Document:

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                                                                Exhibit 10.18

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

                                                                June __, 1996

                     MONOLITHIC SYSTEM TECHNOLOGY, INC.
                         a California corporation

                  COMMON STOCK PURCHASE WARRANT AGREEMENT

         THIS CERTIFIES THAT, for value received, FIELD(1) (hereinafter, the
"Holder"), is entitled, upon the terms and subject to the conditions hereinafter
set forth, to purchase from Monolithic System Technology, Inc., a California
corporation (the "Company"), that number of fully paid and nonassessable shares
of the Company's Common Stock at the purchase price per share as set forth in
Section 1 below.

         This Warrant is one of a duly authorized series of warrants
(collectively, the "Warrants") issued in accordance with and subject to all
terms and conditions of the Note and Warrant Purchase Agreement dated June __,
1996 (the "Purchase Agreement") among the Company and each of the Purchasers
identified in the Schedule of Purchasers attached thereto pursuant to which the
Company purchased the Warrants and the Company's 8.25% Promissory Notes with an
aggregate principal amount of $15 million (the "Notes"). The term "Purchase
Agreement" shall include the agreement, in each of its respective forms, used in
connection with the purchase and sale of the Warrants to certain investors
resident in the United States and to certain additional non-U.S. investors
pursuant to the requirements of Regulation S promulgated under the United States
Securities Act of 1933, as amended (the "Securities Act"). The term "Warrants"
shall refer to all Warrants issued pursuant to the Purchase Agreement in each of
its respective forms.

                         TERMS AND CONDITIONS OF WARRANT

         1.       NUMBER OF SHARES: EXERCISE PRICE; TERM.

                  (a) The Holder shall be entitled to subscribe for and purchase
up to that number of shares of the fully paid and nonassessable Common Stock of
the Company (the "Shares") determined by dividing (i) FIELD(2) by (ii) the
Exercise Price in effect at the time of such subscription and purchase.

                  (b) Until the earlier of (i) the closing of the initial public
offering of the Company's Common Stock (the "IPO Closing") pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission (the "IPO Closing") and (ii) one year from the date of this
Warrant, the Exercise Price shall equal $6.50 per Share. After the earlier of
(i) the IPO Closing and (ii) the date one year from the date of this Warrant,
the Exercise Price shall equal $8.50 per Share.

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                  (c) The Holder may exercise this Warrant at any time and from
time to time prior to 5:00 p.m. (California Time) on May 31, 1998 (the
"Expiration Date"). This Warrant shall expire and cease to be exercisable after
the Expiration Date.

         2.       EXERCISE OF WARRANT.

                  (a) This Warrant may be exercised by the Holder as to the
whole or any lesser number of the Shares covered hereby, at any time and from
time to time prior to the Expiration Date, upon surrender of this Warrant to the
Company at its principal executive office together with the Notice of Exercise
and Investment Representation Statement annexed hereto as EXHIBITS A and B,
respectively, duly completed and executed by the Holder, and payment to the
Company of the aggregate Exercise Price for the Shares to be purchased in the
form of (i) a check made payable to the Company, (ii) forgiveness (evidenced by
a writing signed by the holder of the respective Note) of outstanding principal
owed by the Company under the Notes in an amount equal to the aggregate Exercise
Price for the Shares to be purchased, or (iii) any combination of (i) and (ii).
Certificates for the Shares so purchased shall be delivered to the Holder within
a reasonable time not to exceed 21 days after exercise of the stock purchase
rights represented by this Warrant. The exercise of this Warrant shall be deemed
to have been effected on the day on which the Holder surrenders this Warrant to
the Company and satisfies all of the requirements of this Section 2. Upon such
exercise, the Holder will be deemed a shareholder of record of those Shares for
which the warrant has been exercised with all rights of a shareholder
(including, without limitation, all voting rights with respect to such Shares
and all rights to receive any dividends with respect to such Shares). If this
Warrant is to be exercised in respect of less than all of the Shares covered
hereby, the Holder shall be entitled to receive a new warrant covering the
number of Shares in respect of which this Warrant shall not have been exercised
and for which it remains subject to exercise. Such new warrant shall be in all
other respects identical to this Warrant.

