ex4-14.htm


    EXHIBT
4.14

    


    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR UNDER APPLICABLE STATE SECURITIES ACTS (THE “STATE ACTS”). NOR IS SUCH
REGISTRATION CONTEMPLATED.  SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT
OR THE STATE ACTS, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL
SATISFACTORY TO THE BOARD OF DIRECTORS OF THE COMPANY AND TO LEGAL COUNSEL FOR
THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE BOARD OF DIRECTORS AND SUCH COUNSEL SATISFACTORY EVIDENCE THAT
ANY SUCH TRANSFER WILL NOT BE IN VIOLATION OF THE ACT OR STATE ACTS OR ANY RULE
OR REGULATION PROMULGATED THEREUNDER.THESE SECURITIES ARE ALSO SUBJECT TO
CERTAIN ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 3
HEREOF.

     

    


     

    NEOMAGIC
CORPORATION

     

    CLASS
B WARRANT

     

    
      	 
      	 
      	 
      
	
              Warrant
      No. B__ 

            	
                

            	
              Original
      Issue Date:
October    ,2009

            


    

     

    NEOMAGIC CORPORATION, a
Delaware corporation (the “Company”), hereby certifies that, for
value received, ________________________ or
its permitted registered assigns (the “Holder”), is entitled to purchase
from the Company up to a total of ______ shares of common stock, $0.001 par
value (the “Common
Stock”), of the Company (each such share issued upon exercise of this
Warrant , a “Warrant
Share” and all
such shares, the “Warrant
Shares”) at an
exercise price equal to $.09 per share (as adjusted from time to time as
provided herein, the “Exercise
Price”), at any time and from time to time during the two (2) year period
commencing on the date hereof (the "Commencement
Date") and expiring on October__, 2011 or earlier, upon thirty (30) days
notice given to Holder following  the occurrence of a Trading Price
Termination Event ( as defined below in Section 4(c)) (the “Expiration
Date”), subject
to  the following terms and conditions:

     

    This Warrant is one of a series of
Class B Warrants issued pursuant to that certain Subscription Agreement, dated
October___, 2009, by and among the Company and the Investors identified therein
(the “Subscription 
Agreement”).  All such Class B Warrants are referred to herein,
collectively, as the “Warrants.”

     

    
      
        
        

      

      
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    1.           Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Subscription Agreement.

     

    2.           
List of Warrant
Holders.  The Company shall register this Warrant, upon records
to be maintained by the Company for that purpose (the “Warrant
Register”), in
the name of the record Holder (which shall include the initial Holder or, as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder from time to time).  The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.

     

    3.           List of Transfers;
Restrictions on Transfer.

     

    (a)           This
Warrant and the Warrant Shares are subject to the restrictions on transfer set
forth in this Section 3.

     

    (b)           The
Company shall register any such transfer of all or any portion of this Warrant
in the Warrant Register, upon (i) surrender of this Warrant, with the Form of
Assignment attached hereto duly completed and signed, to the Company at its
address specified herein and (ii) delivery by the transferee of a written
statement to the Company certifying that the transferee is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and making the
representations and certifications set forth in Section 9(a) of the Subscription
Agreement, to the Company at its address specified in the Subscription
Agreement. Upon any such registration or transfer, a new Warrant to purchase
Common Stock, in substantially the form of this Warrant (any such new Warrant, a
“New
Warrant”),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations in respect of
the New Warrant that the Holder has transferred in respect of this
Warrant.

     

    (c)           This
Warrant may only be transferred to a transferee who is an “accredited
investor.”  If a  registration statement is
not  in effect at any time that this Warrant is exercised, (i) the
Warrant Shares issued upon such exercise shall be “restricted securities,” (ii)
the stock certificate evidencing the Warrant Shares shall bear a restrictive
legend referring to the Act, and (iii) as a condition precedent to issuance of
the Warrant Shares upon such exercise, the Holder shall be required to execute
an investment representation statement in the form provided by the Company as
evidence of the Holder’s qualifications to purchase Common Stock in a “private
placement” that is exempt from registration pursuant to Section 4(2) of the
Act.

