercised Option shall
          terminate. If a Participant's death occurs at any other time, the
          balance of such Participant's Account shall be paid to such
          beneficiary (or such other person as set forth in Section 13(b)) in
          cash as soon as administratively practicable after the Corporation
          receives notice of such Participant's death and such Participant's
          Option shall terminate. If a Participant is married and the designated
          beneficiary is not his or her spouse, spousal consent shall be
          required for such designation to be effective unless it is established
          (to the satisfaction of the Committee or its delegate) that there is
          no spouse or that the spouse cannot be located. The Committee may rely
          on the last designation of a beneficiary filed by a Participant in
          accordance with this Plan.

     (b)  Beneficiary designations may be changed by the Participant (and his or
          her spouse, if required) at any time on forms provided and in the
          manner prescribed by the Committee (or its delegate). If a Participant
          dies with no validly designated beneficiary under this Plan who is
          living at the time of such Participant's death, the Corporation shall
          deliver all Shares and/or cash payable pursuant to the terms hereof to
          the executor or administrator of the estate of the

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          Participant, or if no such executor or administrator has been
          appointed, the Corporation, in its discretion, may deliver such Shares
          and/or cash to the spouse or to any one or more dependents or
          relatives of the Participant, or if no spouse, dependent or relative
          is known to the Corporation, then to such other person as the
          Corporation may designate.

14.  TRANSFERABILITY

     Neither Contributions credited to a Participant's Account nor any Options
     or rights with respect to the exercise of Options or right to receive
     Shares under this Plan may be anticipated, alienated, encumbered, assigned,
     transferred, pledged or otherwise disposed of in any way (other than by
     will, the laws of descent and distribution, or as provided in Section 13)
     by the Participant. Any such attempt at anticipation, alienation,
     encumbrance, assignment, transfer, pledge or other disposition shall be
     without effect and all amounts shall be paid and all Shares shall be
     delivered in accordance with the provisions of this Plan. Amounts payable
     or Shares deliverable pursuant to this Plan shall be paid or delivered only
     to the Participant or, in the event of the Participant's death, to the
     Participant's beneficiary pursuant to Section 13.

15.  USE OF FUNDS; INTEREST

     All Contributions received or held by the Corporation under this Plan will
     be included in the general assets of the Corporation and may be used for
     any corporate purpose. Notwithstanding anything else contained herein to
     the contrary, no interest will be paid to any Participant or credited to
     his or her Account under this Plan (in respect of Account balances, refunds
     of Account balances, or otherwise).

16.  REPORTS

     Statements shall be provided to Participants as soon as administratively
     practicable following each Exercise Date. Each Participant's statement
     shall set forth, as of such Exercise Date, that Participant's Account
     balance immediately prior to the exercise of his or her Option, the Option
     Price, the number of whole Shares purchased and his or her remaining
     Account balance, if any.

17.  ADJUSTMENTS OF AND CHANGES IN THE STOCK

     Upon or in contemplation of any reclassification, recapitalization, stock
     split (including a stock split in the form of a stock dividend), or reverse
     stock split; any merger, combination, consolidation, or other
     reorganization; split-up, spin-off, or any similar extraordinary dividend
     distribution in respect of the Common Stock (whether in the form of
     securities or property); any exchange of Common Stock or other securities
     of the Corporation, or any similar, unusual or extraordinary corporate
     transaction in respect of the Common Stock; or a sale of substantially all
     the assets of the Corporation as an entirety occurs; then the Committee
     shall, in such manner, to such extent (if any) and at such time as it deems
     appropriate and equitable in the circumstances:

                                       11

<PAGE>

     (a)  proportionately adjust any or all of (i) the number and type of Shares
          or the number and type of other securities that thereafter may be made
          the subject of Options (including the specific maxima and numbers of
          Shares set forth elsewhere in this Plan), (ii) the number, amount and
          type of Shares (or other securities or property) subject to any or all
          outstanding Options, (iii) the Option Price of any or all outstanding
          Options, or (iv) the securities, cash or other property deliverable
          upon exercise of any outstanding Options; or

     (b)  make provision for a cash payment or for the substitution or exchange
          of any or all outstanding Options for cash, securities or property to
          be delivered to the holders of any or all outstanding Options based
          upon the distribution or consideration payable to holders of the
          Common Stock upon or in respect of such event.

     The Committee may adopt such valuation methodologies for outstanding
     Options as it deems reasonable in the event of a cash or property
     settlement and, without limitation on other methodologies, may base such
     settlement solely upon the excess (if any) of the amount payable upon or in
     respect of such event over the exercise or strike price of the Option.

     In any of such events, the Committee may take such action sufficiently
     prior to such event to the extent that the Committee deems the action
     necessary to permit the Participant to realize the benefits intended to be
     conveyed with respect to the underlying shares in the same manner as is or
     will be available to stockholders generally.

18.  POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS

     Upon a dissolution of the Corporation, or any other event described in
     Section 17 that the Corporation does not survive, the Plan and, if prior to
     the last day of an Offering Period, any outstanding Option granted with
     respect to that Offering Period shall terminate, subject to any provision
     that has been expressly made by the Board for the survival, substitution,
     assumption, exchange or other settlement of the Plan and Options. In the
     event a Participant's Option is terminated pursuant to this Section 18
     without a provision having been made by the Board for a substitution,
     exchange or other settlement of the Option, such Participant's Account
     shall be paid to him or her in cash without interest.

19.  TERM OF PLAN; AMENDMENT OR TERMINATION

     (a)  This Plan shall become effective as of the Effective Date. No new
          Offering Periods shall commence on or after the day before the tenth
          anniversary of the Effective Date and this Plan shall terminate as of
          the Exercise Date on or immediately following such date unless sooner
          terminated pursuant to Section 4, Section 18, or this Section 19.

     (b)  The Board may, at any time, terminate or, from time to time, amend,
          modify or suspend this Plan, in whole or in part, without notice
          (including, without limitation, the limits of Sections 4(b), 6(b)(ii),
          and 6(b)(iii)). Stockholder approval for any amendment or modification
          shall not be required, except to the

                                       12

<PAGE>

          extent required by applicable law or required under Section 423 of the
          Code in order to preserve the intended tax consequences of this Plan,
          or otherwise deemed necessary or advisable by the Board. No Options
          may be granted during any suspension of this Plan or after the
          termination of this Plan, but the Committee will retain jurisdiction
          as to Options then outstanding in accordance with the terms of this
          Plan. No amendment, modification, or termination pursuant to this
          Section 19(b) shall, without written consent of the Participant,
          affect in any manner materially adverse to the Participant any rights
          or benefits of such Participant or obligations of the Corporation
          under any Option granted under this Plan prior to the effective date
          of such change. Changes contemplated by Section 17 or Section 18 shall
          not be deemed to constitute changes or amendments requiring
          Participant consent. Notwithstanding the foregoing, the Committee
          shall have the right to designate from time to time the Subsidiaries
          whose employees may be eligible to participate in this Plan and such
          designation shall not constitute any amendment to this Plan requiring
          stockholder approval.

20.  NOTICES

     All notices or other communications by a Participant to the Corporation
     contemplated by this Plan shall be deemed to have been duly given when
     received in the form and manner specified by the Committee (or its
     delegate) at the location, or by the person, designated by the Committee
     (or its delegate) for that purpose.

21.  CONDITIONS UPON ISSUANCE OF SHARES

     This Plan, the granting of Options under this Plan and the offer, issuance
     and delivery of Shares are subject to compliance with all applicable
     federal and state laws, rules and regulations (including but not limited to
     state and federal securities laws) and to such approvals by any listing,
     regulatory or governmental authority as may, in the opinion of counsel for
     the Corporation, be necessary or advisable in connection therewith. The
     person acquiring any securities under this Plan will, if requested by the
     Corporation and as a condition precedent to the exercise of his or her
     Option, provide such assurances and representations to the Corporation as
     the Committee may deem necessary or desirable to assure compliance with all
     applicable legal and accounting requirements.

