Document:

Form of Subscription Agreement

 Exhibit 10.1 
 Form of Subscription Terms 
 NeoMagic Corporation 
 3250 Jay Street 
 Santa Clara, California 95054 
 Ladies and Gentlemen: 
 The undersigned (the “Investor”) hereby confirms and agrees with you as follows:

 1. The subscription terms set forth herein (the “Subscription”) are made as of the date set forth below between NeoMagic
Corporation, a Delaware corporation (the “Company”), and the Investor. 
 2. As of the Closing (as defined below) and subject to the
terms and conditions hereof, the Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to the Investor (i) such number of shares (the “Shares”) of common stock, par
value $0.001 per share, of the Company (the “Common Stock”), and (ii) such number of Warrants to purchase Common Stock (the “Warrants” in the form attached hereto as Exhibit B, and together with the
Shares, the “Securities”) as is set forth on the signature page hereto (the “Signature Page”) for a purchase price of $4.58 per Security. The Investor acknowledges that the offering is not a firm commitment
underwriting and that there is no minimum offering amount. 
 3. The completion of the purchase and sale of the Securities shall occur at a closing
(the “Closing”) that, in accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended, is expected to occur on or about December 6, 2006. At the Closing, (a) the Company shall cause its
transfer agent to release to the Investor the number of Securities being purchased by the Investor and (b) the aggregate purchase price for the Securities being purchased by the Investor will be delivered by or on behalf of the Investor to the
Company. The Investor shall settle the Shares via DWAC and the provisions set forth in Exhibit A hereto shall be incorporated herein by reference as if set forth fully herein. 
 4. The offering and sale of the Securities are being made pursuant to the Registration Statement and the Prospectus (as such terms are defined below). The Investor acknowledges that the Company intends to enter
into subscriptions in substantially the same form as this Subscription with certain other investors and intends to offer and sell (the “Offering”) up to an aggregate of 2,500,000 shares of Common Stock and Warrants to purchase
1,250,000 shares of Common Stock pursuant to the Registration Statement and Prospectus. The Investor acknowledges and agrees that there is no minimum offering amount. 
 5. The Company has filed with the Securities and Exchange Commission (the “Commission”) a prospectus (the “Base Prospectus”) and a final prospectus supplement (collectively,
the “Prospectus”) with respect to the registration statement (File No. 333-133088) reflecting the Offering, including all amendments thereto, the exhibits and any schedules thereto, the documents otherwise deemed to be a part
thereof or included therein by the rules and regulations of the Commission (the “Rules and Regulations”) and any registration statement relating to the Offering and filed pursuant to Rule 462(b) under the Rules and Regulations
(collectively, the “Registration Statement”), in conformity with the Securities Act of 1933, as amended (the “Securities Act”), including Rule 424(b) thereunder. The Investor hereby confirms that it has had full
access to the Base Prospectus and the Company’s periodic reports and other information incorporated by reference therein, and was able to read, review, download and print such materials. 

 6. The Company has entered into a Placement Agency Agreement (the “Placement Agreement”), dated
November 30, 2006 with A.G. Edwards & Sons, Inc. (the “Placement Agent”), which will act as the Company’s placement agent with respect to the Offering and receive a fee in connection with the sale of the
Securities. The Placement Agreement contains certain representations and warranties of the Company. The Company acknowledges and agrees that the Investor may rely on the representations and warranties made by it to the Placement Agent in
Section 3 of the Placement Agreement in the form attached hereto as Exhibit C, to the same extent as if such representations and warranties had been incorporated in full herein and made directly to the Investor. Capitalized terms used,
but not otherwise defined, herein shall have the meanings ascribed to such terms in the Placement Agreement. 
 7. The obligations of the Company and
the Investor to complete the transactions contemplated by this Subscription shall be subject to the following: 
 a. The Company’s
obligation to issue and sell the Securities to the Investor shall be subject to: (i) the receipt by the Company of the purchase price for the Securities being purchased hereunder as set forth on the Signature Page and (ii) the accuracy of
the representations and warranties made by the Investor and the fulfillment of those undertakings of the Investor to be fulfilled prior to the Closing Date. 
 b. The Investor’s obligation to purchase the Securities will be subject to the condition that the Placement Agent shall not have: (i) terminated the Placement Agreement pursuant to the terms thereof or
(ii) determined that the conditions to closing in the Placement Agreement have not been satisfied. 
 8. The Company hereby makes the following
representations, warranties and covenants to the Investor: 
 a. The Company has the requisite corporate power and authority to enter into and
to consummate the transactions contemplated by this Subscription and otherwise to carry out its obligations hereunder. The execution and delivery of this Subscription by the Company and the consummation by it of the transactions contemplated
hereunder have been duly authorized by all necessary action on the part of the Company. This Subscription has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation
of the Company enforceable against the Company in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’
rights generally or by general principles of equity. 
 b. The Company shall (i) before the opening of trading on The Nasdaq Global
Market on the next trading day after the date hereof, issue a press release, disclosing all material aspects of the transactions contemplated hereby and (ii) make such other filings and notices in the manner and time required by the Commission
with respect to the transactions contemplated hereby. The Company shall not identify the Investor by name in any press release or public filing, or otherwise publicly disclose the Investor’s name, without the Investor’s prior written
consent, unless required by law or the rules and regulations of any self-regulatory organization which the Company or its securities are subject. 
 9.
The Investor hereby makes the following representations, warranties and covenants to the Company: 
 a. The Investor represents that
(i) it has had full access to the Base Prospectus, the Prospectus Supplement and the Company’s periodic reports and other information incorporated by reference therein, prior to or in connection with its receipt of this Subscription,
(ii) it is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in securities representing an investment decision like that involved in the purchase of the Securities, and (iii)
it does not have any agreement or understanding, directly or indirectly, with any person or entity to distribute any of the Securities. 
  

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 b. The Investor has the requisite power and authority to enter into this Subscription and to consummate
the transactions contemplated hereby. The execution and delivery of this Subscription by the Investor and the consummation by it of the transactions contemplated hereunder have been duly authorized by all necessary action on the part of the
Investor. This Subscription has been executed by the Investor and, when delivered in accordance with the terms hereof, will constitute a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
 c. The Investor
understands that nothing in this Subscription or any other materials presented to the Investor in connection with the purchase and sale of the Securities constitutes legal, tax or investment advice. The Investor 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 Securities. 
 d.
Neither the Investor nor any Person acting on behalf of, or pursuant to any understanding with or based upon any information received from, the Investor has, directly or indirectly, as of the date of this Subscription, engaged in any transactions in
the securities of the Company (including, without limitation, any Short Sales involving the Company’s securities) since the earlier to occur of (i) the time that the Investor was first contacted by the Placement Agent or the Company with
respect to the transactions contemplated hereby and (ii) the date that is the tenth (10th) trading day
prior to the date of this Subscription. “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). The Investor covenants that neither it, nor any Person acting on behalf of, or pursuant to any understanding with or based upon any information received from, the Investor will engage in any transactions in the
securities of the Company (including, without limitation, Short Sales) prior to the time that the transactions contemplated by this Subscription are publicly disclosed. 
 e. The Investor represents that, except as set forth below, (i) it has had no position, office or other material relationship within the past three years with the Company or persons known to it to be affiliates
of the Company, (ii) it is not a, and it has no direct or indirect affiliation or association with any, NASD member or an Associated Person (as such term is defined under the NASD Membership and Registration Rules Section 1011) as of the
date hereof, and (iii) neither it nor any group of investors (as identified in a public filing made with the Commission) of which it is a member, acquired, or obtained the right to acquire, 20% or more of the Common Stock (or securities
convertible or exercisable for Common Stock) or the voting power of the Company on a post-transaction basis. Exceptions: 
  

 (If no exceptions, write “none.” If left blank, response will be deemed to be “none.”) 
 10. Notwithstanding any investigation made by any party to this Subscription, all covenants, agreements, representations and warranties made by the Company and
the Investor herein will survive the execution of this Subscription, the delivery to the Investor of the Securities being purchased and the payment therefor. 
 11. If, at the time the Company files its Annual Report on Form 10-K for the fiscal year ended January 28, 2007 (the “Annual Report”), the Company does not meet the Transaction Requirements for a 
  

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 primary offering by the Company set forth in Section I.B.1. of the General Instructions to Form S-3 (or any equivalent
successor provision), as interpreted by the staff of the Commission, thus rendering the Registration Statement and the Prospectus used to issue the Securities in the Offering ineffective, the Company shall, within ninety (90) days prior to the
one-year anniversary of the Closing Date, prepare and file with the Commission a registration statement on an appropriate form (the “Resale Registration Statement”) in accordance with the Securities Act and the Exchange Act covering
the resale of the shares of Common Stock underlying the Warrants. The Company shall use its reasonable efforts to have the Resale Registration Statement declared effective by the Commission as soon as possible after the initial filing, and in any
event no later than sixty (60) days after the initial filing, and agrees to use its reasonable efforts to respond promptly to any Commission comments or questions regarding the Resale Registration Statement. The Company will maintain the
effectiveness of the Resale Registration Statement from the date of the effectiveness of the Resale Registration Statement until the earlier to occur of (i) the expiration of the Warrants and (ii) the date all of the shares of Common Stock
underlying the Warrants have been sold or may be sold pursuant to Rule 144(k) under the Securities Act. 
 12. This Subscription may not be modified
or amended except pursuant to an instrument in writing signed by the Company and the Investor. 
 13. In case any provision contained in this
Subscription should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby. 
 14. This Subscription will be governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to the principles
of conflicts of law that would require the application of the laws of any other jurisdiction. 
 15. This Subscription may be executed in one or more
counterparts, each of which will constitute an original, but all of which, when taken together, will constitute but one instrument, and will become effective when one or more counterparts have been signed by each party hereto and delivered to the
other parties. 
 16. The Investor acknowledges and agrees that such Investor’s receipt of the Company’s counterpart to this Subscription
shall constitute written confirmation of the Company’s sale of Securities to such Investor. 
 17. In the event that the Placement
Agreement is terminated by the Placement Agent pursuant to the terms thereof, this Subscription shall terminate without any further action on the part of the parties hereto. 
  