                  (b) In the event (i) the Exercise Price in effect at the time
of exercise of this Warrant by the Holder is $6.50 and (ii) the per-share price
at which shares of the Company's Common Stock are sold to the public at the IPO
Closing is less than $12.50, the Company shall pay to the Holder an amount equal
to the product determined by the following equation:

                                    Z=X*Y*[I-(P / IPO)], where

                  Z =               the amount to be paid by the Company to the
                                    Holder pursuant to this subSection 2(b);

                  X =               the number of Shares for which the Holder
                                    exercised the Warrant at an Exercise Price
                                    of $6.50;

                  Y =               $6.50;

                  P =               the per-share price at which shares of
                                    the Company's Common Stock are sold to the
                                    public at the IPO Closing; and

                  IPO =             $12.50;

PROVIDED, however, that in no event shall the value calculated as "Z" above
exceed the product of (i) X and (ii) $1.50. The Company may satisfy any
obligation to the Holder pursuant to this Section 2(b) by delivery to the Holder
of (i) a check made payable to the Holder or (ii) a note in an amount equal to
the value of "Z" and in form and substance equivalent to the Notes (including,
without limitation, with respect to interest rate and maturity date).

         3.       COVENANTS OF THE COMPANY. The Company covenants and agrees
that all equity securities which may be issued upon the exercise of the rights
represented by this Warrant, upon issuance and payment therefore in accordance
herewith, will be duly authorized, validly issued, fully

                                     -2-
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paid, and nonassessable shares of capital stock of the Company. The Company
further covenants and agrees that, during the period within which the stock
purchase rights represented by this Warrant may be exercised, the Company will
at all times have duly authorized and duly reserved for issuance upon the
exercise of the purchase rights evidenced by this Warrant a number of shares of
its Common Stock sufficient for such issuance.

         4.       TRANSFER, EXCHANGE, OR LOSS OF WARRANT.

                  (a) This Warrant may not be assigned or transferred except as
provided in this Section 4 and in accordance with and subject to the provisions
of the Securities Act of 1933, as amended, and the Rules and Regulations
promulgated thereunder (collectively, the "Securities Act"). Any purported
transfer or assignment made other than in accordance with this Section 4 shall
be null and void and of no force or effect.

                  (b) Prior to any transfer of this Warrant, other than in an
offering registered under the Securities Act, the Holder shall notify the
Company of its intention to effect such transfer, indicating the circumstances
of the proposed transfer and, upon request, furnish the Company with an opinion
of its counsel, in form and substance satisfactory to counsel for the Company,
to the effect that the proposed transfer may be made without registration under
the Securities Act or qualification under any applicable state securities laws.
The Company will promptly notify the Holder if the opinion of counsel furnished
to the Company is satisfactory to counsel for the Company. Unless the Company
notifies the Holder within ten (10) days after its receipt of such opinion that
such opinion is not satisfactory to counsel for the Company, the Holder may
proceed to effect the transfer.

                  (c) Unless a registration statement under the Securities Act
is effective with respect to the Shares or any other security issued upon
exercise of this Warrant, the certificate representing such Shares or other
securities shall bear the following legend, in addition to any legend imposed by
applicable state securities laws:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NO SALE OR
         DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR WRITTEN CONSENT OF THE
         COMPANY OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
         OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY,
         THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A
         NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

                  (d) Upon receipt by the Company of satisfactory evidence of
loss, theft, destruction, or mutilation of this Warrant and of indemnity
satisfactory to the Company, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date and any such lost, stolen, or destroyed Warrant shall
thereupon become void. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not the Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.