22.  PLAN CONSTRUCTION

     (a)  It is the intent of the Corporation that transactions involving
          Options under this Plan in the case of Participants who are or may be
          subject to the prohibitions of Section 16 of the Exchange Act satisfy
          the requirements for applicable exemptions under Rule 16 promulgated
          by the Commission under Section 16 of the Exchange Act so that such
          persons (unless they otherwise agree) will be entitled to the
          exemptive relief of Rule 16b-3 or other exemptive rules under Section
          16 of the Exchange Act in respect of those transactions and will not
          be subject to avoidable liability thereunder.

     (b)  This Plan and Options are intended to qualify under Section 423 of the
          Code.

                                       13

<PAGE>

     (c)  If any provision of this Plan or of any Option would otherwise
          frustrate or conflict with the intents expressed above, that provision
          to the extent possible shall be interpreted so as to avoid such
          conflict. If the conflict remains irreconcilable, the Committee may
          disregard the provision if it concludes that to do so furthers the
          interest of the Corporation and is consistent with the purposes of
          this Plan as to such persons in the circumstances.

23.  EMPLOYEES' RIGHTS

     (a)  Nothing in this Plan (or in any other documents related to this Plan)
          will confer upon any Eligible Employee or Participant any right to
          continue in the employ or other service of the Company, constitute any
          contract or agreement of employment or other service or effect an
          employee's status as an employee at will, nor shall interfere in any
          way with the right of the Company to change such person's compensation
          or other benefits or to terminate his or her employment or other
          service with or without cause. Nothing contained in this Section
          23(a), however, is intended to adversely affect any express
          independent right of any such person under a separate employment or
          service contract other than a Subscription Agreement.

     (b)  No Participant or other person will have any right, title or interest
          in any fund or in any specific asset (including Shares) of the Company
          by reason of any Option hereunder. Neither the provisions of this Plan
          (or of any related documents), nor the creation or adoption of this
          Plan, nor any action taken pursuant to the provisions of this Plan
          will create, or be construed to create, a trust of any kind or a
          fiduciary relationship between the Company and any Participant or
          other person. To the extent that a Participant or other person
          acquires a right to receive payment pursuant to this Plan, such right
          will be no greater than the right of any unsecured general creditor of
          the Corporation. No special or separate reserve, fund or deposit will
          be made to assure any such payment.

     (c)  A Participant will not be entitled to any privilege of stock ownership
          as to any Shares not actually delivered to and held of record by the
          Participant. No adjustment will be made for dividends or other rights
          as a stockholder for which a record date is prior to such date of
          delivery.

24.  MISCELLANEOUS

     (a)  This Plan, the Options, and related documents shall be governed by,
          and construed in accordance with, the laws of the State of Delaware.
          If any provision shall be held by a court of competent jurisdiction to
          be invalid and unenforceable, the remaining provisions of this Plan
          shall continue in effect.

     (b)  Captions and headings are given to the sections of this Plan solely as
          a convenience to facilitate reference. Such captions and headings
          shall not be deemed in any way material or relevant to the
          construction of interpretation of this Plan or any provision hereof.

                                       14

<PAGE>

     (c)  The adoption of this Plan shall not affect any other Company
          compensation or incentive plans in effect. Nothing in this Plan will
          limit or be deemed to limit the authority of the Board or Committee
          (i) to establish any other forms of incentives or compensation for
          employees of the Company (with or without reference to the Common
          Stock), or (ii) to grant or assume options (outside the scope of and
          in addition to those contemplated by this Plan) in connection with any
          proper corporate purpose; to the extent consistent with any other plan
          or authority.

     (d)  Benefits received by a Participant under an Option granted pursuant to
          this Plan shall not be deemed a part of the Participant's compensation
          for purposes of the determination of benefits under any other employee
          welfare or benefit plans or arrangements, if any, provided by the
          Company, except where the Committee or the Board expressly otherwise
          provides or authorizes in writing.

25.  EFFECTIVE DATE

     Notwithstanding anything else contained herein to the contrary, the
     effectiveness of this Plan is subject to the approval of this Plan by the
     stockholders of the Corporation within twelve months after the Effective
     Date. Notwithstanding anything else contained herein to the contrary, no
     Shares shall be issued or delivered under this Plan until such stockholder
     approval is obtained and, if such stockholder approval is not obtained
     within such twelve-month period of time, all Contributions credited to a
     Participant's Account hereunder shall be refunded to such Participant
     (without interest) as soon as practicable after the end of such
     twelve-month period.

26.  TAX WITHHOLDING

     Notwithstanding anything else contained in this Plan herein to the
     contrary, the Company may deduct from a Participant's Account balance as of
     an Exercise Date, before the exercise of the Participant's Option is given
     effect on such date, the amount of any taxes which the Company reasonably
     determines it may be required to withhold with respect to such exercise. In
     such event, the maximum number of whole Shares subject to such Option
     (subject to the other limits set forth in this Plan) shall be purchased at
     the Option Price with the balance of the Participant's Account (after
     reduction for the tax withholding amount).

     Should the Company for any reason be unable, or elect not to, satisfy its
     tax withholding obligations in the manner described in the preceding
     paragraph with respect to a Participant's exercise of an Option, or should
     the Company reasonably determine that it has a tax withholding obligation
     with respect to a disposition of Shares acquired pursuant to the exercise
     of an Option prior to satisfaction of the holding period requirements of
     Section 423 of the Code, the Company shall have the right at its option to
     (i) require the Participant to pay or provide for payment of the amount of
     any taxes which the Company reasonably determines that it is required to
     withhold with respect to such event or (ii) deduct from any amount
     otherwise payable to or for the account of the Participant the amount of
     any taxes which the Company reasonably determines that it is required to
     withhold with respect to such event.

                                       15

<PAGE>

27.  NOTICE OF SALE

     Any person who has acquired Shares under this Plan shall give prompt
     written notice to the Corporation of any sale or other transfer of the
     Shares if such sale or transfer occurs (i) within the two-year period after
     the Grant Date of the Offering Period with respect to which such Shares
     were acquired, or (ii) within the twelve-month period after the Exercise
     Date of the Offering Period with respect to which such Shares were
     acquired.

28.  LOCK-UP

     Any person who holds Shares originally issued or delivered under this Plan
     may not, directly or indirectly, offer, sell, transfer or dispose of such
     Shares or any interest in such Shares (or agree to do any thereof)
     (collectively, a "Transfer") prior to the date (the "Lapse Date") that is
     six months after the effective date of the registration statement filed by
     the Corporation with the Securities and Exchange Commission pursuant to the
     Securities Act of 1933, as amended, with respect to the initial public
     offering of the Common Stock. Any such person shall agree and consent to
     the entry of stop transfer instructions with the Corporation's transfer
     agent against the Transfer of any such Shares beneficially held by him or
     her and shall confirm the limitations hereunder by agreement with and for
     the benefit of the relevant underwriters by a lock-up agreement or other
     agreement in customary form.

     All certificates evidencing Shares issued or delivered under this Plan
     prior to the Lapse Date shall bear the following legend and/or any other
     appropriate or required legends under applicable laws:

     "OWNERSHIP OF THIS CERTIFICATE, THE SHARES EVIDENCED BY THIS CERTIFICATE
     AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON
     TRANSFER UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON
     SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION. A COPY OF SUCH
     AGREEMENT IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE
     CORPORATION."

                                       16<PAGE>

                                                                    EXHIBIT 4.01

                           Schedule of Omitted Details

     The following schedule presents the names of, and the aggregate purchase
price paid and number of shares and warrants purchased by, each of purchaser of
shares and warrants in connection with our June 2002 private placement (the
"Purchasers") on the terms set forth in the accompanying form of Subscription
Agreement. This information is omitted from the form of Subscription Agreement
filed herewith on the signature page thereto in the rows captioned "Exact Name
to appear on Stock Certificate:", "Number of Shares Subscribed For:", "Aggregate
Purchase Price (see Section 1.1):" and "Warrants to Purchase _________ shares of
Common Stock:".