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 INVESTOR SIGNATURE PAGE 
 Number of
Shares:                                       
                  
 Number of
Warrants:                                      
                   
 (such number to be equal to 50% of the
number of Shares being purchased by the Investor) 
 Purchase Price Per Security:
$                                        

 Aggregate Purchase Price:
$                                        
     
 Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for
that purpose. 
 Dated as of:             , 2006 
  

											
	  
	  		  		  	
	INVESTOR	  		  		  		  	
					
	By:	  	  
	  		  		  	
	Print Name:	  	  
	  		  		  	
	Title:	  	  
	  		  		  	
	Name that Securities are to be registered:	  	  
	  		  	

											
	Mailing Address:	  	  
	  		  		  	
		  	  
	  		  		  	
		  	  
	  		  		  	

 Taxpayer Identification Number:
                                        
                 
 Manner of Settlement of the Shares: DWAC (see
Exhibit A for explanation and instructions) 
 Agreed and Accepted this
             day of
                                 2006: 
 NEOMAGIC CORPORATION 
  

			
	By:	 	  

	Title:	 	  

 Sales of the Securities purchased hereunder were made pursuant to a registration statement or in a transaction
in which a final prospectus would have been required to have been delivered in the absence of Rule 172 promulgated under the Securities Act. 
  

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 EXHIBIT A 
 TO BE COMPLETED BY INVESTOR 
 SETTLING VIA DWAC 
 Delivery by electronic book-entry at The Depository Trust Company (“DTC”), registered in the Investor’s name and address as set forth on the
Signature Page of the Subscription to which this Exhibit A is attached, and released by Computershare Investor Services, the Company’s transfer agent (the “Transfer Agent”), to the Investor at the Closing. 
  

			
	 Name of DTC Participant (broker-dealer at
 which the
account or accounts to be credited with
 the Shares are maintained)
	  	  

		
	DTC Participant Number	  	  

		
	Name of Account at DTC Participant being credited with the Shares	  	  

		
	Account Number at DTC Participant being credited with the Shares	  	  

 NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THE SUBSCRIPTION TO WHICH THIS
EXHIBIT A IS ATTACHED BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL: 
  

	 	(I)	DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN
(“DWAC”) INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES, AND 

  

	 	(II)	REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT:

 PNC Bank New Jersey 
 ABA#: 031207607 
 Account Name: Lowenstein Sandler PC Attorney Trust Account 
 Account #: 8025720131 
 Such funds shall be
held in escrow pursuant to an escrow agreement entered into between Lowenstein Sandler PC (the “Escrow Agent”), the Placement Agent and the Company (the “Escrow Agreement”) until the Closing and delivered by the
Escrow Agent on behalf of the Investor to the Company upon the satisfaction, in the sole judgment of the Placement Agent, of the conditions set forth in Section 7(b) of the Subscription to which this Exhibit A is attached. The Company
and the Investor agree to indemnify and hold the Escrow Agent harmless from and against any and all losses, costs, damages, expenses and claims (including, without limitation, court costs and reasonable attorneys fees) (“Losses”)
with 
  

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 respect to the funds held in escrow pursuant hereto or arising under the Escrow Agreement, unless it is finally
determined that such Losses resulted directly from the willful misconduct or gross negligence of the Escrow Agent. Anything in this paragraph to the contrary notwithstanding, in no event shall the Escrow Agent be liable for any special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. 
 Investor acknowledges that the Escrow Agent acts as counsel to the Placement Agent, and shall have the right to continue to represent the Placement
Agent, in any action, proceeding, claim, litigation, dispute, arbitration or negotiation in connection with the Offering, and Investor hereby consents thereto and waives any objection to the continued representation of the Placement Agent by the
Escrow Agent in connection therewith based upon the services of the Escrow Agent under the Escrow Agreement, without waiving any duty or obligation the Escrow Agent may have to any other person. 
  

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 EXHIBIT B 
 FORM OF WARRANT 
 THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN SECTION 3 HEREOF.

 NEOMAGIC CORPORATION 
 WARRANT 
  

			
	Warrant No. __	  	Original Issue Date: December 6, 2006

 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, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to $5.20 per share (as adjusted from time to time as
provided herein, the “Exercise Price”), at any time and from time to time on or after the date occurring one year after the Closing Date (the “Anniversary Date”) (or earlier as provided in
Section 4(a) hereof) and through and including December 6, 2011 (the “Expiration Date”), and subject to the following terms and conditions: 
 This Warrant is one of a series of warrants issued pursuant to that certain Securities Subscription Agreement, dated November 30, 2006, by and among
the Company and the Purchasers identified therein (the “Purchase Agreement”). All such warrants are referred to herein, collectively, as the “Warrants.” The original issuance of the Warrants by the
Company pursuant to the Purchase Agreement has been registered pursuant to a Registration Statement on Form S-3 (File No. 333-133088) (the “Registration Statement”). 
 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 Purchase 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. 
  

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 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 Purchase Agreement, to the Company at its address specified in the Purchase
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 in respect of this Warrant. 
 (c) This Warrant may only be transferred to a transferee who is an “accredited investor.” In the event that the Registration Statement is not effective at any time that this Warrant is exercised and this
Warrant is exercised for cash pursuant to Section 10(a), (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 Securities Act of 1933, 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 Securities Act of 1933. 
 4. Exercise and Duration of Warrants. 
 (a) All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by Section 10 of this Warrant at any time and from time to time on or after the Trigger Date (as defined in Section 4(c))
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. In addition, if cashless exercise would be permitted under Section 10(b) of this Warrant, then all or part of this Warrant may be exercised by the registered Holder utilizing such cashless
exercise provisions at any time, or from time to time, on or after the date occurring six months after the Closing Date (the “Six-Month Date”) and through and including the Expiration Date. 
 (b) The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto (the “Exercise
Notice”), 
  

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 completed and duly signed, and (ii) if such Holder is not utilizing the cashless exercise provisions set forth in
this Warrant, 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 Purchase 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 Purchase 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 “Trigger Date” shall mean the Anniversary Date; provided, however, that if at the time that the Company files its Annual
Report on Form 10-K for the fiscal year ending January 28, 2007, the Company meets the Transaction Requirements for a primary offering by the Company set forth in Section I.B.1. of the General Instructions to Form S-3 (or any equivalent
successor provision), as interpreted by the staff of the Securities and Exchange Commission, then exercisability shall be accelerated and “Trigger Date” shall mean the Six-Month Date. 
 5. Delivery of Warrant Shares. 
 (a)
Upon exercise of this Warrant, the Company shall promptly (but in no event later than three 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 (provided that, if the Registration Statement is not then effective 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, it 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 Securities Act and all applicable state securities or blue sky laws), a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends unless the Registration Statement is not then
effective or the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144(k) under the Securities Act. The Holder, or any Person permissibly so designated by the Holder 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. 
  

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 (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 required 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 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 the date of the event giving rise to the Company’s obligation to deliver such certificate. 
 (c) To the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the
same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach
by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company
to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. 
 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. 
  

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 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 paragraph 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 paragraph shall become effective immediately after the effective date of such subdivision or combination. 
 (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 the preceding paragraph), (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 
  

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 determination of stockholders entitled to receive such distribution, the Holder shall be entitled to receive, in addition
to the Warrant Shares otherwise issuable upon such exercise (if applicable), 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, 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 “Alternate 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 the obligation to deliver to the Holder, such Alternate
Consideration as, in accordance with the foregoing provisions, the Holder may be entitled to purchase, and the other obligations under this Warrant. The provisions of this paragraph (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
paragraph (a) of this Section 9, 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. 
 (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 and 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: 
  

 -6- 

			
	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 subsection 9(e), the following subsections (e)(ii)(l) to (e)(ii)(4) shall also be applicable: 
 (1) Issuance of Rights or Options. In case 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 (which sum shall constitute the applicable consideration) 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 
  

 -7- 

 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 issue of such Common Stock or of such Convertible Securities upon exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities. 
 (2) Issuance of Convertible Securities. In case 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 (which sum shall constitute the applicable consideration) 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 issue 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 issue 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 issue 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 subsection 9(e). 
 (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)(l) hereof, the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities referred to in
subsections 9(e)(ii)(l) or 9(e)(ii)(2), or the rate at which Convertible Securities referred to in subsections 9(e)(ii)(l) 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 subsection 9(e) or any right to convert 
  

 -8- 

 or exchange Convertible Securities for which any adjustment was made pursuant to this subsection 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. In case 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. In case 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. In case any Options shall be issued in connection with the issue 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. In the event that 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, who is 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. 
 (iii) Notwithstanding the foregoing, no adjustment will be made under this paragraph (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, (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. 
  

