Document:

EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

         This SECURITIES PURCHASE AGREEMENT,  dated as of January 16, 2003 (this
"Agreement")  is  entered  into  by  and  among  The  3DO  Company,  a  Delaware
corporation (the "Company"), and the purchasers listed in Exhibit A hereto (each
a "Purchaser" and collectively the "Purchasers").  The parties,  intending to be
legally bound, hereby agree as follows:

         1. Sale of Common  Stock.  Subject to the terms and  conditions of this
Agreement,  Company  hereby agrees to sell to each  Purchaser and each Purchaser
hereby  severally  agree to  purchase  from  Company  the  number  of  shares of
Company's  Common Stock set forth  opposite such  Purchaser's  name on Exhibit A
(the "Shares"), at the purchase price listed on Exhibit A. Upon the execution of
this Agreement (the "First Closing"),  (A) the Company shall deliver or cause to
be delivered to each Purchaser the  following:  (i) this Agreement duly executed
by the Company; (ii) a certificate evidencing a number of shares of Common Stock
being  purchased by such  Purchaser,  registered in the name of such  Purchaser;
(iii) the  Registration  Rights  Agreement duly executed by the Company and (iv)
and Warrant (the "Warrant"), registered in the name of the Purchaser in the form
attached hereto as Annex A, giving the Purchaser the right to acquire the number
of shares  of Common  Stock  upon the  exercise  of the  Warrant  (the  "Warrant
Shares") listed on Exhibit A and (B) each Purchaser shall deliver or cause to be
delivered to the Company the following: (i) this Agreement duly executed by such
Purchaser;  (ii) the  purchase  prices for the Shares  being  purchased  by such
Purchaser,  by check,  wire transfer,  or any  combination  thereof,  payable to
Company,  and (iii) the  Registration  Rights  Agreement  duly  executed by such
Purchaser.

         2. Additional Closings.  The Company may sell Common Stock and Warrants
at an  additional  closing  or  closings  on or before  20 days  after the First
Closing  (the  "Additional  Closing(s)"),  subject  to the  same  procedures  as
provided  in  Section  1.  Upon  delivery  of an  executed  counterpart  of this
Agreement and the Registration  Rights Agreement (and an updated Exhibit A), the
purchasers  in  such   Additional   Closing(s)   shall  become  parties  to  the
Registration  Rights Agreement  without further action by the Purchasers and the
Company.

         3. Representations and Warranties of Company. Company hereby represents
and  warrants  to each  Purchaser  in the  First  Closing  that  the  statements
contained in the following paragraphs of this Section 3 are all true and correct
as of the date of this  Agreement and the Closing Date, and to each Purchaser in
an Additional Closing that the statements  contained in the following paragraphs
of this  Section  3 are all true and  correct  as of the date of the  Additional
Closing:

                  (a) Organization and Standing: Articles and Bylaws. Company is
a corporation  duly organized,  validly  existing and in good standing under the
laws of the  State  of  Delaware  and  has all  requisite  corporate  power  and
authority to carry on its business as now conducted.

<PAGE>

                  (b)  Corporate  Power.  Company  has all  requisite  legal and
corporate power to enter into,  execute,  deliver and perform this Agreement and
the Registration Rights Agreement (the "Registration  Rights Agreement") of even
date herewith between Company and Purchaser. This Agreement and the Registration
Rights  Agreement (the  "Transaction  Documents") have been duly executed by the
Company and  constitute  the legal,  valid and binding  obligations  of Company,
enforceable in accordance with their terms, except as the same may be limited by
(i) bankruptcy,  insolvency,  moratorium,  and other laws of general application
affecting the  enforcement  of  creditors'  rights and (ii)  limitations  on the
enforceability  of the  indemnification  provisions of the  Registration  Rights
Agreement as limited by applicable securities laws.

                  (c) Authorization.

                           (i) Corporate Action.  All corporate and legal action
on the part of Company, its officers,  directors and shareholders  necessary for
the execution and delivery of this Agreement, the Registration Rights Agreement,
the sale and issuance of the Shares and Warrant  Shares,  and the performance of
Company's obligations hereunder have been taken.

                           (ii) Valid  Issuance.  The Shares and Warrant Shares,
when issued in compliance with the provisions of this Agreement and the Warrant,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all liens and encumbrances; provided, however, that the Shares, the Warrants and
the Warrant Shares may be subject to restrictions on transfer under state and/or
federal  securities  laws as set forth herein,  and as may be required by future
changes in such laws.

                  (d) Government Consent,  Etc. No consent,  approval,  order or
authorization of, or designation,  registration, declaration or filing with, any
federal,  state, local or other governmental authority on the part of Company is
required in connection  with the valid execution and delivery of this Agreement,
the Registration  Rights Agreement or the offer, sale or issuance of the Shares,
the  Warrants  and the  Warrant  Shares  other  than,  if  required,  filings or
qualifications under the California Corporate Securities Law of 1968, as amended
(the  "California  Law"), or other  applicable  blue sky laws,  which filings or
qualifications,  if required,  will be timely filed or obtained by Company.  The
execution,  delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions  contemplated thereby do
not and will not conflict  with,  or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination,  amendment,  acceleration  or  cancellation  (with or
without notice,  lapse of time or both) of, any agreement filed (or incorporated
by reference) as an exhibit to the SEC Reports (as defined below).

                  (e) SEC Reports;  Financial Statements.  The Company has filed
all reports  required  to be filed by it under the  Securities  Exchange  Act of
1934,  as amended  ("1934  Act"),  including  pursuant to Section 13(a) or 15(d)
thereof,  for the  twelve  months  preceding  the  date  hereof  (the  foregoing
materials  being  collectively  referred  to herein as the "SEC  Reports")  on a
timely  basis or has  received a valid  extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension.  As of
their respective  dates, the SEC Reports complied in all material  respects with
the  requirements of the Securities Act of 1933, as amended (the "1933 Act")

                                      -2-
<PAGE>

and the 1934 Act and the rules and  regulations  of the  Securities and Exchange
Commission ("Commission")  promulgated thereunder,  and none of the SEC Reports,
when filed,  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, in light of the circumstances under which they were
made, not misleading.  The financial  statements of the Company  included in the
SEC  Reports  comply  in  all  material  respects  with  applicable   accounting
requirements  and the rules  and  regulations  of the  Commission  with  respect
thereto as in effect at the time of filing. Such financial  statements have been
prepared in accordance with generally accepted accounting  principles applied on
a  consistent  basis  during the periods  involved,  except as may be  otherwise
specified in such financial  statements or the notes thereto, and fairly present
in all  material  respects  the  financial  position  of  the  Company  and  its
consolidated  subsidiaries  as of and for the dates  thereof  and the results of
operations  and cash flows for the periods then ended,  subject,  in the case of
unaudited statements, to normal, year-end audit adjustments.

                  (f) Private Placement. Assuming the accuracy of the Purchasers
representations and warranties set forth in Section 4, no registration under the
1933  Act is  required  for the  offer,  issuance  and sale of the  Shares,  the
Warrants and the Warrant Shares by the Company to the Purchasers as contemplated
hereby.

