Series B Preferred Stock Purchase Agreement

3DFX INTERACTIVE, INC.


SERIES B PREFERRED STOCK PURCHASE AGREEMENT


This Series B Preferred Stock Purchase Agreement (this "AGREEMENT") is made as of June 13, 2002, by and among 3dfx Interactive, Inc., a California corporation (the "COMPANY"), and SF Capital Partners Ltd., a limited company formed under the laws of the British Virgin Islands (the "INVESTOR").


WHEREAS, the Company is a party to that certain Asset Purchase Agreement dated as of December 15, 2000 (the "ASSET PURCHASE AGREEMENT"), by and among the Company, NVIDIA Corporation, a Delaware corporation ("NVIDIA"), and NVIDIA US Investment Company, a Delaware corporation, f/k/a Titan Acquisition Corp. No. 2 ("NVIDIA SUB");


WHEREAS, pursuant to the terms of the Asset Purchase Agreement, the Company is entitled to receive two million (2,000,000) shares of the common stock, par value $.001 per share, of NVIDIA ("NVIDIA STOCK") upon the satisfaction of certain conditions described therein;


WHEREAS, the Board of Directors of the Company deems it advisable and in the Company's best interest to issue shares of Series B Stock (as defined below) to the Investor in order to generate sufficient cash proceeds to satisfy the Liabilities (as defined in Section 3.5 hereof), thereby enabling the Company to expeditiously wind up, settle and liquidate its affairs and dissolve in accordance with its Plan of Dissolution; and


WHEREAS, the generation of cash from the issuance of the shares of Series B Stock, the satisfaction of the Liabilities and the receipt of shares of NVIDIA Stock by the Company should allow the Company to pay its creditors and maximize the value it is able to deliver to its common shareholders.


NOW, THEREFORE, the parties hereto agree as follows:


SECTION 1
PURCHASE AND SALE OF STOCK


1.1 Certificate of Determination. The Company shall adopt and file with the Secretary of State of the State of California on or before the Closing Date (as defined below) the Certificate of Determination of the Rights, Preferences, Privileges and Restrictions of Series B Preferred Stock of the Company in the form attached hereto as Exhibit A (the "CERTIFICATE").


1.2 Authorization and Issuance of Series B Stock. Subject to the terms and conditions of this Agreement, the Investor agrees to acquire, and the Company agrees to authorize and issue to the Investor, at the Closing Date (as defined below), that number of shares (the "SHARES") of the Company's Series B Preferred Stock, no par value ("SERIES B STOCK"), which equals the quotient obtained by dividing (a)(i) the sum of the Funding Amount (as defined below) and (ii) the specified percentage of the Funding Amount indicated in the table below (the "SPECIFIED PERCENTAGE") by (b) the average closing price of NVIDIA Stock for the five (5) trading days


immediately preceding the Closing Date (the "NVIDIA CLOSING PRICE"), with any resulting fraction of a Share to be rounded up to the next whole Share; provided, however, that if the NVIDIA Closing Price is greater than $70, the number of Shares to be issued to the Investor on the Closing Date shall equal that number of Shares to which the Investor would have been entitled had the NVIDIA Closing Price been $70. The calculation of the number of Shares of Series B Stock to be issued to the Investor shall be determined in accordance with the preceding sentence, with reference to the Specified Percentages set forth below that vary based on the NVIDIA Closing Price:


NVIDIA CLOSING PRICE ($) SPECIFIED PERCENTAGE (%)
------------------------ ------------------------
35.01 to 70.00 40
34.51 to 35.00 40
34.01 to 34.50 39
33.51 to 34.00 38
33.01 to 33.50 37
32.51 to 33.00 36
32.01 to 32.50 35
31.51 to 32.00 34
31.01 to 31.50 33
30.51 to 31.00 32
30.01 to 30.50 31
29.51 to 30.00 30
29.01 to 29.50 29
28.51 to 29.00 28
28.01 to 28.50 27
27.51 to 28.00 26
27.01 to 27.50 25
26.51 to 27.00 25
26.01 to 26.50 25


As provided in Section 8.1 hereof, in the event the NVIDIA Closing Price is at or below $26.00, the Company or the Investor is entitled to terminate this Agreement.


1.3 Purchase Price. The purchase price of the Shares to be delivered by the Investor to the Company on the Closing Date shall be cash in immediately available funds equal to the Funding Amount (as defined below).


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For purposes of this Agreement, the "Funding Amount" shall be the sum of (a) the fixed and determinable amount of Liabilities upon the Closing Date, (b) the maximum amount of all undetermined Liabilities, as shall be reasonably known upon the Closing Date, and (c) that amount of expenses reasonably necessary to complete the liquidation, winding-up and dissolution of the Company and otherwise address the expenses associated with resolving all undetermined Liabilities through a liquidating trust or otherwise, after taking into account the Company's assets then on hand.