 -9- 

 (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 $4.58 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 issue 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. 
 (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 contemplating or solicits stockholder approval for any Fundamental Transaction or
(iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then, except if 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 such transaction at least 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- 

 10. Payment of Exercise Price. The Holder may pay the Exercise Price in one of the following
manners: 
 (a) Cash Exercise. The Holder may deliver immediately available funds; or 
 (b) Cashless Exercise. If an Exercise Notice is delivered at a time when the Registration Statement (or, in lieu thereof, a resale registration
statement on Form S-3 covering the resale of the Warrant Shares) is not then effective, then the Holder may notify the Company in an Exercise Notice of its election to utilize cashless exercise, in which event the Company shall issue to the Holder
the number of Warrant Shares determined as follows: 
 X = Y [(A-B)/A] 
 where: 
 X = the number of Warrant Shares to
be issued to the Holder. 
 Y = the number of Warrant Shares with respect to which this Warrant is being exercised. 
 A = the average of the Closing Prices for the five Trading Days immediately prior to (but not including) the Exercise Date. 
 B = the Exercise Price. 
 For purposes of Rule 144
promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares
shall be deemed to have commenced, on the date this Warrant was originally issued. 
 11. Limitations on Exercise. Notwithstanding
anything to the contrary contained herein, 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 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 
  

 -11- 

 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 10% of the total number of issued and outstanding shares of Common Stock. 
 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, 3250 Jay Street, Santa Clara, California 95054 Attn: Chief Financial Officer or to facsimile number (408) 988-7030 (or such other
address 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 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 shareholders services 
  

 -12- 

 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. 
 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 New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the
transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed 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 any New York Court, or that 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 legal 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. 
 (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 validity and enforceability of the remaining 
  

 -13- 

 terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in
good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 
 (e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of by being a Holder, be entitled to any rights of a stockholder with
respect to the Warrant Shares 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, 
 SIGNATURE PAGE FOLLOWS] 
  

 -14- 

 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:	 	  

	Name:	 	Scott Sullinger
	Title:	 	Chief Financial Officer

 EXERCISE NOTICE 
 NeoMagic Corporation 
 WARRANT NO.          DATED
DECEMBER 6, 2006 
 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 intends that payment of the Exercise Price shall be made as (check one): 

 

	 	 ̈	Cash Exercise under Section 10(a) 

  

	 	 ̈	Cashless Exercise under Section 10(b) 

 (3) If the Holder has elected
a Cash Exercise, the holder shall pay the sum of $             to the Company in accordance with the terms of the Warrant. 
 (4) 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.

 (5) 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 this Warrant to which
this notice relates. 
  

			
	HOLDER:
	
	  

	(Print name)
		
	By:	 	  

		
	Title:	 	  

  

 -2- 

 WARRANT ORIGINALLY ISSUED DECEMBER 6, 2006 
 WARRANT NO.          
 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:	 		 	
			
	  
	 		 	

  

 -3- 

 EXHIBIT C 
 FORM OF REPRESENTATIONS AND WARRANTIES 
 (i) At the time of filing the Registration Statement on Form S-3 (File No. 333-133088), the Company met the requirements for use of Form S-3 under the 1933 Act for a primary offering. A Registration Statement on
Form S-3 (Registration No. 333-133088) with respect to the Securities, including a base prospectus (the “Base Prospectus”), and such amendments to such registration statement as may have been required to the date of this
Agreement, has been carefully prepared by the Company pursuant to and in conformity with the requirements of the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations thereunder (the “1933 Act
Rules and Regulations”) of the Securities and Exchange Commission (the “SEC”) and has been filed with the SEC under the 1933 Act. Such registration statement has been declared effective by the SEC. Copies of such
registration statement, including any amendments thereto, each related preliminary prospectus (meeting the requirements of Rule 430, 430A or 430B of the 1933 Act Rules and Regulations) contained therein, and the exhibits, financial statements
and schedules thereto have heretofore been delivered by the Company to the Placement Agent. A final prospectus supplement containing information permitted to be omitted at the time of effectiveness by Rule 430A or 430B of the 1933 Act Rules and
Regulations will be filed promptly by the Company with the SEC in accordance with Rule 424(b) of the 1933 Act Rules and Regulations. The term “Registration Statement” as used herein means the registration statement as amended at the
time it became effective by the SEC under the 1933 Act (the “Effective Date”), including financial statements, all exhibits and all documents incorporated by reference therein and, if applicable, the information deemed to be
included by Rule 430A or 430B of the 1933 Act Rules and Regulations. If an abbreviated registration statement is prepared and filed with the SEC in accordance with Rule 462(b) under the 1933 Act (an “Abbreviated Registration
Statement”), the term “Registration Statement” as used in this Agreement includes the Abbreviated Registration Statement. The term “Prospectus” as used herein means, together with the Base Prospectus, (i) the final prospectus supplement as first filed with the SEC pursuant to Rule 424(b) of the 1933
Act Rules and Regulations, or (ii) if no such filing is required, the form of final prospectus included in the Registration Statement at the Effective Date, including, in each case, the documents incorporated by reference therein. The term
“Preliminary Prospectus” as used herein shall mean a preliminary prospectus as contemplated by Rule 430, 430A or 430B of the 1933 Act Rules and Regulations included at any time in the Registration Statement, including the Base
Prospectus and any preliminary prospectus supplement, and including in each case the documents incorporated by reference therein. The term “Free Writing Prospectus” as used herein shall have the meaning set forth in Rule 405 of the
1933 Act. The term “Issuer Free Writing Prospectus” as used herein shall have the meaning set forth in Rule 433 of the 1933 Act Rules and Regulations. The term “Disclosure Package” as used herein shall mean the
Preliminary Prospectus as most recently amended or supplemented prior to the Initial Time of Sale (as defined below) together with the Issuer Free Writing Prospectuses identified in Schedule I hereto, if any, and any other Free Writing
Prospectus that the parties hereto shall hereafter expressly agree to treat as part of the Disclosure Package. The Preliminary Prospectus, if any, any Issuer Free Writing Prospectus required to be filed pursuant to Rule 433(d) of the 1933 Act Rules
and Regulations and the Prospectus delivered to the Placement Agent for use in connection 

 with the offering of the Securities have been and will be identical to the respective versions thereof transmitted to the
SEC for filing via the Electronic Data Gathering Analysis and Retrieval System (“EDGAR”), except to the extent permitted by Regulation S-T. For purposes of this Agreement, the words “amend,” “amendment,”
“amended,” “supplement” or “supplemented” with respect to the Registration Statement, the Prospectus, any Free Writing Prospectus or the Disclosure Package shall mean amendments or supplements to the Registration
Statement, the Prospectus, any Free Writing Prospectus or the Disclosure Package, as the case may be, as well as documents filed after the date of this Agreement and prior to the completion of the distribution of the Securities and incorporated by
reference therein as described above. 
 (ii) Neither the SEC nor any state or other jurisdiction or other regulatory body has issued, and
neither is, to the knowledge of the Company, threatening to issue, any stop order under the 1933 Act or other order suspending the effectiveness of the Registration Statement (as amended or supplemented) or preventing or suspending the use of any
Preliminary Prospectus, Issuer Free Writing Prospectus, the Disclosure Package or the Prospectus or suspending the qualification or registration of the Securities for offering or sale in any jurisdiction nor instituted or, to the knowledge of the
Company, threatened to institute proceedings for any such purpose. The Preliminary Prospectus at its date of issue and as of 5:00 p.m. Eastern Standard Time on the date hereof (the “Initial Time of Sale”), the Registration Statement
at each effective date and the Initial Time of Sale, and the Prospectus and any amendments or supplements thereto or to the Registration Statement when they are filed with the SEC or become effective, as the case may be, contain or will contain, as
the case may be, all statements that are required to be stated therein by, and in all material respects conform or will conform, as the case may be, to the requirements of, the 1933 Act and the 1933 Act Rules and Regulations. Neither the
Registration Statement nor any amendment thereto, as of the applicable effective date, contains or will contain, as the case may be, any untrue statement of a material fact or omits or will omit to state any material fact required to be stated
therein or necessary to make the statements therein, not misleading. Neither the Preliminary Prospectus, the Prospectus nor any supplement thereto contains or will contain, as the case may be, any untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither the Disclosure Package nor any supplement thereto, at
the Initial Time of Sale, contains or will contain, as the case may be, any untrue statement of a material fact or omits or will omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the Company makes no representation or warranty as to information contained in or omitted from the Registration Statement, the Disclosure Package or the
Prospectus, or any such amendment or supplement, in reliance upon, and in conformity with, written information furnished to the Company relating to the Placement Agent by or on behalf of the Placement Agent expressly for use in the preparation
thereof (as provided in Section 12 hereof). There is no contract, agreement, understanding or arrangement, whether written or oral, or document required to be described in the Registration Statement, Disclosure Package or Prospectus or to be
filed as an exhibit to the Registration Statement that is not described or filed as required. The documents incorporated by reference in the Disclosure Package or the Prospectus at the time they were filed with the SEC, complied in all material
respects with the requirements of the Securities Exchange Act of 1934, as amended (the “1934  
  