                  (g) Listing and  Maintenance  Requirements.  The  issuance and
sale of the Shares,  the Warrants and the Warrant Shares  hereunder,  when taken
together  with any Shares,  Warrants  and  Warrant  Shares that may be issued at
Additional  Closings do not contravene  the rules and  regulations of the Nasdaq
National  Market and no approval of the  stockholders of the Company is required
for the Company to issue and deliver to the Purchasers the Shares,  the Warrants
and the Warrant  Shares  including  all Shares and  Warrants  issued and Warrant
Shares  issuable as of the Closing and each Additional  Closing.  The Company is
eligible to utilize  Form S-3 to  register  the resale of the Shares and Warrant
Shares by the Purchasers.

                  (h)  Investment  Company.  The  Company is not,  and is not an
Affiliate  of, an  "investment  company"  within the  meaning of the  Investment
Company Act of 1940, as amended.

                  (i) Disclosure.  The Company  confirms that neither it nor any
other person  acting on its behalf has provided any of the  Purchasers  or their
agents or counsel with any  information  that  constitutes  or might  constitute
material,  non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing  representations in effecting transactions
in  securities  of the  Company.  All  disclosure  provided  to  the  Purchasers
regarding the Company,  its business and the  transactions  contemplated  hereby
furnished by or, to the Company's  knowledge,  on behalf of the Company are true
and correct and do not contain any untrue  statement of a material  fact or omit
to state  any  material  fact  necessary  in order to make the  statements  made
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

         4.  Representations  and  Warranties  by  Purchaser.   Each  Purchaser,
severally and not jointly,  represents and warrants to Company as of the Closing
Date (or Additional Closing Date, as applicable) as follows:

                                      -3-
<PAGE>

                  (a) Investment Intent:  Authority. This Agreement is made with
Purchaser in reliance upon Purchaser's  representation to Company,  evidenced by
Purchaser's execution of this Agreement, that Purchaser is acquiring the Shares,
the Warrants and the Warrant Shares for investment for  Purchaser's own account,
not as nominee or agent, for investment and not with a view to, or for resale in
connection  with, any distribution or public offering thereof within the meaning
of the 1933 Act; provided,  however, that by making the representations  herein,
Purchaser does not agree to hold any of the Shares, the Warrants and the Warrant
Shares for any minimum or other  specific term and reserves the right to dispose
of the Shares,  the  Warrants and the Warrant  Shares at any time in  accordance
with or pursuant to a registration statement or an exemption under the 1933 Act.
Purchaser has the requisite right,  power,  authority and capacity to enter into
and perform this Agreement and the Agreement will constitute a valid and binding
obligation  upon  Purchaser,  except as the same may be limited  by  bankruptcy,
insolvency,  moratorium,  and other laws of general  application  affecting  the
enforcement of creditors' rights.

                  (b) Knowledge and Experience. Purchaser (i) has such knowledge
and experience in financial and business  matters as to be capable of evaluating
the merits and risks of Purchaser's  prospective  investment in the Shares,  the
Warrants and the Warrant Shares; (ii) has the ability to bear the economic risks
of Purchaser's  prospective  investment;  (iii) has had all questions which have
been asked by  Purchaser  satisfactorily  answered by Company;  and (iv) has not
been  offered the Shares,  the  Warrants  and the Warrant  Shares by any form of
advertisement,   article,   notice  or  other  communication  published  in  any
newspaper,  magazine, or similar media or broadcast over television or radio, or
any  seminar or meeting  whose  attendees  have been  invited by any such media.
Purchaser represents and warrants that it is an "accredited investor" within the
meaning of Rule 501 of Regulation D of the Securities Act.

                  (c)  Transfer  Restrictions.  Purchaser  covenants  that in no
event will it sell,  transfer or  otherwise  dispose of any of the  Shares,  the
Warrants  and the Warrant  Shares  other than in  conjunction  with an effective
registration statement for the Shares under the Securities Act or pursuant to an
exemption  therefrom,  or in  compliance  with  Rule 144  promulgated  under the
Securities  Act or to a person  related  to or an  entity  affiliated  with said
Purchaser and other than in compliance with the applicable securities regulation
laws of any state.

         5. Registration of the Shares to be Purchased.  The Company will file a
registration  statement  with  respect to the Shares  and  Warrant  Shares on or
before  twenty  (20) days after the  Closing  Date  pursuant to the terms of the
Registration Rights Agreement.

         6.  Legends.   Company  will  place  the  following   legends  on  each
certificate representing Shares and Warrant Shares:

         THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED  UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED  ("ACT"),  OR ANY  APPLICABLE  STATE
         SECURITIES LAWS ("BLUE SKY LAWS"). ANY TRANSFER OF SUCH SECURITIES WILL
         BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT OR AS REQUIRED
         BY BLUE SKY LAWS IS IN EFFECT AS TO SUCH  TRANSFER OR IN THE

                                      -4-
<PAGE>

         OPINION  OF  COUNSEL  REASONABLY   SATISFACTORY  TO  THE  COMPANY  SUCH
         REGISTRATION  IS  UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH
         THE ACT OR BLUE SKY LAWS.

The legend  set forth  above  shall be removed  and the  Company  shall  issue a
certificate  without such legend to the holder of the Shares and Warrant  Shares
upon which it is stamped,  if,  unless  otherwise  required by state  securities
laws,  (i) such Shares and Warrant  Shares are  registered  for resale under the
1933 Act, (ii) in connection with a sale  transaction,  such holder provides the
Company  with an opinion of counsel,  in a  generally  acceptable  form,  to the
effect  that a public  sale,  assignment  or  transfer of the Shares and Warrant
Shares may be made without registration under the 1933 Act, or (iii) such holder
provides  the Company  with  reasonable  assurances  that the Shares and Warrant
Shares can be sold pursuant to Rule 144 without any restriction as to the number
of  securities  acquired as of a  particular  date that can then be  immediately
sold.  Such  Investor  acknowledges,  covenants  and  agrees to sell  Shares and
Warrant  Shares  represented  by a  certificate  from  which the legend has been
removed only pursuant to (i) a registration  statement  effective under the 1933
Act or (ii)  advice of counsel  that such sale is exempt  from the  registration
requirements  of Section 5 of the 1993 Act,  including,  without  limitation,  a
transaction pursuant to Rule 144.

         7.  Indemnification of Purchasers.  The Company will indemnify and hold
the Purchasers and their directors, officers, shareholders,  partners, employees
and  agents  (each,  a  "Purchaser  Party")  harmless  from any and all  losses,
liabilities,  obligations,  claims, contingencies,  damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys'  fees and costs of  investigation  (collectively,  "Losses") that any
such  Purchaser  Party may  suffer or incur as a result  of or  relating  to the
failure of the  representations  and  warranties  of the  Company to be true and
correct.

         8.  Non-Public  Information.  The  Company  covenants  and agrees  that
neither it nor any other Person  acting on its behalf will provide any Purchaser
or its  agents  or  counsel  with  any  information  that the  Company  believes
constitutes  material  non-public  information.   The  Company  understands  and
confirms that each Purchaser  shall be relying on the foregoing  representations
in effecting transactions in securities of the Company.

         9. Miscellaneous.

                  (a) Waivers and  Amendments.  The provisions of this Agreement
may only be amended or  modified  in a writing  executed  by each of Company and
Purchaser.  A waiver  shall not be  effective  unless in a writing  by the party
against whom such waiver is to be enforced.

