Document:

ex4-16.htm

    EXHIBIT
4.16

     

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

       

      

       

      NEOMAGIC
CORPORATION

       

      CLASS
B (EMPLOYEE) WARRANT

       

      
        	 
      	 
      	 
      
	
                Warrant
      No. B__ 

              	
                  

              	
                Original
      Issue Date:
October    ,2009

              

      

       

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

       

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

       

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

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

       

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

       

      3.           List of Transfers;
Restrictions on Transfer.

       

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

       

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

       

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

       

      
        
           

        

        
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      4.           Exercise and Duration of
Warrants.

       

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

       

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

       

        5.           Delivery of Warrant
Shares.

       

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

      

      
        
           

        

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

       

      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 Section 9(a) shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this  Section 9(a)
shall become effective immediately after the effective date of such subdivision
or combination.

       

      
        
           

        

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

       

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

       

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

      
         

        (e)           Subsequent Equity
Sales.

         

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

         

      

      
        
           

        

        
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      Adjusted
Exercise Price = (A x
B) + D

                  A+C

       

      where

       

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

       

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

       

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

       

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

       

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

       

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

       

       

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

       

       

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

       

      
        
           

        

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

       

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

       

      
        
           

        

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

       

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

       

      
        
           

        

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

       

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

       

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

       

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

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

         

      

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

       

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

       

      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.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

         

      

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

       

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

       

      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.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

         

      

      (b)           All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of California, without regard to the
principles of conflicts of law thereof. Each party agrees that any legal
proceeding concerning the interpretation, enforcement and defense of this
Warrant and the transactions herein contemplated (“Proceeding")
,whether brought against a party hereto or its respective Affiliates ( as
defined above), employees or agents. shall be commenced and maintained
exclusively in the federal or state courts located within Santa Clara County,
California. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of such courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or referenced
herein, and hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the jurisdiction of
such courts, or that any such Proceeding has been commenced in an improper or
inconvenient forum. Each party hereto hereby irrevocably waives personal service
of process and consents to process being served in any such Proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any
Proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce any
provisions of this Warrant, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.

       

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

       

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

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

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

       

      
        
          	 	
                  NEOMAGIC
      CORPORATION

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ 	 
	 	Name:	
                  Douglas
      R. Young

                	 
	 	Title:	
                  Chief
      Executive Officer

                	 
	 	 	 	 

        

         

        
          
             

          

          
            14

            
              

            

          

          
             

          

           

        

      

      EXERCISE
NOTICE

      

      NeoMagic
Corporation

      

      (EMPLOYEE)
WARRANT NO.
B___                            DATED
OCTOBER__, 2009

       

      Ladies
and Gentlemen:

      

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

        

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

      

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

       

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

       

      
        	 	
              	 
	 	HOLDER:	 
	 	 	 
	
                 

              	 	 
	 	
                (Print
      name)

              	 
	 	
              	 
	 	By: 	 
	 	 	 
	 	Title:    	 

      

      

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

         

      

      WARRANT
ORIGINALLY ISSUED OCTOBER__, 2009

      (EMPLOYEE)
WARRANT NO. B___

      

      FORM
OF ASSIGNMENT

       

      To be
completed and signed only upon transfer of Warrant

       

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

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	Dated:
      	 	TRANSFEROR:	 
	 	 	 	 
	 	
                                           

                                        	 	 
	 	 	
                                          (Print
      name)

                                        	 
	 	 	
                                        	 
	 	 	By: 	 
	 	 	 	 
	 	 	Title:    	 

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	
                                    	 
	 	
                                      TRANSFEREE:

                                    	 
	 	 	 
	
                                       

                                    	 	 
	 	
                                      (Print
      name)

                                    	 
	 	
                                    	 
	 	(Address of Transferee)	 
	 	 	 
	 	   	 
	 	 	 
	 	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

          
            
              	In the presence of:	 	
                    	 
	 	 	 	 

               

               

            

          

        

      

       

       

    

    

    16ex10-29.htm

    
      
        EXHIBIT
10.29

      

    

     

    STOCK PURCHASE
AGREEMENT

     

    THIS
STOCK PURCHASE AGREEMENT
(this “Agreement”)
is dated as of October___, 2009, and is entered into by and among each of the
investors whose names are set forth below (each individually, an “Investor”
and collectively, the "Investors")
and NeoMagic Corporation, a Delaware corporation (the “Company”),
with the Company and each of the Investors hereinafter being referred to
collectively as the “Parties”
and individually as a “Party.”).