 -2- 

 Act”), and the rules and regulations adopted by the SEC thereunder (the “1934 Act Rules and
Regulations”). Any future documents incorporated by reference so filed, when they are filed, will comply in all material respects with the requirements of the 1934 Act and the 1934 Act Rules and Regulations; no such incorporated document
contained or will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and, when read together and with the other information in
each of the Disclosure Package and the Prospectus, at the time the Registration Statement became effective, at the Initial Time of Sale and at the Closing Date, each such incorporated document did not or will not, as the case may be, contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 
 (iii) The Company is eligible to use Issuer Free Writing Prospectuses in connection with the offering of the Securities pursuant to Rules 164 and 433 of the 1933 Act. Any Issuer Free Writing Prospectus that the
Company is required to file pursuant to Rule 433(d) of the 1933 Act Rules and Regulations has been, or will be, timely filed with the SEC in accordance with the requirements of the 1933 Act Rules and Regulations. Each Issuer Free Writing Prospectus
that the Company has filed, or is required to file, pursuant to Rule 433(d) of the 1933 Act or that was prepared by or on behalf of or used by the Company complies or will comply in all material respects with the requirements of the 1933 Act Rules
and Regulations, including but not limited to legending and recordkeeping requirements. Except for the Issuer Free Writing Prospectuses, if any, identified in Schedule I hereto, the Company has not prepared, used or referred to, and will not,
without your prior consent, prepare, use or refer to any Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and at all times through the completion of the offering and sale of the Securities, did not, does not and
will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement. The Company filed the Registration Statement with the SEC before using any Free Writing Prospectus. The
Company has satisfied and will satisfy the conditions of Rule 433 of the 1933 Act Rules and Regulations such that any electronic road show need not be filed with the SEC. 
 (iv) This Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and by general principles of equity (the
“Exceptions”). 
 (v) The Company and its Subsidiaries have been duly organized and are validly existing as corporations in
good standing under the laws of the states or other jurisdictions in which they are incorporated, with full power and authority (corporate and other) to own, lease and operate their properties and conduct their businesses as described in each of the
Disclosure Package and the Prospectus and, with respect to the Company, to execute and deliver, and perform the Company’s obligations under, this Agreement; the Company and its Subsidiaries are duly qualified to do business as foreign
corporations in good standing in each state or other jurisdiction in which their ownership or leasing of property or conduct of business 
  

 -3- 

 legally requires such qualification, except where the failure to be so qualified, individually or in the aggregate, would
not have a Material Adverse Effect. The term “Material Adverse Effect” as used herein means any material adverse effect on the condition (financial or other), net worth, business, affairs, management, prospects, results of
operations or cash flow of the Company and its Subsidiaries, taken as a whole. The Company has no significant subsidiaries (as such term is defined in Rule 1-02(w) of Regulation S-X promulgated by the Commission) other than those Subsidiaries listed
on Schedule II hereto (the “Subsidiaries”). 
 (vi) Neither the Company nor any of its Subsidiaries has sustained
since the date of the latest audited financial statements included or incorporated by reference in the Disclosure Package any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or decree. otherwise than as set forth in each of the Disclosure Package and the Prospectus and, since the respective dates as of which information is given in the
Disclosure Package, there has not been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any Material Adverse Change, or any development involving a prospective Material Adverse Change, otherwise than as
set forth in each of the Disclosure Package and the Prospectus. The term “Material Adverse Change” as used herein means any change that has a Material Adverse Effect. 
 (vii) The issuance and sale of the Securities and the execution, delivery and performance by the Company of this Agreement, and the consummation of the
transactions herein contemplated, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any of its Subsidiaries under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound or to which any of the properties or assets of the Company or any of its Subsidiaries is subject, except to such extent as, individually or in the aggregate, does not have a Material Adverse Effect, nor will such action
result in any violation of the provisions of the Company’s certificate of incorporation or bylaws or any statute, rule, regulation or other law, or any order or judgment, of any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the execution, delivery and
performance of this Agreement, the issuance and sale of the Securities or the consummation of the transactions contemplated hereby, except such as have been, or will be prior to the Closing Date, obtained under the 1933 Act or as may be required by
the National Association of Securities Dealers, Inc. (the “NASD”) and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws in connection with the
purchase and distribution of the Securities to the Investors. 
 (viii) The Company has duly and validly authorized capital stock as set
forth in each of the Disclosure Package and Prospectus; all outstanding shares of Common Stock of the Company and the Securities conform, or when issued will conform, to the description thereof in the Prospectus and have been, or, when issued and
paid for in the manner described herein will 
  

 -4- 

 be, duly authorized, validly issued, fully paid and non-assessable; and the issuance of the Securities to be purchased
from the Company hereunder is not subject to preemptive or other similar rights, or any restriction upon the voting or transfer thereof pursuant to applicable law or the Company’s certificate of incorporation, by-laws or governing documents or
any agreement to which the Company or any of its Subsidiaries is a party or by which any of them may be bound. All corporate action required to be taken by the Company for the authorization, issuance and sale of the Securities has been duly and
validly taken. Except as disclosed in each of the Disclosure Package and Prospectus, there are no outstanding subscriptions, rights, warrants, options, calls, convertible securities, commitments of sale or rights related to or entitling any person
to purchase or otherwise to acquire any shares of, or any security convertible into or exchangeable or exercisable for, the capital stock of, or other ownership interest in, the Company, except for such options or rights as may have been granted by
the Company to employees or directors pursuant to its stock option or stock purchase plans. The outstanding shares of capital stock of the Company’s Subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by the Company free and clear of any mortgage, pledge, lien, encumbrance, charge or adverse claim and are not the subject of any agreement or understanding with any person and were not issued in violation of any preemptive or similar
rights; and there are no outstanding subscriptions, rights, warrants, options, calls, convertible securities, commitments of sale or instruments related to or entitling any person to purchase or otherwise acquire any shares of, or any security
convertible into or exchangeable or exercisable for, the capital stock of, or other ownership interest in any of the Subsidiaries. 
 (ix)
The statements set forth in each of the Disclosure Package and the Prospectus describing the Securities and this Agreement, insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and
fair. 
 (x) Each of the Company and its Subsidiaries is in possession of and is operating in compliance with all franchises, grants,
authorizations, licenses, certificates, permits, easements, consents, orders and approvals (“Permits”) from all state, federal, foreign and other regulatory authorities, and has satisfied the requirements imposed by regulatory
bodies, administrative agencies or other governmental bodies, agencies or officials, that are required for the Company and its Subsidiaries lawfully to own, lease and operate their properties and conduct their businesses as described in each of the
Disclosure Package and the Prospectus, and each of the Company and its Subsidiaries is conducting its business in compliance with all of the laws, rules and regulations of each jurisdiction in which it conducts its business, in each case with such
exceptions, individually or in the aggregate, as would not have a Material Adverse Effect; each of the Company and its Subsidiaries has filed all notices, reports, documents or other information (“Notices”) required to be filed
under applicable laws, rules and regulations, in each case, with such exceptions, individually or in the aggregate, as would not have a Material Adverse Effect; and, except as otherwise specifically described in each of the Disclosure Package and
the Prospectus, neither the Company nor any of its Subsidiaries has received any notification from any court or governmental body, authority or agency, relating to the revocation or modification of any such Permit or to the effect that any
additional authorization, approval, order, consent, license, certificate, permit, registration or qualification (“Approvals”) from such regulatory authority is needed to be obtained by any of them, in any case where it could be
reasonably expected that obtaining such Approvals or the failure to obtain such Approvals, individually or in the aggregate, would have a Material Adverse Effect. 
  

 -5- 

 (xi) The Company and its Subsidiaries have filed all necessary federal, state and foreign income and
franchise tax returns and paid all taxes shown as due thereon; all such tax returns are complete and correct in all material respects; all tax liabilities are adequately provided for on the books of the Company and its Subsidiaries except to such
extent as would not have a Material Adverse Effect; the Company and its Subsidiaries have made all necessary payroll tax payments; and the Company and its Subsidiaries have no knowledge of any tax proceeding or action pending or threatened against
the Company or its Subsidiaries that, individually or in the aggregate, might have a Material Adverse Effect. 
 (xii) Except as described in
each of the Disclosure Package and the Prospectus, the Company and its Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent licenses, trademarks, service marks and trade names necessary to conduct the business
now operated by them, and neither the Company nor any of its Subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any patents, patent licenses, trademarks, service marks or trade names
that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect. 
 (xiii) The Company and its Subsidiaries have good and marketable title in fee simple to all items of real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances,
restrictions and defects except such as are described in each of the Disclosure Package and the Prospectus or do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property; and
any property held under lease or sublease by the Company or any of its Subsidiaries is held under valid, subsisting and enforceable leases or subleases with such exceptions as are not material and do not interfere with the use made and proposed to
be made of such property by the Company and its Subsidiaries; and neither the Company nor any of its Subsidiaries has any notice or knowledge of any material claim of any sort that has been, or may be, asserted by anyone adverse to the
Company’s or any of its Subsidiaries rights as lessee or sublessee under any lease or sublease described above, or affecting or questioning the Company’s or any of its Subsidiaries’ rights to the continued possession of the leased or
subleased premises under any such lease or sublease in conflict with the terms thereof. 
 (xiv) Except as described in each of the
Disclosure Package and the Prospectus, there is no pending action, suit or other proceeding involving the Company or any of its Subsidiaries or any of their material assets for any failure of the Company or any of its Subsidiaries, or any
predecessor thereof, to comply with any requirements of federal, state or local regulation relating to air, water, solid waste management, hazardous or toxic substances, or the protection of health, safety or the environment. Except as described in
each of the Disclosure Package and the Prospectus, none of the property owned or leased by the Company or any of its Subsidiaries is, to the best knowledge of the Company, contaminated with any waste or hazardous or toxic substances, and neither the
Company nor any of its Subsidiaries may be deemed an “owner or operator” of a “facility” or “vessel” that owns, possesses, transports, 
  