                  (b) Governing Law. This Agreement and all actions  arising out
of or in connection  with this  Agreement  shall be governed by and construed in
accordance  with  the laws of the  State  of  Delaware,  without  regard  to the
conflicts of law provisions  thereof.  EACH PARTY HEREBY  IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,  A JURY TRIAL FOR THE ADJUDICATION
OF ANY  DISPUTE  HEREUNDER  OR IN  CONNECTION  HEREWITH  OR ARISING  OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

                                      -5-
<PAGE>

                  (c) Entire Agreement.  This Agreement, the Registration Rights
Agreement  and the Warrants  constitute  the full and entire  understanding  and
agreement between the parties with regard to the subjects hereof and thereof.

                  (d) Survival. The representations,  warranties,  covenants and
agreements  made  herein  shall  survive  the  execution  and  delivery  of this
Agreement.

                  (e) Expenses.  Company shall pay on demand all reasonable fees
and expenses incurred by Purchaser, including reasonable legal fees and expenses
in connection with the preparation,  execution and delivery of this Agreement up
to a maximum amount of $5,000.

                  (f) Notices,  etc. Any notice,  request or other communication
required or permitted  hereunder shall be in writing and shall be deemed to have
been duly given (i) upon receipt if  personally  delivered,  (ii) three (3) days
after being mailed by registered or certified mail,  postage  prepaid,  or (iii)
one day after being sent by recognized overnight courier or by facsimile,  if to
Purchaser,  at the address and facsimile  number listed on Exhibit A, or at such
other address or number as Purchaser shall have furnished to Company in writing,
or if to Company, at 200 Cardinal Way, Redwood City, California 94063 or at such
other address or number as Company shall have furnished to Purchaser in writing.

                  (g)  Validity.  If any  provision of this  Agreement  shall be
judicially  determined to be invalid,  illegal or  unenforceable,  the validity,
legality and enforceability of the remaining  provisions shall not in any way be
affected or impaired thereby.

                  (h) Counterparts. This Agreement may be executed in any number
of counterparts,  each of which shall be an original,  but all of which together
shall be deemed to constitute one instrument.

                  (i)  Assignment.  The terms and  conditions of this  Agreement
shall inure to the benefit of and be binding upon the respective  successors and
assigns of the  parties.  Nothing in this  Agreement,  express  or  implied,  is
intended  to  confer  upon any  party  other  than the  parties  hereto or their
respective  successors  and  assigns  any  rights,  remedies,   obligations,  or
liabilities under or by reason of this Agreement,  except as expressly  provided
in this Agreement.

                  (j) Independent Nature of Purchasers'  Obligations and Rights.
The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers  are in any way acting in concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Documents. Each
Purchaser  shall be  entitled to  independently  protect and enforce its rights,
including without  limitation the rights arising out of this Agreement or out of
the other  Transaction  Documents,  and it

                                      -6-
<PAGE>

shall not be necessary  for any other  Purchaser  to be joined as an  additional
party in any proceeding for such purpose.

                  (k) Remedies.  Each Investor and each holder of the Securities
shall have all rights and remedies set forth in the  Transaction  Documents  and
all rights and  remedies  which such holders have been granted at any time under
any other  agreement  or contract  and all of the rights which such holders have
under  any law.  Any  person  having  any  rights  under any  provision  of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other  security),  to  recover  damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.

                                      -7-
<PAGE>

         IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
date and year first written above.

                                               THE 3DO COMPANY
                                               a Delaware corporation

                                               By: /s/ James Alan Cook
                                                   -----------------------------

                                               Name: James Alan Cook
                                                     ---------------------------

                                               Title: Executive Vice President
                                                      --------------------------

                                               PURCHASER:

                                               By:
                                                   -----------------------------

                                               Name:
                                                     ---------------------------

                                               Title:
                                                      --------------------------

                                      -8-
<PAGE>

                                    EXHIBIT A

                             SCHEDULE OF PURCHASERS

<TABLE>
<CAPTION>
                                                                                                 Aggregate         Warrant
                                  Investor Address                              Number of        Purchase         Exercise
     Investor's Name            and Facsimile Number        Number of Shares  Warrant Shares     Price ($)        Price ($)
     ---------------            --------------------        ----------------  --------------     ---------        ---------
<S>                        <C>                                  <C>               <C>            <C>                 <C>
Vertical Ventures, LLC     650 5th Avenue, 6th Floor            58,823            14,705         $99,999.10          $2.525
                           New York, NY 10019
                           Attn: Josh Silverman
                           Facsimile:  (212) 259-2659

                           666 Dundee Road                     235,294            58,823         399,999.80           2.525
Cranshire Capital          Northbrook, IL 60062
                           Attn:  Mitch Kopin
                           Facsimile:  (847) 562-9031

                           900 3rd Ave.                         29,411             7,352          49,998.70           2.525
Richard Friedman           New York, NY 10022
                           Attn:  Richard Friedman
                           Facsimile:  (212) 750-3490

                           9950 Longwood Drive                 100,000            25,000         170,000.00           2.525
Paul Duggan                Chicago, IL 60943
                           Facsimile:  (708) 952-4449
</TABLE>EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT (this  "Agreement"),  dated as of January
16,  2003,  by  and  among  The  3DO  Company,  a  Delaware  corporation,   with
headquarters  located at 200 Cardinal Way Redwood  City,  California  94063 (the
"Company"),  and the undersigned  buyers (each, a "Buyer" and collectively,  the
"Buyers").

         WHEREAS:

         A. In connection  with the Securities  Purchase  Agreement by and among
the parties hereto of even date herewith (the "Securities Purchase  Agreement"),
the  Company has agreed,  upon the terms and  subject to the  conditions  of the
Securities  Purchase  Agreement,  to issue and sell to the Buyers  shares of the
Company's  common  stock,  par value  $0.01 per share (the  "Common  Stock") and
warrants to purchase shares of Common Stock (the "Warrants");

         B. To induce the Buyers to execute and deliver the Securities  Purchase
Agreement,  the Company has agreed to provide certain  registration rights under
the  Securities  Act  of  1933,  as  amended,  and  the  rules  and  regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and sufficiency of which are hereby  acknowledged,  the Company and each
of the Buyers hereby agree as follows:

         1. DEFINITIONS.

                  As used in this Agreement,  the following terms shall have the
following meanings:

                  a.  "Investor"  means a  Buyer,  any  transferee  or  assignee
thereof to whom a Buyer  assigns its rights under this  Agreement and who agrees
to become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee  thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9.

                  b. "Person" means an individual,  a limited liability company,
a  partnership,  a joint  venture,  a corporation,  a trust,  an  unincorporated
organization and a governmental or any department or agency thereof.

                  c. "Register,"  "registered,"  and  "registration"  refer to a
registration   effected  by  preparing  and  filing  one  or  more  Registration
Statements  (as defined  below) in compliance  with the 1933 Act and pursuant to
Rule 415  under  the 1933  Act or any  successor  rule  providing  for  offering
securities on a continuous or delayed basis ("Rule 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").

<PAGE>

                  d.  "Registrable  Securities" means the Common Stock issued or
issuable to the Buyer  pursuant to the  Securities  Purchase  Agreement  and the
shares of Common Stock issued or issuable upon exercise of the Warrants (and any
shares of capital stock issued or issuable with respect to the Common Stock as a
result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise.)

                  e. "Registration  Statement" means a registration statement or
registration  statements  of the Company  filed under the 1933 Act  covering the
Registrable Securities.

Capitalized  terms used herein and not otherwise  defined  herein shall have the
respective meanings set forth in the Securities Purchase Agreement.

