STOCK PURCHASE AGREEMENT by NEOMAGIC CORP

THIS STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of January 11. 2012, and is entered into by and among each of the investors whose names are listed on Exhibit A hereto (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 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 A, of an aggregate consideration of up to One Hundred Sixty Thousand Dollars (U.S. $160,000.00), the Company shall issue and sell to Investors, and the Investors shall purchase up to Sixteen Million (16,000,000) shares of the Company's common stock, par value $0.001 (the "Common Stock);

WHEREAS, the aggregate consideration payable by the Investors shall be based on a purchase price of One Cents ($.01) (the "Purchase Price") for one share of Common Stock (the shares of Common Stock issued to the Investors pursuant to this Agreement shall be referred to in this Agreement as the "Stock"); and

 

WHEREAS, contemporaneously with the execution and delivery of this Agreement the Parties may be executing and delivering other contemporaneous agreements executed by the Parties, which together with this Agreement  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 Stock.  Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, each Investor agrees to purchase at the applicable Closing (as defined below) and the Company agrees to sell and issue to such Investor at the applicable Closing the Stock set forth opposite its name in Exhibit A hereto. 

1.3 Initial Closing Date.  The closing (the "Initial Closing") of the purchase and sale of the Common Stock shall take place at 4:00 p.m., Pacific Time on January 11, 2012, subject to any required notification of satisfaction of the conditions to the Initial Closing set forth herein, or on such later date as is mutually agreed to by the Company and the Investors (the "Initial Closing Date").  The Initial Closing shall occur on the Initial Closing Date at the offices of the Company at 2372-A Qume Drive, San Jose, California 95131(or such other place as is mutually agreed to by the Company and the Investors).

 

1.3 Subsequent Closings.  At the discretion of the Company, the Company may conduct one or more subsequent closings (each a "Subsequent Closing" and collectively with the Initial Closing, the "Closings" and each individually, a "Closing") within 150 days of the Initial Closing Date.  Subject to the terms and conditions hereof, on the closing date of each Subsequent Closing (each a "Subsequent Closing Date") the Company will issue and sell to each additional Investor, and each additional Investor will purchase, the Stock specified opposite the name of each such Investor added to Exhibit A.  Any such Investor shall become a party to this Agreement, and shall have the rights and obligations hereunder.  In the event that there is more than one Closing, the term Stock shall apply to all Stock sold and issued at each such Subsequent Closing.

 

1.4 Closing Deliveries. 

(a) At the Initial Closing, and each Subsequent Closing, the Company shall deliver or cause to be delivered to each Investor the following (the "Company Deliverable"):

 

(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 Stock, registered in the name of such Investor;

 

(b)  At the Initial Closing, and each Subsequent Closing, each Investor shall deliver or cause to be delivered to the Company the consideration set forth opposite such Investor's name on Exhibit A, in immediately available funds, by wire transfer to the following bank account:

NeoMagic Corporation

Checking account No.   XXXXXXXXX

XXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXX

 

Routing and Transit #ABA:   XXXXXXX

 

SWIFT: XXXXXXXX

 

 

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

OF THE INVESTORS

Except for the representations and warranties set forth in Section 2.1(b) which is being made only by Investors that are not employees of the Company, each of the Investors represents and warrants to the Company that, as of the date hereof and as of the applicable 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 Stock.

 

(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 Stock 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 Stock 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 Stock 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 Stock for any period of time.  Such Investor is acquiring the Stock 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 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.

 

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 Stock, 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 the date of October 31, 2010 hereof have been made available to the Investor at www.sec.gov.  Information for the period ending January 30, 2011 to the present is not available through the SEC due to the cessation of the Company's required filings under the 1934 Act.  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 Stock.  Investor understands that an investment