         5.       NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which such holder would otherwise be
entitled, such holder shall be entitled, at its option, to receive either (i) a
cash payment equal to the excess of the Fair Market Value for such fractional
share above the Exercise

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Price for such fractional share (as mutually determined by the Company and the
Holder) or (ii) a whole share if the Holder tenders the Exercise Price for one
whole share.

         6.       NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the
holder hereof to any voting rights, dividend rights, or other rights as a
shareholder of the Company prior to the exercise hereof.

         7.       SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday or a Sunday or a legal holiday.

         8.       ADJUSTMENTS.  The Exercise Price per Share and the number of
Shares purchasable hereunder shall be subject to adjustment from time to time
as follows:

                  (a) MERGER. If at any time there shall be a merger or
consolidation of the Company with or into another corporation when the Company
is not the surviving corporation, then, as a part of such merger or
consolidation, lawful provision shall be made so that the holder of this Warrant
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the aggregate Exercise Price
then in effect, the number of shares of stock or other securities or property of
the successor corporation resulting from such merger or consolidation, to which
a holder of the stock deliverable upon exercise of this Warrant would have been
entitled in such merger or consolidation if this Warrant had been exercised
immediately before such merger or consolidation. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the merger or
consolidation.

                  (b) RECLASSIFICATION, ETC. If the Company shall, at any time,
by subdivision, combination, or reclassification of securities or otherwise,
change any of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any other class or
classes, the Exercise Price shall be adjusted such that this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change.

                  (c) SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the
Company at any time while this Warrant remains outstanding and unexpired shall
split, subdivide or combine the securities as to which purchase rights under
this Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination.

         9.       NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price or
number of Shares issuable upon exercise hereof shall be adjusted pursuant to
Section 8 hereof, the Company shall issue a written notice setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Exercise
Price and number of Shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such notice to be mailed to the holder of
this Warrant.

         10.      MISCELLANEOUS.

                  (a) SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon
any successors or assigns of the Company.

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                  (b) GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of California as applied to
agreements between California residents entered and to be performed entirely
within California.

                  (c) ATTORNEYS' FEES. In any litigation, arbitration, or court
proceeding between the Company and the holder relating hereto, the prevailing
party shall be entitled to reasonable attorneys' fees and expenses incurred in
enforcing this Warrant.

                  (d) AMENDMENTS. This Warrant may be amended and the observance
of any term of this Warrant may be waived only with the written consent of the
Company and the holders of then-outstanding Warrants exercisable for a majority
of the shares of the Company's Common Stock then issuable upon exercise of all
outstanding unexercised Warrants sold pursuant to the Purchase Agreement.

                  (e) NOTICE. Any notice, request, or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered, sent by facsimile, or mailed by
registered or certified mail, postage prepaid, or by recognized overnight
courier or personal delivery at the respective addresses or facsimile number of
the parties as set forth below. Any Party hereto may by notice so given change
its address for future notice hereunder. Notice shall conclusively be deemed to
have been given when received.

                  If to the Holder:       At the address set forth for the
                                          Holder in the Schedule of Purchasers
                                          to the Purchase Agreement.

                  If to the Company:      Monolithic System Technology, Inc.
                                          2670 Seeley Road
                                          San Jose, California 95134
                                          ATTN:  Wayne B. Snyder,
                                                 Chief Financial Officer
                                          FAX:   (408) 321-0780

                  (f) INVESTOR RIGHTS. All Shares issuable upon exercise of this
Warrant are subject to the registration rights provisions of the Second Amended
and Restated Investor Rights Agreement dated July 26, 1995 (the "Rights
Agreement"), as such agreement may be amended from time to time, as evidenced by
an Addendum to the Rights Agreement executed by the original holder of this
Warrant in connection with its purchase of the Notes and this Warrant pursuant
to the Purchase Agreement.

                [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the Company and the Holder have caused this Common
Stock Purchase Warrant Agreement to be executed as of the date first above
written.

                                       MONOLITHIC SYSTEM TECHNOLOGY, INC.