As provided in Section 8.1 hereof, in the event that the Funding Amount is greater than $35,000,000 or less than $25,000,000, the Investor may terminate this Agreement at its option. The Funding Amount shall be applied exclusively to the payment of Liabilities, with any residual amount being applied to the resolution of any undetermined Liabilities and the expenses referred to in clause (c) above (with any further residual amount distributed to the Company's shareholders).


SECTION 2
ESCROW AND CLOSING


2.1 Escrow and Closing. Once (a) the amount of all Liabilities is determined, or if some Liabilities are not determinable then the maximum amount of all undetermined Liabilities shall be reasonably known to the Company and the Investor (as determined by the parties in good faith); and (b) upon satisfaction of one of the conditions precedent specified in clauses (i) - (iv) below, then the Investor will promptly deliver the Funding Amount in immediately available funds to an escrow agent reasonably satisfactory to the Company and the Investor pursuant to an escrow agreement reasonably satisfactory to the Company and the Investor (the "Cash Funding Escrow"). Without limiting the foregoing, such escrow agreement shall provide that subject to the satisfaction of the conditions described in Sections 5 and 6 of this Agreement (it being understood and agreed that the Investor shall have the right to waive any of the conditions set forth in Section 5 and the Company shall have the right to waive any of the conditions set forth in Section 6), upon satisfaction of the conditions stipulated in the escrow agreement for release to the Company of the Funding Amount from the escrow, the purchase and sale of the Series B Stock shall take place at the offices of the Company or another mutually agreeable location on the first reasonably practicable business day (the "Closing Date").


Without limiting the foregoing, such escrow agreement shall further provide for the return to the Investor of the Funding Amount, plus any other amounts provided for in the escrow agreement, in the event (x) of the termination of this Agreement by the Investor or the Company in accordance with the terms of Section 8.1 hereof or (y) that the NVIDIA Stock has not been delivered to the Company, or to an escrow agent or other third party reasonably acceptable to Investor pursuant to an escrow agreement or other arrangement reasonably acceptable to Investor (the "Stock Escrow"), within 3 business days after the Investor's delivery of the Funding Amount to the Cash Funding Escrow; provided that in the event that the Funding Amount is returned to Investor pursuant to clause (y), Investor acknowledges that the terms of this Section 2.1 shall continue to have full effect and Investor may again be required to deliver the Funding Amount in accordance with this Section 2.1 until such time as this Agreement is terminated in accordance with Section 8.1 hereof.


The conditions precedent specified in clause (b) above are:


(i) the delivery of the NVIDIA Stock to the Company or to the
Stock Escrow; or


(ii) NVIDIA's and/or NVIDIA Sub's delivery of an agreement,
certificate or other document pursuant to which one or both of
them agree with the Company and with the Investor, or pursuant
to which one or both of them expressly represents to the
Company and the Investor, that (a) upon the Company's receipt
of the purchase price for the Shares and NVIDIA's and NVIDIA
Sub's receipt of a Company certificate or other document in
which the Company certifies and covenants as to certain
matters in satisfaction of its certification obligation set
forth in Section 1.3(a) of the Asset Purchase Agreement
(provided, that the required contents of the Company's
certificate or other document must be reasonably satisfactory
to the Investor), that provision for the payment of the
Liabilities of the Company and its Subsidiaries will be deemed
to have been made and (b) NVIDIA Sub will deliver the NVIDIA
Stock to the Company or the Stock Escrow on the same business
day as the Company receives the purchase price for the Shares
and NVIDIA and NVIDIA Sub receives the Company's certificate
or other document referred to in subclause (a) above; or


(iii) the issuance of a court order by a court of competent
jurisdiction directing NVIDIA or NVIDIA Sub to deliver the
NVIDIA Stock to the Company or into the Stock Escrow; or


(iv) Investor has received such other assurances that are
satisfactory to it, in its sole discretion.


2.2 Issuance of Shares against Payment. At the Closing, the Company shall deliver to the Investor a certificate representing that number of Shares determined in accordance with Section 1.2 hereof against payment of the purchase price therefor as specified in Section 1.3.


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SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY


Except as otherwise described in the Schedule of Exceptions attached hereto, the Company hereby represents and warrants to, and covenants with, the Investor as of the date hereof, as follows:


3.1 Organization. Each of the Company and its Subsidiaries (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended (the "SECURITIES ACT")), is duly incorporated and validly existing under the laws of the jurisdiction of its organization, whether contained within or outside of the United States of America. Each of the Company and its Subsidiaries has full power and authority to conduct its business as presently conducted, and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification.