     

    
      
        
        

      

      
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    4.           Exercise and Duration of
Warrants.

     

     (a)           All
or any part of this Warrant shall be exercisable by the registered Holder
pursuant to Section 10 of this Warrant at any time and from time to time on
or after the Commencement Date (as defined above and through and including the
Expiration Date. Subject to Section 11 hereof, at 5:00 p.m., New York City time,
on the Expiration Date the portion of this Warrant not exercised prior thereto
shall be and become void and of no value and this Warrant shall be terminated
and no longer outstanding.

     

     (b)           The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached hereto (the “Exercise
Notice”), completed and duly signed, and (ii) payment of the Exercise
Price for the number of Warrant Shares as to which this Warrant is being
exercised.  The date such items are delivered to the Company (as
determined in accordance with the notice provisions hereof) is an “Exercise
Date.” The delivery by (or on behalf of) the Holder of the Exercise
Notice and the applicable Exercise Price as provided above shall constitute the
Holder’s certification to the Company that its representations contained in
Section 9(a) of the Subscription Agreement are true and correct as of the
Exercise Date as if remade in their entirety (or, in the case of any transferee
Holder that is not a party to the Subscription Agreement, such transferee
Holder’s certification to the Company that such representations are true and
correct as to such assignee Holder as of the Exercise Date).  The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder.  Execution and delivery of the Exercise Notice
shall have the same effect as cancellation of the original Warrant and issuance
of a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares.

    


    (c) The term “Trading
Price Termination Event” shall mean the occurrence, at any time that the
Common Stock is listed for trading on a national securities exchange, other
nationally recognized trading system, or is quoted on the Pink Sheets LLC or
similar over-the-counter service (including, without limitation, the OTC
Bulletin Board), for  a period of fifteen (15) consecutive trading
days (each a "Trading
Day") during which the quoted bid price of the Common Stock has been
greater than two hundred percent (200%) of the Exercise Price.

     

    
      
        
        

      

      
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      5.           Delivery of Warrant
Shares.

     

     (a)           Upon
exercise of this Warrant in accordance with Section 4 above, the Company shall
promptly (but in no event later than three(3) Trading Days after the Exercise
Date) issue or cause to be issued and cause to be delivered to or upon the
written order of the Holder and in such name or names as the Holder may
designate), a certificate for the Warrant Shares issuable upon such exercise,
with  restrictive legends  complying with the Act and
applicable state securities or blue sky laws unless  (i)a registration
statement is then in effect with respect to the Warrant Shares issued hereunder
or (ii) the Warrant Shares are freely transferable without volume restrictions
pursuant to Rule 144(k) promulgated under the Securities Act. If
a  registration statement with respect to the Warrant Shares issued
hereunder is not then in effect and the Holder directs the Company to deliver a
certificate for the Warrant Shares in a name other than that of the Holder or an
Affiliate of the Holder, the Holder shall deliver to the Company on the Exercise
Date an opinion of counsel reasonably satisfactory to the Company to the effect
that the issuance of such Warrant Shares in such other name may be made pursuant
to an available exemption from the registration requirements of the Act and all
applicable state securities or blue sky laws. The Holder, or any Person so
designated by the Holder, in accordance with the terms of this Warrant
Agreement, to receive Warrant Shares shall be deemed to have become the holder
of record of such Warrant Shares as of the Exercise Date.  If the
Warrant Shares can be issued without restrictive legends, the Company shall,
upon the written request of the Holder, use its best efforts to deliver, or
cause to be delivered, Warrant Shares hereunder electronically through the
Depository Trust and Clearing Corporation or another established clearing
corporation performing similar functions, if available; provided, that, the
Company may, but will not be required to, change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through the
Depository Trust and Clearing Corporation.