                                       By:
                                          -------------------------------------
                                       Name:
                                            -----------------------------------
                                       Title:
                                             ----------------------------------

Acknowledged and Agreed:

-----------------------------------

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

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

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

                                     -6-<PAGE>

                                                                   Exhibit 10.19

                       MONOLITHIC SYSTEM TECHNOLOGY, INC.
                       NOTE AND WARRANT PURCHASE AGREEMENT
                               (U.S. SUBSCRIBERS)

         This Subordinated Note and Warrant Purchase Agreement (the "Agreement")
is made as of June ___, 1996, by and among Monolithic System Technology, Inc., a
California corporation with its principal office located at 2670 Seeley Road,
San Jose, California 95134 (the "Company"), and each of the persons and entities
listed on the Schedule of Purchasers attached hereto as EXHIBIT A (the
"Purchasers").

                                    SECTION 1

                        SALE OF NOTES AND STOCK WARRANTS

         1.1      AUTHORIZATION. The Company has authorized the sale and
issuance of up to $15,000,000 in aggregate principal amount of indebtedness,
which shall be represented by promissory notes in the form attached hereto as
EXHIBIT B (each, a "Note," and collectively, the "Notes"). The Company has
further authorized the issuance to the Purchasers of warrants in substantially
the form attached hereto as EXHIBIT C (each, a "Warrant," and collectively, the
"Warrants") to acquire up to an aggregate maximum of 1,153,847 shares of the
Company's Common Stock, subject to adjustment of the exercise price and number
of shares as set forth therein.

         1.2      SALE OF THE NOTES. Subject to the terms and conditions of this
Agreement, each Purchaser severally agrees to lend to the Company the sum set
forth in Column 2 of EXHIBIT A, and the Company agrees to issue to each such
Purchaser upon delivery by the Purchaser to the Company of the aggregate
consideration therefor, a Note in such principal amount.

         1.3      SALE OF THE WARRANTS. Subject to the terms and conditions of
this Agreement, the Purchaser agrees to purchase and the Company agrees to issue
to each Purchaser a Warrant exercisable for the number of shares of the
Company's Common Stock set forth in Column 3 of EXHIBIT A opposite such
Purchaser's name, subject to adjustment of the exercise price and number of
shares as set forth in such Purchaser's respective Warrant. The shares of the
Company's Common Stock issued or issuable upon exercise of the Warrants are
referred to herein as the "Warrant Stock." The Company's agreements with each of
the Purchasers are separate agreements, and the sales of the Notes and the
Warrants to each of the Purchasers are separate sales.

         1.4      BIFURCATED OFFERING. Each of the Purchasers acknowledges and
agrees that the Company proposes to sell and issue the Notes and the Warrants
pursuant to this Agreement in reliance on the exemption(s) from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
set forth in Section 4(2) thereof and/or Regulation D promulgated thereunder.
Each of the Purchasers acknowledges and agrees that the Company proposes to sell
and

<PAGE>

issue a portion of the Notes and the Warrants outside the United States pursuant
to the exemption from the registration requirements of the Securities Act set
forth in Regulation S promulgated thereunder. Each Purchaser acknowledges and
agrees that the Notes and the Warrants to be sold outside the United States will
be sold pursuant to a separate purchase agreement (the "Foreign Purchase
Agreement") containing financial terms and conditions materially equivalent to
those set forth in this Agreement and the forms of Note and Warrant used in
connection herewith, PROVIDED, HOWEVER, that the Company shall obtain such
representations and warranties of the Purchasers and shall enter such covenants
as are necessary to ensure compliance with applicable securities laws. A list of
those individuals and entities purchasing the Notes and Warrants pursuant to the
Foreign Purchase Agreement is set forth in the Schedule of Foreign Purchasers
attached hereto as EXHIBIT A-1.

