EXHIBITC

----

 

REGISTRATIONRIGHTS AGREEMENT

between

TERAGLOBALCOMMUNICATIONS CORP.,

and

WALLERSUTTON 2000, L.P.

and

TheParties Set Forth On Exhibit A Hereto

 

Datedas of June 28, 2001

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**TABLE OF CONTENTS**
| 1.     | Certain  Definitions    |
|--------|-------------------------|
| 2.     | Registration  Rights    |
|   | 2.1.                    | Demand  Registrations |
| .      | 2.2                     | Piggyback  Registration |
|   | 2.3.                    | Allocation  of Securities Included in Registration Statement |
|   | 2.4.                    | Registration  Procedures |
|   | 2.5.                    | Registration  Expenses |
|   | 2.6.                    | Certain  Limitations on Registration Rights |
|   | 2.7.                    | Limitations  on Sale or Distribution of Other Securities |
|   | 2.8.                    | No Required  Sale |
|   | 2.9.                    | Indemnification |
|   |                    |   |
| 3.     | Underwritten  Offerings |
|   | 3.1.                    | Requested  Underwritten Offerings |
|   | 3.2.                    | Piggyback  Underwritten Offerings |
|   |                    |   |
| 4.     | General                 |
|   | 4.1.                    | Rule 144 |
|   | 4.2.                    | Nominees for Beneficial  Owners |
|   | 4.3.                    | Amendments  and Waivers |
|   | 4.4.                    | Notices |
|   | 4.5.                    | Transfer  or Assignment of Registration Rights |
|   | 4.6.                    | Miscellaneous |
|   | 4.7.                    | No Inconsistent Agreements |

 

**REGISTRATION RIGHTS AGREEMENT**

             ThisAGREEMENT, is made as of June 28, 2001, between TERAGLOBAL COMMUNICATIONSCORP., a Delaware corporation (the “Company”), WALLERSUTTON 2000, L.P., aDelaware limited partnership (“WallerSutton”) and the parties set forth onExhibit A attached hereto (the “Bridge Financiers” and, collectively, withWallerSutton, the “Purchasing Parties”).

             WHEREAS,as of the date hereof, the Company and WallerSutton are entering into a SeriesA Preferred Stock and Warrant Purchase Agreement (the “Purchase Agreement”),pursuant to which WallerSutton is purchasing shares of Series A ConvertiblePreferred Stock, par value $.001 per share (“Series A Preferred Stock”), of theCompany, which Series A Preferred Stock is convertible into shares of CommonStock;

             WHEREAS,the Company and the Bridge Financiers entered into a bridge financing and theBridge Financiers are converting their investment into shares of Series APreferred Stock immediately after the closing of the Purchase Agreement.

             WHEREAS,in connection with (i) the Company and WallerSutton entering into the PurchaseAgreement, and as a condition precedent to such purchase, and (ii) the BridgeFinanciers entering into the bridge financing and converting their investmentinto shares of Series A Preferred Stock, the Company desires to provide thePurchasing Parties, pursuant to this Agreement, certain registration rightswith respect to the shares of Common Stock held by them.

             ACCORDINGLY,the parties hereto agree as follows:

             1.          CertainDefinitions.

             Asused in this Agreement, the following terms shall have the meanings ascribed tothem below:

             “Affiliate”means with respect to any Person, any other Person directly or indirectlycontrolling, controlled by or under direct or indirect common control with,such specified Person.

             “CommonStock” means the Common Stock, par value $.001 per share, of the Company andany and all securities of any kind whatsoever of the Company which may beissued after the date hereof in respect of, or in exchange for, shares ofCommon Stock of the Company pursuant to a merger, consolidation, stock split,stock dividend or recapitalization of the Company or otherwise.

             “CommonStock Equivalents” means any securities convertible into, or exercisable orexchangeable for, shares of Common Stock, including, but in no way limited to,the shares of Common Stock issuable upon exercise of the Warrants pursuant tothe Purchase Agreement.
             “ExchangeAct” means the Securities Exchange Act of 1934, as amended.

             “Holder”  or “Holders”  means any party who is a signatory to this Agreement any partywho shall hereafter acquire and holder Registrable Securities.

             “Person”means any individual, corporation, limited liability company, limited orgeneral partnership, joint venture, association, joint-stock company, trust,unincorporated organization or government or any agency or political subdivisionsthereof.

             “PreferredStock” means the Series A Preferred Stock.

             “RegistrableSecurities” means any (i) shares of Common Stock held by Any PurchasingParty and (ii) shares of Common Stock issued or issuable upon theconversion, exercise or exchange of any shares of Preferred Stock or any otherCommon Stock Equivalents held by Any Purchasing Party and (iii) any sharesof Common Stock issued or issuable, directly or indirectly, with respect to theCommon Stock referenced in clauses (i) or (ii) above by way of stock dividend,stock split or combination of shares. As to any particular Registrable Securities, such securities shall ceaseto be Registrable Securities when (i) a registration statement withrespect to the sale of such securities shall have been declared effective underthe Securities Act and such securities shall have been disposed of inaccordance with such registration statement or (ii) such securities shallhave been sold (other than in a privately negotiated sale) pursuant toRule 144 (or any successor provision) under the Securities Act and incompliance with the requirements of paragraphs (f) and (g) of Rule 144(notwithstanding the provisions of paragraph (k) of such Rule).

             “SEC”means the Securities and Exchange Commission.

             “SecuritiesAct” means the Securities Act of 1933, as amended.

             2.          RegistrationRights.

             2.1.       Demand Registrations.

                           (a)         (i)          Subjectto Sections 2.1(b) and 2.3 below, at any time and from time to time, so long asany Holder holds Registrable Securities constituting at least $1,500,000 ofCommon Stock (assuming for purposes of making this computation that any sharesof Preferred Stock held by such Holder have been converted into shares ofCommon Stock), each Holder shall have the right to require the Company to filea registration statement under the Securities Act covering all or any part oftheir respective Registrable Securities, by delivering a written requesttherefor to the Company specifying the number of Registrable Securities to beincluded in such registration by such Holder(s) and the intended method ofdistribution thereof. All such requests by any Holder pursuant to thisSection 2.1(a)(i) are referred to herein as “Demand RegistrationRequests,” and the registrations so requested are referred to herein as “DemandRegistrations” (with respect to any Demand Registration, the Holder(s) makingsuch demand for registration being referred to as the “InitiatingHolder”).  As promptly as practicable,but no later than ten days after receipt of a Demand Registration Request, theCompany shall give written notice (the “Demand Exercise Notice”) of such DemandRegistration Request to all Holders of record of Registrable Securities.