     

    RECITALS

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Act”),
the Company desires to issue and sell to each Investor, and each Investor
desires to purchase from the Company, common stock and warrants to be issued by
the Company as more fully described below in this Agreement, including the
exhibits hereto;

     

    WHEREAS,
the Company and each  Investor are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 505 of Regulation D (“Regulation
D”) as promulgated by the U.S. Securities and Exchange Commission (the
“SEC”)
under the  Act;

     

    WHEREAS,
the Parties desire that, upon the terms and subject to the conditions contained
herein, including payment by the Investors, in accordance with Exhibit 1, of an
aggregate consideration of Six Hundred Thousand Dollars (U.S. $600,000), the
Company shall issue and sell to Investors, and the Investors shall purchase
Twenty Million (20,000,000) Shares of the Company’s common stock, par value
$0.001 (the “Common
Stock”), and, in connection with such purchase, shall receive the
following:

    

    (a) An aggregate of Twenty Million
(20,000,000) Class A Warrants (the"Class A
Warrants"), to be granted pursuant to the form of Class AWarrant
Agreement attached as Exhibit 2; and

    

               (b)
An aggregate of Twenty Million (20,000,000) Class B Warrants (the "Class B
Warrants"), to be granted pursuant to the form of Class BWarrant
Agreement attached as Exhibit 3;

    

    WHEREAS,
the aggregate consideration payable by the Investors shall be  based
on a purchase price of Three Cents ($.03) (the “Purchase
Price”) for one share of Common Stock, plus one Class A Warrant and one
Class B Warrant  (Such Common Stock and Warrants, being collectively
referred to hereinafter as the "Securities");
and

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    WHEREAS,
contemporaneously with the execution and delivery of this Agreement and the
Class A Warrant Agreements and Class B Warrant Agreements referenced above, the
Parties may be executing and delivering other contemporaneous agreements
executed by the Parties, which together with this Agreement  and such
Warrant Agreements ,shall be collectively referred to as the “Transaction
Documents”);

     

    NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth, and
such other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto do hereby covenant, agree, represent
and warrant as follows:

     

    ARTICLE
1

    PURCHASE
AND SALE OF SECURITIES

     

    1.1  
Incorporation of
Recitals.  The recitals to this Agreement set forth above are hereby
incorporated by reference into this Agreement. 

    

    1.2 Purchase of
Securities.  Subject to the satisfaction (or waiver) of the terms
and conditions of this Agreement, each Investor agrees to purchase at the
Closing and the Company agrees to sell and issue to such Investor at the Closing
the Securities set forth opposite its name in Exhibit 1
hereto. 

    

    1.3 Closing Date. 
The closing (the “Closing”)
of the purchase and sale of the Common Stock and the Warrants shall take place
at 11:00 a.m., Pacific Time on October 16, 2009, subject to any required
notification of satisfaction of the conditions to the Closing set forth herein,
or on such later date as is mutually agreed to by the Company and the Investors
(the “Closing
Date”).  The Closing shall occur on the Closing Date at the offices
of the Company at 780 Montague Expressway, Suite 504, San Jose, California (or
such other place as is mutually agreed to by the Company and the
Investors).

     

    1.4 Closing Deliveries. 
(a) At the Closing, the Company shall deliver or cause to be delivered to
each Investor the following (the “Company
Deliverables”):

     

    (i)
irrevocable instructions addressed to the Company’s transfer agent instructing
it to issue a certificate or to make an appropriate book entry evidencing the
Shares, registered in the name of such Investor;

     

    (ii) the
Class A and Class B Warrant Agreements, duly executed by the Company, granting
the number of  Class A and Class B Warrants to be delivered to the
Investor in accordance with Exhibit 1 hereto ;

    

    (iii) a
copy of the resolutions of the Board of Directors increasing the number of
Directors to five (5) and electing Messrs. Jorge Granier, David Tomasello and
Joseph Fitzgerald as directors of the Company; and

