Paul E. Manasian (SB No. 130855)

Gregory A. Rougeau (SB No. 194437)

MANASIAN & ROUGEAU LLP

400 Montgomery Street, Suite 1000

San Francisco, CA 94104
Telephone: (415) 291‑8425

Facsimile: (415) 291-8426

manasian@mrlawsf.com

rougeau@mrlawsf.com

Attorneys for Former Chapter 11 Trustee

BRADLEY D. SHARP

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In re THE 3DO COMPANY, a California corporation, THE 3DO COMPANY, a Delaware corporation, Debtors. Employer Identification Number: 94-3145110 _____ Affects BOTH DEBTORS _____ Affects THE 3DO COMPANY, a California corporation _____ Affects THE 3DO COMPANY, a Delaware corporation

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Chapter 7 Case No. 03-31580 Jointly Administrated with Case No. 03-31581 EXPERT WITNESS DECLARATION OF RANDEL B. REISS Trial: Date: January 12, 13 and 14, 2004 Time: 9:30 a.m. Place: 235 Pine Street, 23^rd Floor San Francisco, CA Judge: Hon. Dennis Montali

I , Randel B. Reiss, hereby declare:

1. I am an independent programming consultant who has been retained as an expert on behalf of the parties objecting to the “cure” claim asserted in the above-captioned proceeding by Eutechnyx Limited (“Eutechnyx”), and have prepared this Declaration for use of the objecting parties in connection with such objections. Specifically, I have been requested to render testimony concerning the version of the “Street Challenge” or “Street Racing Syndicate” software (the “SRS Game”) delivered on or about May 9, 2003 by Eutechnyx to The 3DO Company, a California corporation (the “Debtor”), meets industry and contractual standards for a “Beta” version of gaming software, and whether, given the functionality of such software, Eutechnyx complied with certain game development milestones set forth in Exhibit A.2 to the Development, Licensing and Publishing Agreement (the “SRS License”), dated May 16, 2002, between Eutechnyx and the Debtor. The opinions expressed herein represent my professional judgment, relying on my experience and utilizing materials made available to me by the management of The 3DO Company, a California corporation (the “Debtor”), one of the debtors herein. I am over the age of 18 and am not a party to this action, and have no connection to the Debtor, any creditors of the Debtor, or any parties in interest in this proceeding.

INTRODUCTION

2. I am a self-employed independent consultant specializing in the product development of interactive games. My primary clients are the leaders of the interactive gaming industry: Sega of America (“Sega”), Electronic Arts (“EA”), and Sony.

3. I have over 21 years’ experience in gaming software product development. A copy of my current curriculum vitae is attached hereto as Exhibit “A.” A listing of the gaming product titles to my credit is attached hereto as Exhibit “B.” A copy of the SRS License upon which this Report is based (and which has been produced by Eutechnyx in connection with its cure claim in this case) is attached hereto as Exhibit “C.”

4. Within my 21 years’ of product development, I have obtained extensive experience in developing interactive entertainment software and in submitting various milestones of progress to publishing partners. Further, I have extensive experience as a Producer, working for a publisher, reviewing in-progress product milestone submissions. In my capacity as a developer of interactive entertainment software development, I have been a guest lecturer at the 2003 Game Developer Conference, delivering a seminar entitled concerning finalizing interactive entertainment software products.

5. In connection with the preparation of this report, I have reviewed the SRS License, conferred with the Debtor’s management, and have comprehensively evaluated the “Beta” candidate of the SRS Game delivered to the Debtor by Eutechnyx on or about May 9, 2003.

6. Based on my review of the foregoing, I have concluded that the version of the SRS game delivered to the Debtor by Eutechnyx on or about May 9, 2003 failed to meet industry standards, and the standards defined by the SRS License, for “Beta.” I have further concluded that given the development of the SRS Game software as it existed on May 9, 2003, Eutechnyx could not possibly have satisfied the “Eight Milestone” under the SRS License, defined by the delivery of platform-specific games that are “100% complete with no known bugs” and approved by the particular game manufacturer, by the end of June, 2003.