                                    SECTION 2

                             CLOSING DATE; DELIVERY

         2.1      MULTIPLE CLOSING DATES. The Company may schedule closings of
the purchase and sale of the Notes and Warrants hereunder (each, a Closing) on
such date or dates prior to June 7, 1996 as the Company may determine; PROVIDED,
HOWEVER, that the Company's Board of Directors may extend the date of the final
Closing at its discretion and provided further that the Company may accept
subscriptions as received. Purchasers purchasing Notes and Warrants at each
Closing shall be deemed to become parties to this Agreement as if all Purchasers
had purchased Notes and Warrants simultaneously at a single Closing. At each
Closing, the Schedule of Purchasers attached hereto shall be amended to include
all Purchasers purchasing at such Closing and all Purchasers who purchased at
any prior Closing. Upon the Company's termination of its offering of the Notes
and the Warrants, the Company shall provide to each Purchaser a revised Schedule
of Purchasers identifying all Purchasers who purchased Notes and Warrants at any
Closing and a revised Schedule of Foreign Purchasers identifying all purchasers
who purchased Notes and Warrants pursuant to the Foreign Purchase Agreement.

         2.2      DELIVERY. At each Closing, the Company will deliver to each
Purchaser purchasing at such Closing a Note in the principal amount set forth
opposite such Purchaser's name in Column 2 of EXHIBIT A and a Warrant initially
exercisable for the number of shares of Common Stock set forth opposite such
Purchaser's name in Column 3 of EXHIBIT A. Such delivery shall be made against
payment to the Company of the principal amount of such Purchaser's Note (as set
forth in EXHIBIT A) by cashier's check made payable to the Company or wire
transfer according to the Company's instructions.

                                    SECTION 3

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         Except as set forth in the Schedule of Exceptions attached hereto as
EXHIBIT D, the Company hereby represents and warrants as of each Closing to the
Purchasers purchasing Notes and Warrants at such Closing as follows:

<PAGE>

         3.1      ORGANIZATION AND STANDING. The Company is a corporation duly
organized and existing under, and by virtue of, the laws of the State of
California and is in good standing under such laws. The Company has requisite
corporate power to own and operate its properties and assets and to carry on its
business as presently conducted. The Company is presently qualified to do
business in each state in which the failure to be so qualified would have a
material adverse effect on the Company's business as now conducted.

         3.2      CORPORATE POWER. The Company will have at the Closing Date all
requisite legal and corporate power to execute and deliver this Agreement, to
sell and issue the Notes and Warrants hereunder, to issue the Warrant Stock
issuable upon exercise of the Warrants, and to carry out and perform its
obligations under the terms of this Agreement.

         3.3      CAPITALIZATION. At each Closing, the authorized capital stock
of the Company will consist of 30,000,000 shares of Common Stock, of which
8,836,860 shares are issued and outstanding and 5,000,000 shares of Preferred
Stock, of which 500,000 shares have been designated as Series A Preferred Stock,
all of which are issued and outstanding; of which 1,000,000 shares have been
designated as Series B Preferred Stock, all of which are issued and outstanding;
of which 1,100,000 shares have been designated as Series C Preferred Stock,
1,010,000 of which are issued and outstanding; of which 300,000 shares have been
designated as Series D Preferred Stock, all of which are issued and outstanding;
of which 420,000 shares have been designated Series E Preferred Stock, of which
264,487 shares are issued and outstanding; and of which 166,667 shares have been
designated as Series I Preferred Stock, none of which is issued and outstanding.
All such issued and outstanding shares have been duly authorized and validly
issued and are fully paid and nonassessable. The Company has reserved (or will
reserve prior to the Closing) (i) 9,223,461 shares of Common Stock for issuance
upon conversion of the outstanding Series A, Series B, Series C, Series D, and
Series E Preferred Stock, (ii) 3,300,000 shares of Common Stock for issuance to
employees and consultants of the Company under the Company's 1992 Stock Option
Plan, (iii) 2,000,000 shares of Common Stock for issuance to employees and
consultants of the Company under the Company's 1996 Stock Option Plan, (iv)
1,153,847 shares for issuance upon exercise of the Warrants, and (v) 384,616
shares for issuance to Tseng Labs, Inc. ("Tseng"), a Utah corporation, upon
exercise of a warrant granted to Tseng in connection with certain debt financing
provided by Tseng.

