EXHIBIT 10.20  SECURITY
AGREEMENT This
SECURITY
AGREEMENT, dated as of September 1, 2001 (the Agreement),
is executed by Stephen T. Lanza (Debtor), in favor of NeoMagic
Corporation, a Delaware corporation (Secured Party). RECITALS A.            Debtor has executed a Promissory
Note, dated as of the date hereof (the Note), in favor of the Secured
Party in the principal amount of $100,000. B.            In order to induce the Secured Party
to extend the credit evidenced by the Note, Debtor has agreed to enter into
this Agreement and to grant to Secured Party the security interest in the
Collateral described below. AGREEMENT NOW,
THEREFORE, in consideration of the above recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged,
Debtor hereby agrees with Secured Party as follows: 1.             Definitions and Interpretation.  Unless otherwise defined herein, all other
capitalized terms used herein and defined in the Note shall have the respective
meanings given to those terms in the Note, and all terms defined in the
California Uniform Commercial Code (the UCC) shall have the respective
meanings given to those terms in the UCC. 2.             The Collateral.  To secure the Obligations as defined in
Section 3 hereof, Debtor hereby grants to Secured Party a security
interest in all of Debtors right, title and interest, in net after-tax
proceeds of shares of stock of Secured Party whether now existing or hereafter
acquired by Debtor (the Collateral). 3.Security for
Obligations.  The
obligations secured by this Agreement (the Obligations) shall mean and
include all loans, advances, debts, liabilities and obligations, howsoever
arising, owed by Debtor to the Secured Party of every kind and description
(whether or not evidenced by any note or instrument and whether or not for the
payment of money), now existing or hereafter arising under or pursuant to the
terms of the Note, including, all interest, fees, charges, expenses, attorneys
fees and costs and accountants fees and costs chargeable to and payable by
Debtor hereunder and thereunder, in each case, whether direct or indirect,
absolute or contingent, due or to become due, and whether or not arising after
the commencement of a proceeding under Title 11 of the United States Code (11
U.S.C. Section 101 et  seq.), as amended from time to time
(including post-petition interest) and whether or not allowed or allowable as a
claim in any such proceeding.  
   4.             Further
Assurances. (a)           Debtor agrees that at
any time and from time to time, at Debtors expense, Debtor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured Party may
reasonably request, in order to perfect and protect any security interest granted
or purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral. (b)           Margin Regulations.  In the event that Secured Partys Common
Stock is now or later classified as margin stock as such term is defined
under Regulation U of the Board of Governors of the Federal Reserve System
(Regulation U) and Secured Party is classified as a lender within the
meaning of Regulation U, Debtor agrees to cooperate with Secured Party in
making any amendments to the Note or providing any additional collateral as may
be necessary to comply with such regulations. (c)           Liens on
Collateral.  Debtor agrees not to
create, incur, assume or suffer to exist any lien or security interest of any
kind upon the Collateral. 5.             Voting Rights; Dividends; Etc. (a)           Rights Prior to an Event of
Default.  So long as no Event of
Default shall have occurred and be continuing: (i)            Debtor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Collateral or any part thereof
for any purpose not inconsistent with the terms of this Agreement. (ii)           Debtor shall be entitled to receive
and retain free and clear of the security interest of Secured Party hereunder
any and all dividends and interest paid in respect of the Collateral, provided,
however, that any and all (A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for any
Collateral, (B) dividends and other distributions paid or payable in cash
in respect of any Collateral in connection with a partial or total liquidation
or dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus, and (C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any
Collateral, shall be, and shall be forthwith delivered to Secured Party to hold
as, Collateral and shall, if received by Debtor, be received in trust for the
benefit of Secured Party, be segregated from the other property or funds of
Debtor and be forthwith delivered to Secured Party as Collateral in the same
form as so received (with any necessary endorsement) to be held as part of the
Collateral. (b)           Rights Following an Event of
Default.  Upon the occurrence and
during the continuance of an Event of Default: (i)            All rights of Debtor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant to
Section 5(a)(i) and to receive   -2- 
   the dividends and interest payments which it would otherwise be
authorized to receive and retain pursuant to Section 5(a)(ii) shall cease and
all such rights shall thereupon become vested in Secured Party which shall
thereupon have the sole right, but not the obligation, to exercise such voting
and other consensual rights and to receive and hold as Collateral such dividends
and interest payments. (ii)           All dividends and interest payments which are received by
Debtor contrary to the provisions of subparagraph (i) of this Section 5(b)
shall be received in trust for the benefit of Secured Party, shall be
segregated from other funds of Debtor and shall be forthwith delivered to
Secured Party as Collateral in the same form as so received (with any necessary
endorsement). 6.