    

    (iv) an officer's certificate or other
reasonably satisfactorydocumentation confirming that at or prior to the
Closing:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

                     
(A) the Company's CEO, COO and other current employeesinvest One Hundred and
Fifty Two Thousand Four Hundredand Fourteen Dollars ($152, 414) to purchase an
aggregateof Five Million Eighty Thousand Four Hundred and Eighty(5,080,480)
shares of the Company's Common Stock issuableat a price ofUS$0.03 per share at
the Closing, at which time they will also be granted an aggregate of Two Million
Five Hundred and Forty Thousand Two Hundred and Forty (2,540,240) Class A
(Employee) Warrants and Two Million Five Hundred and Forty Thousand Two Hundred
and Forty (2,540,240) Class B (Employee) Warrants, to be evidenced by agreements
substantially in the form of Exhibits 4 and 5 hereto; and

    

     

    (B) all current employees have agreed
to forgo any other amountsdue them from the Company, other than accrued vacation
and anamount of Twenty Eight Thousand Dollars ($28,000),which theInvestors agree
may be used by such employees, in their discretion,  to exercise their
Class A (Employee) Warrants.

     

     

    (b) 
At the Closing, each Investor shall deliver or cause to be delivered to the
Company the consideration set forth below on the Investor's signature page, in
immediately available funds, by wire transfer to the following bank
account:

    

    NeoMagic
Corporation

    Checking
account No. 4127386647

    Wells
Fargo Bank

    121 Park
Center Plaza,

    San Jose,
Ca 95113

    

    Routing
and Transit #ABA: 121000248

    SWIFT:
WFBIUS6S

     

     

    
      	
              1.5
      Completion of
      Due Diligence. The Closing is subject to the Investor's
      satisfactory completion of due diligence, by no later than October 9,
      2009.

            

    

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    ARTICLE
2

    REPRESENTATIONS
AND WARRANTIES

     

    OF THE
INVESTORS

    

    Each of
the Investors represents and warrants to the Company that, as of the date hereof
and as of the Closing:

    

    2.1 Status of
Investor.

    

    (a)   Investor has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Securities.

     

    (b)  
Investor is an “accredited investor” as defined in Rule 501(a) under
the Act.  Such Investor is not a registered broker-dealer under
Section 15 of the Securities Exchange Act of 1934, as amended (the "1934
Act").   

    

    (c) 
Investor is acquiring the Securities as principal for its own account for
investment purposes only and not with a view to or with the intent of
distributing or reselling such Securities or any part thereof, without
prejudice, however, to such Investor’s right at all times  to sell or
otherwise dispose of all or any part of such Securities in compliance with the
one year holding period set forth in Rule 144 promulgated under the Act and in
compliance with other applicable federal and state securities laws. 
Subject to the immediately preceding sentence, nothing contained herein shall be
deemed a representation or warranty by such Investor to hold the Securities for
any period of time.  Such Investor is acquiring the Securities hereunder in
the ordinary course of its business.  Such Investor does not have any
agreement or understanding, directly or indirectly, with any person to
distribute any of the Securities.

     

    (d) 
Investor has not directly or indirectly, nor has any person acting on behalf of
or pursuant to any understanding with such Investor, engaged in any transactions
in the securities of the Company (including, without limitation, any short sales
as defined in Rule 200 promulgated under Regulation SHO under the 1934 Act
and all types of direct and indirect stock pledges, forward sale contracts,
options, puts, calls, short sales, swaps and similar arrangements (including on
a total return basis), and sales and other transactions through non-US broker
dealers or foreign regulated brokers (“Short
Sales”) involving the Company’s securities) since the earlier to occur of
(1) the time that such Investor became a party to a non-disclosure
agreement with the Company regarding this investment in the Company and
(2) the 30th day prior to the date of this Agreement.  Such Investor
covenants that neither it nor any person acting on its behalf or pursuant to any
understanding with it will engage in any transactions in the securities of the
Company (including Short Sales) prior to the time that the transactions
contemplated by this Agreement are publicly disclosed.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    2.2 Access to
Information.  Investor has been furnished with such materials and
has been given access to such information relating to the Company as it its
representative has requested and has been afforded the full opportunity to ask
questions regarding the Company and the Securities, all to the extent that the
Investor has found necessary to make an informed decision regarding the
Investor’s entering into this Agreement. In particular, Investor specifically
confirms that all of the Company's filings, including its Form10-K's, 10-Q and
8-K's for 2007 through 2009 have been made available to the Investor at www.sec.gov. Investor
also confirms that it has been advised that the proceeds of this offering are to
be utilized as provided in Section 4.1 below.

