Warrant To Purchase Stock

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.





WARRANT TO PURCHASE STOCK



Corporation: 3Dfx Interactive, Inc., a California corporation Number of Shares: 25,000 Class of Stock: Common Warrant Price: $13.875 Issue Date: December 3, 1997 Expiration Date: December 3, 2002



For value received, 3Dfx Interactive , Inc. (the "Company"), a California corporation, hereby grants to Creative Labs, Inc. (the "Holder"), a California Corporation, and the Holder is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase f rom the Company, 25,000 fully paid and nonassessable shares of the common stock (the "Shares") of the Company at the exercise price per share (the "Warrant Price") set forth in Article 1 below and as adjusted pursuant to Article 2, subject to the provisio ns and upon the terms and conditions set forth in this Warrant.



ARTICLE 1. EXERCISE.



1.1 Exercise Price. The exercise price per Share of common stock (the "Exercise Price") to be delivered by the Company upon exercise hereof shall be, on or prior to December 3, 2002, $13.875.



1.2 Method of Exercise. Holder may exercise this Warrant by delivering a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company. Unle ss Holder is exercising the conversion right set forth in Section 1.3, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased.



1.3 Conversion Right. In lieu of exercising this Warra nt as specified in Section 1.2, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise o f this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant Section 1.4.



1.4 Fair Market Value. If the Shares are traded in a p ublic market, the fair market value of the Shares shall be the closing price of the Shares (or the closing price of the Company's common stock into which the Shares are convertible) reported for the business day immediately before







Holder delivers its Notice of Exercise to the Company. If the Shares are not traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment. The foregoing notwithstanding, if Holder advises the Board of Directors in writing that Holder disagrees with such determination, then the Company and Holder shall promptly agree upon a reputable investment banking firm to undertake such valuation. If the valuation of such investment banking fir m is more than 110 percent of that determined by the Board of Directors, then all fees and expenses of such investment banking firm shall be paid by the Company. In all other circumstances, such fees and expenses shall be paid by Holder.



1 .5 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expir ed, a new Warrant representing the Shares not so acquired.



1.6 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, t heft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, or surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lie u of this Warrant, a new warrant of like tenor.



1.7 Repurchase on Sale, Merger, or Consolidation of the Company.



1.7.1. "Acquisition." For the purpose of this Warrant, "Acquisition" means any sale, license, or other disposition of all or substantially all of the assets of the Company, or any reorganization, consolidation, or merger of the Company where the holders of the Company's securities before the transaction beneficially own less than 50% of the outstanding vot ing securities of the surviving entity after the transaction.



1.7.2. Assumption of Warrant. If upon the closing of any Acquisition the successor entity assumes the obligations of this Warrant, then this Warrant shall be exercisable fo r the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Pr ice shall be adjusted accordingly.



1.7.3. Nonassumption. If upon the closing of any Acquisition the successor entity does not assume the obligations of this Warrant and Holder has not otherwise exercised this Warrant in full, then the unexercised portion of this Warrant shall be deemed to have been automatically converted pursuant to Section 1.3 and thereafter Holder shall participate in the acquisition on the same terms as other holders of the same class of securities of the Company.



ARTICLE 2. ADJUSTMENTS TO THE SHARES.



2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on its common stock (or the Shares if the Shares are securities other than common stock) payable in common







stock, or ot her securities, subdivides the outstanding common stock into a greater amount of common stock, or, if the Shares are securities other than common stock, subdivides the Shares in a transaction that increases the amount of common stock into which the Shares are convertible, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the da te the dividend or subdivision occurred.



2.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class ...