<TABLE>
<CAPTION>
     -----------------------------------------------------------------------------------------------

                                                          Aggregate            Warrants to Purchase
     Exact Name to appear on Stock     Number ofShares    Purchase Price       _________ shares of
     Certificate:                      Subscribed For:    (see Section 1.1):   Common Stock:
     -----------------------------------------------------------------------------------------------
     <S>                               <C>                <C>                  <C>
     MicroCapital Fund LP              140,000            $980,000             42,000
     -----------------------------------------------------------------------------------------------
     MicroCapital Fund Ltd.            115,715             810,005             34,715
     -----------------------------------------------------------------------------------------------
     Irvine Capital Partners, LP         9,000              63,000              2,700
     -----------------------------------------------------------------------------------------------
     Irivne Capital Partners III, LP     1,000               7,000                300
     -----------------------------------------------------------------------------------------------
     Windy Hill Capital Partners        20,000             140,000              6,000
     -----------------------------------------------------------------------------------------------
</TABLE>

     Each Subscription Agreement is executed by the entity whose name appears
under the column captioned "Exact Name to appear on Stock Certificate:" and
James Tolonen, Chief Operating Officer and Chief Financial Officer, on behalf of
the Registrant.

     All Subscription Agreements are dated June 18, 2002.

     This schedule sets forth the only material details in which the document
filed herewith differs from the actual documents between the Registrant and each
Purchaser.

<PAGE>

                             SUBSCRIPTION AGREEMENT

     This Subscription Agreement (this "Agreement") is entered into as of the
date set forth on the signature page hereof by and between IGN Entertainment,
Inc., a Delaware corporation formerly known as Snowball.com, Inc. (together with
its successors and permitted assigns, the "Issuer"), the undersigned investor
(together with its successors and permitted assigns, the "Investor").
Capitalized terms used but not otherwise defined herein shall have the meanings
set forth in Section 9.1.

                                    RECITALS

     Subject to the terms and conditions of this Agreement, the Investor desires
to subscribe for and purchase, and the Issuer desires to issue and sell to the
Investor, certain shares of the Issuer's common stock, par value $0.001 per
share (the "Common Stock"). The Issuer is offering shares of Common Stock, with
warrants to purchase Common Stock as provided below, in a private placement to
the Investor and other investors at a purchase price of $7.00 per share and on
the other terms and conditions contained in this Agreement (the "Offering"),
provided that the Issuer reserves the right to sell a lesser or greater number
of shares.

     In connection with entering into this Agreement, the Issuer will issue to
each of the investors Stock Purchase Warrants (the "Warrants") pursuant to which
such investors, in certain instances, may purchase shares of Common Stock at a
price of $9.00 per share.

                               TERMS OF AGREEMENT

     In consideration of the mutual representations and warranties, covenants
and agreements contained herein, the parties hereto agree as follows:

                                   ARTICLE 1
             SUBSCRIPTION AND ISSUANCE OF COMMON STOCK AND WARRANTS

     1.1 Subscription and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, the Issuer will issue and sell to the Investor and
the Investor subscribes for and will purchase from the Issuer the number of
shares of Common Stock set forth on the signature page hereof (the "Shares") for
the aggregate purchase price set forth on the signature page hereof, which shall
be equal to the product of the number of Shares subscribed for by the Investor
times the per share purchase price specified in the above Recitals to this
Agreement (the "Purchase Price"). In addition, Investor shall receive Warrants
to purchase shares of Common Stock as set forth on the signature page hereof.

                                      -1-

<PAGE>

     1.2 Legend.  Any certificate or certificates representing the Shares and
the Warrants shall bear the following legend:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
     TRANSFERRED, OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN
     EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE WITH
     RESPECT THERETO OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND
     SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM SUCH
     REGISTRATION IS AVAILABLE AND ALSO MAY NOT BE SOLD, TRANSFERRED OR
     OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH ANY APPLICABLE RULES OF THE
     SECURITIES AND EXCHANGE COMMISSION.

                                    ARTICLE 2
                                     CLOSING

     2.1 Closing. The closing of the transactions contemplated herein (the
"Closing") shall take place on a date designated by the Issuer, which date shall
be on or before June 21, 2002 (the "Closing Date"). The Closing shall take place
at the offices of Fenwick & West LLP, 275 Battery Street, 15th Floor, San
Francisco, California, or at such other time and place as the Issuer and RTX
Securities Corporation mutually agree. At the Closing, unless the Investor and
the Issuer otherwise agree (i) the Investor shall pay the Purchase Price to the
Issuer, by wire transfer of immediately available funds to the account
designated on Exhibit A hereto; (ii) the Issuer shall issue to the Investor the
Shares, and deliver to the Investor certificates for the Shares and Warrants
duly registered in the name of the Investor; and (iii) all other agreements and
other documents referred to in this Agreement which are required for the Closing
shall be executed and delivered (if that is not done prior to the Closing).

     2.2 Termination. This Agreement may be terminated at any time prior to the
Closing:

         (a) by mutual written consent of the Issuer and the Investor;

         (b) by the Investor, upon a breach of any material representation and
warranty, covenant or agreement on the part of the Issuer set forth in this
Agreement, or if any material representation and warranty of the Issuer shall
have become untrue in any material respect, in either case such that the
conditions in Section 8.1 would be incapable of being satisfied by the date of
the Closing; or

         (c) by the Issuer upon a breach of any material representation and
warranty, covenant or agreement on the part of the Investor set forth in this
Agreement, or if any material

                                      -2-

<PAGE>

representation and warranty of the Investor shall have become untrue in any
material respect, in either case such that the conditions in Section 8.2 would
be incapable of being satisfied by the date of the Closing.

     2.3 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 2.2, this Agreement shall forthwith become void, there shall
be no liability on the part of the Issuer or the Investor to each other and all
rights and obligations of any party hereto shall cease; provided, however, that
nothing herein shall relieve any party from liability for the willful breach of
any of its representations and warranties, covenants or agreements set forth in
this Agreement.

                                   ARTICLE 3
                  REPRESENTATIONS AND WARRANTIES OF THE ISSUER

         As a material inducement to the Investor entering into this Agreement
and subscribing for the Shares and Warrants, except as set forth in the Schedule
of Exceptions attached hereto as Exhibit B and delivered to the Investor at or
prior to the date of this Agreement (it being understood that any information
disclosed in any section of the Schedule of Exceptions shall be deemed disclosed
in all other applicable sections of the Schedule of Exceptions even though not
expressly set forth in such other section(s), provided that it is reasonably
apparent on its face that such disclosure is applicable to the other
section(s)), the Issuer hereby represents and warrants to the Investor as
follows (it being understood that, except in the case of any representation or
warranty that by its terms is made only as of a specified date, each
representation and warranty set forth in this Article 3 shall be deemed to be
made by the Issuer both as of the date of this Agreement and, if the Closing
occurs, as of the date of the Closing):

     3.1 Corporate Status. The Issuer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.

     3.2 Corporate Power and Authority. The Issuer has the corporate power and
authority to execute and deliver this Agreement and the Warrants and to perform
its obligations hereunder and consummate the transactions contemplated hereby.
At the time of the closing, the Issuer will have taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby.

     3.3 Enforceability. This Agreement and the Warrants have been duly executed
and delivered by the Issuer and constitutes a legal, valid and binding
obligation of the Issuer, enforceable against the Issuer in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and general equitable principles, regardless of
whether such enforceability is considered in a proceeding at law or in equity.

                                      -3-

<PAGE>

     3.4 No Violation. The execution and delivery by the Issuer of this
Agreement and the Warrants, the consummation of the transactions contemplated
hereby, and the compliance by the Issuer with the terms and provisions hereof
(including, without limitation, the Issuer's issuance to the Investor of the
Shares as contemplated by and in accordance with this Agreement), will not
result in a default under (or give any other party the right, with the giving of
notice or the passage of time (or both), to declare a default or accelerate any
obligation under) or violate the Certificate of Incorporation or By-Laws of the
Issuer or any material Contract to which the Issuer is a party (except to the
extent such a default would not, in the case of a Contract, have a Material
Adverse Effect on the Issuer), or any material Requirement of Law applicable to
the Issuer, or result in the creation or imposition of any material Lien upon
any of the properties or assets of the Issuer or any of its Subsidiaries (except
where such Lien would not have a Material Adverse Effect on the Issuer).