    

    2.3 Understanding of Risks
Associated with the Acquisition of the Securities.  Investor
understands that an investment in the Securities is speculative and subject to
numerous risks, including but not limited to the risks set forth in the
Company’s filings with the U.S. Securities and Exchange Commission under the
heading “Risk Factors.” 

    

    2.4 Understanding of Nature
of Securities.  Investor understands that:

     

    (a) 
the Securities have not been registered by the Company under the Act or any
State Act (as defined below), and the Company does not intend to register the
Securities for sale under the Act or any State Act in reliance, among other
things, on the exemptions from registration available under Regulation D and
under Section 25102(f) of the California Corporate Securities Law of 1968, as
amended.

     

    (b) 
the Securities are “restricted securities” as that term is defined in
Rule 144 under the Act. 

     

    (c) the
certificates, if any, evidencing the Securities shall include provisions
substantially in the form of the legend set forth below, which Investor has
read, understands and agrees to be bound by:

     

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

     

    (d) the
Company may, from time to time, make stop transfer notations in the Company’s
records to ensure compliance with the Act and any applicable State
Acts.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    (e)
Investor agrees, prior to any transfer of the Securities, to give written notice
to the Company expressing its desire to effect such transfer and describing
briefly the proposed transfer.  Upon receiving such notice, the Company
shall present copies thereof to counsel for the Company and the following
provisions shall apply:

     

    (i)           
If, in the opinion of such counsel, the proposed transfer of such Securities may
be effected without registration of such Securities under the Act and the State
Acts, the Company shall promptly thereafter notify the person desiring to
transfer such Securities, whereupon such person shall be entitled to transfer
such Securities, all in accordance with the terms of the notice delivered by
such person to the Company and upon such further terms and conditions as shall
be required by the Company to ensure compliance with the Act and the State
Acts.

     

    (ii)          
If, in the opinion of such counsel, the proposed transfer of such Securities may
not be effected without registration of such Securities under the Act and the
State Acts, a copy of such opinion shall be promptly delivered to the person who
has proposed such transfer, and such proposed transfer shall not be made unless
such registration is then in effect.

     

    2.5  
Investment
Intent.  Investor represents and warrants that:

     

    (a)    
Investor is acquiring the Securities for the Investor’s own account and not on
behalf of any other person.

     

    (b)   
Investor is the sole party in interest in this investment in the Securities and
is acquiring the Securities for investment and not for distribution or with the
intent of dividing Investor’s participation with others or of selling,
assigning, transferring or otherwise disposing of the Securities.

     

    2.6 Further Assurances. 
Investor will execute and deliver to the Company any document, or do any other
act or thing, which the Company may reasonably request in connection with the
acquisition or transfer of the Securities.

     

    2.7 Non-disclosure. Except
as expressly permitted by its current non-disclosure agreement with the Company,
Investor has not distributed to any person any written materials furnished to
Investor by the Company. 

    

    2.8 Ability to Bear
Economic Risk.  Investor has adequate means of providing for its
current needs and possible future contingencies, and has no need, and
anticipates no need in the foreseeable future, to sell the Securities which it
is acquiring pursuant to this Agreement. Investor is able to bear the economic
risks related to the acquisition of the Securities and, consequently, without
limiting the generality of the foregoing, is able to hold the Securities for an
indefinite period of time and has sufficient net worth to sustain a loss of its
entire interest in the Company in the event such loss should occur. 
Investor has no need for liquidity with respect to the Securities being
purchased hereunder.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    2.9 Tax Matters. 
Investor has reviewed with Investor’s own tax advisors the federal, state, local
and foreign tax consequences arising in connection with the acquisition of the
Securities (including any tax consequences that may result under recently
enacted tax legislation).  Investor is relying solely on such advisors and
not on any statements or representations of the Company or any of its agents and
understands that Investor (and not the Company) shall be responsible for
Investor’s own tax liability that may arise as a result of this
transaction.