            Events of Default. (a)           Event of Default.  An Event of Default shall mean the
occurrence of one or more of the following described events: (i)            Debtor shall default in the payment
of principal or interest on the Note when the same is due, or default in the
payment of any expense or other amount payable under the Note or under this
Agreement; or (ii)           Debtor shall breach the provisions of
Section 4(c) of this Agreement; or (iii)          Debtor shall default in the
performance or any covenant, agreement or obligation (other than a covenant,
agreement or obligation referred to in Section 6(a)(i) or Section 6(a)(ii) of
this Agreement) contained in the Note or this Agreement and Debtor shall fail
to cure such default within ten (10) days after written notice thereof from
Secured Party. (b)           Rights Under the UCC.  In addition to all other rights granted
hereby, by the Note and by law, Secured Party shall have, with respect to the
Collateral, the rights and obligations of a secured party under the UCC. (c)           Notice, Etc. In any case where
notice of sale is required, ten (10) days notice shall be deemed reasonable
notice.  Secured Party may have resort
to the Collateral or any portion thereof with no requirement on the part of
Secured Party to proceed first against any other Person or property. (d)Other Remedies.  Upon the occurrence and during the
continuance of an Event of Default, (i) at the request of Secured Party,
Debtor shall assemble and make available to Secured Party all records relating
to the Collateral at any place or places specified by Secured Party, together
with such other information as Secured Party shall request concerning Debtors
ownership of the Collateral and relationship to Issuer; and (ii) Secured
Party or its nominee shall have the right, but shall not be obligated, to vote
or give consent with respect to the Collateral or any part thereof.    -3- 
    7.
            Secured Party Appointed
Attorney-in-Fact. Debtor
hereby appoints Secured Party as Debtors attorney-in-fact, with full authority
in the place and stead of Debtor and in the name of Debtor or otherwise, from
time to time in Secured Partys discretion and to the full extent permitted by
law to take any action and to execute any instrument which Secured Party may
deem reasonably necessary or advisable to accomplish the purposes of this
Agreement in accordance with the terms and provisions hereof, including without
limitation, to receive, endorse and collect all instruments made payable to
Debtor representing any dividend, interest payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for
the same. Debtor
hereby ratifies all reasonable actions that said attorney shall lawfully do or
cause to be done by virtue hereof.  This
power of attorney is a power coupled with an interest and shall be irrevocable.  The powers conferred on Secured Party
hereunder are solely to protect its interests in the Collateral and shall not
impose any duty upon Secured Party to exercise any such powers.  Secured Party shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers
and in no event shall Secured Party or any of its officers, directors,
employees or agents be responsible to Debtor for any act or failure to act,
except for gross negligence or willful misconduct. 8.               Miscellaneous. (a)           Notices.  Except as otherwise provided herein, all
notices, requests, demands, consents, instructions or other communications to
or upon Secured Party or Debtor under this Agreement shall be in writing and
telecopied, mailed or delivered to each party at its telecopier number or
address set forth on the signature page of this Agreement (or to such other
telecopier number or address for any party as indicated in any notice given by
that party to the other party).  All such
notices and communications shall be effective (a) when sent by Federal
Express or other overnight service of recognized standing, on the business day
following the deposit with such service; (b) when mailed by registered or
certified mail, first class postage prepaid and addressed as aforesaid through
the United States Postal Service, upon receipt; (c) when delivered by
hand, upon delivery; and (d) when telecopied, upon confirmation of
receipt. (b)           Nonwaiver.  No failure or delay on Secured Partys part
in exercising any right hereunder shall operate as a waiver thereof or of any
other right nor shall any single or partial exercise of any such right preclude
any other further exercise thereof or of any other right. (c)           Amendments and Waivers.  This Agreement may not be amended or
modified, nor may any of its terms be waived, except by written instruments
signed by Debtor and Secured Party. 
Each waiver or consent under any provision hereof shall be effective
only in the specific instances for the purpose for which given. (d)           Assignments.  This Agreement shall be binding upon and
inure to the benefit of Secured Party and Debtor and their respective
successors and assigns. (e)           Cumulative Rights, etc.  The rights, powers and remedies of Secured
Party under this Agreement shall be in addition to all rights, powers and
remedies given to    -4- 
    Secured Party by virtue of any applicable law, rule
or regulation of any governmental authority, the Note or any other agreement,
all of which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Secured Partys rights
hereunder.  Debtor waives any right to
require Secured Party to proceed against any Person or to exhaust any
Collateral or to pursue any remedy in Secured Partys power. (f)            Partial Invalidity.  If any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby. (g)          Expenses.  Each of Debtor and Secured Party shall bear
its own costs in connection with the preparation, execution and delivery of,
and the exercise of its duties under, this Agreement. (i)            Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules (except to the extent governed by the UCC). (j)            Jury Trial.  EACH OF DEBTOR AND SECURED PARTY, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. (k)           Manner of Sale.  As long as any portion of the principal or
interest on the Note remains outstanding, any shares of Secured Party owned by
Debtor shall only be sold through a broker approved by Secured Party and under
procedures that provide that the net after-tax proceeds resulting from such
sale be paid directly to Secured Party until all outstanding obligations under
the Note have been repaid in full.  [Remainder of page intentionally left blank.]    -5- 
   IN
WITNESS WHEREOF, Debtor has caused this Agreement to be executed as of the day
and year first above written.  Stephen T. Lanza   ACKNOWLEDGED:NEOMAGIC CORPORATIONBy:Prakash Agarwal,President and CEOAddress:3250 Jay StreetSanta Clara, CA 95054-3309            -6-