SUMMARY OF OPINIONS

7. In preparing this Report, the management of the Debtor has provided to me a version of the SRS Game which was delivered to the Debtor by Eutechnyx on or about May 9, 2003, which is sometimes referred to herein as the “E3 Demo” of the SRS Game. The ostensible reason why I have been provided this version of the SRS Game is that, by May 1, 2003, Eutechnyx was to have provided to the Debtor a “final candidate” of the SRS Game, defined under the SRS License as a product which is “100% complete with no known bugs.” I have also reviewed some of the pleadings filed by the parties in this case, analyzed the SRS License, and have interviewed Richard Hicks, the Debtor’s Senior Vice President and Chief Technology Officer.

8. Based upon the data I have evaluated concerning the SRS Game and upon my experience, the E3 Demo falls well short not only of the parties’ contractual requirements, but industry-wide standards for “Beta” version of interactive software. It

does not meet any entertainment software industry definitions of minimum standards for achieving the product development milestone known as “Beta,” let alone the “Final Candidate” version of the software (described as the “Seventh Milestone” of Exhibit A.2 of the SRS License), which was supposed to be achieved by May 1, 2003. The E3 Demo version of SRS Game delivered to the Debtor on May 9, 2003 by Eutechnyx has core product features that are not functional whatsoever. Containing such non-functional features is simply incompatible with the base criteria for achieving a “Beta” version of gaming software.

9. Based on my evaluation of the E3 Demo version of the software delivered to the Debtor by Eutechnyx on May 9, 2003, the SRS game could not have a final ship date before the end of June, 2003, as is contemplated by the “Seventh Milestone” and “Eighth Milestone” of the SRS License.

ANALYSIS

I. Definition Of “Beta,” As Applied To Interactive Gaming Software Programs.

10. A “Beta” version of an interactive software product is part of a product finalization within the entire software product development cycle. This software development cycle and the procedures and policies of finalization were not invented or pioneered by the entertainment industry, but have been authenticated through development processes by software industry leaders such as Hewlett Packard, IBM, Digital Equipment Corporation, and Apple Computer. The term “Beta” is defined as follows in Digital Equipment Corporation’s Software Engineering Manual, 1988:

The development team has frozen the code in its final form. Only [Bug] corrections to Priority 1 [A Level Crash] and 2 [B Level] errors that do not effect documentation are allowed.

By virtue of the above definition, a “Beta” version of software essentially means that, upon a software developer’s delivery to a publisher, no product features are left to be implemented, no graphic artwork, audio sound, or screen text is either missing or relying on temporary placeholder versions.

11. This basic definition of “Beta” software survives today. At Electronic Arts, one of the entertainment software industries leaders in modern development procedures, product developers define “Beta” version of software according to “Beta Checklist.” That “Beta Checklist” states that “Beta” is the “first product version with zero non-shippable bugs.” Essentially, this means that the build of the game product has the expectation by the development staff of being the very last build before manufacturing begins.

12. An increased understanding of “Beta” is achieved with an understanding of the industry-wide milestone for software product development that is scheduled just prior to “Beta”. Prior to “Beta” is a milestone referred to as “Alpha,” described in the SRS License as the “Fourth Milestone.” During the “Alpha” period of the product development cycle, rigorous testing of a product occurs to determine a thorough list of erroneous bugs and defects. Based on my experience, there are 2 key types of bugs that require identification during the “Alpha” phase of product development:

“A” Level Crash Bugs – These erroneous defects completely hinder or disrupt a feature of the product or the entire software product’s ability to function altogether.

“B” Level Bugs – These erroneous defects hinder a player or consumers ability to complete, finish, or enjoy a feature, benefit, or the entire software product.

In order for a software product to complete the “Alpha” period (and to proceed to a “Beta” version of the program), all known “A” Level Crash Bugs and “B” Level Bugs must be eliminated completely from the product.