         3.4      AUTHORIZATION. Prior to initial Closing, the Company will have
taken all requisite corporate action to execute and deliver this Agreement, to
sell and issue the Notes and the Warrants (and the Common Stock issuable upon
exercise of the Warrants), and to carry out and perform all of its obligations
under the terms of this Agreement. This Agreement, when executed and delivered
by the Company, shall constitute a valid and binding obligation of the Company
enforceable in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency, and the relief of debtors and rules of law
governing specific performance, injunctive relief, or other equitable remedies.
The Notes and the Warrants, when issued in compliance with the provisions of
this Agreement, will be validly issued and will be free of any liens and
encumbrances, assuming the Purchasers take the Notes and the Warrants with no
notice thereof, other than any liens or encumbrances created by or imposed upon
the Purchasers. The Warrant Stock has been duly and validly reserved and, when
issued in compliance with the provisions of this Agreement and the Warrants,
will be validly issued, fully paid, and nonassessable and will be free of any
liens or encumbrances, assuming the Purchasers take the Warrant Stock with no
notice thereof, other than any liens or encumbrances created by or imposed upon
the Purchasers; PROVIDED, HOWEVER, that the Notes,

<PAGE>

the Warrants, and the Warrant Stock may be subject to restrictions on transfer
under applicable state and/or federal securities laws and as set forth herein.

         3.5      COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation of any term of its Articles of Incorporation or Bylaws, as each are
amended to date, or, in any material respect, of any term or provision of any
mortgage, indebtedness, indenture, contract, agreement, instrument, judgment, or
decree and is not in violation of any order, statute, rule, or regulation
applicable to the Company where such violation would materially and adversely
affect the Company. The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated herein and the issuance of
the Warrant Stock have not resulted and will not result in any violation of, or
conflict with, or constitute a default under the Company's Articles of
Incorporation or Bylaws, as each are amended to date, any of the Company's
agreements, or any applicable statute, rule, regulation, order, or restriction
of any federal or state governmental entity or agency thereof nor result in the
creation of any mortgage, pledge, lien, encumbrance, or charge upon any of the
properties or assets of the Company.

         3.6      LITIGATION. There are no actions, suits, proceedings, or
investigations pending against the Company or its properties before any court or
governmental agency (nor, to the best of the Company's knowledge, is there any
basis therefor or threat thereof), which, either in any case or in the
aggregate, might result in any material adverse change in the business or
financial condition of the Company or any of its properties or assets, or in any
material impairment of the right or ability of the Company to carry on its
business as now conducted or as proposed to be conducted, or in any material
liability on the part of the Company.

                                    SECTION 4

                    INVESTMENT REPRESENTATIONS OF PURCHASERS

         Each Purchaser hereby severally represents and warrants to the Company
with respect to the purchase of the Notes and the Warrants as follows:

         4.1      EXPERIENCE. It has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to the Company so that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests.

         4.2      INVESTMENT. It is acquiring the Notes, the Warrants, and the
Warrant Stock for investment for its own account, not as a nominee or agent, and
not with the view to, or for resale in connection with, any distribution
thereof. It understands that the Notes, the Warrants, and the Warrant Stock have
not been, and when issued will not be, registered under the Securities Act of
1933, as amended (the "Securities Act"), by reason of a specific exemption from
the registration provisions of the Securities Act, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and accuracy of such Purchaser's representations as expressed herein and in
response to the Company's inquiries.