     3.5 Consents/Approvals. Except for the filing of a registration statement
in accordance with Article 6 hereof and as may be required under applicable
securities or blue sky laws of various states or foreign jurisdictions in
connection with the secondary trading of the Shares or shares of Common Stock
issuable upon exercise of the Warrants, no consents, filings, authorizations or
other actions of any Governmental Authority are required to be obtained or made
by the Issuer for the Issuer's execution, delivery and performance of this
Agreement which have not already been obtained or made. No consent, approval,
waiver or other action by any Person under any Contract to which the Issuer is a
party or by which the Issuer or any of its properties or assets are bound is
required or necessary for the execution, delivery or performance by the Issuer
of this Agreement and the consummation of the transactions contemplated hereby,
except where the failure to obtain such consents would not have a Material
Adverse Effect on the Issuer.

     3.6 Valid Issuance. Upon payment of the Purchase Price by the Investor and
delivery to the Investor of the certificates for the Shares, such Shares will be
validly issued, fully paid and non-assessable.

     3.7 SEC Reports, Other Filings and Nasdaq Compliance. The Issuer has timely
made all filings required to be made by it under the Exchange Act. The Issuer
has delivered or made accessible to the Investor true, accurate and complete
copies of (i) Issuer's annual report on Form 10-K for the fiscal year ended
December 31, 2002 and Amendment No. 1 thereto; (ii) the Issuer's quarterly
report on Form 10-Q for the fiscal quarter ended March 31, 2002; and (iii) the
Issuer's definitive proxy statement dated April 19, 2002 relating to its May 9,
2002 Annual Meeting of Stockholders (the "SEC Reports"). The SEC Reports, when
filed, complied in all material respects with all applicable requirements of the
Exchange Act. None of the SEC Reports, at the time of filing, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading in light of the circumstances in which they were made. The Issuer has
filed in a timely manner all documents that the Issuer was required to file
under the Exchange Act during the 12 months preceding the date of this
Agreement. The Issuer is currently eligible to register the resale of the Shares
in a secondary offering on a registration statement on Form S-3 under the
Securities Act. The Issuer's Common

                                       -4-

<PAGE>

Stock is currently listed on the Nasdaq SmallCap Market. The Issuer is currently
in compliance with all currently effective inclusion requirements of the Nasdaq
SmallCap Market. Each balance sheet included in the SEC Reports (including any
related notes and schedules) fairly presents in all material respects the
consolidated financial position of the Issuer as of its date, and each of the
other financial statements included in the SEC Reports (including any related
notes and Schedules) fairly presents in all material respects the consolidated
results of operations of the Issuer for the periods or as of the dates therein
set forth in accordance with GAAP consistently applied during the periods
involved (except that the interim reports are subject to adjustments which might
be required as a result of year end audit and except as otherwise stated
therein).

     3.8  Commissions. The Issuer has not incurred any other obligation for any
finder's or broker's or agent's fees or commissions in connection with the
transactions contemplated hereby, except that the Issuer could potentially pay
fees to Allen & Company Incorporated and RTX Securities Corporation in
consideration for their services as placement agents for the Offering, which
fees shall be issued in warrants or cash valued together in the aggregate at
approximately 6% of the aggregate gross proceeds to the Issuer in the Offering.

     3.9  Capitalization. The authorized capital stock of the Issuer consists of
100,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock. All
issued and outstanding shares of capital stock of the Issuer have been, and as
of the Closing Date will be, duly authorized and validly issued and are fully
paid and non-assessable. As of the close of business on May 31, 2002, the Issuer
has issued and outstanding 1,868,414 shares of Common Stock and no shares of
Preferred Stock. Except for the Warrants and as set forth in this Section 3.9
and on Schedule 3.9 of the Schedule of Exceptions, there are no outstanding
options, warrants, rights (including conversion or preemptive rights and rights
of first refusal and similar rights) or agreements, orally or in writing, for
the purchase or acquisition from the Issuer of any shares of capital stock and
the Issuer is not a party to or subject to any agreement or understanding, and
there is no agreement or understanding between any person and/or entities, which
affects or relates to the voting or giving of written consents with respect to
any security or by a director of the Issuer. Except for as set forth in
agreements under which the Issuer has the option to repurchase shares of Common
Stock at cost, upon the occurrence of certain events, such as the termination of
employment or services, the Issuer has no obligation, contingent or otherwise,
to redeem or repurchase any equity security or any security that is a
combination of debt and equity.

     3.10 Material Changes. Except as set forth in the SEC Reports or as
otherwise contemplated herein, since March 31, 2002, there has been no Material
Adverse Change in the Issuer and its subsidiaries taken as a whole. Except as
set forth in the SEC Reports, since March 31, 2002, there has not been (i) any
direct or indirect redemption, purchase or other acquisition by the Issuer of
any shares of the Common Stock other than pursuant to agreements under which the
Issuer has the option to repurchase shares of Common Stock at cost, upon the
occurrence of certain events, such as the termination of employment or services,
or (ii) declaration, setting aside or payment of any dividend or other
distribution by the Issuer with respect to the Common Stock.

                                       -5-

<PAGE>

     3.11 Litigation. Except as disclosed on Schedule 3.11 or the SEC Reports,
there is no action, suit, proceeding or investigation pending or, to the
Issuer's knowledge, currently threatened against the Issuer or any of its
subsidiaries that questions the validity of this Agreement or the right of the
Issuer to enter into it, or to consummate the transactions contemplated hereby,
or that might result, either individually or in the aggregate, in a Material
Adverse Effect on the Issuer or any material change in the current equity
ownership of the Issuer. The foregoing includes, without limitation, actions
pending or, to the Issuer's knowledge, threatened involving the prior employment
of any of the Issuer's employees or their use in connection with the Issuer's
business of any information or techniques allegedly proprietary to any of their
former employers. Neither the Issuer nor any of its subsidiaries is a party to
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Issuer or any of its subsidiaries currently
pending or which the Issuer or any of its subsidiaries currently intends to
initiate.

     3.12 Rights of Registration and Voting Rights. Except as contemplated in
this Agreement and as disclosed on Schedule 3.12, the Issuer has not granted or
agreed to grant any registration rights, including piggyback rights, to any
person or entity, which have not been waived, and no stockholder of the Issuer
has entered into any agreements with respect to the voting of capital shares of
the Issuer.

     3.13 Offerings. Subject in part to the truth and accuracy of Investor's
representations and warranties set forth in this Agreement, the offer, sale and
issuance of the Shares and the Warrants as contemplated by this Agreement are
exempt from the registration requirements of the Securities Act and any
applicable state securities laws, and neither the Issuer nor any authorized
agent acting on its behalf will take any action hereafter that would cause the
loss of such exemption.

     3.14 Disclosure. The Issuer is aware of no facts which lead it to believe
that the Disclosure Documents, as of their respective dates, contain any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.

                                    ARTICLE 4
                 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

     As a material inducement to the Issuer entering into this Agreement and
issuing the Shares and the Warrants, the Investor represents and warrants to the
Issuer as follows:

     4.1  Power and Authority. The Investor, if other than a natural person, is
an entity duly organized, validly existing and in good standing under the laws
of the state of its incorporation or formation. The Investor has the corporate,
partnership or other power and authority under applicable law to execute and
deliver this Agreement and consummate the transactions contemplated hereby,

                                       -6-

<PAGE>

and has all necessary authority to execute, deliver and perform its obligations
under this Agreement and consummate the transactions contemplated hereby. The
Investor has taken all necessary action to authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby.