    


    (b)           
If by the close of the third Trading Day after delivery of an Exercise Notice,
the Company fails to deliver to the Holder a certificate representing the
requisite number of Warrant Shares in the manner required pursuant to Section
5(a), and if after such third Trading Day and prior to the receipt of such
Warrant Shares, the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”),
then the Company shall, within three (3) Trading Days after the Holder’s request
and in the Holder’s sole discretion, either (1) pay in cash to the Holder an
amount equal to the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Warrant Shares) shall terminate or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates
representing  such Warrant Shares and pay cash to the Holder in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of Warrant Shares, times (B) the closing bid price  on a
national securities exchange, other nationally recognized trading system, or on
the Pink Sheets LLC or similar over-the-counter service (including, without
limitation, the OTC Bulletin Board), on the date of the event giving rise to the
Company’s obligation to deliver such certificate.

     

    
      
        
        

      

      
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    6.           Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, withholding tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such certificates, all
of which taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise
hereof.

     

    7.           Replacement of
Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third party costs as the Company may prescribe. If a New Warrant is requested as
a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company’s
obligation to issue the New Warrant.

     

    8.           Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares that are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.

     

    9.           Certain Adjustments.
The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section
9.

     

    (a)           
Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides outstanding shares of Common Stock into a larger number of shares, or
(iii) combines outstanding shares of Common Stock into a smaller number of
shares, then in each such case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this Section 9(a) shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this  Section 9(a)
shall become effective immediately after the effective date of such subdivision
or combination.

     

    
      
        
        

      

      
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    (b)           Pro Rata
Distributions.  If the Company, at any time while this Warrant
is outstanding, distributes to all holders of Common Stock for no consideration
(i) evidences of its indebtedness, (ii) any security (other than a distribution
of Common Stock covered by Section 9(a)), (iii) rights or warrants to subscribe
for or purchase any security, or (iv) any other asset (in each case, “Distributed
Property”), then, upon any exercise of this Warrant that occurs after the
record date fixed for determination of stockholders entitled to receive such
distribution, the Holder shall be entitled to receive, in addition to any
Warrant Shares otherwise issuable upon such exercise, the Distributed Property
that such Holder would have been entitled to receive in respect of such number
of Warrant Shares had the Holder been the record holder of such Warrant Shares
immediately prior to such record date.

     

    (c)           Fundamental
Transactions. If, at any time while this Warrant is
outstanding  (i) the Company effects any merger or consolidation of
the Company with or into another person, in which the shareholders of the
Company as of immediately prior to the transaction own less than a majority of
the outstanding stock of the surviving entity, (ii) the Company effects any sale
of all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company
or another person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or
property, or (iv) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(each such transaction under (i), (ii) (iii) or (iv), a “Fundamental
Transaction”), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the “Alternative
Consideration”).  The Company
shall not effect any such Fundamental Transaction unless prior to or
simultaneously with the consummation thereof, any successor to the Company,
surviving entity or the corporation purchasing or otherwise acquiring such
assets or other appropriate corporation or entity shall assume(a) the obligation
to deliver to the Holder, the  Alternative Consideration which, in
accordance with the foregoing provisions, the Holder may be entitled to receive,
and (b) the other obligations under this Warrant.  The provisions of
this Section 9 (c) shall similarly apply to subsequent transactions analogous to
a Fundamental Transaction.

     

    (d)           Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to Section 9(a) above, the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for
the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.

     

    
      
        
        

      

      
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    (e)           Subsequent Equity
Sales.