 

             (ii)         The Company, subject to Sections 2.3 and 2.6, shall includein such Demand Registration (x) the Registrable Securities of theInitiating Holder and (y) the Registrable Securities of any other Holderwhich shall have made a written request to the Company for inclusion in suchregistration (which request shall specify the maximum number of RegistrableSecurities intended to be disposed of by such Holder) within 15 days after thereceipt of the Demand Exercise Notice.

             (iii)        The Company shall, as expeditiously as possible, use its bestefforts to (x) effect the registration under the Securities Act(including, without limitation, by means of a shelf registration pursuant toRule 415 under the Securities Act if so requested and if the Company isthen eligible to use such a registration) of the Registrable Securities whichthe Company has been so requested to register, for distribution in accordancewith such intended method of distribution and (y) if requested by theInitiating Holder, obtain acceleration of the effective date of theregistration statement relating to such registration.

             (b)        The Demand Registration rights grantedin Section 2.1(a) to the Holders are subject to the following limitations:(i) each registration in respect of a Demand Registration Request shall bemade on Form S-3 or any equivalent form then in effect (or, if Form S-3 or anyequivalent form is not available, on a Form S-1 or S-2 as determined by theCompany, if the use of such forms is then available); (ii) the Companyshall not be required to cause a registration pursuant toSection 2.1(a)(i) to be declared effective within a period of 90 daysafter the date any registration statement of the Company declared effectivepursuant to a Demand Registration Request was filed; (iii) if the Board ofDirectors of the Company, in its good faith judgment, determines that any registrationof Registrable Securities should not be made or continued because it wouldmaterially interfere with any material financing, acquisition, corporatereorganization or merger or other transaction involving the Company or any ofits subsidiaries (a “Valid Business Reason”), (x) the Company may postponefiling a registration statement relating to a Demand Registration Request untilsuch Valid Business Reason no longer exists, but in no event for more than 90days, and (y) in case a registration statement has been filed relating toa Demand Registration Request, if the Valid Business Reason has not resultedfrom actions taken by the Company, the Company may cause such registrationstatement to be withdrawn and its effectiveness terminated or may postponeamending or supplementing such registration statement until such Valid BusinessReason no longer exists, but in no event for more than three months (suchperiod of postponement or withdrawal under subclause(s) (x) or (y) of thisclause (iii), the “Postponement Period”); and the Company shall givewritten notice of its determination to postpone or withdraw a registrationstatement and of the fact that the Valid Business Reason for such postponementor withdrawal no longer exists, in each case, promptly after the occurrencethereof, provided, however, the Company shall not be permitted to postpone orwithdraw a registration statement after the expiration of any PostponementPeriod until 4 months after the expiration of such Postponement Period; and(iv) the Company shall not be required to effect an effective registrationwith respect to more than three Demand Registration Requests pursuant to thisAgreement.
             Ifthe Company shall give any notice of postponement or withdrawal of anyregistration statement, the Company shall not, during the period ofpostponement or withdrawal, register any Common Stock, other than pursuant to aregistration statement on Form S-4 or S-8 (or an equivalent registration formthen in effect). Each Holder of Registrable Securities agrees that, uponreceipt of any notice from the Company that the Company has determined towithdraw any registration statement pursuant to clause (iii) above, suchHolder will discontinue its disposition of Registrable Securities pursuant tosuch registration statement and, if so directed by the Company, will deliver tothe Company (at the Company’s expense) all copies, other than permanent filecopies, then in such Holder’s possession of the prospectus covering suchRegistrable Securities that was in effect at the time of receipt of suchnotice.  If the Company shall havewithdrawn or prematurely terminated a registration statement filed underSection 2.1(a)(i) (whether pursuant to clause (iii) above or as a resultof any stop order, injunction or other order or requirement of the SEC or anyother governmental agency or court), the Company shall not be considered tohave effected an effective registration for the purposes of this Agreementuntil the Company shall have filed a new registration statement covering theRegistrable Securities covered by the withdrawn registration statement and suchregistration statement shall have been declared effective and shall not havebeen withdrawn.  If the Company shallgive any notice of withdrawal or postponement of a registration statement, theCompany shall, at such time as the Valid Business Reason that caused suchwithdrawal or postponement no longer exists (but in no event later than threemonths after the date of the postponement or withdrawal), use its best effortsto effect the registration under the Securities Act of the RegistrableSecurities covered by the withdrawn or postponed registration statement inaccordance with this Section 2.1 (unless the Initiating Holder shall havewithdrawn such request, in which case the Company shall not be considered tohave effected an effective registration for the purposes of this Agreement).

             (c)         The Company, subject to Sections 2.3and 2.6, may elect to include in any registration statement and offering madepursuant to Section 2.1(a)(i), authorized but unissued shares of CommonStock or shares of Common Stock held by the Company as treasury shares;provided, however, that such inclusion shall be permitted only to the extentthat it is pursuant to and subject to the terms of the underwriting agreementor arrangements, if any, entered into by the Initiating Holder.

             (d)        In connection with any DemandRegistration, the Initiating Holder participating in such registration shallhave the right to designate the lead managing underwriter for such registrationand each other managing underwriter for such registration, provided that eachsuch managing underwriter is reasonably satisfactory to the Company.