     4.2 No Violation. The execution and delivery by the Investor of this
Agreement, the consummation of the transactions contemplated hereby, and the
compliance by the Investor with the terms and provisions hereof, will not result
in a default under (or give any other party the right, with the giving of notice
or the passage of time (or both), to declare a default or accelerate any
obligation under) or violate any charter or similar documents of the Investor,
if other than a natural person, or any Contract to which the Investor is a party
or by which it or its properties or assets are bound, or violate any Requirement
of Law applicable to the Investor, other than such violations or defaults which,
individually and in the aggregate, do not and will not have a Material Adverse
Effect on the Investor. The Investor is familiar with Regulation M promulgated
under the Exchange Act, a copy of which is attached hereto as Exhibit C, and is
in full compliance with the provisions thereof with respect to the transactions
contemplated hereby.

     4.3 Consents/Approvals. No consents, filings, authorizations or actions of
any Governmental Authority are required for the Investor's execution, delivery
and performance of this Agreement. No consent, approval, waiver or other actions
by any Person under any Contract to which the Investor is a party or by which
the Investor or any of its properties or assets are bound is required or
necessary for the execution, delivery and performance by the Investor of this
Agreement and the consummation of the transactions contemplated hereby.

     4.4 Enforceability. This Agreement has been duly executed and delivered by
the Investor and constitutes a legal, valid and binding obligation of the
Investor, enforceable against the Investor in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and general equitable principles, regardless of
whether enforceability is considered in a proceeding at law or in equity.

     4.5 Investment Intent. The Investor is acquiring the Shares and the
Warrants hereunder for its own account and with no present intention of
distributing or selling such Shares and further agrees not to transfer such
Shares or Warrants in violation of the Securities Act or any applicable state
securities law, and no one other than the Investor has any beneficial interest
in the Shares and the Warrants. The Investor agrees that it will not sell or
otherwise dispose of any of the Shares or the Warrants unless such sale or other
disposition has been registered under the Securities Act or, in the opinion of
counsel acceptable to the Issuer, is exempt from registration under the
Securities Act and has been registered or qualified or, in the opinion of such
counsel acceptable to the Issuer, is exempt from registration or qualification
under applicable state securities laws. The Investor understands that the offer
and sale by the Issuer of the Shares or the Warrants being acquired by the
Investor hereunder has not been registered under the Securities Act by reason of
their contemplated issuance

                                       -7-

<PAGE>

in transactions exempt from the registration and prospectus delivery
requirements of the Securities Act pursuant to Section 4(2) thereof, and that
the reliance of the Issuer on such exemption from registration is predicated in
part on these representations and warranties of the Investor. The Investor
acknowledges that pursuant to Section 1.2 of this Agreement a restrictive legend
consistent with the foregoing has been or will be placed on the certificates for
the Shares and Warrants.

     4.6  Accredited Investor. The Investor is an "accredited investor" as such
term is defined in Rule 501(a) of Regulation D under the Securities Act (a copy
of which is attached hereto as Exhibit D), and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the investment to be made by it hereunder.

     4.7  Adequate Information. The Investor has received from the Issuer, and
has reviewed, such information which the Investor considers necessary or
appropriate to evaluate the risks and merits of an investment in the Shares and
Warrants, including without limitation, the documents listed on Exhibit E, which
have been received by Investor as part of an informational packet of materials
from the Issuer (the "Disclosure Documents"). The Investor acknowledges that
each of the SEC Reports are specifically incorporated herein by reference and
form an integral part of this Agreement. The Investor also acknowledges that the
additional risk factors set forth on Exhibit E and contained in the Disclosure
Documents are specifically incorporated herein by reference and forms an
integral part of this Agreement.

     4.8  Opportunity to Question. The Investor has had the opportunity to
question, and has questioned, to the extent deemed necessary or appropriate,
representatives of the Issuer so as to receive answers and verify information
obtained in the Investor's examination of the Issuer, including the information
that the Investor has received and reviewed as referenced in Section 4.7 hereof
in relation to its investment in the Shares and the Warrants.

     4.9  No Other Representations. No oral or written representations have been
made to the Investor in connection with the Investor's acquisition of the Shares
or Warrants which were in any way inconsistent with the information reviewed by
the Investor. The Investor acknowledges that no representations or warranties of
any type or description have been made to it by any Person with regard to the
Issuer, any of its Subsidiaries, any of their respective businesses, properties
or prospects or the investment contemplated herein, other than the
representations and warranties set forth in Article 3 hereof.

     4.10 Knowledge and Experience. The Investor has such knowledge and
experience in financial, tax and business matters, including substantial
experience in evaluating and investing in common stock and other securities
(including the common stock and other securities of speculative companies), so
as to enable the Investor to utilize the information referred to in Section 4.7
hereof and any other information made available by the Issuer to the Investor in
order to evaluate the merits and risks of an investment in the Shares and
Warrants and to make an informed investment decision with respect thereto.
Investor is fully aware of: (i) the highly speculative nature of the Shares and

                                       -8-

<PAGE>

Warrants; (ii) the financial hazards involved; (iii) the lack of liquidity of
the Shares and Warrants and the restrictions on transferability of the Shares
and Warrants; (iv) the qualifications and backgrounds of the management of the
Issuer; (v) the tax consequences of acquiring the Shares and Warrants; and (vi)
Investor understands that the Shares and Warrants are restricted and cannot be
resold unless a registration statement under the Securities Act (and current
prospectus) is in effect as to the Shares and Warrants, the Shares and Warrants
are sold pursuant to SEC Rule 144 of the Securities Act or pursuant to another
exemption from the registration requirements of the Securities Act or applicable
state securities laws.

         4.11  Rule 144.  In addition, Investor has been advised that SEC
Rule 144 promulgated under the Securities Act, which permits certain limited
sales of unregistered securities, may not be presently available with respect to
the Shares and Warrants and, in any event, requires that the Shares and any
shares of Common Stock issuable upon exercise of the Warrants be held for a
minimum of one (1) year, and in certain cases two (2) years, after they have
been purchased and paid for (within the meaning of SEC Rule 144), before they
may be resold under SEC Rule 144.

         4.12  Independent Decision. The Investor is not relying on the Issuer
or on any legal or other opinion in the materials reviewed by the Investor with
respect to the financial or tax considerations of the Investor relating to its
investment in the Shares and Warrants. The Investor has relied solely on the
representations and warranties, covenants and agreements of the Issuer in this
Agreement (including the Exhibits hereto) and on its examination and independent
investigation in making its decision to acquire the Shares and Warrants.

         4.13  Commissions. The Investor has not incurred any obligation for any
finder's or broker's or agent's fees or commissions in connection with the
transactions contemplated hereby.

         4.14  No General Solicitation. At no time was Investor presented with
or solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the Shares and Warrants.

                                    ARTICLE 5
                                    COVENANTS

         5.1   Public Announcements. The Investor agrees not to make any public
announcement or issue any press release or otherwise publicly disseminate any
information about the subject matter of this Agreement. The Issuer shall have
the right to make such public announcements and shall control, in its sole and
absolute discretion, the timing, form and content of all press releases or other
public communications of any sort relating to the subject matter of this
Agreement, and the method of their release, or publication thereof.

         5.2   Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be reasonably necessary

                                      -9-

<PAGE>

or appropriate to effectuate, carry out and comply with all of the terms of this
Agreement and the transactions contemplated hereby. Each of the Investor and the
Issuer shall make on a prompt and timely basis all governmental or regulatory
notifications and filings required to be made by it with or to any Governmental
Authority in connection with the consummation of the transactions contemplated
hereby. The Issuer and the Investor each agree to cooperate with the other in
the preparation and filing of all forms, notifications, reports and information,
if any, required or reasonably deemed advisable pursuant to any Requirement of
Law or the rules of Nasdaq SmallCap Market in connection with the transactions
contemplated by this Agreement and to use their respective best efforts to agree
jointly on a method to overcome any objections by any Governmental Authority to
any such transactions. Except as may be specifically required hereunder, neither
of the parties hereto or their respective Affiliates shall be required to agree
to take any action that in the reasonable opinion of such party would result in
or produce a Material Adverse Effect on such party.