     

    2.10
Accuracy of
Representations.  All of the representations and information
provided herein and any additional information that Investor has furnished to
the Company or its agents with respect to Investor’s financial position and
business experience is accurate and complete as of the date of this
Agreement.  If there should be any material adverse change in any such
representation or information prior to the Closing, Investor will immediately
furnish accurate and complete information concerning any such material change to
the Company.

     

    2.11
Piggyback Registration
Rights.  If at any time following the Closing Date the Company
proposes to register any of the Securities under the Act (other than an
underwritten public offering or a registration on Form S-8 or S-4, or any
successor forms, relating to Common Stock issuable upon exercise of employee
stock options or in connection with any employee benefit or similar plan of the
Company or in connection with a direct or indirect acquisition by the Company of
another entity), whether or not for sale for its own account, the Company shall
each such time give prompt notice at least ten (10) days prior to the
anticipated filing date of the registration statement relating to such
registration to Investor, which notice shall offer Investor the opportunity to
include in such registration statement the number of Securities such Investor
may request. Upon the request of Investor made within five (5) days after
the receipt of notice from the Company (which request shall specify the number
and nature of the Securities intended to be registered by Investor, which may
include the shares of Common Stock issuable upon exercise of the
Warrants      (the "Warrant
Shares")), the Company shall use all reasonable efforts to effect the
registration under the Act of all Securities that the Company has been so
requested to register by the Investors, to the extent requisite to permit the
disposition of the Securities so to be registered, provided that if, at any time
after giving notice of its intention to register any Securities pursuant to this
Section 2.11 and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register such Securities, the Company shall give notice to Investor and,
thereupon, shall be relieved of its obligation to register any Securities in
connection with such registration. The obligations under this Section 2.11
shall expire when all of the Securities are saleable by Investors pursuant to
Rule 144 without limitation as to volume.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    ARTICLE
3

    

    REPRESENTATIONS
AND WARRANTIES

    OF
THE COMPANY

    

     The
Company represents and warrants to each of the Investors that, as of the date
hereof and as of the Closing:

    

    3.1 Issuance of
Securities.  The issuance of the Securities has been duly
authorized by all necessary corporate action and, when paid for and issued in
accordance with the terms of the Transaction Documents, the Securities will be
duly and validly issued, free and clear of all liens and encumbrances of the
Company. In addition, any Shares of Common Stock issued upon exercise of the
Warrants will be validly issued, fully paid and nonassessable and free and clear
from all preemptive or similar rights, and all liens and encumbrances of the
Company, with the holders being entitled to all rights accorded to a holder of
Common Stock.  Assuming the accuracy of each of the representations
and warranties set forth in Section 2 of this Agreement, the Company's offer and
issuance of the Securities to the Investors pursuant to this Agreement shall be
exempt from registration under the Act.

    

    3.2 No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby (including, without limitation, the issuance
of Warrants and reservation for issuance and issuance of the Warrant Shares
)will not (i) result in a violation of any certificate of incorporation,
certificate of designation or bylaws or any other constituent document of the
Company or of any of its Subsidiaries, or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) in any respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or (iii)
result in a violation of any federal or state law, rule, regulation, order,
judgment or decree (including securities laws applicable to the Company or any
of its Subsidiaries) by which any property or asset of the Company or any of its
Subsidiaries is bound or affected.

    

    3.3 Consents.  Neither
the Company nor any of its Subsidiaries is required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
person in order for it to execute, deliver or perform any of its obligations
under or contemplated by the Transaction Documents, in each case in accordance
with the terms thereof, except for (a) the filing with the SEC of (i) a Form D
with respect to the transactions contemplated hereby and (ii) any registration
statements in accordance with Section 2.11 and (b) the filing with the
California Department of Corporations of a Notice pursuant to Section 25102(f)
of the California Corporate Securities Act of 1968, as amended.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    3.4 No General
Solicitation.  Neither the Company, nor any of its Subsidiaries
or Affiliates( as defined below), nor any Person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offer or sale of the
Securities.