     

    (i)           Except
as provided in subsection (e)(iii) hereof, if and whenever the Company shall
issue or sell, or is, in accordance with any of subsections (e)(ii)(l) through
(e)(ii)(4) hereof, deemed to have issued or sold, any shares of Common Stock for
no consideration or for a consideration per share less than the Exercise Price
in effect immediately prior to the time of such issue or sale, then, in each
such case (a “Trigger
Issuance”), the then-existing Exercise Price shall be reduced, as of the
close of business on the effective date of the Trigger Issuance, to a price
determined as follows:

     

    Adjusted
Exercise Price = (A x
B) + D

                A+C

    


    where

     

    “A”
equals the number of shares of Common Stock outstanding, including Additional
Shares of Common Stock (as defined below) deemed to be issued hereunder,
immediately preceding such Trigger Issuance;

     

    “B”
equals the Exercise Price in effect immediately preceding such Trigger
Issuance;

     

    “C”
equals the number of Additional Shares of Common Stock issued or deemed issued
hereunder as a result of the Trigger Issuance; and

     

    “D”
equals the aggregate consideration, if any, received or deemed to be received by
the Company upon such Trigger Issuance;

     

    provided, however, that in no
event shall the Exercise Price after giving effect to such Trigger Issuance be
greater than the Exercise Price as of immediately prior to such Trigger
Issuance.

     

    For
purposes of this subsection (e), “Additional
Shares of Common Stock” shall mean all shares of Common Stock issued by
the Company or deemed to be issued pursuant to this subsection (e), other than
Excluded Issuances (as defined in subsection (e)(iii) hereof).

     

     

    (ii)           For
purposes of this Section 9(e), the following subsections (e) (ii) (1) to
(e) (ii) (4) shall also be applicable:

     

    
      
        
        

      

      
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    (1)           Issuance of Rights or
Options. If at any time the Company shall in any manner grant (directly
and not by assumption in a merger or otherwise) any warrants or other rights to
subscribe for or to purchase, or any options for the purchase of, Common Stock
or any stock or security convertible into or exchangeable for Common Stock (such
warrants, rights or options being called “Options” and such convertible or
exchangeable stock or securities being called “Convertible Securities”), whether
or not such Options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which Common
Stock is issuable upon the exercise of such Options or upon the conversion or
exchange of such Convertible Securities (determined by dividing (i) the
sum  of (x) the total amount, if any, received or receivable by
the Company as consideration for the granting of such Options, plus (y) the
aggregate amount of additional consideration payable to the Company upon the
exercise of all such Options, plus (z), in the case of such Options that relate
to Convertible Securities, the aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options) shall be less than the Exercise Price in effect
immediately prior to the time of the granting of such Options, then the total
number of shares of Common Stock issuable upon the exercise of such Options or
upon conversion or exchange of the total amount of such Convertible Securities
issuable upon the exercise of such Options shall be deemed to have been issued
for such price per share as of the date of granting of such Options or the
issuance of such Convertible Securities and thereafter shall be deemed to be
outstanding for purposes of adjusting the Exercise Price. Except as otherwise
provided in subsection 9(e)(ii)(3), no adjustment of the Exercise Price
shall be made upon the actual issuance of such Common Stock or of such
Convertible Securities upon exercise of such Options or upon the actual issuance
of such Common Stock upon conversion or exchange of such Convertible
Securities.

     

    (2)           Issuance of Convertible
Securities. If the Company shall in any manner issue (directly and not by
assumption in a merger or otherwise) or sell any Convertible Securities, whether
or not the rights to exchange or convert any such Convertible Securities are
immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (i) the
sum  of (x) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus (y) the aggregate amount of additional consideration, if any, payable
to the Company upon the conversion or exchange thereof, by (ii) the total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities shall be less than the Exercise Price in effect
immediately prior to the time of such issuance or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued for such price
per share as of the date of the issuance or sale of such Convertible Securities
and thereafter shall be deemed to be outstanding for purposes of adjusting the
Exercise Price, provided that (a) except as otherwise provided in
subsection 9(e)(ii)(3), no adjustment of the Exercise Price shall be made
upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities and (b) no further adjustment of the Exercise Price
shall be made by reason of the issuance or sale of Convertible Securities upon
exercise of any Options to purchase any such Convertible Securities for which
adjustments of the Exercise Price have been made pursuant to the other
provisions of Section 9(e).