         5.3   Notification of Certain Matters. Each party hereto shall give
prompt notice to the other party of the occurrence, or non-occurrence, of any
event which would be likely to cause any representation and warranty herein to
be untrue or inaccurate, or any covenant, condition or agreement herein not to
be complied with or satisfied.

         5.4   Confidential Information; Standstill.

               (a)  The Investor agrees that no portion of the Confidential
Information (as defined below) shall be disclosed to third parties, except as
may be required by law, without the prior express consent of the Issuer provided
that the Investor may share such information with such of its officers and
professional advisors as may need to know such information to assist the
Investor in its evaluation thereof on the condition that such parties agree to
be bound by the terms hereof. All Confidential Information received by the
Investor shall be promptly returned or destroyed, as directed by the Issuer.
"Confidential Information" means all oral or written data, reports, records or
materials and any and all other confidential or disclosure information or
materials obtained from the Issuer or its professional advisors, which are not
yet publicly available. Confidential Information excludes information that is
publicly available or already known to the Investor through a source not bound
by any confidentiality obligation.

               (b)  For a period of one year from the Closing Date, the Investor
will not, without the prior written consent of the Issuer (i) propose to enter
into any acquisition of all or substantially of the assets or stock of the
Issuer or a merger or other business combination involving the Issuer; (ii) seek
to control or influence the management, Board of Directors or policies of the
Issuer; or (iii) form, join or in any way participate in a "group" (within the
meaning of Section 13(d) (3) of the Exchange Act) with respect to any securities
of the Issuer in connection with any of the foregoing. Notwithstanding the
foregoing, this section shall not restrict the Investor's acquisition of shares
of the Issuer's Common Stock through open market purchases.

                                      -10-

<PAGE>

                                   ARTICLE 6
                               REGISTRATION RIGHTS

         The Investor shall have the following registration rights with respect
to the Registrable Securities owned by it:

         6.1   Transfer of Registration Rights. The Investor may assign the
registration rights with respect to the Shares or the shares of Common Stock
issuable upon exercise of the Warrants (the "Warrant Shares") to any party or
parties to which it may from time to time transfer the Shares or Warrant Shares,
provided that the transferee agrees in writing with the Issuer to be bound by
the applicable provisions of this Agreement regarding such registration rights
and indemnification relating thereto. Upon assignment of any registration rights
pursuant to this Section 6.1, the Investor shall deliver to the Issuer a notice
of such assignment which includes the identity and address of any assignee and
such other information reasonably requested by the Issuer in connection with
effecting any such registration (collectively, the Investor and each such
subsequent holder is referred to as a "Holder").

         6.2   Required Registration.

               (a)  Filing of Shelf Registration Statement. As promptly as
practicable after the Closing, but in no event later than thirty (30) days after
the date of the Closing (the "Filing Deadline Date"), the Issuer agrees to file
a Registration Statement on Form S-3 (the "Shelf Registration Statement") to
register the resale of all of the Shares. The Issuer shall use reasonable
efforts to cause the SEC to declare the Shelf Registration Statement effective
as soon as practicable after filing and to thereafter maintain the effectiveness
of the Shelf Registration Statement until such time as the Issuer reasonably
determines, based on an opinion of counsel, that the Holders will be eligible to
sell all of the Shares then owned by the Holders without the need for continued
registration of the Shares in the three month period immediately following the
termination of the effectiveness of the Shelf Registration Statement. The
Issuer's obligations contained in this Section 6.2 shall terminate on the second
anniversary of the date on which the Shares are issued hereunder.

               (b)  Delay In Filing.

                    (i)   If the Shelf Registration Statement is not filed by
the Issuer with the SEC on or prior to the Filing Deadline Date, then upon the
first day following the Filing Deadline Date (the "Initial Liquidated Damages
Date"), and upon the expiration of each seven (7)-day period following the
Initial Liquidated Damages Date in which the Shelf Registration Statement has
not been filed by the Issuer with the SEC (each, an "Additional Liquidated
Damages Date"), the Issuer shall pay the Investor, as liquidated damages and not
as a penalty, an amount equal to 1.0% (expressed as a percentage of the Purchase
Price) with respect to any failure to timely file the Shelf Registration
Statement; and for any Initial Liquidated Damages Date or Additional Liquidated
Damages Date, such payment shall be made no later than the first business day of
the calendar month

                                      -11-

<PAGE>

next succeeding the month in which such Initial Liquidated Damages Date or
Additional Liquidated Damages Date occurs.

                    (ii)   The parties agree that the sole damages payable for a
violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude the Investor from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.

                    (iii)  The parties hereto agree that the liquidated damages
provided for in this Section 6.2(b) constitute a reasonable estimate of the
damages that may be incurred by the Investor by reason of the failure of the
Shelf Registration Statement to be filed in accordance with the provisions
hereof.

         6.3   Registration Procedures.

               (a)  In case of the Shelf Registration Statement effected by the
Issuer subject to this Article 6, the Issuer shall keep the Investor, on behalf
of each Holder, advised in writing as to the initiation of such registration,
and as to the completion thereof. In addition, subject to Section 6.2 above, the
Issuer shall, to the extent applicable to the Shelf Registration Statement:

                    (i)    prepare and file with the SEC such amendments and
supplements to the Shelf Registration Statement as may be necessary to keep such
registration, effective and comply with provisions of the Securities Act with
respect to the disposition of all securities covered thereby during the period
referred to in Section 6.2;

                    (ii)   update, correct, amend and supplement the Shelf
Registration Statement as necessary;

                    (iii)  notify Holder when the Shelf Registration Statement
is declared effective by the SEC, and furnish such number of prospectuses,
including preliminary prospectuses, and other documents incident thereto as
Holder may reasonably request from time to time;

                    (iv)   use its commercially reasonable efforts to register
or qualify such Registrable Securities under such other securities or blue sky
laws of such jurisdictions of the United States where an exemption is not
available and as Holder may reasonably request to enable it to consummate the
disposition in such jurisdiction of the Registrable Securities (provided that
the Issuer will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
provision, or (ii) consent to general service of process in any such
jurisdiction, or (iii) subject itself to taxation in any jurisdiction where it
is not already subject to taxation);

                                      -12-

<PAGE>

               (v)    notify Holder at any time when a prospectus relating to
the Registrable Securities is required to be delivered under the Securities Act,
of the happening of any event as a result of which the prospectus included in
the Shelf Registration Statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and
at the request of Holder, the Issuer will prepare a supplement or amendment to
such prospectus, so that, as thereafter delivered to purchasers of such shares,
such prospectus will not contain any untrue statements of a material fact or
omit to state any fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;

               (vi)   cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Issuer are then
listed and obtain all necessary approvals from the Nasdaq SmallCap Market, if
applicable, for trading thereon;

               (vii)  provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of the Shelf
Registration Statement; and

               (viii) upon the sale of any Registrable Securities pursuant to
the Shelf Registration Statement, direct the transfer agent to remove all
restrictive legends from all certificates or other instruments evidencing such
Registrable Securities.

          (b)  Notwithstanding anything stated or implied to the contrary in
Section 6.3(a) above, the Issuer shall not be required to consent to any
underwritten offering of the Registrable Securities or to any specific
underwriter participating in any underwritten public offering of the Registrable
Securities.

          (c)  Each Holder agrees that upon receipt of any notice from the
Issuer of the happening of any event of the kind described in Section 6.3(a)(v),
such Holder will forthwith discontinue such Holder's disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 6.3(a)(v) and, if so directed by the
Issuer, will deliver to the Issuer at the Issuer's expense all copies, other
than permanent file copies, then in such Holder's possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.

          (d)  Except as required by law, all expenses incurred by the Issuer in
complying with this Article 6, including but not limited to, all registration,
qualification and filing fees, printing expenses, fees and disbursements of
counsel and accountants for the Issuer, blue sky fees and expenses (including
fees and disbursements of counsel related to all blue sky matters)
("Registration Expenses") incurred in connection with any registration,
qualification or compliance pursuant to this Article 6 shall be borne by the
Issuer. All underwriting discounts and selling commissions applicable to a sale
incurred in connection with any registration of Registrable Securities and the
legal fees and other expenses of a Holder shall be borne by such Holder.