         4.3      TRANSFERABILITY. It acknowledges that the Notes, the Warrants,
and the Warrant Stock must be held indefinitely unless subsequently registered
under the Securities Act or unless an

<PAGE>

exemption from such registration is available. It understands and acknowledges
that the Company is under no obligation to register the Notes, the Warrants, or
the Warrant Stock except as set forth in the Addendum to the Second Amended and
Restated Investor Rights Agreement (the "Rights Agreement") dated as of July 26,
1995 to be executed by the Company and the Purchaser (the "Addendum") in
connection with the sale of the Notes and the Warrants. It understands that the
Notes, the Warrants, and the Warrant Stock may be imprinted with a legend which
prohibits the transfer of such securities unless they are registered under the
Securities Act or such registration is not required in the opinion of counsel
for the Company.

         4.4      RULE 144. It acknowledges that it is familiar with the
provisions of Rule 144 promulgated under the Securities Act ("Rule 144"), which,
in substance, permit limited public resale of "restricted securities" acquired,
directly or indirectly, from the issuer thereof (or from an affiliate of such
issuer), in a non-public offering, subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the Company's securities, the availability of certain public information about
the Company, the resale occurring not less than two years after the party has
purchased and paid for the securities to be sold, and the sale being effected
through a broker in an unsolicited "broker transaction" or in a transaction
directly with a "market maker" and the number of shares being sold during any
three-month period not exceeding specified limitations.

         4.5      NO PUBLIC MARKET. It understands that no public market now
exists for any of the securities issued by the Company and that the Company has
made no assurances that a public market will ever exist for the Company's
securities. It understands that even if such a public market exists in the
future, the Company may not, at the time such Purchaser wishes to sell the
Notes, the Warrants, or the Warrant Stock, be satisfying the current public
information requirements of Rule 144, and that, in such event, it would be
precluded from selling such securities under Rule 144 even if the two-year
minimum holding period had been satisfied.

         4.6      ACCESS TO DATA. It has received all the information it
considers necessary or appropriate for deciding whether to acquire the Notes and
the Warrants. It has had an opportunity to discuss the Company's business,
management, and financial affairs with the Company's management and has had the
opportunity to review the Company's facilities. It has also had an opportunity
to ask questions of officers of the Company concerning the terms of this
offering, which questions were answered to its satisfaction. It understands that
such discussions, as well as any written information issued by the Company were
intended to describe certain aspects of the Company's business and prospects but
were not a thorough or exhaustive description. It acknowledges that any
estimates or projections as to events that may occur in the future are based on
the best judgment of the Company's management as of the date of this Agreement
and that whether or not such estimates or projections may be achieved will
depend upon the Company's achieving its overall business objectives, including
the availability of funds from the sale of the Notes and the Warrants hereby. It
acknowledges that there can be no assurances that any projections will be
attained.

         4.7      AUTHORIZATION. This Agreement and the Addendum, when executed
and delivered by the Purchaser, will constitute a valid and legally binding
obligation of such Purchaser, enforceable in accordance with its terms.

         4.8      RESPONSIBILITY FOR TAX CONSEQUENCES. It has had an opportunity
to review the federal, state, local, and foreign tax consequences of this
investment and the transactions contemplated by this

<PAGE>

Agreement (including any tax consequences that may result now or in the future
under recently enacted tax legislation) and has had the opportunity to consult
with such tax advisors as it deems appropriate regarding such consequences. It
acknowledges that it is not relying on any statements or representations of the
Company or its agents in regard to such tax consequences and understands that it
(and not the Company) shall be responsible for its own tax liability that may
arise as a result of this investment or the transactions contemplated by this
Agreement. It acknowledges that the Company has no obligation in regard to the
future conduct of its business, or to act or refrain from acting in any manner,
regardless of the loss of any tax benefit to the Purchaser in connection with
the purchase, ownership, or sale of the Notes, the Warrants, or the Warrant
Stock.

         4.9      NO LEGAL, TAX, OR INVESTMENT ADVICE. It understands that
nothing in this Agreement or any other material presented to it in connection
with the purchase and sale of the Notes, the Warrants, or the Warrant Stock
constitutes legal, tax, or investment advice. It has consulted such legal, tax,
and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Notes and the Warrants.