             2.2.       Piggyback Registration.

             (a)         If, at any time, the Company proposesor is required to register any of its equity securities (including pursuant toany registration statement which generally registers equity and debt securitieswithout specifying the type of security or the amount) under the Securities Act(other than pursuant to (i) registrations on such form or similar form(s)solely for registration of securities in connection with an employee benefitplan or dividend reinvestment plan or a merger or consolidation or (ii) aDemand Registration under Section 2.1) on a registration statement on FormS-1, Form S-2 or Form S-3 (or an equivalent general registration form then ineffect), whether or not for its own account, the Company shall give promptwritten notice of its intention to do so to each of the Holders of record ofRegistrable Securities.  Upon thewritten request of any Holder, made within 15 days following the receipt of anysuch written notice (which request shall specify the maximum number ofRegistrable Securities intended to be disposed of by such Holder and theintended method of distribution thereof), the Company shall, subject toSections 2.2(b), 2.3 and 2.6 hereof, use its best efforts to cause all suchRegistrable Securities, the Holders of which have so requested the registrationthereof, to be registered under the Securities Act (with the securities whichthe Company at the time proposes to register) to permit the sale or otherdisposition by the Holders (in accordance with the intended method ofdistribution thereof) of the Registrable Securities to be so registered. Thereis no limitation on the number of such piggyback registrations pursuant to thepreceding sentence which the Company is obligated to effect. No registrationeffected under this Section 2.2(a) shall relieve the Company of itsobligations to effect Demand Registrations hereby.
             (b)        If, at any time after giving writtennotice of its intention to register any equity securities and prior to theeffective date of the registration statement filed in connection with suchregistration, the Company shall determine for any reason not to register or todelay registration of such equity securities, the Company may, at its election,give written notice of such determination to all Holders of record ofRegistrable Securities who have requested registration of the RegistrableSecurities pursuant to this Section 2.2 and in the case of a determinationnot to register, shall be relieved of its obligation to register anyRegistrable Securities in connection with such abandoned registration, withoutprejudice, however, to the rights of Holders under Section 2.1.

             (c)         Any Holder shall have the right towithdraw its request for inclusion of its Registrable Securities in anyregistration statement pursuant to this Section 2.2 by giving writtennotice to the Company of its request to withdraw; provided, however, that(i) such request must be made in writing prior to the earlier of theexecution of the underwriting agreement or the execution of the custodyagreement with respect to such registration and (ii) such withdrawal shallbe irrevocable and, after making such withdrawal, a Holder shall no longer haveany right to include Registrable Securities in the registration as to whichsuch withdrawal was made.

             2.3.       Allocationof Securities Included in Registration Statement. (a) If any requested registration pursuant toSection 2.1 involves an underwritten offering and the lead managingunderwriter of such offering (the “Manager”) shall advise the Company that, inits view, the number of securities requested to be included in suchregistration by the Holders or any other Persons (including those shares ofCommon Stock requested by the Company to be included in such registration)exceeds the largest number (the “Section 2.1 Sale Number”) that can besold in an orderly manner in such offering within a price range acceptable tothe Initiating Holder, the Company shall include in such registration:

             (i)          allRegistrable Securities requested to be included in such registration by Holdersof Registrable Securities; provided, however, that, if the number of suchRegistrable Securities exceeds the Section 2.1 Sale Number, the number ofsuch Registrable Securities (not to exceed the Section 2.1 Sale Number) tobe included in such registration shall be allocated on a pro rata basis amongall Holders requesting that Registrable Securities be included in suchregistration, based on the number of Registrable Securities then owned by eachsuch Holder requesting inclusion in relation to the number of RegistrableSecurities then owned by all such Holders requesting inclusion; and

 

             (ii)         to the extent that the number of Registrable Securities tobe included by all Holders is less than the Section 2.1 Sale Number,shares of Common Stock that the Company proposes to register.

             If,as a result of the proration provisions of this Section 2.3(a), any Holdershall not be entitled to include all Registrable Securities in a registrationthat such Holder has requested be included, such Holder may elect to withdrawhis request to include Registrable Securities in such registration or mayreduce the number requested to be included; provided, however, that(x) such request must be made in writing prior to the earlier of theexecution of the underwriting agreement or the execution of the custodyagreement with respect to such registration and (y) such withdrawal shallbe irrevocable and, after making such withdrawal, a Holder shall no longer haveany right to include Registrable Securities in the registration as to whichsuch withdrawal was made.

             (b)        If any registration pursuant toSection 2.2 involves an underwritten offering and the Manager shall advisethe Company that, in its view, the number of securities requested to beincluded in such registration exceeds the number (the “Section 2.2 SaleNumber”) that can be sold in an orderly manner in such registration within aprice range acceptable to the Company, the Company shall include in suchregistration:

             (i)          allCommon Stock or Common Stock Equivalents that the Company proposes to registerfor its own account (the “Company Securities”); and

             (ii)         to the extent that the number of Company Securities is lessthan the Section 2.2 Sale Number, the remaining shares to be included insuch registration shall be allocated on a pro rata basis among all Holdersrequesting that Registrable Securities be included in such registration, basedon the number of Registrable Securities owned by each such Holder requestinginclusion in relation to the number of Registrable Securities then owned by allsuch Holders requesting inclusion.

             2.4.       Registration Procedures.  If and whenever the Company is required bythe provisions of this Agreement to use its best efforts to effect or cause theregistration of any Registrable Securities under the Securities Act as providedin this Agreement, the Company shall, as expeditiously as possible (but in anyevent, within 90 days after a Demand Registration Request in the case ofSection 2.4(a)):

             (a)         prepare and file with the SEC aregistration statement on an appropriate registration form of the SEC for thedisposition of such Registrable Securities in accordance with the intendedmethod of disposition thereof, which form (i) shall be selected by theCompany and (ii) shall, in the case of a shelf registration, be availablefor the sale of the Registrable Securities by the selling Holders thereof andsuch registration statement shall comply as to form in all material respectswith the requirements of the applicable form and include all financialstatements required by the SEC to be filed therewith, and the Company shall useits best efforts to cause such registration statement to become and remaineffective (provided, however, that before filing a registration statement orprospectus or any amendments or supplements thereto, or comparable statements undersecurities or blue sky laws of any jurisdiction, the Company will furnish toone counsel for the Holders participating in the planned offering (selected bythe Initiating Holder, in the case of a registration pursuant toSection 2.1, and selected by the Holders of a majority of the RegistrableSecurities included in such registration, in the case of a registrationpursuant to Section 2.2) and the underwriters, if any, copies of all suchdocuments proposed to be filed (including all exhibits thereto), whichdocuments will be subject to the reasonable review and reasonable comment ofsuch counsel, and the Company shall not file any registration statement oramendment thereto or any prospectus or supplement thereto to which the holdersof a majority of the Registrable Securities covered by such registrationstatement or the underwriters, if any, shall reasonably object in writing);
             (b)        prepare and file with the SEC suchamendments and supplements to such registration statement and the prospectusused in connection therewith as may be necessary to keep such registrationstatement effective for such period (which shall not be required to exceed 180days in the case of a registration pursuant to Section 2.1 or 120 days inthe case of a registration pursuant to Section 2.2, unless reasonablyrequested by any underwriter pursuant to an underwritten offering) as anyseller of Registrable Securities pursuant to such registration statement shallrequest and to comply with the provisions of the Securities Act with respect tothe sale or other disposition of all Registrable Securities covered by suchregistration statement in accordance with the intended methods of dispositionby the seller or sellers thereof set forth in such registration statement;