13. By way of an industry-wide example, Electronic Arts defines “Alpha” requirements in an “Alpha Checklist” made available to product development staff. “Alpha” is achieved for a particular product when the following is achieved:

A complete, running software program containing all features of product as described in the Project plan. All software modules integrated and working together in usable and testable fashion.

This essentially means that all product features and benefits are functioning. To use a feature in a race car game like the SRS Game as an example, such games often contain a feature known as “Driver Selection.” An evaluator of the product may select one or more car driver characters in connection with such a feature, but may not yet be able to select all of the intended selectable car driving characters, as would be available in the final version of the game. If all of the features and benefits of the product are completed to this state of functionality, and other game assets of a race car game (i.e., the car driving characters graphic artwork, audio sound, and statistical data) are implemented, the product has reached its “Alpha” stage of development, even though the product may still have erroneous bugs. By contrast, when all of the features and benefits of the product have reached asset complete functionality and no erroneous Level “A” Crash or Level “B” bugs or defects are known, the product has reached “Beta” stage of development. At “Beta,” the gaming product is essentially functionally complete.

II. Product Evaluation Of The SRS Game Delivered To Debtor.

14. Measured against the foregoing criteria, I have evaluated the version of the SRS Game delivered to te Debtor by Eutechnyx on May 9, 2003. According to the SRS License, a “Beta” version of the SRS Game was supposed to be delivered to the Debtor by March 1, 2003, and a “Final Candidate,” defines as being “100% complete with no known bugs” was supposed to have been delivered to the Debtor by Eutechnyx by May 1, 2003. I have conducted my review of the product in the same manner in which an Executive Producer or Producer employed by Nintendo, Sony, or Microsoft would evaluate a product submission on the behalf of a publisher for the “Beta” milestone.

PRODUCT NAME: Street Racing Syndicate

PLATFORM(S): Microsoft X-Box

and Sony Playstation 2

VERSION: May 9, 2003, E3 Demo

MILESTONE SUBMISSION: BETA

Further, in connection with my evaluation of the Eutechnyx product, I have used equipment identical to those used by any typical publishing producer evaluating product submissions:

2 Microsoft X-Box Debug Kits

2 Microsoft X-Box controllers

2 Mad Katz X-Box controllers

2 Microsoft X-Box memory cards

2 Sony Playstation 2 Debug Units

4 Sony Playstation 2 controllers

4 Monitors

2 VCR recorders

Assorted cables

The redundancy in systems has, in my opinion, prevented any observation results caused by problematic behavior related to specific hardware.

15. The SRS Game product was tested on both the X-Box and Playstation platforms for over 12 hours each. Every aspect of the game was tested and utilized to verify functionality as a comparison for the qualification of “Beta” software. Although the version of the product had numerous erroneous high priority bugs and defects, these bugs and defects are not necessarily the focus for “Beta” milestone acceptance.

16. For the reasons set forth hereinbelow, the SRS Game product delivered to he Debtor on or about May 9, 2003 was not only a “Final Candidate,” as that term is defined as Exhibit A.2 of the SRS License, but fails to meet the standards applicable for a “Beta” version for the software.

III. Violations For Conformity To “Beta” Acceptance.

17. The reasons why the May 9, 2003 version of the SRS Game delivered by Eutechnyx to the Debtor fails to meet “Beta” standards, as defined by both the industry and the SRS License itself, are numerous. A listing of product deficiencies is as follows:

The “Objective” feature of saving a player’s progress is not functioning. Referenced in Peripheral Support Technology as Memory Device Save & Load Code in Exhibit C of the SRS License.

The “Objective” feature of loading a player’s saved progress is not functioning. Referenced in Peripheral Support Technology as Memory Device Save & Load Code in Exhibit C of the SRS License.

Arcade Multiplayer support is not functioning. Referenced in Game Mode Technology as 1/2/3/4 Player Arcade, Time Trial & Championship Modes Code and in Multi-Player Technology of Exhibit C of the SRS License.

Car parts purchased through the web pages are not applied to the player’s car or the player’s Garage Modify menu system.