         2. REGISTRATION.

                  a. Mandatory Registration.  The Company shall prepare, and, as
soon as  practicable  but in no event later than 20 days after the Closing  Date
(the "Filing Deadline"),  file with the SEC a Registration Statement on Form S-3
covering the resale of all of the Registrable Securities. In the event that Form
S-3 is  unavailable  for such a  registration,  the Company shall use such other
form as is  available  for such a  registration,  subject to the  provisions  of
Section 2(b) and shall  contain the "Plan of  Distribution"  attached  hereto as
Annex  A.  The  Company  shall  use its best  efforts  to have the  Registration
Statement declared effective by the SEC as soon as practicable prior to the 90th
day following the Closing Date (the "Effectiveness  Date");  provided,  however,
the Effectiveness  Date shall be the 120th day following the Closing Date if the
SEC reviews and provides comments on the Registration Statement.

                  b.  Ineligibility  for Form S-3. In the event that Form S-3 is
not  available  for the  registration  of the resale of  Registrable  Securities
hereunder,  the  Company  shall  (i)  register  the  resale  of the  Registrable
Securities on another appropriate form reasonably acceptable to the holder of at
least a majority of the  Registrable  Securities  and (ii) undertake to register
the  Registrable  Securities  on Form  S-3 as soon  as such  form is  available,
provided that in each such event,  the Company shall maintain the  effectiveness
of the  Registration  Statement then in effect until such time as a Registration
Statement on Form S-3  covering the  Registrable  Securities  has been  declared
effective by the SEC.

         3. RELATED OBLIGATIONS.

                  At  such  time  as  the  Company  is   obligated   to  file  a
Registration  Statement  with the SEC pursuant to Section 2(a), the Company will
use its best efforts to effect the registration of the Registrable Securities in
accordance  with the  intended  method  of  disposition  thereof  and,  pursuant
thereto, the Company shall have the following obligations:

                  a. The Company shall promptly  prepare and file with the SEC a
Registration  Statement  with respect to the applicable  Registrable  Securities
(but in no event later than the  applicable  Filing  Deadline)  and use its best
efforts  to  cause  such  Registration  Statement  relating  to the  Registrable
Securities to become effective as soon as practicable after such filing prior to
the  Effectiveness  Date.  The Company  shall keep each  Registration  Statement
effective pursuant to

                                      -2-
<PAGE>

Rule  415 at all  times  until  the  earlier  of (i) the  date as of  which  the
Investors  may  sell  all  of  the  Registrable   Securities   covered  by  such
Registration Statement without restriction pursuant to Rule 144(k) (or successor
thereto)  promulgated under the 1933 Act or (ii) the date on which the Investors
shall have sold all the  Registrable  Securities  covered  by such  Registration
Statement (the "Registration  Period"),  which Registration Statement (including
any amendments or supplements thereto and prospectuses  contained therein) shall
not contain any untrue  statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading.  The term
"best efforts" shall mean, among other things,  that the Company shall submit to
the SEC, within two (2) business days after the Company learns that no review of
a particular Registration Statement will be made by the staff of the SEC or that
the staff has no further comments on the Registration Statement, as the case may
be, a request for acceleration of effectiveness of such  Registration  Statement
to a time and date not later than 48 hours after the submission of such request.

                  b.  The  Company  shall  prepare  and  file  with the SEC such
amendments   (including   post-effective   amendments)   and  supplements  to  a
Registration   Statement  and  the  prospectus  used  in  connection  with  such
Registration  Statement,  which  prospectus is to be filed  pursuant to Rule 424
promulgated  under the 1933 Act, as may be necessary  to keep such  Registration
Statement  effective at all times during the  Registration  Period,  and, during
such  period,  comply with the  provisions  of the 1933 Act with  respect to the
disposition  of all  Registrable  Securities  of the  Company  covered  by  such
Registration  Statement  until such time as all of such  Registrable  Securities
shall  have  been  disposed  of in  accordance  with  the  intended  methods  of
disposition by the seller or sellers  thereof as set forth in such  Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company  filing a report on Form 10-K,  Form
10-Q or Form 8-K or any analogous  report under the  Securities  Exchange Act of
1934,  as amended (the "1934 Act"),  the Company  shall have  incorporated  such
report by reference into the  Registration  Statement,  if applicable,  or shall
file such  amendments or  supplements  with the SEC on the same day on which the
1934 Act report is filed which created the  requirement for the Company to amend
or supplement the Registration Statement.

                  c.  The  Company  shall   furnish  to  each   Investor   whose
Registrable  Securities  are  included in any  Registration  Statement,  without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto,  including
financial  statements  and  schedules,  all  documents  incorporated  therein by
reference,  all  exhibits  and  each  preliminary  prospectus,   (ii)  upon  the
effectiveness of any Registration  Statement,  ten (10) copies of the prospectus
included in such  Registration  Statement  and all  amendments  and  supplements
thereto (or such other number of copies as such Investor may reasonably request)
and (iii) such other  documents,  including  copies of any  preliminary or final
prospectus,  as such Investor may reasonably  request from time to time in order
to  facilitate  the  disposition  of the  Registrable  Securities  owned by such
Investor.

                  d. The Company  shall use its best efforts to (i) register and
qualify,  unless an exemption from registration and qualification  applies,  the
resale by the Investors of the Registrable  Securities covered by a Registration
Statement  under such other  securities  or "blue sky" laws of all the states of
the United States, (ii) prepare and file in those jurisdictions, such amendments

                                      -3-
<PAGE>

(including post-effective  amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness  thereof during
the  Registration  Period,  (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration  Period,  and (iv) take all other actions  reasonably  necessary or
advisable to qualify the Registrable  Securities for sale in such jurisdictions;
provided,  however,  that  the  Company  shall  not be  required  in  connection
therewith  or as a  condition  thereto  to (x)  qualify  to do  business  in any
jurisdiction  where it would not  otherwise  be required to qualify but for this
Section 3(d), (y) subject itself to general  taxation in any such  jurisdiction,
or (z) file a general  consent to  service of process in any such  jurisdiction.
The Company shall promptly notify each Investor who holds Registrable Securities
of the receipt by the Company of any notification with respect to the suspension
of the registration or  qualification  of any of the Registrable  Securities for
sale under the securities or "blue sky" laws of any  jurisdiction  in the United
States or its receipt of actual notice of the  initiation or  threatening of any
proceeding for such purpose.

                  e. The Company  shall  notify each  Investor in writing of the
happening of any event, as promptly as practicable  after becoming aware of such
event, as a result of which the prospectus included in a Registration Statement,
as then in effect,  includes an untrue  statement of a material fact or omission
to state a material fact required to be stated  therein or necessary to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading  (provided  that in no  event  shall  such  notice  contain  any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such  supplement  or amendment  to each  Investor (or
such  other  number of copies as such  Investor  may  reasonably  request).  The
Company  shall  also  promptly  notify  each  Investor  in  writing  (i)  when a
prospectus or any  prospectus  supplement or  post-effective  amendment has been
filed,  and when a Registration  Statement or any  post-effective  amendment has
become effective  (notification of such effectiveness shall be delivered to each
Investor by  facsimile  on the same day of such  effectiveness  and by overnight
mail),  (ii) of any  request  by the  SEC for  amendments  or  supplements  to a
Registration  Statement or related prospectus or related information,  and (iii)
of the Company's reasonable  determination that a post-effective  amendment to a
Registration Statement would be appropriate.