     

    
      
        
        

      

      
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    (3)           Change in Option Price or
Conversion Rate. Upon the happening of any of the following events,
namely, if the purchase price provided for in any Option referred to in
subsection 9(e)(ii)(1) hereof, the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities referred
to in subsections 9(e)(ii)(1) or 9(e)(ii)(2), or the rate at which Convertible
Securities referred to in subsections 9(e)(ii)(1) or 9(e)(ii)(2) are convertible
into or exchangeable for Common Stock shall change at any time (including, but
not limited to, changes under or by reason of provisions designed to protect
against dilution), the Exercise Price in effect at the time of such event shall
forthwith be readjusted to the Exercise Price that would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold. On the
termination of any Option for which any adjustment was made pursuant to this
Section 9(e) or any right to convert or exchange Convertible Securities for
which any adjustment was made pursuant to this Section 9(e) (including
without limitation upon the redemption or purchase for consideration of such
Convertible Securities by the Company), the Exercise Price then in effect
hereunder shall forthwith be changed to the Exercise Price that would have been
in effect at the time of such termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such termination,
never been issued.

     

    (4)           Consideration for
Stock.  If any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for cash, the consideration received therefor
shall be deemed to be the gross amount received by the Company therefor. If any
shares of Common Stock, Options or Convertible Securities shall be issued or
sold for a consideration other than cash, the amount of the consideration other
than cash received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board of Directors of the
Company. If any Options shall be issued in connection with the issuance and sale
of other securities of the Company, together comprising one integral transaction
in which no specific consideration is allocated to such Options by the parties
thereto, such Options shall be deemed to have been issued for such consideration
as determined in good faith by the Board of Directors of the Company. If Common
Stock, Options or Convertible Securities shall be issued or sold by the Company
and, in connection therewith, other Options or Convertible Securities (the
“Additional
Rights”) are issued, then the consideration received or deemed to be
received by the Company shall be reduced by the fair market value of the
Additional Rights (as determined using the Black-Scholes option pricing model or
another method mutually agreed to by the Company and the Holder). The Board of
Directors of the Company shall respond promptly, in writing, to an inquiry by
the Holders as to the fair market value of the Additional Rights. If the Board
of Directors of the Company and the Holder are unable to agree upon the fair
market value of the Additional Rights, the Company and the Holder shall jointly
select an appraiser experienced in such matters. The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
evenly by the Company and the Holder.

     

    
      
        
        

      

      
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    (iii)           Notwithstanding
the foregoing, no adjustment will be made under this Section 9 (e) in respect
of: (i) the issuance of securities upon the exercise or conversion of any
Common Stock or Common Stock equivalents issued by the Company prior to the date
hereof, (ii) the grant of options, warrants, Common Stock or other Common
Stock equivalents under any duly authorized Company stock option, restricted
stock plan or stock purchase plan, whether now existing or hereafter approved by
the Company and its stockholders, and the issuance of Common Stock in respect
thereof, (iii) the issuance of securities in connection with a Strategic
Transaction ( as defined below), (iv) the issuance of securities to
vendors, or (v) the issuance of securities in a transaction described in
Section 9(a) or 9(b). For purposes of this paragraph, a “Strategic
Transaction” means a transaction or relationship in which (1) the
Company issues shares of Common Stock to a person that the Board of Directors of
the Company determined in good faith is, itself or through its Subsidiaries, an
operating company in a business synergistic with the business of the Company (or
a shareholder thereof) and (2) the Company expects to receive benefits in
addition to the investment of funds, but shall not include (x) a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to a person whose primary business is investing in
securities or (y) issuances to lenders.

     

    (iv)           Upon
any adjustment to the Exercise Price pursuant to Section 9(e) (i) above, the
number of Warrant Shares purchasable hereunder shall be adjusted by multiplying
such number by a fraction, the numerator of which shall be the Exercise Price in
effect immediately prior to such adjustment and the denominator of which shall
be the Exercise Price in effect immediately
thereafter.  Notwithstanding any other provisions in this Section 9 to
the contrary, the Exercise Price shall in no event
be reduced to a price less than $.09 per share
(subject to adjustment pursuant to Section 9(a) above).  This
provision shall not restrict the number of shares of Common Stock that a Holder
may receive or beneficially own in order to determine the amount of securities
or other consideration that such Holder may receive in the event of a
transaction contemplated by Section 9 of this Warrant.