Betting system for car races is not calculating winnings or loses. Referenced in Game Mode Technology as Cash ranking systems and Scoring Technology as Cash balance in Exhibit C of the SRS License.

“Sticker Tool” in the Garage is non-functioning on the Playstation 2 version of the Game.

“Sticker Tool” placement functionality works only on default Celica vehicle and no other vehicles.

“Hollywood Parkway Dash” is an unfinished track on the Playstation 2 version of the Game

Car parts purchase from the “Underground Parts” van at the race meet is non-functional on the Playstation 2 version of the Game.

“Booster’s Performance Systems” web page is not functioning in the browser of the Playstion 2 version of the Game.

“Welcome to Crew Web Site” web page has incomplete graphic artwork for driver profiles.

“LA Underground Racing” web page has incomplete graphic artwork for Rival profiles.

In-race Option of Camera View menu is non-functional. Referenced in Camera Technology as 3^rd Person And In-Car Racing Viewpoints Code in Exhibit C of the SRS License.

The girl character “Tita” has no texture artwork on X-Box.

The “Street Style” car parts web page contains no car part graphic artwork or descriptive text.

Player progress summaries of Cash total, Cars total and Girlfriends total in Street Mode are non-functional. Referenced in Game Mode Technology as Cash ranking systems and Scoring Technology as Cash balance in Exhibit C of the SRS License.

“Behind the Scenes” menu item is not functional.

The “Credits” menu item is not functional.

“Add current page” in the web browser is non-functioning.

Graphic artwork for ambulance is missing. Referenced in Artificial Intelligence Technology as Point events AI e.g. ambulance raiding to a crash scene in Exhibit C of the SRS License.

Graphic artwork for Aeroplanes is missing. Referenced in Animation Technology as Animating Flight Path Code, Including Flypast Aeroplanes, Helicopters, Blimps in Exhibit C of the SRS License.

Graphic artwork for Helicopters is missing. Referenced in Animation Technology as Animating Flight Path Code, Including Flypast Aeroplanes, Helicopters, Blimps in Exhibit C of the SRS License.

Graphic artwork for Blimps is missing. Referenced in Animation Technology as Animating Flight Path Code, Including Flypast Aeroplanes, Helicopters, Blimps in Exhibit C of the SRS License.

Graphic artwork for explosions is missing. Referenced in Animation Technology as Characters running away from cars – out of path and prior to explosion in Exhibit C of the SRS License.

Graphic artwork for crashing windscreens is missing. Referenced in Animation Technology as Characters crashing through windscreens & being thrown from vehicles in Exhibit C of the SRS License.

Graphic artwork for motorcycle is missing. Referenced in Physics Technology as Motorcycle physics in Exhibit C of the SRS License.

Horizontal And Vertical Split Screen Code Support is missing. Rendering Technology in Exhibit C of the SRS License.

Camera Flashes from public under Special Effects Code is missing. Rendering Technology in Exhibit C of the SRS License.

Car Smoke And Fire are missing under Special Effects Code is missing. Rendering Technology in Exhibit C of the SRS License.

Dirt And Mud Build Up on Cars under Special Effects Code is missing. Rendering Technology in Exhibit C of the SRS License.

Explosions And Gun Fire Effects under Special Effects Code is missing. Rendering Technology in Exhibit C of the SRS License.

Spotlight Effects – Moving And Stationary under Special Effects Code is missing. Rendering Technology in Exhibit C of the SRS License.

Flaming Skid Marks Effects under Special Effects Code is missing. Rendering Technology in Exhibit C of the SRS License.

Passage of Time Effects, Including Racing From Day To Night To Day under Special Effects Code is missing. Rendering Technology in Exhibit C of the SRS License.

Weather Conditions That Change With The Passage Of Time Eg. Start Race Dry & Then Rain Begins under Special Effects Code is missing. Rendering Technology in Exhibit C of the SRS License.

Training Modes feature is missing. Game Mode Technology in Exhibit C of the SRS License.

License Modes feature is missing. Game Mode Technology in Exhibit C of the SRS License.