                  f. The  Company  shall use its best  efforts  to  prevent  the
issuance  of  any  stop  order  or  other   suspension  of  effectiveness  of  a
Registration  Statement,  or the suspension of the  qualification  of any of the
Registrable  Securities  for sale in any  jurisdiction  and, if such an order or
suspension  is issued,  to obtain the  withdrawal of such order or suspension at
the earliest  possible moment and to notify each Investor who holds  Registrable
Securities  being sold of the issuance of such order and the resolution  thereof
or its receipt of actual notice of the  initiation  or threat of any  proceeding
for such purpose.

                  g. The Company shall use its best efforts  either to (i) cause
all the Registrable  Securities covered by a Registration Statement to be listed
on each  securities  exchange  on which  securities  of the same class or series
issued  by the  Company  are  then  listed,  if  any,  if the  listing  of  such
Registrable  Securities is then permitted  under the rules of such exchange,  or
(ii) secure designation and quotation of all the Registrable  Securities covered
by the  Registration  Statement  on the  Nasdaq  National  Market,  or (iii) if,
despite the Company's best efforts to satisfy the preceding  clause (i) or (ii),
the Company is unsuccessful  in satisfying the preceding  clause (i) or (ii), to
secure

                                      -4-
<PAGE>

the inclusion for quotation on The Nasdaq SmallCap  Market for such  Registrable
Securities.  The  Company  shall pay all fees and  expenses in  connection  with
satisfying its obligation under this Section 3(g).

                  h. The Company  shall  cooperate  with the  Investors who hold
Registrable  Securities being offered and, to the extent applicable,  facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend)  representing  the  Registrable  Securities to be offered  pursuant to a
Registration  Statement and enable such certificates to be in such denominations
or amounts,  as the case may be, as the  Investors  may  reasonably  request and
registered in such names as the Investors may request.

                  i. The Company shall provide a transfer agent and registrar of
all  such  Registrable  Securities  not  later  than the  effective  date of the
applicable Registration Statement.

                  j. If requested by an Investor,  the Company shall (i) as soon
as  practicable   incorporate  in  a  prospectus  supplement  or  post-effective
amendment  such  information  as an Investor  requests  to be  included  therein
relating to the sale and  distribution  of  Registrable  Securities,  including,
without  limitation,  information  with  respect  to the  number of  Registrable
Securities being offered or sold, the purchase price being paid therefor and any
other terms of the  offering of the  Registrable  Securities  to be sold in such
offering;  (ii)  as  soon as  practicable  make  all  required  filings  of such
prospectus  supplement or  post-effective  amendment after being notified of the
matters to be  incorporated  in such  prospectus  supplement  or  post-effective
amendment;  and (iii) as soon as  practicable,  supplement or make amendments to
any  Registration  Statement  if  reasonably  requested  by an  Investor of such
Registrable Securities.

                  k. Within two (2) business days after a Registration Statement
which covers applicable  Registrable Securities is ordered effective by the SEC,
the Company  shall  deliver to  Investors  confirmation  that such  Registration
Statement has been declared effective by the SEC.

                  l.  Notwithstanding  anything to the contrary in Section 3(e),
at any time  after  the  applicable  Registration  Statement  has been  declared
effective  by the  SEC,  the  Company  may  delay  the  disclosure  of  material
non-public  information  concerning  the Company the  disclosure of which at the
time is not, in the good faith  opinion of the Board of Directors of the Company
and its  counsel,  in the best  interest of the  Company  and, in the opinion of
counsel to the Company,  otherwise required (a "Grace Period");  provided,  that
the Company shall  promptly (i) notify the Investors in writing of the existence
of material non-public  information giving rise to a Grace Period (provided that
in each  notice the  Company  will not  disclose  the  content of such  material
non-public  information to the Investors) and the date on which the Grace Period
will begin,  and (ii) notify the  Investors  in writing of the date on which the
Grace Period ends; and, provided  further,  that no Grace Period shall exceed 15
consecutive  days and  during any 365 day period  such Grace  Periods  shall not
exceed an  aggregate of 30 days and the first day of any Grace Period must be at
least  two  trading  days  after  the last day of any  prior  Grace  Period  (an
"Allowable  Grace  Period").  For purposes of determining  the length of a Grace
Period  above,  the Grace Period shall begin on and include the date the holders
receive  the notice  referred  to in clause (i) and shall end on and include the
later of the date the holders  receive the notice referred to in clause (ii) and
the date referred to in such notice.  The provisions of 3(f) hereof shall not be
applicable during the period of any Allowable Grace

                                      -5-
<PAGE>

Period. Upon expiration of the Grace Period, the Company shall again be bound by
the first sentence of Section 3(e) with respect to the  information  giving rise
to such Grace Period unless such material  non-public  information  is no longer
applicable.

         4. OBLIGATIONS OF THE INVESTORS.

                  a.  Not  less  than  two  days  prior  to  the  filing  of the
Registration  Statement or any related Prospectus or any amendment or supplement
thereto,  the Company shall furnish to the Investors  copies of the Registration
Statement to be filed. The Company shall not file the Registration  Statement or
any such Prospectus or any amendments or supplements thereto to which the Buyers
of a majority of the  Registrable  Securities  shall  reasonably  object in good
faith or for which a Buyer shall have  notified  the Company or its counsel that
the information for such Buyer is not correct.

                  b.  Each  Investor,  by  such  Investor's  acceptance  of  the
Registrable  Securities,  agrees to  cooperate  with the  Company as  reasonably
requested by the Company in connection  with the  preparation  and filing of any
Registration Statement hereunder,  unless such Investor has notified the Company
in  writing  of such  Investor's  election  to  exclude  all of such  Investor's
Registrable Securities from such Registration Statement.

                  c. Each Investor  agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind  described in Section 3(f)
or the first  sentence  of 3(e),  such  Investor  will  immediately  discontinue
disposition of Registrable Securities pursuant to any Registration  Statement(s)
covering such Registrable Securities until such Investor's receipt of the copies
of the  supplemented or amended  prospectus  contemplated by Section 3(f) or the
first  sentence of 3(e) or receipt of notice that no  supplement or amendment is
required.

         5. EXPENSES OF REGISTRATION.

                  All reasonable expenses, other than underwriting discounts and
commissions,   incurred   in   connection   with   registrations,   filings   or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.