     

    (f)           Calculations. All
calculations under this Section 9 shall be made to the nearest cent or the
nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an issuance
or sale of Common Stock.

     

    (g)           Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will, at the written request of the
Holder, promptly compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant
Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s Transfer Agent.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    (h)           Notice of Corporate
Events. If, while this Warrant is outstanding, the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including without limitation any granting of rights
or warrants to subscribe for or purchase any capital stock of the Company or any
subsidiary, (ii) authorizes or approves, enters into any agreement which
contemplates or requires stockholder approval for any Fundamental Transaction or
(iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then, unless such notice and the contents thereof shall
be deemed to constitute material non-public information, the Company shall
deliver to the Holder a notice describing the material terms and conditions of
transaction described in (i), (ii) or (iii) above at least ten (10)( Trading
Days prior to the applicable record or effective date on which a person would
need to hold Common Stock in order to participate in or vote with respect to
such transaction, and the Company will take all reasonable steps to give Holder
the practical opportunity to exercise this Warrant prior to such time; provided, however, that the
failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such
notice.

     

     10.          Payment of Exercise
Price. The Holder shall pay the Exercise Price to the Company in
immediately available funds.

     

     11.           Limitations on
Exercise. Subject to the last sentence hereof, the number of Warrant
Shares that may be acquired by the Holder upon any exercise of this Warrant (or
otherwise in respect hereof) shall be limited to the extent necessary to insure
that, following such exercise (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Holder and its affiliates, as
defined in Rule 501 of Regulation D ("Affiliates"),
and any other Persons whose beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act,
does not exceed 9.999% (the “Maximum
Percentage”) of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise). For such purposes, beneficial ownership shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this Section and determined that issuance of the
full number of Warrant Shares requested in such Exercise Notice is permitted
under this Section.  The Company’s obligation to issue shares of
Common Stock in excess of the limitation referred to in this Section shall be
suspended (and, except as provided below, shall not terminate or expire
notwithstanding any contrary provisions hereof) until such time, if any, as such
shares of Common Stock may be issued in compliance with such limitation;
provided, that, if, as of 5:00 p.m., New York City time, on the Expiration Date,
the Company has not received written notice that the shares of Common Stock may
be issued in compliance with such limitation, the Company’s obligation to issue
such shares shall terminate.  This provision shall not restrict the
number of shares of Common Stock that a Holder may receive or beneficially own
in order to determine the amount of securities or other consideration that such
Holder may receive in the event of a Fundamental Transaction as contemplated in
Section 9 of this Warrant. By written notice to the Company, the Holder may
waive the provisions of this Section but any such waiver will not be effective
until the 61st day
after such notice is delivered to the Company, nor will any such waiver effect
any other Holder.  This provision shall not apply to Holders who as of
the Closing Date beneficially own in excess of ten percent (10%) of the total
number of issued and outstanding shares of Common Stock.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    12.           No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any exercise of
this Warrant. In lieu of any fractional shares that would otherwise be issuable,
the Company shall pay cash equal to the product of such fraction multiplied by
the closing price of one Warrant Share as reported by the applicable Trading
Market on the Exercise Date.

     

    13.           Notices. Any and all
notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section at or prior to 5:00 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 5:00 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such notices or communications shall
be:  if to the Company, to NeoMagic Corporation, 780 Montague
Expressway, Suite 504, San Jose, California 95131  Attn: Chief
Executive Officer or to facsimile number 408 428-9712 (or such other
address  and facsimile number as the Company shall indicate in writing
in accordance with this Section) or (ii) if to the Holder, to the address or
facsimile number appearing on the Warrant Register (or such other address as the
Company shall indicate in writing in accordance with this Section).