 -6- 

 generates or disposes of a “hazardous substance” as those terms are defined in §9601 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601 et seq. 
 (xv) No labor disturbance exists
with the employees of the Company or any of its Subsidiaries or is imminent that, individually or in the aggregate, would have a Material Adverse Effect. None of the employees of the Company or any of its Subsidiaries is represented by a union and,
to the best knowledge of the Company and its Subsidiaries, no union organizing activities are taking place. Neither the Company nor any of its Subsidiaries has violated any federal, state or local law or foreign law relating to discrimination in
hiring, promotion or pay of employees, nor any applicable wage or hour laws, or the rules and regulations thereunder, or analogous foreign laws and regulations, that might, individually or in the aggregate, result in a Material Adverse Effect.

 (xvi) The Company and its Subsidiaries are in compliance in all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension
plan” (as defined in ERISA) for which the Company and its Subsidiaries would have any liability; the Company and its Subsidiaries have not incurred and do not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”);
and each “pension plan” for which the Company or any of its Subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects, and nothing has occurred,
whether by action or by failure to act, that would cause the loss of such qualification. 
 (xvii) The Company and its Subsidiaries maintain
insurance of the types and in the amounts generally deemed adequate for its business, including, but not limited to, directors’ and officers’ insurance, insurance covering real and personal property owned or leased by the Company and its
Subsidiaries against theft, damage, destruction, acts of vandalism and all other risks customarily insured against, all of which insurance is in full force and effect. Neither the Company nor any of its Subsidiaries has been refused any insurance
coverage sought or applied for, and the Company has no reason to believe that it and its Subsidiaries will not be able to renew their existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. 
 (xviii) Neither the Company nor any
of its Subsidiaries is, or with the giving of notice or lapse of time or both would be, in default or violation with respect to its certificate of incorporation or by-laws. Neither the Company nor any of its Subsidiaries is, or with the giving of
notice or lapse of time or both would be, in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material indenture, mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries 
  

 -7- 

 is bound or to which any of the properties or assets of the Company or any of its Subsidiaries is subject, or in
violation of any statutes, laws, ordinances or governmental rules or regulations or any orders or decrees to which it is subject, including, without limitation, Section 13 of the 1934 Act, which default or violation, individually or in the
aggregate, would have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has, at any time during the past five years, (A) made any unlawful contributions to any candidate for any political office, or failed fully to
disclose any contribution in violation of law, or (B) made any payment to any state, federal or foreign government official, or other person charged with similar public or quasi-public duty (other than payment required or permitted by
applicable law). 
 (xix) Other than as set forth in each of the Disclosure Package and the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property of the Company or any of its Subsidiaries is the subject that, if determined adversely to the Company or any of its Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect or that would materially and adversely affect the consummation of the transactions contemplated hereby or that is required to be disclosed in each of the Disclosure Package or the
Prospectus; to the best of the Company’s knowledge, no such proceedings are threatened or contemplated. 
 (xx) The Company is not and,
after giving effect to the offering and sale of the Securities, will not be a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a
“subsidiary company,” as such terms are defined in the Public Utility Holding Company Act of 1935, as amended (the “1935 Act”). 
 (xxi) The Company is not and, after giving effect to the offering and sale of the Securities, will not be an “investment company” or an entity “controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as amended (the “1940 Act”). 
 (xxii) At the earliest time
after the filing of the Registration Statement at which the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(a)(2) of the 1933 Act Rules and Regulations) and as of the date hereof, the
Company was not and is not an “ineligible issuer” as such term is defined in Rule 405 of the 1933 Act Rules and Regulations, without taking account of any determination by the SEC that it is not necessary that the Company be considered an
“ineligible issuer.” 
 (xxiii) Stonefield Josephson Inc., the accounting firm that has certified the financial statements filed
with or incorporated by reference in and as a part of the Registration Statement, is an independent registered public accounting firm within the meaning of the 1933 Act and the 1933 Act Rules and Regulations and the rules and regulations of the
Public Company Accounting Oversight Board (“PCAOB”) of the United States. The Company and each of its Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that:
(1) transactions are executed in accordance with management’s general or specific authorization; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (3) access to assets is permitted only in accordance with 
  

 -8- 

 management’s general or specific authorization; and (4) the recorded accounts for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect thereto. The consolidated financial statements and schedules of the Company, including the notes thereto, filed with (or incorporated by reference) and as a part of
the Registration Statement, Disclosure Package or Prospectus, are accurate in all material respects and present fairly the financial condition of the Company and its Subsidiaries as of the respective dates thereof and the consolidated results of
operations and changes in financial position and consolidated statements of cash flow for the respective periods covered thereby, all in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods
involved except as otherwise disclosed therein. All adjustments necessary for a fair presentation of results for such periods have been made. The selected financial data included or incorporated by reference in the Registration Statement, Disclosure
Package and Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements. Any operating or other statistical data included or incorporated by reference in the
Registration Statement, Disclosure Package and Prospectus comply in all material respects with the 1933 Act and the 1933 Act Rules and Regulations and present fairly the information shown therein and are based on or derived from sources that the
Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived. All non-GAAP financial information included (or incorporated by reference) in the Registration Statement,
Disclosure Package or Prospectus complies with the requirements of Regulation G and Item 10 of Regulation S-K under the 1933 Act. 
 (xxiv) Except as disclosed in each of the Disclosure Package and the Prospectus, no holder of any security of the Company has any right to require registration of shares of Common Stock or any other security of the Company because of the
filing of the Registration Statement or the consummation of the transactions contemplated hereby and, except as disclosed in each of the Disclosure Package and the Prospectus, no person has the right to require registration under the 1933 Act of any
shares of Common Stock or other securities of the Company. No person has the right, contractual or otherwise, to cause the Company to permit such person to underwrite the sale of any of the Securities. Except for this Agreement, there are no
contracts, agreements or understandings between the Company or any of its Subsidiaries and any person that would give rise to a valid claim against the Company, its Subsidiaries or any Placement Agent for a brokerage commission, finder’s fee or
like payment in connection with the issuance, purchase and sale of the Securities. 
 (xxv) The Company has not distributed and, prior to the
later to occur of (A) the Closing Date and (B) completion of the distribution of the Securities, will not distribute any offering material in connection with the offering and sale of the Securities other than the Registration Statement,
the Preliminary Prospectus, any Issuer Free Writing Prospectus identified in Schedule I hereto, the Disclosure Package and the Prospectus. 
 (xxvi) The Company has not taken and will not take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Company’s Common Stock, and
the Company is not aware of any such action taken or to be taken by affiliates of the Company. 
  

 -9- 

 (xxvii) There is not currently and has not in the past been a failure on the part of the Company or any
of its respective directors or officers, in their capacities as such, to comply with any applicable provisions of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the rules and regulations promulgated in connection therewith,
including Sections 302, 402 and 906, and the statements contained in any certification pursuant to such Act and related rules and regulations are complete and correct. 
 (xxviii) The Company has established and maintains disclosure controls and procedures and internal control over financial reporting as are currently required (as such terms are defined in Rule 13a-15 and 15d-15 under
the 1934 Act); the Company’s disclosure controls and procedures (i) are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated
to management, including the principal executive and principal financial officer of the Company, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, and that such information is recorded,
processed, summarized and reported, within the time periods specified in the 1934 Act Rules and Regulations; (ii) have been evaluated for effectiveness; and (iii) are effective in all material respects to perform the functions for which
they were established. 
 (xxix) Except as discussed with the Company’s auditors and audit committee and as disclosed in each of the
Disclosure Package and the Prospectus, (i) there are no significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the Company’s
ability to record, process, summarize, and report financial data and (ii) there is, and there has been, no fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal control over
financial reporting. 
 (xxx) Since the date of the end of the last fiscal year for which audited financial statements are included or
incorporated by reference in each of the Disclosure Package and the Prospectus, there have been no significant changes in internal control over financial reporting or in other factors that could significantly affect internal control over financial
reporting, including any corrective actions with regard to significant deficiencies and material weaknesses. 
 (xxxi) The Company has
received no written comments from the SEC staff regarding its periodic or current reports under the 1934 Act that remain unresolved and have not been disclosed in the Registration Statement, Disclosure Package and Prospectus. 
 (xxxii) No relationship, direct or indirect, exists between or among the Company and any director, officer or stockholder of the Company, or any member
of his or her immediate family, or any customers or suppliers that is required to be described in the Registration Statement, the Disclosure Package or the Prospectus and that is not so described and described as required in material compliance with
such requirement. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of
the Company or any member of their respective immediate families, except as 
  

 -10- 

 disclosed in the Registration Statement, the Disclosure Package and the Prospectus. The Company has not, in violation of
the Sarbanes-Oxley Act, directly or indirectly, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.