                                      -13-

<PAGE>

     6.4   Further Information. If Registrable Securities owned by a Holder are
included in any registration, such Holder shall furnish the Issuer such
information regarding itself as the Issuer may reasonably request and as shall
be required in connection with any registration (or amendment thereto), referred
to in this Agreement, and Holder shall indemnify the Issuer with respect thereto
in accordance with Article 7 hereof. The Investor hereby agrees to promptly
complete and return all forms and questionnaires relating to Investor that the
Issuer shall reasonably request in connection with its preparation of the Shelf
Registration Statement. The Investor agrees and acknowledges that the Issuer may
rely on such information as being true and correct for purposes of preparing and
filing the Shelf Registration Statement at the time of filing thereof and at the
time it is declared effective, unless the Investor has notified the Issuer in
writing to the contrary prior to such time.

                                    ARTICLE 7
                                 INDEMNIFICATION

     7.1   Indemnification Generally. The Issuer, on the one hand, and the
Investor, on the other hand (each an "Indemnifying Party"), shall indemnify the
other from and against any and all losses, damages, liabilities, claims,
charges, actions, proceedings, demands, judgments, settlement costs and expenses
of any nature whatsoever (including, without limitation, reasonable attorneys'
fees and expenses) or deficiencies resulting from any breach of a representation
and warranty, covenant or agreement by the Indemnifying Party and all claims,
charges, actions or proceedings incident to or arising out of the foregoing.

     7.2   Indemnification Relating to Registration Rights.

           (a)   With respect to any registration, effected or to be effected
pursuant to Article 6 of this Agreement, the Issuer shall indemnify each Holder
of Registrable Securities whose securities are included or are to be included
therein, each of such Holder's directors and officers, each underwriter (as
defined in the Securities Act) of the securities sold by such Holder (if any),
and each Person who controls (within the meaning of the Securities Act) any such
Holder or underwriter (a "Controlling Person") from and against all losses,
damages, liabilities, claims, charges, actions, proceedings, demands, judgments,
settlement costs and expenses of any nature whatsoever (including, without
limitation, reasonable attorneys' fees and expenses) or deficiencies of any such
Holder or any such underwriter or Controlling Person concerning:

                 (i)   any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration;

                 (ii)  any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statement
therein, in the light of the circumstances under which it was made, not
misleading; or

                                      -14-

<PAGE>

                 (iii)  any violation by the Issuer of the Securities Act or any
rule or regulation promulgated thereunder applicable to the Issuer, or of any
blue sky or other state securities laws or any rule or regulation promulgated
thereunder applicable to the Issuer,

in each case, relating to any action or inaction required of the Issuer in
connection with any such registration, and subject to Section 7.3 below will
reimburse each such Person entitled to indemnity under this Section 7.2 for all
legal and other expenses reasonably incurred in connection with investigating or
defending any such loss, damage, liability, claim, charge, action, proceeding,
demand, judgment, settlement or deficiency; provided, however, that, the
foregoing indemnity and reimbursement obligation shall not be applicable to the
extent that any such matter arises out of or is based on any untrue statement
(or alleged untrue statement) or omission (or alleged omission) made in reliance
upon and in conformity with written information furnished to the Issuer by or on
behalf of such Holder or by or on behalf of such an underwriter specifically for
use in such prospectus, offering circular or other document.

            (b)  With respect to any registration, qualification or compliance
effected or to be effected pursuant to this Agreement, each Holder of
Registrable Securities whose securities are included or are to be included
therein, shall indemnify the Issuer from and against all losses, damages,
liabilities, claims, charges, actions, proceedings, demands, judgments,
settlement costs and expenses of any nature whatsoever (including, without
limitation, reasonable attorneys' fees and expenses) or deficiencies of the
Issuer concerning:

                 (i)    any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance;

                 (ii)   any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statement
therein, in the light of the circumstances under which it was made, not
misleading; or

                 (iii)  any violation by such Holder of the Securities Act or
any rule or regulation promulgated thereunder applicable to the Issuer or such
Holder or of any blue sky or other state securities laws or any rule or
regulation promulgated thereunder applicable to the Issuer or such Holder,

in each case, relating to any action or inaction required of such Holder in
connection with any such registration, qualification or compliance, and subject
to Section 7.3 below will reimburse the Issuer for all legal and other expenses
reasonably incurred in connection with investigating or defending any such loss,
damage, liability, claim, charge, action, proceeding, demand, judgment,
settlement or deficiency; provided, however, that, the foregoing indemnity and
reimbursement obligation shall only be applicable to the extent that any such
matter arises out of or is based on any untrue statement (or alleged untrue
statement) or omission (or alleged omission) made in reliance upon and in
conformity with written information furnished to the Issuer by or on behalf of
the Holder specifically

                                      -15-

<PAGE>

for use in such prospectus, offering circular or other document; provided,
however, that, the obligation of the Holder hereunder shall be limited to an
amount equal to the proceeds to the Holder of Registrable Securities sold as
contemplated hereunder.

            7.3  Indemnification Procedures. Each Person entitled to
indemnification under this Section (an "Indemnified Party") shall give notice as
promptly as reasonably practicable to each party required to provide
indemnification under this Section (an "Indemnifying Party") of any action
commenced against or by it in respect of which indemnity may be sought
hereunder, but failure to so notify an Indemnifying Party shall not relieve such
Indemnifying Party from any liability that it may have otherwise than on account
of this indemnity agreement so long as such failure shall not have materially
prejudiced the position of the Indemnifying Party. Upon such notification, the
Indemnifying Party shall assume the defense of such action if it is a claim
brought by a third party, if and after such assumption the Indemnifying Party
shall not be entitled to reimbursement of any expenses incurred by it in
connection with such action except as described below. In any such action, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the contrary or (ii) the named parties in any such action (including
any impleaded parties) include both the Indemnifying Party and the Indemnified
Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing or conflicting interests
between them. The Indemnifying Party shall not be liable for any settlement of
any proceeding effected without its written consent (which shall not be
unreasonably withheld or delayed by such Indemnifying Party), but if settled
with such consent or if there be final judgment for the plaintiff, the
Indemnifying Party shall indemnify the Indemnified Party from and against any
loss, damage or liability by reason of such settlement or judgment.

                                    ARTICLE 8
                              CONDITIONS TO CLOSING

            8.1  Conditions to the Obligations of the Investor. The obligations
of the Investor to proceed with respect to its purchase of the Shares and
Warrants at the Closing is subject to the following conditions any and all of
which may be waived, in whole or in part, to the extent permitted by applicable
law:

                 (a)  Representations and Warranties. Each of the
representations and warranties of the Issuer contained in this Agreement shall
be true and correct in all material respects as of the Closing as though made on
and as of the Closing, except (i) for changes specifically permitted by this
Agreement, and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date, except in any case for such failures to be true and correct which would
not, individually or in the aggregate, have a Material Adverse Effect on the
Issuer. Unless the Investor receives written notice to the contrary at the
Closing, Investor shall be entitled to assume that the preceding is accurate in
all respects at the Closing.

                                      -16-

<PAGE>

           (b)   Agreement and Covenants. The Issuer shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Closing. Unless the Investor receives written notice to the contrary at the
Closing, Investor shall be entitled to assume that the preceding is accurate in
all respects at the Closing.

           (c)   No Order. No governmental authority or other agency or
commission or federal or state court of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction, or other order (whether temporary,
preliminary or permanent) which is in effect and which materially restricts,
prevents or prohibits consummation of the Closing or any transaction
contemplated by this Agreement.

           (d)   Opinion of Issuer's Counsel. The Holder shall have received an
opinion of Issuer's counsel, dated the Closing Date, with respect to legal
matters customary for private offerings of this type.