         6. INDEMNIFICATION.

                  In the event any  Registrable  Securities  are  included  in a
Registration Statement under this Agreement:

                  a. To the fullest  extent  permitted by law, the Company will,
and hereby  does,  indemnify,  hold  harmless  and  defend  each  Investor,  the
directors,  officers, partners, employees, agents,  representatives of, and each
Person, if any, who controls any Investor within the meaning of the 1933 Act and
of the 1934 Act (each, an  "Indemnified  Person"),  against any losses,  claims,
damages,  liabilities,  judgments, fines, penalties,  charges, costs, reasonable
attorneys'  fees,  amounts paid in  settlement  or  expenses,  joint or several,
(collectively,  "Claims") incurred in investigating,  preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing  by or  before  any  court or  governmental,  administrative  or other
regulatory

                                      -6-
<PAGE>

agency,  body or the SEC,  whether  pending  or  threatened,  whether  or not an
indemnified party is or may be a party thereto ("Indemnified Damages"), to which
any  of  them  may  become  subject  insofar  as  such  Claims  (or  actions  or
proceedings,  whether commenced or threatened,  in respect thereof) arise out of
or are based upon:  (i) any untrue  statement or alleged  untrue  statement of a
material  fact  in a  Registration  Statement  or any  post-effective  amendment
thereto  or in any  filing  made in  connection  with the  qualification  of the
offering  under the securities or other "blue sky" laws of any  jurisdiction  in
which Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged  omission  to state a material  fact  required  to be stated  therein or
necessary  to make the  statements  therein  not  misleading,  (ii)  any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
preliminary  prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,  if
the Company files any amendment  thereof or supplement  thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein,  in light of the circumstances under which the
statements  therein were made,  not  misleading,  (iii) any violation or alleged
violation  by the  Company  of the  1933  Act,  the 1934  Act,  any  other  law,
including,  without  limitation,  any  state  securities  law,  or any  rule  or
regulation  thereunder  relating  to  the  offer  or  sale  of  the  Registrable
Securities  pursuant to a Registration  Statement or (iv) any material violation
of this Agreement (the matters in the foregoing  clauses (i) through (iv) being,
collectively,   "Violations").  Subject  to  Section  6(c),  the  Company  shall
reimburse the  Indemnified  Persons,  promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them  in   connection   with   investigating   or  defending   any  such  Claim.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained in this Section 6(a):  (i) shall not apply to a Claim by an
Indemnified  Person  arising  out of or based upon a Violation  which  occurs in
reliance upon and in  conformity  with  information  furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection  with the  preparation of the  Registration  Statement or any such
amendment  thereof or supplement  thereto,  if such  prospectus  was timely made
available by the Company  pursuant to Section 3(c),  and if such new  prospectus
will have cured the defect giving rise to such Claims;  (ii) with respect to any
preliminary  prospectus,  shall not inure to the benefit of any such person from
whom the person  asserting any such Claim purchased the  Registrable  Securities
that are the subject thereof (or to the benefit of any person  controlling  such
person) if the untrue  statement or omission of material  fact  contained in the
preliminary  prospectus  was  corrected  in the  prospectus,  as then amended or
supplemented,  if such  prospectus  was timely  made  available  by the  Company
pursuant to Section 3(c),  and the  Indemnified  Person was promptly  advised in
writing not to use the  incorrect  prospectus  prior to the use giving rise to a
violation and such Indemnified Person, notwithstanding such advice, used it; and
(iii) shall not be  available  to the extent such Claim is based on a failure of
the  Investor  to  deliver  or to  cause to be  delivered  the  prospectus  made
available by the Company,  if such  prospectus  was timely made available by the
Company  pursuant to Section 3(d) and if such new prospectus will have cured the
defect  giving  rise to such  Claims;  (iv) shall not apply to  amounts  paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably  withheld.  Such
indemnity shall remain in full force and effect  regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.

                  b. In connection with any  Registration  Statement in which an
Investor  is  participating,  each such  Investor  agrees to  severally  and not
jointly indemnify,  hold harmless and

                                      -7-
<PAGE>

defend,  to the same  extent  and in the same  manner as is set forth in Section
6(a),  the Company,  each of its  directors,  each of its officers who signs the
Registration  Statement each Person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act (each an "Indemnified  Party"),  against
any Claim or Indemnified Damages to which any of them may become subject,  under
the 1933 Act, the 1934 Act or  otherwise,  insofar as such Claim or  Indemnified
Damages  arise  out of or are  based  upon any  Violation,  in each  case to the
extent, and only to the extent,  that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration  Statement;  and, subject
to Section  6(c),  such  Investor  will  reimburse  any legal or other  expenses
reasonably  incurred by an Indemnified Party in connection with investigating or
defending  any such  Claim;  provided,  however,  that the  indemnity  agreement
contained in this Section 6(b) and the  agreement  with respect to  contribution
contained  in Section 7 shall not apply to  amounts  paid in  settlement  of any
Claim if such  settlement is effected  without the prior written consent of such
Investor;  provided,  further,  however, that the Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does
not  exceed  the net  proceeds  to such  Investor  as a  result  of the  sale of
Registrable Securities pursuant to such Registration  Statement.  Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on  behalf of such  Indemnified  Party and shall  survive  the  transfer  of the
Registrable  Securities by the Investors pursuant to Section 9.  Notwithstanding
anything  to  the  contrary  contained  herein,  the  indemnification  agreement
contained in this Section 6(b) with respect to any preliminary  prospectus shall
not inure to the benefit of any  Indemnified  Party if the untrue  statement  or
omission of material fact contained in the preliminary  prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.

                  c.  Promptly  after  receipt  by  an  Indemnified   Person  or
Indemnified  Party  under this  Section 6 of notice of the  commencement  of any
action or proceeding (including any governmental action or proceeding) involving
a Claim,  such  Indemnified  Person or  Indemnified  Party shall,  if a Claim in
respect thereof is to be made against any indemnifying  party under this Section
6,  deliver  to the  indemnifying  party a written  notice  of the  commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the  extent  the  indemnifying  party so  desires,  jointly  with  any  other
indemnifying party similarly  noticed,  to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided,  however, that an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel  with the fees  and  expenses  of not  more  than one  counsel  for such
Indemnified  Person or Indemnified  Party to be paid by the indemnifying  party,
if, in the reasonable  opinion of counsel retained by the indemnifying  party or
the indemnified  party,  the  representation  by such counsel of the Indemnified
Person or Indemnified  Party and the  indemnifying  party would be inappropriate
due to actual or potential  differing  interests between such Indemnified Person
or  Indemnified  Party and any other party  represented  by such counsel in such
proceeding.  In the case of an Indemnified Person,  legal counsel referred to in
the immediately  preceding sentence shall be selected by the Investors holding a
majority in interest of the Registrable  Securities included in the Registration
Statement  to which the Claim  relates.  The  Indemnified  Party or  Indemnified
Person  shall  cooperate  with the  indemnifying  party in  connection  with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information  reasonably available to
the  Indemnified  Party or  Indemnified  Person which  relates to such action or
Claim.  The indemnifying  party shall keep the Indemnified  Party or Indemnified
Person  apprized as to the status of the defense or any settlement

                                      -8-
<PAGE>

negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its prior written
consent,  provided,  however, that the indemnifying party shall not unreasonably
withhold,  delay or condition its consent. No indemnifying party shall,  without
the prior  written  consent  of the  Indemnified  Party or  Indemnified  Person,
consent  to  entry  of any  judgment  or  enter  into  any  settlement  or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified  Party or Indemnified  Person of a
release  from all  liability in respect to such Claim or  litigation.  Following
indemnification  as provided  for  hereunder,  the  indemnifying  party shall be
subrogated to all rights of the  Indemnified  Party or  Indemnified  Person with
respect to all third parties,  firms or corporations  relating to the matter for
which  indemnification  has been made. The failure to deliver  written notice to
the indemnifying  party within a reasonable time of the commencement of any such
action  shall  not  relieve  such  indemnifying  party of any  liability  to the
Indemnified  Person or  Indemnified  Party  under this  Section 6, except to the
extent that the  indemnifying  party is prejudiced in its ability to defend such
action.

                  d. The  indemnification  required  by this  Section 6 shall be
made by  periodic  payments  of the  amount  thereof  during  the  course of the
investigation or defense,  as and when bills are received or Indemnified Damages
are incurred.

                  e.  The  indemnity  agreements  contained  herein  shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified  Person  against  the  indemnifying  party or  others,  and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

         7. CONTRIBUTION.

                  To the extent any  indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying  party agrees to make the maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no person  involved in the sale of Registrable  Securities,  which person is
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the 1933 Act) in connection  with such sale,  shall be entitled to  contribution
from any person  involved  in such sale of  Registrable  Securities  who was not
guilty of fraudulent  misrepresentation;  and (ii) contribution by any seller of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement.