 (xxxiii) To the best knowledge of the Company, no change in any laws or regulations is pending that could reasonably be expected to be
adopted and if adopted, could reasonably be expected to have, individually or in the aggregate with all such changes, a Material Adverse Effect, except as set forth in or contemplated in each of the Disclosure Package and the Prospectus. 

(xxxiv) The minute books of each of the Company and its Subsidiaries have been made available to the Placement Agent and contain a complete summary of
all meetings and other actions of the directors and shareholders of each such entity in all material respects, and reflect all transactions referred to in such minutes accurately in all material respects. 
 (xxxv) Neither the Company nor any of its Subsidiaries, nor any director, officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its Subsidiaries, has, directly or indirectly, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment
to any foreign or domestic government official or employee or to foreign or domestic political parties or campaigns from corporate funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment. 
 (xxxvi) The operations of the Company and its Subsidiaries are and
have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending, or to the knowledge of the Company,
threatened. 
 (xxxvii) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity that, to the Company’s knowledge, will use such proceeds,
for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC. 
 (xxxviii) No
customer of or supplier to the Company or any of its Subsidiaries has ceased purchases or shipments of merchandise to the 
  

 -11- 

 Company or indicated, to the Company’s knowledge, an interest in decreasing or ceasing its purchases from the
Company or otherwise modifying its relationship with the Company, other than in the normal and ordinary course of business consistent with past practices in a manner which would not, singly or in the aggregate, result in a Material Adverse Effect.

  

 -12-Exhibit 10.14 - Newgold, Inc. 2006 Stock Option Plan

    Exhibit
      10.14

    NEWGOLD,
      INC.

    2006
      STOCK OPTION PLAN

    

    

    1.
      Purposes
      of the Plan.
      The
      purposes of this 2006 Stock Option Plan are: 

    

    
      	·  
                	
              to
                attract and retain the best available personnel for positions of
                responsibility, 

            

    

    

    
      	·  
                	
              to
                provide additional incentive to Employees, Directors and Consultants,
                and
                

            

    

    

    
      	·  
                	
              to
                promote the success of the Company's business.

            

    

    

    Options
      granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
      Options, as determined by the Administrator at the time of grant. 

    

    2.
      Definitions.
      As used
      herein, the following definitions shall apply: 

    

    (a)
      "Administrator"
      means
      the Board or, if the Board delegates administration of the Plan to a Committee
      pursuant to Section 4 of the Plan, such Committee.

    

    (b)
      “Applicable Laws” means the requirements relating to the administration of stock
      option plans under state corporate laws, US federal and state securities laws,
      the Code, and any stock exchange or quotation system on which the Common Stock
      is listed or quoted. 

    

    (c)
      "Board"
      means
      the Board of Directors of the Company. 

    

    (d)
      "Code"
      means
      the Internal Revenue Code of 1986, as amended. 

    

    (e)
      "Committee"
      means a
      committee of the Board. 

    

    (f)
      "Common
      Stock"
      means
      the common stock of the Company. 

    

    (g)
      “Company”
means
      Newgold, Inc., a Delaware corporation.

    

    (h)
      "Consultant"
      means
      any person, including an advisor, engaged by the Company or a Parent or
      Subsidiary to render services to such entity. 

    

    (i)
      "Director"
      means a
      member of the Board. 

    

    (j)
      "Disability"
      means
      total and permanent disability as defined in Section 22(e)(3) of the Code.
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (k)
      "Employee"
      means
      any person (including an officer or a Director) who is treated as an employee
      in
      the records of the Company or any Parent or Subsidiary of the Company. Neither
      service as a Director nor payment of a director's fee by the Company shall
      alone
      be sufficient to constitute "employment" by the Company. 

    

    (l)
      "Fair
      Market Value"
      means,
      as of any date, the value of Common Stock determined as follows: 

    

    (i)
      If
      the Common Stock is listed on any established stock exchange or a national
      market system, including without limitation the Nasdaq National Market, The
      Nasdaq SmallCap Market of The Nasdaq Stock Market or the Nasdaq Over-The-Counter
      Bulletin Board, its Fair Market Value shall be the closing sales price for
      such
      stock (or the closing bid, if no sales were reported) as quoted on such exchange
      or system on the day of determination, as reported in The Wall Street Journal
      or
      such other source as the Administrator deems reliable; 

    

    (ii)
      If
      the Common Stock is regularly quoted by a recognized securities dealer but
      selling prices are not reported, the Fair Market Value of a Share of Common
      Stock shall be the mean between the high bid and low asked prices for the Common
      Stock on the day of determination, as reported in The Wall Street Journal or
      such other source as the Administrator deems reliable; or 

    

    (iii)
      In
      the absence of an established market for the Common Stock, the Fair Market
      Value
      shall be determined in good faith by the Administrator. 

    

    (m)
      "Incentive
      Stock Option"
      means
      an Option intended to qualify as an incentive stock option within the meaning
      of
      Section 422 of the Code and the regulations promulgated thereunder.

    

    (n)
      "Nonstatutory
      Stock Option"
      means
      an Option not intended to qualify as an Incentive Stock Option. 

    

    (o)
      "Option"
      means
      an option to purchase Shares granted pursuant to the Plan. 

    

    (p)
      "Option
      Agreement"
      means
      an agreement between the Company and an Optionee evidencing the terms and
      conditions of an individual Option grant. The Option Agreement is subject to
      the
      terms and conditions of the Plan. 

    

    (q)
      "Optionee"
      means
      the holder of an outstanding Option. 

    

    (r)
      "Parent"
      means a
      "parent corporation" of the Company, whether now or hereafter existing, as
      defined in Section 424(e) of the Code. 

    

    (s)
      "Plan"
      means
      this 2006 Stock Option Plan, as it may be amended from time to
      time.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (t)
      “Restricted
      Stock”
means
      Shares issued pursuant to an Option. 

    

    (u)
      "Service
      Provider"
      means
      an Employee, Director or Consultant. 

    

    (v)
      "Share"
      means a
      share of the Common Stock, as adjusted in accordance with Section 12 of the
      Plan. 

    

    (w)
      “Subsidiary”
means
      a
“subsidiary corporation” of the Company, whether now or hereafter existing, as
      defined in Section 424(f) of the Code.

    

    3.
      Stock
      Subject to the Plan.
      Subject
      to the provisions of Section 12 of the Plan, the maximum aggregate number of
      Shares that may be awarded and sold under the Plan is 5,000,000. The Shares
      may
      be authorized, but unissued, or re-acquired Common Stock. 

    

    If
      an
      Option expires or becomes unexercisable without having been exercised in full,
      the unpurchased Shares which were subject thereto shall become available for
      future grant or sale under the Plan (unless the Plan has terminated); provided,
      however, that Shares that have actually been issued under the Plan upon exercise
      of an Option, shall not be returned to the Plan and shall not become available
      for future distribution under the Plan. 

    

    4.
      Administration
      of the Plan.
      

    

    (a)
      Powers
      of the Administrator.
      Subject
      to the provisions of the Plan, and in the case of a Committee, subject to the
      specific duties delegated by the Board to such Committee, the Administrator
      shall have the authority, in its discretion: (i) to determine the Fair Market
      Value; (ii) to select the Service Providers to whom Options are granted
      hereunder; (iii) to determine the number of shares of Common Stock to be covered
      by each Option granted hereunder; (iv) to approve forms of agreement for use
      under the Plan; (v) to determine the terms and conditions, not inconsistent
      with
      the terms of the Plan, of any Option granted hereunder. Such terms and
      conditions include, but are not limited to, the exercise price, the time or
      times when Options may be exercised (which may be based on performance
      criteria), any vesting acceleration or waiver of forfeiture restrictions, and
      any restriction or limitation regarding any Option or the Shares relating
      thereto, based in each case on such factors as the Administrator, in its sole
      discretion, shall determine; (vi) to construe and interpret the terms of the
      Plan and Options granted pursuant to the Plan and to correct any defect, supply
      any omission or reconcile any inconsistency in the Plan or any Option Agreement;
      (vii) to prescribe, amend and rescind rules and regulations relating to the
      Plan; (viii) to modify or amend each Option (subject to Section 14(c) of the
      Plan), including the discretionary authority to extend the post-termination
      exercisability period of Options longer than is otherwise provided for in the
      Plan; (ix) to allow Optionees to satisfy withholding tax obligations by electing
      to have the Company withhold from the Shares to be issued upon exercise of
      an
      Option that number of Shares having a Fair Market Value equal to the amount
      required to be withheld. The Fair Market Value of the Shares to be withheld
      shall be determined on the date that the amount of tax to be withheld is to
      be
      determined. All elections by an Optionee to have Shares withheld for this
      purpose shall be made in such form and under such conditions as 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the
      Administrator may deem necessary or advisable; and (x) to make all other
      determinations deemed necessary or advisable for administering the Plan.

    

    (b)
      Effect
      of Administrator's Decision.
      The
      Administrator's decisions, determinations and interpretations shall be final
      and
      binding on all Optionees. 

    

    5.
      Eligibility.
      A
      Nonstatutory Stock Options may be granted to any Service Provider. An Incentive
      Stock Option may be granted only to an Employee who is an “employee” of the
      Company or a Parent or Subsidiary of the Company for purposes of Section 422
      of
      the Code. 