     8.2   Conditions to the Obligations of the Issuer. The obligations of the
Issuer to proceed with the Closing is subject to the following conditions any
and all of which may be waived, in whole or in part, to the extent permitted by
applicable law:

           (a)   Representations and Warranties. Each of the representations and
warranties of the Investor contained in this Agreement shall be true and correct
as of the Closing as though made on and as of the Closing, except (i) for
changes specifically permitted by this Agreement, and (ii) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date. Unless the Issuer receives
written notification to the contrary at the Closing, the Issuer shall be
entitled to assume that the preceding is accurate in all respects at the
Closing.

           (b)   Agreement and Covenants. The Investor shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Closing. Unless the Issuer receives written notification to the contrary at the
Closing, the Issuer shall be entitled to assume that the preceding is accurate
in all respects at the Closing.

           (c)   No Order. No governmental authority or other agency or
commission or federal or state court of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction, or other order (whether temporary,
preliminary or permanent) which is in effect and which materially restricts,
prevents or prohibits consummation of the Closing or any transaction
contemplated by this Agreement.

                                      -17-

<PAGE>

                                    ARTICLE 9
                                  MISCELLANEOUS

     9.1   Defined Terms. As used herein the following terms shall have the
following meanings:

           "Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.

           "Certificate of Incorporation" means the Issuer's Certificate of
Incorporation, as the same may be supplemented, amended or restated from time to
time.

           "Closing" has the meaning in Article 2 of this Agreement.

           "Common Stock" has the meaning specified in the Recitals to this
Agreement.

           "Contract" means any material indenture, lease, sublease, loan
agreement, mortgage, note, restriction, commitment, obligation or other
contract, agreement or instrument.

           "Exchange Act" means the Securities Exchange Act of 1934, as amended.

           "GAAP" means generally accepted accounting principles in effect in
the United States of America from time to time.

           "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any entity or official exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

           "Investor" has the meaning specified in the Recitals to this
Agreement.

           "Issuer" means IGN Entertainment, Inc., a Delaware corporation
formerly known as Snowball.com, Inc.

           "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code or
comparable law or any jurisdiction in connection with such mortgage, pledge,
security interest, encumbrance, lien or charge).

           "Material Adverse Change (or Effect)" means a material and adverse
change in (or effect on) the financial condition, properties, assets,
liabilities, rights, obligations, operations or business, of a Person and its
Subsidiaries taken as a whole.

                                      -18-

<PAGE>

          "Person" means an individual, partnership, corporation, business
trust, joint stock company, estate, trust, unincorporated association, joint
venture, Governmental Authority or other entity, of whatever nature.

          "Purchase Price" has the meaning specified in Section 1.1 of this
Agreement.

          "Register", "registered" and "registration" refer to a registration of
the offering and sale or resale of Common Stock effected by preparing and filing
a registration statement in compliance with the Securities Act and the
declaration or ordering of the effectiveness of such registration statement.

          "Registrable Securities" means all shares of Common Stock acquired by
the Investor pursuant to this Agreement, the Warrant Shares and any other shares
of Common Stock or other securities issued in respect of such Shares or Warrant
Shares by way of a stock dividend or stock split or in connection with a
combination or subdivision of the Issuer's Common Stock or by way of a
recapitalization, merger or consolidation or reorganization of the Issuer;
provided, however, that, as to any particular securities, such securities will
cease to be Registrable Securities when they have been sold pursuant to
registration or in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act under Section 4(1) thereof so that
all transfer restrictions and restrictive legends with respect thereto are
removed upon the consummation of such sale and the purchaser and seller receive
an opinion of counsel for the Issuer, which shall be in form and substance
reasonably satisfactory to the purchaser and seller and their respective
counsel, to the effect that such stock in the hands of the purchaser is freely
transferable without restriction or registration under the Securities Act in any
public or private transaction.

          "Requirements of Law" means as to any Person, the certificate of
incorporation, by-laws or other organizational or governing documents of such
person, and any domestic or foreign and federal, state or local law, rule,
regulation, statute or ordinance or determination of any arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its properties or to which such Person or any of its property
is subject.

          "SEC" means the Securities and Exchange Commission.

          "SEC Reports" has the meaning specified in Section 3.7 of this
Agreement.

          "Securities Act" means the Securities Act of 1933, as amended.

          "Shares" has the meaning specified in Section 1.1 of this Agreement.

          "Subsidiary" means as to any Person, a corporation or limited
partnership of which more than 50% of the outstanding capital stock or
partnership interests having full voting power is at the time directly or
indirectly owned or controlled by such Person.

                                      -19-

<PAGE>

     9.2  Other Definitional Provisions.

          (a)  All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.

          (b)  Terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.

          (c)  All accounting terms shall have a meaning determined in
accordance with GAAP.

          (d)  As used herein, the neuter gender shall also denote the masculine
and feminine, and the masculine gender shall also denote the neuter and
feminine, where the context so permits.

          (e)  The words "hereof," "herein" and "hereunder," and words of
similar import, when used in this Agreement shall refer to this Agreement as a
whole (including any Exhibits hereto) and not to any particular provision of
this Agreement.

     9.3  Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall
subsequently designate in writing to the other party):

          (a)  if to the Issuer to:

               IGN Entertainment, inc.
               3240 Bayshore Boulevard
               Brisbane, CA 94005
               Attention:  James R. Tolonen
               Facsimile: (415) 508-2777

          (b)  if to the Investor to the address set forth next to its name on
the signature page hereto.

Each such notice or other communication shall for all purposes of this Agreement
be treated as effective or having been given when delivered if delivered by
hand, by messenger or by courier, or if sent by facsimile, upon confirmation of
receipt.

                                      -20-

<PAGE>

     9.4  Entire Agreement. This Agreement (including the Exhibits attached
hereto) and other documents delivered at the Closing pursuant hereto, contain
the entire understanding of the parties in respect of its subject matter and
supersedes all prior agreements and understandings between or among the parties
with respect to such subject matter. The Exhibits constitute a part hereof as
though set forth in full above.

     9.5  Expenses; Taxes. Except as otherwise provided in this Agreement, the
parties shall pay their own fees and expenses, including their own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby. Any sales tax, stamp duty, deed transfer or other tax (except taxes
based on the income of the Investor) arising out of the issuance of the Shares
by the Issuer to the Investor and consummation of the transactions contemplated
by this Agreement shall be paid by the Issuer.

     9.6  Amendment; Waiver. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
both parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege. No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts. The rights and remedies of the parties under this Agreement
are in addition to all other rights and remedies, at law or equity, that they
may have against each other.

     9.7  Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and legal assigns. The rights and obligations of this
Agreement may not be assigned by any party without the prior written consent of
the other party.

     9.8  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.

     9.9  Headings. The headings contained in this Agreement are for convenience
of reference only and are not to be given any legal effect and shall not affect
the meaning or interpretation of this Agreement.

     9.10 Governing Law; Interpretation. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of New
York applicable to contracts executed and to be wholly performed within such
State.
                                      -21-

<PAGE>

     9.11 Severability. The parties stipulate that the terms and provisions of
this Agreement are fair and reasonable as of the date of this Agreement.
However, any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. If, moreover, any of those provisions shall for any reason be
determined by a court of competent jurisdiction to be unenforceable because
excessively broad or vague as to duration, activity or subject, it shall be
construed by limiting, reducing or defining it, so as to be enforceable.

                 [SIGNATURES AND OTHER INFORMATION ON NEXT PAGE]

                                      -22-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Subscription
Agreement to be duly executed and delivered as of the date set forth below.

NAME OF INVESTOR:                           ADDRESS FOR NOTICES (Please Print):

______________________________              ____________________________________
                                            ____________________________________
SIGNATURE:                                  ____________________________________
                                            Attention:__________________________
By:___________________________              Telecopy:___________________________
   Name:
   Title:                                   Tax Identification #:_______________

Exact Name to appear on Stock Certificate:  ____________________________________

Number of Shares Subscribed For:            ____________________________________

Aggregate Purchase Price (see Section 1.1): ____________________________________

Warrants to Purchase _______________ shares of Common Stock.

________________________________________________________________________________

ACCEPTED:  IGN ENTERTAINMENT, INC.

           By:______________________           Dated:  __________________, 2002
              Name:
              Title:

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