Multiple day mode feature is missing. Game Mode Technology in Exhibit C of the SRS License.

Cash Ranking Systems feature is not functioning. Game Mode Technology in Exhibit C of the SRS License.

Entering scores on to Internet and swapping via memory devices feature is missing. Scoring Technology in Exhibit C of the SRS License.

Track Preview AVIs With Commentary Code feature is missing. Front-End and/or Menu Technology in Exhibit C of the SRS License.

In-Game Commentary Code Which Can Be Activated By Action On Screen feature is missing. Audio Technology in Exhibit C of the SRS License.

Radio Stations with RDS feature is missing. Audio Technology in Exhibit C of the SRS License.

Virtual Driver View – Shows the arms of the driver from a view that moves in response to g-forces and allows the player to “look around” inside the car feature is missing. Camera Technology in Exhibit C of the SRS License.

Animated Flight Path Code, Including Flypast Aeroplanes, Helicopters, Blimps feature is missing. Animation Technology in Exhibit C of the SRS License.

Lip-synching feature is not functioning. Animation Technology in Exhibit C of the SRS License.

Innocent bystanders and pedestrians populating level and watching action. Animation Technology in Exhibit C of the SRS License.

Characters running away from cars – out of path and prior to explosion feature is missing. Animation Technology in Exhibit C of the SRS License.

Characters crashing through windscreen & being thrown from vehicle feature is missing. Animation Technology in Exhibit C of the SRS License.

Animated crowds, passers-by, pedestrians, physically animated backgrounds drivers enhancing environmental detail feature is missing. Animation Technology in Exhibit C of the SRS License.

On-foot chases feature is missing. Animation Technology in Exhibit C of the SRS License.

Motorcycle physics feature is missing. Physics Technology in Exhibit C of the SRS License.

Characters jumping on moving vehicles feature is missing. Physics Technology in Exhibit C of the SRS License.

Link Cable Technology feature is missing. Multi-Player Technology in Exhibit C of the SRS License.

Two Player “Head-To-Head” Code feature is missing. Multi-Player Technology in Exhibit C of the SRS License.

Network/Internet play feature is missing. Multi-Player Technology in Exhibit C of the SRS License.

Split Screen feature is missing. Multi-Player Technology in Exhibit C of the SRS License.

Fun modes – pass the bomb, hold the package, chase, pursuit, cooperative, etc. feature is missing. Multi-Player Technology in Exhibit C of the SRS License.

Content upload and download feature is missing. Multi-Player Technology in Exhibit C of the SRS License.

Memory Device Save & Load Code feature is missing. Peripheral Support Technology in Exhibit C of the SRS License.

18. Based on the foregoing deficiencies in the SRS Game product delivered to the Debtor by Eutechnyx as of May 9, 2003, it is my conclusion that Eutechnyx neither delivered a “Beta” version of the SRS Game to the Debtor within the time period set forth in Exhibit A.2 of the SRS License, nor delivered a “Final Candidate” version of the SRS Game within the time frame set forth in Exhibit A.2 of the SRS License. A “Final Candidate” was supposed to have been delivered to the Debtor by May 1, 2003; the version delivered by Eutechnyx more than a week later fell well below that standard, and even below the standard for a “Beta” version of the Game, which, pursuant to the License, was supposed to have been delivered by March 1, 2003.

IV. Time Periods Associated With Various Development Milestones To Shipment Date.

19. Based on my extensive experience in the software gaming industry, I have familiarity with the time frame involved in various stages of software product development. The factors which affect that time frame are discussed in greater detail hereinbelow. Based on my experience, the time from various stages of product development to placing a product for retail sales are as follows:

“Alpha” submission: Submission of an “Alpha” candidate to a publisher occurs after a product-specific length of time.

“Alpha” approval by the publisher is contractually defined. In this case, the approval period is 10 days from candidate submission. (Section 4, Paragraph 4.1, of the “Terms and Conditions” of the SRS License).