     

    14.           Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholder services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    15.           Miscellaneous.

     

    (a)           This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Subject to the preceding sentence,
nothing in this Warrant shall be construed to give to any person other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing signed by the
Company and the Holder, or their successors and assigns.

     

    (b)           All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of California, without regard to the
principles of conflicts of law thereof. Each party agrees that any legal
proceeding concerning the interpretation, enforcement and defense of this
Warrant and the transactions herein contemplated (“Proceeding")
,whether brought against a party hereto or its respective Affiliates ( as
defined above), employees or agents. shall be commenced and maintained
exclusively in the federal or state courts located within Santa Clara County,
California. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of such courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or referenced
herein, and hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the jurisdiction of
such courts, or that any such Proceeding has been commenced in an improper or
inconvenient forum. Each party hereto hereby irrevocably waives personal service
of process and consents to process being served in any such Proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant 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. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any
Proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce any
provisions of this Warrant, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    (c)           The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

     

    (d)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the remaining provisions of this Warrant shall
continue in effect to the maximum extent permitted by law. (e) Prior to exercise
of all of this Warrant, the Holder hereof shall not be entitled to any rights of
a stockholder with respect to unexercised portion of this Warrant.

     

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its
authorized officer as of the date first indicated above.

     

    
      
        	 	
                NEOMAGIC
      CORPORATION

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	Name:	
                Douglas
      R. Young

              	 
	 	Title:	
                Chief
      Executive Officer

              	 
	 	 	 	 


      

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    EXERCISE
NOTICE

    


    NeoMagic
Corporation

    
      
        	 
      	 
      	 
      
	WARRANT NO.
      B___	
                  

              	DATED OCTOBER__,
      2009


      

       

    

    Ladies
and Gentlemen:

    


    (1)           The
undersigned hereby elects to exercise the above-referenced Warrant with respect
to _________ shares of Common Stock.  Capitalized terms used herein
and not otherwise defined herein have the respective meanings set forth in the
Warrant.

      

    (2)           The
Holder shall pay the sum of $_______ to the Company in immediately available
funds in accordance with the terms of the Warrant.

    


    (3)           Pursuant
to this Exercise Notice, the Company shall deliver to the Holder the number of
Warrant Shares determined in accordance with the terms of the
Warrant.

     

    (4)           By
its delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby the Holder
will not beneficially own in excess of the number of shares of Common Stock (as
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934) permitted to be owned under Section 11 of the Warrant to which this notice
relates.

     

    
      
        	 	
              	 
	 	HOLDER:	 
	 	 	 
	
                 

              	 	 
	 	
                (Print
      name)

              	 
	 	
              	 
	 	By: 	 
	 	 	 
	 	Title:    	 


      



    


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    WARRANT
ORIGINALLY ISSUED OCTOBER__, 2009

    WARRANT
NO. B___

    


    FORM
OF ASSIGNMENT

     

    To be
completed and signed only upon transfer of Warrant

     

    FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto                             
the right represented by the within Warrant to purchase                 
shares of Common Stock to which the within Warrant relates and appoints                             
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.

     

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	Dated:
      	 	TRANSFEROR:	 
	 	 	 	 
	 	
                                           

                                        	 	 
	 	 	
                                          (Print
      name)

                                        	 
	 	 	
                                        	 
	 	 	By: 	 
	 	 	 	 
	 	 	Title:    	 


                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          


          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	
                                    	 
	 	
                                      TRANSFEREE:

                                    	 
	 	 	 
	
                                       

                                    	 	 
	 	
                                      (Print
      name)

                                    	 
	 	
                                    	 
	 	(Address of Transferee)	 
	 	 	 
	 	   	 
	 	 	 
	 	 	 


                            

                          

                        

                      

                    

                  

                

              

            

          


          
            
              	In the presence of:	 	
                    	 
	 	 	 	 


               

               

            

          

        

        


      

    

     

    16