    

    3.5 Delisting from NASDAQ; No
Integrated Offering.  The Company has been delisted from
NASDAQ. In addition, none of the Company, its Subsidiaries, any of their
Affiliates, and any person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of the issuance of
any of the Securities under the Act, whether through integration with prior
offerings or otherwise.  None of the Company, its Subsidiaries, their
Affiliates and any person acting on their behalf will take any action or steps
referred to in the preceding sentence that would require registration of the
issuance of any of the Securities under the Act or cause the offering of the
Securities to be integrated with other offerings.

    

    3.6 SEC Documents; Financial
Statements.  During the two (2) years prior to the date hereof,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements, notes and
documents incorporated by reference therein being hereinafter referred to as the
"SEC
Documents").  True, correct and complete copies of the SEC
Documents have been made available to the Investors through the EDGAR
system.  As of their respective filing dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. As of their respective filing dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    3.7 Foreign Corrupt
Practices.  Since January 1, 2007, neither the Company nor any
of its Subsidiaries nor any director, officer, agent, employee or other person
acting on behalf of the Company or any of its Subsidiaries has, in the course of
its actions for, or on behalf of, the Company or any of its Subsidiaries (i)
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated  any provision of the
U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.

     

    3.8 Sarbanes-Oxley
Act.  The Company is currently not subject to the requirements
of the Sarbanes-Oxley Act of 2002.

     

               3.9 Employee Relations
The Company and its Subsidiaries are in compliance with all federal,
state and local laws and regulations respecting labor, employment and employment
practices and benefits, terms and conditions of employment and wages and hours,
except where failures to be in compliance would not, in the aggregate,
reasonably be expected to result in a Material Adverse Effect (as defined in
Section 3.12 below).

     

    3.10 Intellectual Property
Rights

    

    (a)The Company and its Subsidiaries own
or possess adequate rights or licenses to use all trademarks, trade names,
service marks and all applications and registrations therefor, patents, patent
rights, copyrights, original works of authorship (including computer software)
and all applications and registrations therefor, inventions, trade secrets and
other intellectual property rights ("Intellectual
Property Rights") necessary to conduct their respective businesses as now
conducted.

    

              (b)  The
Company does not have any knowledge of any infringement by the Company or its
Subsidiaries of Intellectual Property Rights of others.  No claim,
action or proceeding has been brought, or to the knowledge of the Company, has
been threatened, by or against the Company or its Subsidiaries regarding the
infringement, misappropriation or other violation of any Intellectual Property
Rights, other than any claim, action or proceeding which has since been
resolved.  Neither the Company nor any of its Subsidiaries is aware of
any existing facts which are likely to give rise to any infringement of
Intellectual Property Rights of others or infringement claims, actions or
proceedings.  The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of their
material Intellectual Property Rights.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    3.11 Internal Accounting and
Disclosure Controls. Subject to the disclosures contained in the SEC
Documents, the Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset and liability accountability, (iii)
access to assets or incurrence of liabilities is permitted only in accordance
with management's general or specific authorization and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with
respect to any difference. Subject to the disclosures contained in the SEC
Documents , the Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-14 under the 1934 Act) that 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 recorded, processed, summarized and
reported, within the time periods specified in the rules and forms of the SEC,
including, without limitation, controls and procedures 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 the Company's
management, including its principal executive officer or officers and its
principal financial officer or officers, as appropriate.

    

    3.12 Manipulation of
Price.  The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result, or that could reasonably be expected to cause or result, in
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii), sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
Securities or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.

    

    3.13 Material Adverse Effect As used
herein the term, "Material
Adverse Effect" means any material adverse effect on the business,
properties, assets, operations, results of operations or financial condition of
the Company and its Subsidiaries, taken as a whole, or on the transactions
contemplated hereby or in the other Transaction Documents, or on the authority
or ability of the Company to perform its obligations under the Transaction
Documents.

     

    
 

    ARTICLE
4

    COMPANY
COVENANTS

     

    4.1           Use of
Proceeds.  The Company will use the proceeds from the sale of
the Securities for general corporate purposes, including general and
administrative expenses and payment of outstanding liabilities, and not for the
redemption or repurchase of any of its or its Subsidiaries' equity
securities.