             (c)         furnish, without charge, to each sellerof such Registrable Securities and each underwriter, if any, of the securitiescovered by such registration statement such number of copies of suchregistration statement, each amendment and supplement thereto (in each case includingall exhibits), and the prospectus included in such registration statement(including each preliminary prospectus) in conformity with the requirements ofthe Securities Act, and other documents, as such seller and underwriter mayreasonably request in order to facilitate the public sale or other dispositionof the Registrable Securities owned by such seller (the Company herebyconsenting to the use in accordance with all applicable law of each suchregistration statement (or amendment or posteffective amendment thereto) andeach such prospectus (or preliminary prospectus or supplement thereto) by eachsuch seller of Registrable Securities and the underwriters, if any, inconnection with the offering and sale of the Registrable Securities covered bysuch registration statement or prospectus);

             (d)        use its best efforts to register orqualify the Registrable Securities covered by such registration statement undersuch other securities or “blue sky” laws of such jurisdictions as any sellersof Registrable Securities or any managing underwriter, if any, shall reasonablyrequest, and do any and all other acts and things which may be reasonablynecessary or advisable to enable such sellers or underwriter, if any, toconsummate the disposition of the Registrable Securities in such jurisdictions,except that in no event shall the Company be required to qualify to do businessas a foreign corporation in any jurisdiction where it would not, but for therequirements of this paragraph (d), be required to be so qualified, tosubject itself to taxation in any such jurisdiction or to consent to generalservice of process in any such jurisdiction;
             (e)         promptly notify each Holder sellingRegistrable Securities covered by such registration statement and each managingunderwriter, if any: (i) when the registration statement, anypre-effective amendment, the prospectus or any prospectus supplement relatedthereto or post-effective amendment to the registration statement has beenfiled and, with respect to the registration statement or any post-effectiveamendment, when the same has become effective; (ii) of any request by theSEC or state securities authority for amendments or supplements to theregistration statement or the prospectus related thereto or for additional information;(iii) of the issuance by the SEC of any stop order suspending theeffectiveness of the registration statement or the initiation of anyproceedings for that purpose; (iv) of the receipt by the Company of anynotification with respect to the suspension of the qualification of anyRegistrable Securities for sale under the securities or blue sky laws of anyjurisdiction or the initiation of any proceeding for such purpose; (v) ofthe existence of any fact of which the Company becomes aware which results in theregistration statement, the prospectus related thereto or any documentincorporated therein by reference containing an untrue statement of a materialfact or omitting to state a material fact required to be stated therein ornecessary to make any statement therein not misleading; and (vi) if at anytime the representations and warranties contemplated by any underwritingagreement, securities sale agreement, or other similar agreement relating tothe offering shall cease to be true and correct in all material respects; and,if the notification relates to an event described in clause (v), theCompany shall promptly prepare and furnish to each such seller and eachunderwriter, if any, a reasonable number of copies of a prospectus supplementedor amended so that, as thereafter delivered to the purchasers of suchRegistrable Securities, such prospectus shall not include an untrue statementof a material fact or omit to state a material fact required to be statedtherein or necessary to make the statements therein in the light of thecircumstances under which they were made not misleading;

             (f)         comply with all applicable rules andregulations of the SEC, and make generally available to its security holders,as soon as reasonably practicable after the effective date of the registrationstatement (and in any event within 16 months thereafter), an earnings statement(which need not be audited) covering the period of at least twelve consecutivemonths beginning with the first day of the Company’s first calendar quarterafter the effective date of the registration statement, which earningsstatement shall satisfy the provisions of Section 11(a) of the SecuritiesAct and Rule 158 thereunder;

             (g)        (i) cause all such RegistrableSecurities covered by such registration statement to be listed on the principalsecurities exchange on which similar securities issued by the Company are thenlisted (if any), if the listing of such Registrable Securities is thenpermitted under the rules of such exchange or (ii) if no similar securitiesare then so listed, to either cause all such Registrable Securities to belisted on a national securities exchange or to secure designation of all suchRegistrable Securities as a National Association of Securities Dealers, Inc.(the “NASD”) Automated Quotation System (“NASDAQ”) “national market systemsecurity” within the meaning of Rule 11Aa2-1 of the Exchange Act or,failing that, secure NASDAQ authorization for such shares and, without limitingthe generality of the foregoing, take all actions that may be required by theCompany as the issuer of such Registrable Securities in order to facilitate themanaging underwriter’s arranging for the registration of at least two marketmakers as such with respect to such shares with the NASD;
             (h)        provide and cause to be maintained atransfer agent and registrar for all such Registrable Securities covered bysuch registration statement not later than the effective date of suchregistration statement;

             (i)          enter into such customary agreements(including, if applicable, an underwriting agreement) and take such otheractions as the Holders of a majority of the Registrable Securitiesparticipating in such offering shall reasonably request in order to expedite orfacilitate the disposition of such Registrable Securities. The Holders of theRegistrable Securities which are to be distributed by such underwriters shallbe parties to such underwriting agreement and may, at their option, requirethat the Company make to and for the benefit of such Holders the representations,warranties and covenants of the Company which are being made to and for thebenefit of such underwriters and which are of the type customarily provided toinstitutional investors in secondary offerings. The Holders of a majority ofthe Registrable Securities participating in such offering shall have the rightto participate in due diligence activities in the preparation of theregistration statement through their counsel;

             (j)          for underwritten offerings, obtain anopinion from the Company’s counsel and a “cold comfort” letter from theCompany’s independent public accountants in customary form and covering suchmatters as are customarily covered by such opinions and “cold comfort” lettersdelivered to underwriters in underwritten public offerings, which opinion andletter shall be reasonably satisfactory to the underwriter, if any, and to theHolders of a majority of the Registrable Securities participating in suchoffering, and furnish to each Holder participating in the offering and to eachunderwriter, if any, a copy of such opinion and letter addressed to such Holderor underwriter;