    

    6.
      Limitations.
      

    

    (a)
      Each
      Option shall be designated in the Option Agreement as either an Incentive Stock
      Option or a Nonstatutory Stock Option. However, notwithstanding such
      designation, to the extent that the aggregate Fair Market Value of the Shares
      with respect to which Incentive Stock Options are exercisable for the first
      time
      by the Optionee during any calendar year (under all plans of the Company and
      any
      Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
      Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock
      Options shall be taken into account in the order in which they were granted.
      The
      Fair Market Value of the Shares shall be determined as of the time the Option
      with respect to such Shares is granted. 

    

    (b)
      Neither the Plan nor any Option shall confer upon an Optionee any right with
      respect to continuing the Optionee's relationship as a Service Provider with
      the
      Company, nor shall it interfere in any way with the Optionee's right or the
      Company's right to terminate such relationship at any time, with or without
      cause. 

    

    7.
      Term
      of Plan.
      Subject
      to Section 17 of the Plan, the Plan shall become effective upon its adoption
      by
      the Board. It shall continue in effect for a term of ten (10) years unless
      terminated earlier under Section 12 of the Plan. 

    

    8.
      Term
      of Option.
      The
      term of each Option shall be stated in the Option Agreement. In the case of
      an
      Incentive Stock Option, the term shall be ten (10) years from the date of grant
      or such shorter term as may be provided in the Option Agreement; provided,
      however, that in the case of an Incentive Stock Option granted to an Optionee
      who, at the time the Incentive Stock Option is granted, owns stock representing
      more than ten percent (10%) of the total combined voting power of all classes
      of
      stock of the Company or any Parent or Subsidiary, the term of the Incentive
      Stock Option shall be five (5) years from the date of grant or such shorter
      term
      as may be provided in the Option Agreement. 

    

    9.
      Option
      Exercise Price and Consideration.
      

    

    (a)
      Exercise
      Price.
      The per
      share exercise price for the Shares to be issued pursuant to exercise of an
      Option shall be determined by the Administrator, subject to the following:
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)
      In
      the case of an Incentive Stock Option granted to an Employee who, at the time
      the Incentive Stock Option is granted, owns stock representing more than ten
      percent (10%) of the voting power of all classes of stock of the Company or
      any
      Parent or Subsidiary, the per Share exercise price shall be no less than 110%
      of
      the Fair Market Value per Share on the date of grant. 

    

    (ii)
      In
      the case of an Incentive Stock Option granted to any Employee other than an
      Employee described in paragraph (i) immediately above, the per Share exercise
      price shall not be less than 100% of the Fair Market Value per Share on the
      date
      of grant. 

    

    (iii)
      In
      the case of a Nonstatutory Stock Option, the per Share exercise price shall
      be
      determined by the Administrator. 

    

    (b)
      Vesting
      Requirements and Exercise Dates.
      At the
      time an Option is granted, the Administrator shall fix the period within which
      the Option may be exercised and shall determine any conditions that must be
      satisfied before the Option vests or may be exercised. 

    

    (c)
      Form
      of Consideration.
      The
      Administrator shall determine the acceptable form of consideration for
      exercising an Option, including the method of payment. In the case of an
      Incentive Stock Option, the Administrator shall determine the acceptable form
      of
      consideration at the time of grant. Such consideration may consist entirely
      of:
      (i) cash; (ii) check; (iii) secured promissory note; (iv) other Shares held
      for
      at least six months (or other period determined by the Board) that have a Fair
      Market Value on the date of surrender equal to the aggregate exercise price
      of
      the Shares as to which said Option shall be exercised; (v) consideration
      received by the Company under a cashless exercise program implemented by the
      Company in connection with the Plan; (vi) a reduction in the amount of any
      Company liability to the Optionee, including any liability attributable to
      the
      Optionee's participation in any Company sponsored deferred compensation program
      or arrangement; or (vii) any combination of the foregoing methods of payment.
      

    

    10.
      Exercise
      of Option.
      

    

    (a)
      Procedure
      for Exercise; Rights as a Stockholder.
      Any
      Option granted hereunder shall be exercisable according to the terms of the
      Plan
      and at such times and under such conditions as determined by the Administrator
      and set forth in the Option Agreement. An Option may not be exercised for a
      fraction of a Share. 

    

    An
      Option
      shall be deemed exercised when the Company receives: (i) written notice of
      exercise (in accordance with the Option Agreement) from the person entitled
      to
      exercise the Option, and (ii) full payment for the Shares with respect to which
      the Option is exercised. Full payment may consist of any consideration and
      method of payment authorized by the Administrator and permitted by the Option
      Agreement and the Plan. Shares issued upon exercise of an Option shall be issued
      in the name of the Optionee or, 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    if
      requested by the Optionee, in the name of the Optionee and his or her spouse.
      Until the Shares are issued (as evidenced by the appropriate entry on the books
      of the Company or of a duly authorized transfer agent of the Company), no right
      to vote or receive dividends or any other rights as a stockholder shall exist,
      notwithstanding the exercise of the Option. No adjustment will be made for
      a
      dividend or other right for which the record date is prior to the date the
      Shares are issued, except as provided in Section 12 of the Plan. 

    

    Exercising
      an Option in any manner shall decrease the number of Shares thereafter
      available, both for purposes of the Plan and for sale under the Option, by
      the
      number of Shares as to which the Option is exercised. 

    

    (b)
      Termination
      of Relationship as a Service Provider.
      If an
      Optionee ceases to be a Service Provider, other than upon the Optionee's death
      or Disability, the Optionee may exercise his or her Option for three (3) months
      following the Optionee's termination (unless another period is set forth in
      the
      Option Agreement) to the extent that the Option is vested on the date of
      termination; provided that the Option may not be exercised later than the
      expiration date of the term of such Option as set forth in the Option Agreement.
      If, on the date of termination, the Optionee is not vested as to his or her
      entire Option, the Shares covered by the unvested portion of the Option shall
      revert to the Plan. If, after termination, the Optionee does not exercise his
      or
      her Option within the time specified by the Administrator, the Option shall
      terminate, and the Shares covered by such Option shall revert to the
      Plan.

    

    (c)
      Disability
      of Optionee.
      If an
      Optionee ceases to be a Service Provider as a result of the Optionee's
      Disability, the Optionee may exercise his or her Option for twelve (12) months
      following the Optionee's termination (unless another period is set forth in
      the
      Option Agreement) to the extent that the Option is vested on the date of
      termination; provided that the Option may not be exercised later than the
      expiration date of the term of such Option as set forth in the Option Agreement.
      If, on the date of termination, the Optionee is not vested as to his or her
      entire Option, the Shares covered by the unvested portion of the Option shall
      revert to the Plan. If, after termination, the Optionee does not exercise his
      or
      her Option within the time specified herein, the Option shall terminate, and
      the
      Shares covered by such Option shall revert to the Plan. 

    

    (d)
      Death
      of Optionee.
      If an
      Optionee dies while a Service Provider, the Option may be exercised for twelve
      (12) months following the Optionee's death (unless another period is set forth
      in the Option Agreement) to the extent that the Option is vested on the date
      of
      death; provided that the Option may not be exercised later than the expiration
      date of the term of such Option as set forth in the Option Agreement. If, at
      the
      time of death, the Optionee is not vested as to his or her entire Option, the
      Shares covered by the unvested portion of the Option shall immediately revert
      to
      the Plan. The Option may be exercised by the executor or administrator of the
      Optionee's estate or, if none, by the person(s) entitled to exercise the Option
      under the Optionee's will or the laws of descent or distribution. If the Option
      is not so exercised within the time specified herein, the Option shall
      terminate, and the Shares covered by such Option shall revert to the Plan.
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)
      Leaves
      of Absence.
      A
      Service Provider shall not cease to be an Employee in the case of (i) any leave
      of absence approved by the Company or (ii) transfers between locations of the
      Company or between the Company, its Parent, any Subsidiary, or any successor.
      For purposes of Incentive Stock Options, no such leave may exceed ninety days,
      unless reemployment upon expiration of such leave is guaranteed by statute
      or
      contract. If reemployment upon expiration of a leave of absence approved by
      the
      Company is not so guaranteed, then three (3) months following the 91st day
      of
      such leave any Incentive Stock Option held by the Optionee shall cease to be
      treated as an Incentive Stock Option and shall be treated for tax purposes
      as a
      Nonstatutory Stock Option. Unless the Administrator provides otherwise, vesting
      of Options granted hereunder shall be tolled during any unpaid leave of
      absence.

    

    (f)
      Buyout
      Provision.
      The
      Administrator may at any time offer to buy out for a payment in cash, any Option
      previously granted based on such terms and conditions as the Administrator
      shall
      establish and communicate to the Optionee at the time that such offer is made.
      

    

    11.
      Non-Transferability
      of Options.
      Unless
      determined otherwise by the Administrator, an Option may not be sold, pledged,
      assigned, hypothecated, transferred, or disposed of in any manner other than
      by
      will or by the laws of descent or distribution and may be exercised, during
      the
      lifetime of the Optionee, only by the Optionee (except as provided in Section
      10(d) above) . 