3.2 Due Authorization. The Company has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, and this Agreement has been duly authorized and validly executed and delivered by the Company and constitutes a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).


3.3 Non-Contravention. The execution and delivery of this Agreement, the issuance and sale of the Shares to be sold by the Company under this Agreement, the fulfillment of the terms of this Agreement and the consummation of the transactions contemplated hereby will not conflict with or constitute a violation of, or default (with the passage of time or otherwise) under, (i) the Asset Purchase Agreement or any bond, debenture, note or other evidence of indebtedness, or any lease, contract, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or their respective properties are bound, where such conflict, violation or default is reasonably expected to have a material adverse effect upon the Company and its subsidiaries taken as a whole, or the business, financial condition, properties, operations or assets of the Company and its Subsidiaries, taken as a whole, or the Company's ability to perform its obligations under this Agreement ("MATERIAL ADVERSE EFFECT"), (ii) the Articles of Incorporation, bylaws or other organizational documents of the Company or any of its Subsidiaries, or (iii) any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority binding upon the Company or any of its Subsidiaries or their respective properties, where such conflict, violation or default is likely to result in a Material Adverse Effect


3.4 Capitalization. The capitalization of the Company as of January 31, 2002 is as described in the unaudited consolidated financial statements of the Company as of and for the fiscal year ended January 31, 2002 (the "2002 FINANCIAL STATEMENTS"). The Company has not issued any capital stock since January 31, 2002 (other than the Shares contemplated by this


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Agreement). The Shares to be sold pursuant to this Agreement have been duly authorized, and when issued and paid for in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable. Except for options currently outstanding and up to 500,000 additional options that may be issued under the Company's stock option and incentive plans, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock or other equity interest in the Company or any of its Subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind, in either case to which the Company or any of its Subsidiaries is a party and providing for the issuance or sale of any capital stock of the Company or any of its Subsidiaries, any such convertible or exchangeable securities or any such rights, warrants or options. Without limiting the foregoing, no preemptive right, co-sale right, registration right, right of first refusal or other similar right exists with respect to the issuance and sale of the Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company's common stock, no par value per share, to which the Company is a party. Other than STB de Mexico, S.A. de C.V., in which Jose Reyes Ferriz, Esq. owns 0.10% of the capital stock, the Company owns the entire equity interest in its Subsidiaries, or in the Subsidiaries of its Subsidiaries, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest.


3.5 Liabilities. As of January 31, 2002, neither the Company nor its Subsidiaries was subject to any Liabilities, other than as set forth on the Schedule of Exceptions. For purposes of this Agreement, "Liabilities" shall mean, with respect to the Company and its Subsidiaries, any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with generally accepted accounting principles and regardless of whether such debt, obligation, duty or liability is immediately due and payable; provided, that "Liabilities" shall not for purposes of this Agreement include any taxes arising out of the Company's and its Subsidiaries' sale of assets under the Asset Purchase Agreement.


3.6 Legal Proceedings. There is no legal or governmental proceeding pending, or to the knowledge of the Company, threatened, concerning the Asset Purchase Agreement, this Agreement or any other matter whatsoever, to which the Company or any of its Subsidiaries is a party or of which the business or property of the Company or any of its Subsidiaries is subject. Neither the Company nor any Subsidiary is a party to the provisions of any injunction, judgment, decree or order of any court, regulatory body, administrative agency or other government body.


3.7 No Violations. Neither the Company nor any of its Subsidiaries is in violation of its Articles of Incorporation, bylaws or other organizational documents, or its Plan of Dissolution or in violation of any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any of its Subsidiaries, which violation, individually or in the aggregate, is reasonably likely to have a Material Adverse Effect, nor is the Company or any of its Subsidiaries in default (and there exists no condition which, with the passage of time or otherwise, would constitute a default) under the terms of the Company's Plan of Dissolution or in the performance of any bond, debenture, note or any other evidence of indebtedness or any indenture, mortgage, deed of trust


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or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or by which the property of the Company or any of its Subsidiaries is bound, which is reasonably likely to have a Material Adverse Effect.


3.8 Financial Statements. The 2002 Financial Statements present fairly, in accordance with generally accepted accounting principles, the consolidated financial position of the Company and its Subsidiaries as of the date indicated, subject to normal year-end audit adjustments and the absence of footnotes required by generally accepted accounting principles.


3.9 No Material Adverse Change. Since January 31, 2002, there has not been (i) a change that has had or is reasonably likely to have a Material Adverse Effect, ( ...