             (k)         deliver promptly to each Holderparticipating in the offering and each underwriter, if any, copies of allcorrespondence between the SEC and the Company, its counsel or auditors and allmemoranda relating to discussions with the SEC or its staff with respect to theregistration statement, other than those portions of any such memoranda whichcontain information subject to attorney-client privilege with respect to the Company,and, upon receipt of such confidentiality agreements as the Company mayreasonably request, make reasonably available for inspection by any seller ofsuch Registrable Securities covered by such registration statement, by anyunderwriter, if any, participating in any disposition to be effected pursuantto such registration statement and by any attorney, accountant or other agentretained by any such seller or any such underwriter, all pertinent financialand other records, pertinent corporate documents and properties of the Company,and cause all of the Company’s officers, directors and employees to supply allinformation reasonably requested by any such seller, underwriter, attorney,accountant or agent in connection with such registration statement;

             (l)          use its best efforts to obtain thewithdrawal of an order suspending the effectiveness of the registrationstatement;

             (m)        provide a CUSIP number for allRegistrable Securities, not later than the effective date of the registrationstatement;
             (n)        make reasonably available its employeesand personnel and otherwise provide reasonable assistance to the underwriters(taking into account the needs of the Company’s businesses and the requirementsof the marketing process) in the marketing of Registrable Securities in anyunderwritten offering;

             (o)        cooperate with the selling Holders ofRegistrable Securities and the managing underwriter, if any, to facilitate thetimely preparation and delivery of certificates not bearing any restrictivelegends representing the Registrable Securities to be sold, and cause suchRegistrable Securities to be issued in such denominations and registered insuch names in accordance with the underwriting agreement prior to any sale ofRegistrable Securities to the underwriters or, if not an underwritten offering,in accordance with the instructions of the selling Holders of RegistrableSecurities at least three business days prior to any sale of RegistrableSecurities and instruct any transfer agent and registrar of Registrable Securitiesto release any stop transfer orders in respect thereto; and

             (p)        take all such other commerciallyreasonable actions as are necessary or advisable in order to expedite orfacilitate the disposition of such Registrable Securities.

             TheCompany may require as a condition precedent to the Company’s obligations underthis Section 2.4 that each seller of Registrable Securities as to whichany registration is being effected furnish the Company such informationregarding such seller and the distribution of such securities as the Companymay from time to time reasonably request provided that such information shallbe used only in connection with such registration.  No seller of Registrable Securities shall be required to make anyrepresentations or warranties to or agreements with the Company or theUnderwriters (except, with respect to the Underwriter, such as are required forthe consumation of the registration and are customary and reasonable forregistrations of such type) other than as specifically set forth herein and anyother representation required by law.

             EachHolder of Registrable Securities agrees that upon receipt of any notice fromthe Company of the happening of any event of the kind described inclause (v) of paragraph (e) of this Section 2.4, such Holderwill discontinue such Holder’s disposition of Registrable Securities pursuantto the registration statement covering such Registrable Securities until suchHolder’s receipt of the copies of the supplemented or amended prospectuscontemplated by paragraph (e) of this Section 2.4 and, if so directedby the Company, will deliver to the Company (at the Company’s expense) allcopies, other than permanent file copies, then in such Holder’s possession ofthe prospectus covering such Registrable Securities that was in effect at thetime of receipt of such notice. In the event the Company shall give any suchnotice, the applicable period mentioned in paragraph (b) of thisSection 2.4 shall be extended by the number of days during such periodfrom and including the date of the giving of such notice to and including thedate when each seller of any Registrable Securities covered by suchregistration statement shall have received the copies of the supplemented oramended prospectus contemplated by paragraph (e) of this Section 2.4.
             Ifany such registration statement or comparable statement under “blue sky” - lawsrefers to any Holder by name or otherwise as the Holder of any securities ofthe Company, then such Holder shall have the right to require (i) theinsertion therein of language, in form and substance satisfactory to suchHolder and the Company, to the effect that the holding by such Holder of suchsecurities is not to be construed as a recommendation by such Holder of theinvestment quality of the Company’s securities covered thereby and that suchholding does not imply that such Holder will assist in meeting any futurefinancial requirements of the Company or (ii) in the event that suchreference to such Holder by name or otherwise is not in the judgment of theCompany, as advised by counsel, required by the Securities Act or any similarfederal statute or any state “blue sky” or securities law then in force, thedeletion of the reference to such Holder.

             2.5.       Registration Expenses.

             (a)         “Expenses” shall mean any and all feesand expenses incident to the Company’s performance of or compliance with thisArticle 2, including, without limitation: (i) SEC, stock exchange or NASDregistration and filing fees and all listing fees and fees with respect to theinclusion of securities in NASDAQ, (ii) fees and expenses of compliancewith state securities or “blue sky” laws and in connection with the preparationof a “blue sky” survey, including without limitation, reasonable fees andexpenses of blue sky counsel, (iii) printing and copying expenses,(iv) messenger and delivery expenses, (v) expenses incurred inconnection with any road show, (vi) fees and disbursements of counsel forthe Company, (vii) with respect to each registration, the fees anddisbursements of one counsel for the selling Holder(s) (selected by theInitiating Holder, in the case of a registration pursuant to Section 2.1,and selected by the Holders of a majority of the Registrable Securitiesincluded in such registration, in the case of a registration pursuant toSection 2.2), (viii) fees and disbursements of all independent publicaccountants (including the expenses of any audit and/or “cold comfort” letter)and fees and expenses of other Persons, including special experts, retained bythe Company, (ix) fees and expenses payable to a Qualified IndependentUnderwriter (as such term is defined in Conduct Rule 2720 of the NASD’sBy-Laws) and (x) any other fees and disbursements of underwriters, if any,customarily paid by issuers or sellers of securities.

             (b)        The Company shall pay all Expenses withrespect to any Demand Registration whether or not such Demand Registrationbecomes effective or does not remain effective for the period contemplated bySection 2.4(b) and with respect to any registration effected underSection 2.2.

