3DO CO
SECURITIES PURCHASE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>p16526_ex10-1.txt
<DESCRIPTION>SECURITIES PURCHASE AGREEMENT
<TEXT>

                                                                    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>


</TEXT>
</DOCUMENT>