     

    4.2 Disclosure of Transactions
and Other Material Information.  On or before the fourth
business day following the Closing Date, the Company shall issue a press release
and file a Current Report on Form 8-K, in compliance with applicable SEC
regulations.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    ARTICLE
5

    INDEMNIFICATION

     

    The
Investors recognizes that the Company’s entering into this Agreement will be
based to a material extent upon the Investors' representations and warranties
set forth herein and Investors agree to indemnify and hold harmless the Company
and its officers, directors, counsel, employees and other agents from and
against any and all loss, damages, liabilities or expenses including reasonable
attorneys’ fees which any such person may incur by reason of or in connection
with any misrepresentation made by Investors in this Agreement or otherwise, any
breach by Investors of their agreements with the Company or any sale or
distribution of any Securities by Investors in violation of the Act or State
Acts.  All representations and warranties of Investors contained in this
Agreement shall survive this Agreement.

     

    ARTICLE
6

    MISCELLANEOUS
PROVISIONS

     

    6.1 Captions and
Headings. The Article and Section headings throughout this
Agreement are for convenience of reference only and shall in no way be deemed to
define, limit, or alter any provision of this Agreement.

     

    6.2 Entire Agreement;
Amendment.  This Agreement, together with the previously executed
non-disclosure agreements applicable to this transaction and the Class A and
Class B Warrant Agreements being entered into at the Closing set forth the
entire agreement and understanding of the Parties and shall supersede all prior
agreements and understandings.  No amendment of the Agreement shall be made
without the express written consent of the Parties.

     

    6.3 Severability. 
The invalidity or unenforceability of any particular provision of this Agreement
shall not affect any other provision hereof, and all other provisions hereof
shall continue to be enforceable to the maximum extent permitted by
law.

     

    6.4 Governing Law. 
This Agreement shall be governed by and construed in accordance with the laws of
the State of California, without reference to principles of conflicts of
laws.

     

    6.5 Notices.  All
notices, requests, demands, consents, and other communications hereunder shall
be transmitted in writing and shall be deemed to have been duly given when
hand-delivered or sent by certified mail, postage prepaid, with return receipt
requested, addressed to the Parties as follows:

    

     To
the Company:

    

    780 Montague Expressway, Suite 504, San
Jose, California95131, Attention: Chief
Executive Officer; and

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

    

     To
each Investor:

    

    As set forth on Exhibit 1

    

     Any
Party may change its address for purposes of this Section by giving notice
as provided herein.

    

    6.6 Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
all counterparts have been signed by each Party and delivered to the other
Parties; provided that a facsimile signature shall be considered due execution
and shall be binding upon the signatory thereto with the same force and effect
as if the signature were an original.

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    
      IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
Parties hereto as of the date first above written.

    INVESTOR SIGNATURE PAGE FOR:

      Number of
Shares:

      Number
of  Class A Warrants:

      Number
of  Class B Warrants:

      (The
number of Class A and Class B Warrants shall each be equal to the number of
Shares being purchased by the Investor.)

      Purchase
Price Per Security: US$0.03

      Aggregate
Purchase Price: US$

       

      By
signing below, each Investor confirms that the foregoing correctly sets forth
its or his agreement with the Company.

       

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      By:

                                    	
                                       

                                    	 	
                                       

                                    	 	
                                       

                                    
	 	 	 	 	 	 
	 	Dated as of:
      October___, 2009	 	
                                       

                                    	 	
                                       

                                    
	 	
                                       

                                    	 	 	 	 
	 	 	 	 	 	 
	 	
                                      NEOMAGIC
      CORPORATION

                                    	 	 	 	 
	 	 	 	 	 	 
	By: 	
                                      /s/
      

                                    	 	
                                       

                                    	 	
                                       

                                    
	 	
                                      Douglas
      R. Young, Chief Executive Officer

                                    	 	 	 	 
	 	 	 	 	 	 
	 	
                                      Dated
      as of: October___, 2009

                                    	 	
                                    	 	
                                       

                                    
	 	
                                    	 	 	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

       

       

      14

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