             (c)         Notwithstanding the foregoing,(x) the provisions of this Section 2.5 shall be deemed amended to theextent necessary to cause these expense provisions to comply with “blue sky”laws of each state in which the offering is made and (y) in connectionwith any registration hereunder, each Holder of Registrable Securities beingregistered shall pay all underwriting discounts and commissions and anytransfer taxes, if any, attributable to the sale of such Registrable Securities,pro rata with respect to payments of discounts and commissions in accordancewith the number of shares sold in the offering by such Holder and (z) theCompany shall, in the case of all registrations under this Article 2, beresponsible for all its internal expenses (including, without limitation, allsalaries and expenses of its officers and employees performing legal oraccounting duties).
             2.6.       CertainLimitations on Registration Rights. In thecase of any registration under Section 2.1 pursuant to an underwrittenoffering, or in the case of a registration underSection 2.2 if the Company has determined to enterinto an underwriting agreement in connection therewith, all securities to beincluded in such registration shall be subject to an underwriting agreement andno Person may participate in such registration unless such Person agrees tosell such Person’s securities on the basis provided therein and completes andexecutes all reasonable questionnaires, and other documents (other than powersof attorney) which must be executed in connection therewith, and provides suchother information to the Company or the underwriter as may be necessary toregister such Person’s securities.

             2.7.       Limitationson Sale or Distribution of Other Securities.  To the extent requested in writing by amanaging underwriter, if any, of any registration effected pursuant toSection 2.1, each Holder of Registrable Securities agrees not to sell,transfer or otherwise dispose of, including any sale pursuant to Rule 144under the Securities Act, any Common Stock, or any other equity security of theCompany or any security convertible into or exchangeable or exercisable for anyequity security of the Company (other than as part of such underwritten publicoffering) during the time period (following the effectiveness of theRegistration Statement) reasonably requested by the managing underwriter, notto exceed 90 days (and the Company hereby also so agrees (except that theCompany may effect any sale or distribution of any such securities pursuant toa registration on Form S-4 (if reasonably acceptable to such managingunderwriter) or Form S- 8, or any successor or similar form which is then ineffect or upon the conversion, exchange or exercise of any then outstandingCommon Stock Equivalent) to use its reasonable best efforts to cause eachholder of any equity security or any security convertible into or exchangeableor exercisable for any equity security of the Company purchased from theCompany at any time other than in a public offering so to agree and shallinclude the limitations on sale or distribution of securities set forth in thisSection 2.7 in any future permitted issuances of any equity security or anysecurity convertible into or exchangeable or exercisable for any equitysecurity of the Company purchased from the Company, other than in a publicoffering and other than the common stock specifically contemplated to be soldin the Purchase Agreement).

             2.8.       No Required Sale. Nothing in this Agreement shall be deemed tocreate an independent obligation on the part of any Holder to sell anyRegistrable Securities pursuant to any effective registration statement.

             2.9.       Indemnification.
             (a)         In the event of any registration of anysecurities of the Company under the Securities Act pursuant to this Article 2,the Company will, and hereby does, indemnify and hold harmless, to the fullestextent permitted by law, each Holder of Registrable Securities, its directors,officers, fiduciaries, employees and stockholders or general and limitedpartners (and the directors, officers, employees and stockholders thereof),each other Person who participates as an underwriter or a Qualified IndependentUnderwriter, if any, in the offering or sale of such securities, each officer,director, employee, stockholder or partner of such underwriter or QualifiedIndependent Underwriter, and each other Person, if any, who controls suchseller or any such underwriter within the meaning of the Securities Act,against any and all losses, claims, damages or liabilities, joint or several,actions or proceedings (whether commenced or threatened) in respect thereof(“Claims”) and expenses (including reasonable fees of counsel and any amountspaid in any settlement effected with the Company’s consent, which consent shallnot be unreasonably withheld or delayed) to which each such indemnified partymay become subject under the Securities Act or otherwise, insofar as suchClaims or expenses arise out of or are based upon (i) any untrue statementor alleged untrue statement of a material fact contained in any registrationstatement under which such securities were registered under the Securities Actor the omission or alleged omission to state therein a material fact requiredto be stated therein or necessary to make the statements therein notmisleading, (ii) any untrue statement or alleged untrue statement of amaterial fact contained in any preliminary, final or summary prospectus or anyamendment or supplement thereto, together with the documents incorporated by referencetherein, or the omission or alleged omission to state therein a material factrequired to be stated therein or necessary in order to make the statementstherein, in the light of the circumstances under which they were made, notmisleading or (iii) any violation by the Company of any federal, state orcommon law rule or regulation applicable to the Company and relating to actionrequired of or inaction by the Company in connection with any suchregistration, and the Company will reimburse any such indemnified party for anylegal or other expenses reasonably incurred by such indemnified party inconnection with investigating or defending any such Claim as such expenses areincurred; provided, however, that the Company shall not be liable to any such indemnifiedparty in any such case to the extent such Claim or expense arises out of or isbased upon any untrue statement or alleged untrue statement of a material factor omission or alleged omission of a material fact made in such registrationstatement or amendment thereof or supplement thereto or in any such prospectusor any preliminary, final or summary prospectus in reliance upon and inconformity with written information furnished to the Company by or on behalf ofsuch indemnified party specifically for use therein. Such indemnity andreimbursement of expenses shall remain in full force and effect regardless ofany investigation made by as on behalf of such indemnified party and shallsurvive the transfer of such securities by such Holder.

