STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE   AGREEMENT (this “ Agreement ”) is dated as of October___, 2009, and is entered into by and among ____; ____; ____; ____ and ____; (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 .”).

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, concurrently herewith, as part of this offering,  certain other Investors ____________; _______________ ; and ____________ collectively, the  " Other   Investors ") are purchasing from the Company Twenty Million (20,000,000) Shares of the Company’s common stock, par value $0.001 (the “ Common Stock ”), for an aggregate consideration of Six Hundred Thousand Dollars (U.S. $600,000), and , in connection with such purchase, are  receiving an aggregate of Twenty Million (20,000,000) Class A Warrants and Twenty Million (20,000,000) Class B Warrants;

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 (Employee) Warrant and one Class B (Employee)Warrant, as defined below, such Common Stock and Warrants, being collectively referred to hereinafter as the " Securities "; and

WHEREAS, the Parties hereto 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 One Hundred and Fifty Two Thousand Four Hundred and Fourteen Dollars and  Forty Four Cents ($152,414.44) to purchase an aggregate of Five Million Eighty Thousand Four Hundred and Eighty (5,080,480) shares of the Company's Common Stock, issuable at the Purchase Price  at the Closing, and, in connection with such purchase, the Investors shall receive the following :

(a) An aggregate of Two Million Five Hundred and Forty Thousand TwoHundred and  Forty(2,540,240) Class A (Employee) Warrants (the" ClassA (Employee ) Warrants "), to be granted pursuant to the form of the Class A Employee Warrant Agreement attached as Exhibit 2; and

           (b) An aggregate of Two Million Five Hundred and Forty Thousand TwoHundred and Forty(2,540,240) Class B (Employee) Warrants (the" ClassB ( Employee ) Warrants "), to be granted pursuant to the form of the Class B Employee Warrant Agreement attached as Exhibit 3;

WHEREAS, contemporaneously with the execution and delivery of this Agreement and the Class A (Employee) Warrant Agreements and Class B (Employee) 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:

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

(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, pursuant to the Company's  standard authorization to withhold form.

Except for the representation and warranty set forth in Section 2.1 (b) below made solely by Young and Zaidi , 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 he or she is capable of evaluating the merits and risks of an investment in the Securities.

(b)   Young and Zaidi are executive officers of the Company and, as such, each is an “accredited investor” as defined in Rule 501(a) under the Act.  Each 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 six(6) month or greater 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 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 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, and remains an employee of the Company; is intimately familiar with the business and operations of the Company; and has been furnished with such materials and has been given such access to information relating to the Company as he or she has requested. Each Investor has also 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, each Investor specifically confirms that in connection with making this investment, he or she has reviewed the most recent SEC periodic report on Form 10-K and the Company's subsequent SEC reports on Forms 8-K and 10-Q previously provided by the Company. In addition, Investor confirms that he or she is aware that the Company's prior and current SEC reports are available to the Investor on line at www.sec.gov . Investor also confirms that he or she 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 SEC under the heading “Risk Factors.”  Without limiting those disclosures, the Company hereby specifically advises each Investor that there is an extremely limited trading volume for the Company's Common Stock, which is not currently listed on NASDAQ, and the Company cannot and is not providing any assurance that this situation will change after Investor's purchase hereunder.

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 and, as such, may only be resold subject to six (6) months or greater holding periods, which will only commence upon payment for the Common Stock (or exercise and payment for the Warrant Shares), and any re-sale is subject also to the volume and other limitations contained in  Rule 144, a copy of which is available to the Investor on request. 

(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 OF 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.

(e) Investor agrees, prior to any transfer of the Securities, to give written notice to the Company expressing Investor's 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 s