The “Alpha” period (i.e. the elimination of known bugs and completion of product features, as defined above) occurs following a publisher’s acceptance of an “Alpha” candidate, and typically takes no less than one month, and an average of three months. Development and approval of an “Alpha” version of software involves, for example, replacement of place holder sound, graphics and statistical data.

“Beta” product submission (described in Exhibit A.2 of the SRS License as the “Fifth Milestone”)– Occurs at the completion of the “Alpha” period.

“Beta” submission approval is contractually defined In this case, the approval period is 10 days from candidate submission. (Section 4, Paragraph 4.1, of the “Terms and Conditions” of the SRS License).

The Beta period (elimination of all non-shippable bugs, as described in the definitions listed above): Typically takes no less than one month, and an average of three months.

Manufacturer Submission (described in Exhibit A.2 of the SRS License as the “Seventh Milestone”) – Testing and approval by the publisher (in this case, the Debtor), and submission of a final product to a platform (Nintendo, Sony, or Microsoft) takes typically two weeks or less.

Glass Master (testing and approval of a submitted product to Nintendo, Sony or Microsoft) – Typically takes one week or less.

Manufacture – Manufacture of the approved product takes no less than two weeks, but averages one month.

Distribution – Distribution of the product typically takes no less two weeks.

Other factors that affect these steps and the time frame for them are marketing, documentation, manufacturing capacity, and retail seasons.

20. In my opinion, in order to bring the May 9, 2003 E3 Demo of SRS Game which I have evaluated closer to industry, and contractual standards for “Beta,” all of the incomplete features delineated herinabove would need to be completed. Completion of just two of those features- the Arcade Mode Multiplayer and the “Objective” Player Progress Save & Restore functions- would involve a minimum of 160 man-hours worth of development effort, unless the features were removed from the product altogether, thereby compromising the product’s ability to compete with other “arcade style” console racing games. The remaining incomplete graphic artwork and text necessary to bring the May 9, 2003 E3 Demo version of the product to “Beta” represent, in my opinion and based on my extensive experience, approximately 240 man-hours worth of development effort.

21. Given my time estimation associated with correcting the existing deficiencies in the May 9, 2003 E3 Demo produced by Eutechnyx, the earliest that Eutechnyx could deliver a true “Beta” version of the product would be sometime around June 2, 2003.

22. If Eutechnyx were able to deliver a true “Beta” version of the SRS Game to the Debtor by June 2, 2003, the earliest that the Debtor could submit the Game to Nintendo, Sony, and Microsoft would be during the first week of July 2003, given that the Debtor conducts an internal two-week evaluation of products.

23. Following submission of the SRS Game by the Debtor to Nintendo, Sony or Microsoft, the process of manufacturing approval can span from two weeks to several months. Approval involves rigorous testing by quality assurance engineers who meticulously check the product for user interface standards and quality of experience for the consumer. Products typically fail to initially meet quality assurance standards for reasons including random crashes, controller insertion/removal issues, memory unit (MU) insertion/removal issues, game save/load issues, and stress memory leaks. Most game programs require several submissions for manufacturing approval.

24. In the case of the SRS Game, the absolute earliest that manufacturer approval could occur would be sometime in early July 2003. Allowing for two weeks of platform manufacturing and an additional two weeks for air freight drop shipping to retail points of sale, the earliest that the May 9, 2003 E3 Demo of the SRS Game could be shipped would be sometime in early August 2003. In my opinion, given that products typically require resubmission for manufacturer approval, product shipment would most likely have occurred several weeks later than that.

CONCLUSION

25. For all the reasons set forth above, it is my conclusion that the SRS Game delivered to the Debtor by Eutechnyx as of May 9, 2003 was not in compliance with milestones set forth in the SRS License. It is my further conclusion that, given the failure of Eutechnyx to deliver the product in compliance with the SRS License, product shipment on a retail basis, even under the best of circumstances, could not have occurred at any time prior to August 2003.

I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge, information and belief, and that this Declaration was executed in San Francisco, California on November 12, 2003.

__________________________________

Randel B. Reiss

Declarant