         4.10     GOVERNMENT APPROVALS. The Purchaser has obtained, or obtained
waivers of, all governmental consents, waivers, approvals, and permits required
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated thereby.

                                    SECTION 5

                              CONDITIONS TO CLOSING

         The Purchasers' and the Company's obligations to purchase and to sell
and issue, respectively, the Notes and Warrants at the Closing are subject to
the fulfillment on or prior to the Closing Date of the following conditions:

         5.1      REPRESENTATIONS AND WARRANTIES OF COMPANY. The representations
and warranties made by the Company in Section 3 hereof shall be true and correct
when made and shall be true and correct on the Closing Date.

         5.2      REPRESENTATIONS AND WARRANTIES OF PURCHASERS. The
representations made by the Purchasers in Section 4 hereof shall be true and
correct when made and shall be true and correct on the Closing Date.

         5.3      BLUE SKY COMPLIANCE. The Company shall have obtained all
necessary blue sky law permits and qualifications, or secured exemptions
therefrom, required by any state for the offer and sale of the Notes and the
Warrants.

         5.4      RIGHTS AGREEMENT. The Company and each Purchaser shall have
executed the Addendum pursuant to which the Warrant Stock shall become subject
to the registration rights provisions of the Rights Agreement.

<PAGE>

                                    SECTION 6
                                  MISCELLANEOUS

         6.1      ENTIRE AGREEMENT. This Agreement and the other documents
delivered pursuant hereto at the Closing constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and no party shall be liable or bound to the other in any
manner by any warranties, representations, or covenants except as specifically
set forth herein or therein.

         6.2      SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto;
PROVIDED, HOWEVER, that the rights of a Purchaser to purchase the Notes and the
Warrants shall not be assignable without the consent of the Company.

         6.3      AMENDMENT BY AGREEMENT. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged,
or terminated other than by a written instrument signed by the party against
whom enforcement of any such amendment, waiver, discharge, or termination is
sought, PROVIDED, HOWEVER, that any provision of this Agreement may be waived,
modified, or amended with the written consent of the Company and a
majority-in-interest of the holders of the Notes.

         6.4      NOTICES. Any notice, request, or other communication required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered, sent by facsimile, or mailed by registered or
certified mail, postage prepaid, or by recognized overnight courier or personal
delivery at the respective addresses or facsimile phone number of the parties as
set forth below. Any party hereto may by notice so given change its address for
future notice hereunder. Notice shall conclusively be deemed to have been given
when received.

<TABLE>

<S>                                        <C>
                  If to a Purchaser:       At the address set forth in the Schedule of Purchasers

                  If to Company:           Monolithic System Technology, Inc.
                                           2670 Seeley Road
                                           San Jose, California 95134
                                           ATTN:  Wayne B. Snyder, Chief Financial Officer
                                           FAX:  (408) 321-0780

</TABLE>

         6.5      SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
severed from this Agreement as if such provision(s) were not included, and the
balance of this Agreement shall be enforceable in accordance with its terms.

         6.6      EXPENSES. The Company and each Purchaser shall bear its own
expenses and legal fees incurred on its behalf with respect to this Agreement
and the transactions contemplated hereby.

<PAGE>

         6.7      CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEEPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION, OR EXEMPTION THEREFROM, IS UNLAWFUL. THE
RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION, OR EXEMPTION THEREFROM, BEING OBTAINED.

         6.8      GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
between California residents entered and to be performed entirely within
California.

         6.9      COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         6.10     TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Subordinated
Note and Warrant Purchase Agreement as of the date first above written.

"COMPANY"                      MONOLITHIC SYSTEM TECHNOLOGY, INC.
                               a California corporation

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

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

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

"PURCHASER"
                               ----------------------------------------------

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

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

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

       [SIGNATURE PAGE TO SUBORDINATED NOTE AND WARANT PURCHASE AGREEMENT]
                                [U.S. SUBSCRIBER]

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