    

    12.
      Adjustments
      Upon Changes in Capitalization, Dissolution, Liquidation or
      Acquisition.
      

    

    (a)
      Changes
      in Capitalization.
      Subject
      to any required action by the stockholders of the Company, the number of shares
      of Common Stock covered by each outstanding Option and the number of shares
      of
      Common Stock which have been authorized for issuance under the Plan but as
      to
      which no Options have yet been granted or which have been returned to the Plan
      upon cancellation or expiration of an Option, as well as the price per share
      of
      Common Stock covered by each such outstanding Option and the type of securities
      issued upon Option exercise, shall be appropriately adjusted by the Board for
      any stock split, reverse stock split, stock dividend, combination or
      reclassification of the Common Stock, other similar event, or any merger or
      consolidation that does not fall within the definition of Acquisition under
      Section 12(d). 

    

    (b)
      Dissolution
      or Liquidation.
      In the
      event of the proposed dissolution or liquidation of the Company, the
      Administrator shall notify each Optionee as soon as practicable prior to the
      effective date of such proposed transaction. The Administrator in its discretion
      may provide: (i) for an Optionee to have the right to exercise his or her Option
      until ten (10) days prior to the effective date of such transaction as to all
      of
      the Shares covered thereby, including Shares as to which the Option would not
      otherwise be exercisable; or (ii) that any Company repurchase option applicable
      to any Shares purchased upon exercise of an Option shall lapse as to all such
      Shares, provided the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    proposed
      dissolution or liquidation takes place at the time and in the manner
      contemplated. To the extent it has not been previously exercised, an Option
      will
      terminate immediately prior to the consummation of such proposed action.

    

    (c)
      Acquisition of Company. 

    

    (i)
      In
      the event of an Acquisition (defined in Section 12(d)), each outstanding Option
      may be assumed or an equivalent option substituted by the Surviving Corporation
      (defined in Section 12(d)). For the purposes of this paragraph, an Option shall
      be considered assumed if, following the Acquisition, the option confers the
      right to purchase or receive, for each Share subject to the Option immediately
      prior to the Acquisition, the consideration (whether stock, cash, or other
      securities or property) received in the Acquisition by holders of Common Stock
      for each Share held on the effective date of the transaction (and if holders
      were offered a choice of consideration, the type of consideration chosen by
      the
      holders of a majority of the outstanding Shares); provided, however, that if
      such consideration received in the Acquisition is not solely common stock of
      the
      Surviving Corporation, the Administrator may, with the consent of the Surviving
      Corporation, provide for the consideration to be received upon the exercise
      of
      the Option, for each Share subject to the Option, to be solely common stock
      of
      the Surviving Corporation or its Parent equal in fair market value to the per
      share consideration received by holders of Common Stock in the
      Acquisition.

     

    (ii)
      In
      the event that the Surviving Corporation in an Acquisition does not assume
      or
      substitute for the Option: (A) each Optionee shall fully vest in and have the
      right to exercise the Option as to all of the Shares covered thereby, including
      Shares as to which it would not otherwise be vested or exercisable; (B) any
      Company repurchase option applicable to any Shares acquired upon exercise of
      an
      Option shall lapse as to all such Shares; (C) the Administrator shall notify
      the
      Optionee in writing or electronically that the Option shall be exercisable
      in
      full for a period of at least fifteen (15) days from the date of such notice
      (provided that the exercisability of previously unvested Options may be
      conditioned upon the consummation of the Acquisition and/or the agreement of
      Optionee to sell the shares issuable upon Option exercise to the Surviving
      Corporation if the Acquisition is structured as a stock sale), and (D) the
      Option shall terminate upon the expiration of such 15-day period or such later
      date specified in such notice. 

    

    (iii)
      In
      the event that the Surviving Corporation in an Acquisition does assume or
      substitute for an Option but the Optionee is Involuntarily Terminated (defined
      in Section 12(d)) within 12 months of the closing of the Acquisition, then
      (A)
      such Optionee shall fully vest in and have the right to exercise the Option
      as
      to all of the Shares covered thereby, including Shares as to which it would
      not
      otherwise be vested or exercisable; and (B) any Company repurchase option
      applicable to any Shares acquired upon exercise of an Option held by such
      Optionee shall lapse as to all such Shares. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)
      Definitions.
      The
      following capitalized terms have the following definitions when used in this
      Section 12:

    

    (i)
      “Acquisition” means the sale, conveyance, or other disposal of all or
      substantially all of the property or business of the Company or merger with
      or
      into or consolidation with any other corporation, limited liability company
      or
      other entity (other than a wholly-owned subsidiary of the Company), provided,
      however, that none of the following shall be considered an Acquisition: (A)
      a
      merger effected exclusively for the purpose of changing the domicile of the
      Company, (B) an equity financing in which the Company is the surviving
      corporation, or (C) a transaction in which the stockholders of the Company
      immediately prior to the transaction own 50% or more of the voting stock of
      the
      surviving corporation following the transaction (taking into account only stock
      of the Company held by such stockholders prior to the transaction).

    

    (ii)
      "Involuntary Termination" means the occurrence after, or within one month prior
      to and in contemplation of, an Acquisition of: (A) Optionee’s involuntary
      dismissal or discharge by the Company for reasons other than Misconduct, or
      (B)
      Optionee’s voluntary resignation following (1) a change in Optionee’s position
      with the Company which materially reduces Optionee’s level of responsibility,
      other than changes in responsibilities resulting from the retention of one
      or
      more new officers approved by the Board; (2) a reduction in Optionee’s level of
      cash compensation by more than fifteen percent (15%), other than a reduction
      in
      Optionee’s cash compensation which, by resolution of the Board of the Company,
      is applicable to all employees of the Company generally or which Optionee,
      in
      his or her sole and absolute discretion, accepts voluntarily; or (3) a
      relocation of Optionee’s place of provision of services by more than
      seventy-five (75) miles, provided and only if such change, reduction or
      relocation is effected by the Company without Optionee’s consent. 

    

    (iii)
      “Misconduct” means the commission of any act of fraud, embezzlement or
      dishonesty by Optionee, any unauthorized use or disclosure by Optionee of
      confidential information or trade secrets of the Company (or any Parent or
      Subsidiary), or any other intentional misconduct by Optionee adversely affecting
      the business or affairs of the Company (or any Parent or Subsidiary) in a
      material manner. The foregoing definition shall not be deemed to be inclusive
      of
      all the acts or omissions which the Company (or any Parent or Subsidiary) may
      consider as grounds for the dismissal or discharge of Optionee or any other
      person in the Service of the Company (or any Parent or Subsidiary).

     

    (iv)
      “Surviving Corporation” means, in the event of a transaction described in clause
      (i) of the definition of Acquisition above, the surviving corporation if the
      transaction is a merger or consolidation or the purchasing corporation if the
      transaction is an asset or stock sale. The term “Surviving Corporation” shall
      also include any Parent corporation of the entity described in the previous
      sentence if securities of that Parent corporation are issued to the stockholders
      of the Company in connection with such Acquisition.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) Board
      Determination.
      Any
      determination by the Board under this Section 12 shall be final, binding and
      conclusive on all Optionees.

    

    13.
      Date
      of Grant.
      The
      date of grant of an Option shall be, for all purposes, the date on which the
      Administrator makes the determination to grant such Option, or such other later
      date as is specified by the Administrator. 

    

    14.
      Amendment
      and Termination of the Plan.
      

    

    (a)
      Amendment
      and Termination.
      The
      Board may at any time amend, alter, suspend or terminate the Plan. 

    

    (b)
      Stockholder
      Approval.
      The
      Company shall obtain stockholder approval of any Plan amendment to the extent
      necessary and desirable to comply with applicable laws, including any increase
      in the number of shares issuable pursuant to this Plan. . 

    

    (c)
      Effect
      of Amendment or Termination.
      No
      amendment, alteration, suspension or termination of the Plan shall impair the
      rights of any Optionee, unless mutually agreed otherwise between the holder
      of
      such Option and the Administrator, which agreement must be in writing and signed
      by the holder of such Option and the Company. Termination of the Plan shall
      not
      affect the Administrator's ability to exercise the powers granted to it
      hereunder with respect to Options granted under the Plan prior to the date
      of
      such termination. 

    

    15.
      Conditions
      Upon Issuance of Shares.
      

    

    (a)
      Legal
      Compliance.
      Shares
      shall not be issued pursuant to the exercise of an Option unless the exercise
      of
      such Option and the issuance and delivery of such Shares shall comply with
      Applicable Laws and shall be further subject to the approval of counsel for
      the
      Company with respect to such compliance. 

    

    (b)
      Investment
      Representations.
      As a
      condition to the exercise of an Option, the Company may require the person
      exercising such Option to represent and warrant at the time of any such exercise
      that the Shares are being purchased only for investment and without any present
      intention to sell or distribute such Shares if, in the opinion of counsel for
      the Company, such a representation is required. 

    

    16.
      Reservation
      of Shares.
      The
      Company, during the term of this Plan, will at all times reserve and keep
      available such number of Shares as shall be sufficient to satisfy the
      requirements of the Plan. 

    

    17.
      Stockholder
      Approval.
      The
      Plan shall be subject to approval by the stockholders of the Company within
      twelve (12) months after the date the Plan is adopted. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    *
      * * *
      *

    

    

    Plan
      approved by the Board of Directors of the Company on July 26, 2006.

    

    Plan
      approved by the stockholders of the Company on November 17,
      2006.

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