         8. REPORTS UNDER THE 1934 ACT.

                  With a view to making  available to the Investors the benefits
of Rule  144  promulgated  under  the  1933  Act or any  other  similar  rule or
regulation  of the  SEC  that  may at any  time  permit  the  Investors  to sell
securities of the Company to the public without  registration  ("Rule 144"), the
Company agrees to:

                  a. make and keep public information available,  as those terms
are understood and defined in Rule 144;

                                      -9-
<PAGE>

                  b. file with the SEC in a timely  manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company  remains  subject to such  requirements  (it being  understood  that
nothing herein shall limit the Company's  obligations  under Section 4(c) of the
Securities  Purchase  Agreement)  and the  filing  of  such  reports  and  other
documents is required for the applicable provisions of Rule 144; and

                  c.  furnish to each  Investor  so long as such  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company that it has complied  with the reporting  requirements  of Rule 144, the
1933 Act and the 1934 Act,  (ii) a copy of the most recent  annual or  quarterly
report of the  Company  and such other  reports  and  documents  so filed by the
Company,  and (iii) such other  information  as may be  reasonably  requested to
permit  the  investors  to sell such  securities  pursuant  to Rule 144  without
registration.

         9. ASSIGNMENT OF REGISTRATION RIGHTS.

                  The  rights  under  this  Agreement  shall  be   automatically
assignable  by the  Investors  to any  transferee  of  all  or  any  portion  of
Registrable  Securities  if:  (i)  the  Investor  agrees  in  writing  with  the
transferee  or assignee to assign such rights,  and a copy of such  agreement is
furnished  to the  Company  within a  reasonable  time  after such  transfer  or
assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment,  furnished  with written  notice of (a) the name and address of such
transferee  or  assignee,  and (b) the  securities  with  respect  to which such
registration  rights are being  transferred  or assigned;  (iii) if  applicable,
immediately  following  such transfer or assignment  the further  disposition of
such  securities by the transferee or assignee is restricted  under the 1933 Act
and applicable  state  securities  laws;  (iv) at or before the time the Company
receives the written  notice  contemplated  by clause (ii) of this  sentence the
transferee or assignee  agrees in writing with the Company to be bound by all of
the provisions  contained herein;  and (v) such transfer shall have been made in
accordance  with  the  applicable   requirements  of  the  Securities   Purchase
Agreement.  At the transferees  request,  the Company shall promptly prepare and
file any required  prospectus  supplement under Rule 424(b)(3) of the Securities
Act or other applicable  provision of the Securities Act to appropriately  amend
the list of Selling Stockholders thereunder to include such transferee.

         10. AMENDMENT OF REGISTRATION RIGHTS.

                  Provisions of this Agreement may be amended and the observance
thereof may be waived (either  generally or in a particular  instance and either
retroactively  or  prospectively),  only with the written consent of the Company
and Investors who then hold two-thirds of the Registrable Securities, other than
any  amendments  to the  timing  and  length of filing  and  effectiveness  of a
Registration  Statement or the consequences for failure of the Company to timely
perform such obligations,  which require the consent of each affected Buyer. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.  No such amendment shall be effective to the
extent  that it  applies  to less  than all of the  holders  of the  Registrable
Securities.  No consideration shall be offered or paid to any Person to amend or
consent to a waiver or  modification  of any provision of any of this  Agreement
unless the same  consideration  also is  offered  to all of the  parties to this
Agreement.  Notwithstanding  the foregoing,  the Company and the Investors agree
that this Agreement shall be automatically amended without further action by

                                      -10-
<PAGE>

the Company and the Investors to add additional  investors to this Agreement who
purchase  Common  Stock in  Additional  Closings  as defined in Section 2 of the
Securities Purchase Agreement.

         11. OTHER REGISTRATION STATEMENTS; PIGGY-BACK REGISTRATIONS.

                  a. Prior to the  eleventh  (11th) day after the Company  files
the Registration Statement,  the Company shall not file a registration statement
(including any shelf registration  statements) (other than on Form S-8) with the
Commission with respect to any securities of the Company.

                  b. If at any time during the Registration  Period there is not
an effective  Registration  Statement covering all of the Registrable Securities
and the  Company  shall  determine  to prepare  and file with the  Commission  a
registration  statement  relating  to an  offering  for its own  account  or the
account of others  under the  Securities  Act of any of its  equity  securities,
other than on Form S-4 or Form S-8 (each as  promulgated  under the 1933 Act) or
their then  equivalents  relating to equity  securities  to be issued  solely in
connection with any  acquisition of any entity or business or equity  securities
issuable in connection with stock option or other employee  benefit plans,  then
the Company shall send to each  Investor  written  notice of such  determination
and, if within  fifteen  days after  receipt of such notice,  any such  Investor
shall so request in writing,  the  Company  shall  include in such  registration
statement all or any part of such Registrable Securities such holder requests to
be  registered,  subject to customary  underwriter  cutbacks  applicable  to all
holders of registration rights.

         12. MISCELLANEOUS.

                  a. A Person is deemed to be a holder of Registrable Securities
whenever  such  Person  owns or is  deemed  to own of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or  more  Persons  with  respect  to the  same  Registrable
Securities,  the  Company  shall act upon the basis of  instructions,  notice or
election received from the registered owner of such Registrable Securities.

                  b. Any  notices,  consents,  waivers  or other  communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party); or (iii) one business day after deposit with
a  nationally  recognized  overnight  delivery  service,  in each case  properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

                  If to the Company:

                           The 3DO Company
                           200 Cardinal Way
                           Redwood City, California 94063
                           Telephone: (650) 385-3000
                           Facsimile: (650) 385-3184
                           Attention: Chief Executive Officer

                                      -11-
<PAGE>

                           With a copy to:

                           Wilson Sonsini Goodrich & Rosati
                           650 Page Mill Road
                           Palo Alto, CA 94304
                           Telephone: (650) 493-9300
                           Facsimile: (650) 493-6811
                           Attention: Yoichiro Taku, Esq.