             (b)        Each Holder of Registrable Securitiesthat are included in the securities as to which any registration underSection 2.1 or 2.2 is being effected (and, if the Company requires as acondition to including any Registrable Securities in any registration statementfiled in accordance with Section 2.1 or 2.2, any underwriter and QualifiedIndependent Underwriter, if any) shall, severally and not jointly, indemnifyand hold harmless (in the same manner and to the same extent as set forth inparagraph (a) of this Section 2.9) to the fullest extent permitted bylaw the Company, its officers and directors, each Person controlling theCompany within the meaning of the Securities Act and all other prospectivesellers and their directors, officers, general and limited partners andrespective controlling Persons with respect to any untrue statement or allegeduntrue statement of any material fact in, or omission or alleged omission ofany material fact from, such registration statement, any preliminary, final orsummary prospectus contained therein, or any amendment or supplement thereto,if such statement or alleged statement or omission or alleged omission was madein reliance upon and in conformity with written information furnished to theCompany or its representatives by or on behalf of such Holder or underwriter orQualified Independent Underwriter, if any, specifically for use therein andreimburse such indemnified party for any legal or other expenses reasonablyincurred in connection with investigating or defending any such Claim as suchexpenses are incurred; provided, however, that the aggregate amount which anysuch Holder shall be required to pay pursuant to this Section 2.9(b) andSections 2.9(c) and (e) shall in no case be greater than the amount of thenet proceeds received by such Holder upon the sale of the RegistrableSecurities pursuant to the registration statement giving rise to suchclaim.  Such indemnity and reimbursementof expenses shall remain in full force and effect regardless of anyinvestigation made by or on behalf of such indemnified party and shall survivethe transfer of such securities by such Holder.
             (c)         Indemnification similar to thatspecified in the preceding paragraphs (a) and (b) of this Section 2.9(with appropriate modifications) shall be given by the Company and each sellerof Registrable Securities with respect to any required registration or otherqualification of securities under any state securities and “blue sky” laws.

             (d)        Any Person entitled to indemnificationunder this Agreement shall notify promptly the indemnifying party in writing ofthe commencement of any action or proceeding with respect to which a claim forindemnification may be made pursuant to this Section 2.9, but the failureof any indemnified party to provide such notice shall not relieve theindemnifying party of its obligations under the preceding paragraphs of thisSection 2.9, except to the extent the indemnifying party is materiallyprejudiced thereby and shall not relieve the indemnifying party from any liabilitywhich it may have to any indemnified party otherwise than under this Article2.  In case any action or proceeding isbrought against an indemnified party and it shall notify the indemnifying partyof the commencement thereof, the indemnifying party shall be entitled toparticipate therein and, unless in the reasonable opinion of outside counsel tothe indemnified party a conflict of interest between such indemnified andindemnifying parties may exist in respect of such claim, to assume the defensethereof jointly with any other indemnifying party similarly notified, to theextent that it chooses, with counsel reasonably satisfactory to suchindemnified party, and after notice from the indemnifying party to suchindemnified party that it so chooses, the indemnifying party shall not beliable to such indemnified party for any legal or other expenses subsequentlyincurred by such indemnified party in connection with the defense thereof otherthan reasonable costs of investigation; provided, however, that (i) if theindemnifying party fails to take reasonable steps necessary to defenddiligently the action or proceeding within 20 days after receiving notice fromsuch indemnified party; or (ii) if such indemnified party who is adefendant in any action or proceeding which is also brought against theindemnifying party reasonably shall have concluded that there may be one ormore legal defenses available to such indemnified party which are not availableto the indemnifying party; or (iii) if representation of both parties bythe same counsel is otherwise inappropriate under applicable standards ofprofessional conduct, then, in any such case, the indemnified party shall havethe right to assume or continue its own defense as set forth above (but with nomore than one firm of counsel for all indemnified parties in each jurisdiction,except to the extent any indemnified party or parties reasonably shall haveconcluded that there may be legal defenses available to such party or partieswhich are not available to the other indemnified parties or to the extentrepresentation of all indemnified parties by the same counsel is otherwiseinappropriate under applicable standards of professional conduct) and theindemnifying party shall be liable for any expenses therefor.  No indemnifying party shall, without thewritten consent of the indemnified party, effect the settlement or compromiseof, or consent to the entry of any judgment with respect to, any pending orthreatened action or claim in respect of which indemnification or contributionmay be sought hereunder (whether or not the indemnified party is an actual orpotential party to such action or claim) unless such settlement, compromise orjudgment (A) includes an unconditional release of the indemnified partyfrom all liability arising out of such action or claim and (B) does notinclude a statement as to or an admission of fault, culpability or a failure toact, by or on behalf of any indemnified party.
             (e)         If for any reason the foregoingindemnity is unavailable or is insufficient to hold harmless an indemnifiedparty under Sections 2.9(a), (b) or (c), then each indemnifying partyshall contribute to the amount paid or payable by such indemnified party as aresult of any Claim in such proportion as is appropriate to reflect therelative fault of the indemnifying party, on the one hand, and the indemnifiedparty, on the other hand, with respect to such offering of securities.  The relative fault shall be determined byreference to, among other things, whether the untrue or alleged untruestatement of a material fact or the omission or alleged omission to state amaterial fact relates to information supplied by the indemnifying party or theindemnified party and the parties’ relative intent, knowledge, access toinformation and opportunity to correct or prevent such untrue statement oromission.  If, however, the allocationprovided in the second preceding sentence is not permitted by applicable law,then each indemnifying party shall contribute to the amount paid or payable bysuch indemnified party in such proportion as is appropriate to reflect not onlysuch relative faults but also the relative benefits of the indemnifying partyand the indemnified party as well as any other relevant equitableconsiderations.  The parties heretoagree that it would not be just and equitable if contributions pursuant to thisSection 2.9(e) were to be determined by pro rata allocation or by anyother method of allocation which does not take account of the equitableconsiderations referred to in the preceding sentences of thisSection 2.9(e).  The amount paid orpayable in respect of any Claim shall be deemed to include any legal or otherexpenses reasonably incurred by such indemnified party in connection withinvestigating or defending any such Claim. No Person guilty of fraudulentmisrepresentation (within the meaning of Section 11(f) of the SecuritiesAct) shall be entitled to contribution from any Person who was not guilty ofsuch fraudulent misrepresentation. Notwithstanding anything in this Section 2.9(e) to the contrary, noindemnifying party (other than the Company) shall be required pursuant to thisSection 2.9(e) to contribute any amount in excess of the net proceedsreceived by such indemnifying party from the sale of Registrable Securities inthe offering to which the Claims of the indemnified parties relate, less theamount of any indemnification payment made by such indemnifying party pursuantto Sections 2.9(b) and (c).

             (f)         The indemnification and contributionagreements contained herein shall be in addition to any other rights toindemnification or contribution which any indemnified party may have pursuantto law or contract and shall remain operative and in full force and effectregardless of any investigation made or omitted by or on behalf of anyindemnified party and shall survive the transfer of the Registrable Securitiesby any such party.