If to the Buyer,  to its address and facsimile  number set forth on the Schedule
of Buyers attached hereto,  with copies to such Buyer's  representatives  as set
forth on the  Schedule  of Buyers,  or to such other  address  and/or  facsimile
number and/or to the  attention of such other person as the recipient  party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change.  Written  confirmation of receipt (A) given by the
recipient  of  such  notice,  consent,   waiver  or  other  communication,   (B)
mechanically  or  electronically  generated  by the sender's  facsimile  machine
containing the time, date,  recipient facsimile number and an image of the first
page of such  transmission  or (C)  provided by a courier or  overnight  courier
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

                  c.  Failure of any party to exercise any right or remedy under
this  Agreement or otherwise,  or delay by a party in  exercising  such right or
remedy, shall not operate as a waiver thereof.

                  d.  All  questions  concerning  the  construction,   validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by the
internal laws of the State of Delaware,  without  giving effect to any choice of
law or conflict of law provision or rule. Each party hereby  irrevocably  waives
personal  service of process and  consents to process  being  served in any such
suit,  action or  proceeding  by  mailing a copy  thereof  to such  party at the
address for such notices to it under this Agreement and agrees that such service
shall  constitute  good and  sufficient  service of process and notice  thereof.
Nothing  contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this Agreement shall
be  invalid  or   unenforceable   in  any   jurisdiction,   such  invalidity  or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability  of any  provision of this  Agreement in any other  jurisdiction.
EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE,  AND AGREES NOT TO
REQUEST,  A JURY  TRIAL FOR THE  ADJUDICATION  OF ANY  DISPUTE  HEREUNDER  OR IN
CONNECTION  HEREWITH  OR  ARISING  OUT OF  THIS  AGREEMENT  OR  ANY  TRANSACTION
CONTEMPLATED HEREBY.

                  e. This Agreement,  the Securities  Purchase Agreement and the
Warrants  constitute the entire  agreement among the parties hereto with respect
to the subject matter hereof and thereof.  There are no restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  This  Agreement,  the Securities  Purchase  Agreement and the Warrants
supersede all prior agreements and understandings  among the parties hereto with
respect to the subject matter hereof and thereof.

                                      -12-
<PAGE>

                  f. Subject to the  requirements  of Section 9, this  Agreement
shall inure to the benefit of and be binding upon the permitted  successors  and
assigns of each of the parties hereto.

                  g. The  headings  in this  Agreement  are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

                  h. This  Agreement may be executed in identical  counterparts,
each of which shall be deemed an original but all of which shall  constitute one
and the same  agreement.  This  Agreement,  once  executed  by a  party,  may be
delivered to the other party hereto by facsimile  transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

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

                  j. All consents and other  determinations  required to be made
by the Investors  pursuant to this  Agreement  shall be made,  unless  otherwise
specified in this  Agreement,  by  Investors  holding at least a majority of the
Registrable Securities.

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

                  l. The obligations of each Buyer hereunder are several and not
joint with the obligations of any other Buyer  hereunder,  and no Buyer shall be
responsible in any way for the performance of the obligations of any other Buyer
hereunder.  Nothing  contained  herein or in any  other  agreement  or  document
delivered at any closing,  and no action taken by any Buyer  pursuant  hereto or
thereto,  shall  be  deemed  to  constitute  the  Buyers  as a  partnership,  an
association,  a  joint  venture  or any  other  kind  of  entity,  or  create  a
presumption  that the Buyers are in any way  acting in concert  with  respect to
such obligations or the transactions  contemplated by this Agreement. Each Buyer
shall  be  entitled  to  protect  and  enforce  its  rights,  including  without
limitation  the  rights  arising  out of this  Agreement,  and it  shall  not be
necessary  for any  other  Buyer  to be  joined  as an  additional  party in any
proceeding for such purpose.

                  m. This  Agreement  is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

                                   * * * * * *

                                      -13-
<PAGE>

         IN WITNESS WHEREOF,  the parties have caused this  Registration  Rights
Agreement to be duly executed as of day and year first above written.

                                               THE 3DO COMPANY
                                               a Delaware corporation

                                               By: /s/ James Alan Cook
                                                   -----------------------------

                                               Name: James Alan Cook
                                                     ---------------------------

                                               Title: Executive Vice President
                                                      --------------------------

                                               BUYER:

                                               By:
                                                   -----------------------------

                                               Name:
                                                     ---------------------------

                                               Title:
                                                      --------------------------

<PAGE>

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                                                                                                 Aggregate        Warrant
                                  Investor Address                              Number of        Purchase        Exercise
     Investor's Name            and Facsimile Number        Number of Shares  Warrant Shares     Price ($)       Price ($)
     ---------------            --------------------        ----------------  --------------     ---------       ---------
<S>                        <C>                                 <C>                <C>           <C>                  <C>
LH Financial Services      160 Central Park South              147,058            36,764        $249,998.60          $2.60
                           Suite 2701
                           New York, NY 10019
                           Attn: Ari Rabinowitz
                           Facsimile:  (212) 586-8244

                           666 Dundee Road                     294,117            73,529         499,998.90           2.60
Cranshire Capital          Northbrook, IL 60062
                           Attn:  Mitch Kopin
                           Facsimile:  (847) 562-9031

                           900 3rd Ave.                         29,411             7,352          49,998.70           2.60
Richard Friedman           New York, NY 10022
                           Attn:  Jeff Markowitz
                           Facsimile:  (212) 750-3490

                           9950 Longwood Drive                 100,000            25,000         170,000.00           2.60
Paul Duggan                Chicago, IL 60943
                           Facsimile:  (708) 952-4449
</TABLE>

<PAGE>

                                     Annex A
                              Plan of Distribution

         The  Selling  Stockholders  and any of their  pledgees,  assignees  and
successors-in-interest  may, from time to time,  sell any or all of their shares
of Common Stock on any stock exchange,  market or trading  facility on which the
shares  are traded or in private  transactions.  These  sales may be at fixed or
negotiated  prices.  The  Selling  Stockholders  may  use any one or more of the
following methods when selling shares:

         ordinary  brokerage  transactions  and transactions in which the broker
dealer solicits purchasers;

         block trades in which the broker dealer will attempt to sell the shares
as agent but may  position  and  resell a portion of the block as  principal  to
facilitate the transaction;

o        purchases  by a broker  dealer as  principal  and  resale by the broker
         dealer for its account;

o        an exchange distribution in accordance with the rules of the applicable
         exchange;

o        privately negotiated transactions;

o        short sales

o        broker  dealers  may  agree  with the  Selling  Stockholders  to sell a
         specified number of such shares at a stipulated price per share;

o        a combination of any such methods of sale; and

o        any other method permitted pursuant to applicable law.

         The Selling  Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

         Broker  dealers  engaged by the  Selling  Stockholders  may arrange for
other  brokers  dealers to  participate  in sales.  Broker  dealers  may receive
commissions or discounts from the Selling Stockholders (or, if any broker dealer
acts as agent for the purchaser of shares,  from the purchaser) in amounts to be
negotiated.  The  Selling  Stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

         The  Selling  Stockholder  may  from  time to time  pledge  or  grant a
security  interest in some or all of the Shares or common stock or Warrant owned
by them and, if they default in the  performance  of their secured  obligations,
the  pledgees or secured  parties may offer and sell the shares of common  stock
from  time  to time  under  this  prospectus,  or  under  an  amendment  to this
prospectus under Rule 424(b)(3) or other applicable  provision of the Securities
Act of 1933  amending the list of Selling

                                      -2-
<PAGE>

Stockholders to include the pledgee,  transferee or other successors in interest
as selling stockholders under this prospectus.

         The Selling  Stockholders  also may transfer the shares of common stock
in  other  circumstances,  in  which  case the  transferees,  pledgees  or other
successors  in interest  will be the selling  beneficial  owners for purposes of
this prospectus.

         The  Selling  Stockholders  and any broker  dealers or agents  that are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker  dealers  or agents and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed  the  Company  that it does not have any  agreement  or  understanding,
directly or indirectly, with any person to distribute the Common Stock.

         The Company is required  to pay all fees and  expenses  incident to the
registration  of the shares.  The Company  has agreed to  indemnify  the Selling
Stockholders against certain losses, claims, damages and liabilities,  including
liabilities under the Securities Act.

                                      -3-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}]]