             (g)        The indemnification and contributionrequired by this Section 2.9 shall be made by periodic payments of theamount thereof during the course of the investigation or defense, as and whenbills are received or expense, loss, damage or liability is incurred.

             3.          UnderwrittenOfferings.
             3.1.       RequestedUnderwritten Offerings. If requested by the underwriters for anyunderwritten offering by the Holders pursuant to a Demand Registration underSection 2.1, the Company shall enter into acustomary underwriting agreement with the underwriters.  Such underwriting agreement shall besatisfactory in form and substance to the Initiating Holder and shall containsuch representations and warranties by, and such other agreements on the partof,the Company and such other terms as are generallyprevailing in agreements of that type, including, without limitation,indemnities and contribution agreements. Any Holder participating in the offering shall be a party to suchunderwriting agreement and may, at its option, require that any or all of therepresentations and warranties by, and the other agreements on the part of, theCompany to and for the benefit of such underwriters shall also be made to andfor the benefit of such Holder and that any or all of the conditions precedentto the obligations of such underwriters under such underwriting agreement beconditions precedent to the obligations of such Holder; provided, however, thatthe Company shall not be required to make any representations or warrantieswith respect to written information specifically provided by a selling Holderfor inclusion in the registration statement. Such underwriting agreement shall also contain such representations andwarranties by the participating Holders as are customary in agreements of thattype.

             3.2.       Piggyback UnderwrittenOfferings. In the case of a registration pursuant toSection 2.2 hereof, if the Company shall have determined to enter into anunderwriting agreement in connection therewith, all of the Holders’ RegistrableSecurities to be included in such registration shall be subject to suchunderwriting agreement.  Any Holderparticipating in such registration may, at its option, require that any or allof the representations and warranties by, and the other agreements on the partof, the Company to and for the benefit of such underwriters shall also be madeto and for the benefit of such Holder and that any or all of the conditionsprecedent to the obligations of such underwriters under such underwritingagreement be conditions precedent to the obligations of such Holder. Suchunderwriting agreement shall also contain such representations and warrantiesby the participating Holders as are customary in agreements of that type.

             4.          General.

             4.1.       Rule 144.  The Company covenants that (i) so longas it remains subject to the reporting provisions of the Exchange Act, it willtimely file the reports required to be filed by it under the Securities Act orthe Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Actreferred to in subparagraph (c)(1) of Rule 144 under the SecuritiesAct), and (ii) will take such further action as any Holder of RegistrableSecurities may reasonably request, all to the extent required from time to timeto enable such Holder to sell Registrable Securities without registration underthe Securities Act within the limitation of the exemptions provided by(A) Rule 144 under the Securities Act, as such Rule may be amendedfrom time to time, or (B) any similar rule or regulation hereafter adoptedby the SEC.  Upon the request of anyHolder of Registrable Securities, the Company will deliver to such Holder awritten statement as to whether it has complied with such requirements.

             4.2.       Nominees for BeneficialOwners.  If Registrable Securities are held by anominee for the beneficial owner thereof, the beneficial owner thereof may, atits option, be treated as the Holder of such Registrable Securities forpurposes of any request or other action by any Holder or Holders of RegistrableSecurities pursuant to this Agreement (or any determination of any number orpercentage of shares constituting Registrable Securities held by any Holder orHolders of Registrable Securities contemplated by this Agreement), providedthat the Company shall have received assurances reasonably satisfactory to itof such beneficial ownership.
             4.3.       Amendments and Waivers. This Agreement may be amended, modified, supplemented or waivedonly upon the written agreement of the party against whom enforcement of suchamendment, modification, supplement or waiver is sought.

             4.4.       Notices. Except as otherwise provided in thisAgreement, all notices, requests, consents and other communications hereunderto any party shall be deemed to be sufficient if contained in a writteninstrument delivered in person or by telecopy, nationally recognized overnightcourier or first class registered or certified mail, return receipt requested,postage prepaid, addressed to such party at the address set forth below or suchother address as may hereafter be designated in writing by such party to theother parties:
(i)if  to the Company, to:   TeraGlobal  Communications Corp. 9171  Towne Centre Drive, 6th Floor San  Diego, CA  92122 Telecopy:  (858) 404-5555 Attention:  Chief Executive Officer  (ii)if  to the Purchaser, to the address listed on Exhibit A of the Purchase  Agreement   with  a copy to: Cadwalader,  Wickersham & Taft 100  Maiden Lane New  York, New York  10038 Telecopy:  (212) 504-6666 Attention:  Jonathan M. Wainwright, Esq.
All such notices, requests, consents andother communications shall be deemed to have been given when received.

             4.5.       Transferor Assignment of Registration Rights. The rights to cause the Company to registersecurities granted to a Holder by the Company under this Agreement may betransferred or assigned by a Holder only to a transferee or assignee of notless than 250,000 shares of Registrable Securities (as presently constitutedand subject to subsequent adjustments for stock splits, stock dividends,reverse stock splits and the like); provided, however, that, a Holder maytransfer such rights to affiliates or associates of such Holder without theforegoing share restriction.

             4.6.       Miscellaneous.

             (a)         This Agreement shall be binding uponand inure to the benefit of and be enforceable by the parties hereto and therespective successors, personal representatives and assigns of the partieshereto, whether so expressed or not.  Ifany Person shall acquire Registrable Securities from any Holder, in any manner,whether by operation of law or otherwise, such transferee shall promptly notifythe Company and such Registrable Securities acquired from such Holder shall beheld subject to all of the terms of this Agreement, and by taking and holdingsuch Registrable Securities such Person shall be entitled to receive thebenefits of and be conclusively deemed to have agreed to be bound by and toperform all of the terms and provisions of this Agreement.  If the Company shall so request, any suchsuccessor or assign shall agree in writing to acquire and hold the RegistrableSecurities acquired from such Holder subject to all of the terms hereof.  If any Holder shall acquire additionalRegistrable Securities, such Registrable Securities shall be subject to all ofthe terms, and entitled to all the benefits, of this Agreement.
             (b)        This Agreement (with the documents referredto herein or delivered pursuant hereto and the Stockholders Agreement that theparties hereto have entered into as of the date hereof) embodies the entireagreement and understanding between the parties hereto and supersedes all prioragreements and understandings relating to the subject matter hereof.

             (c)         This Agreement shall be construed andenforced in accordance with and governed by the laws of the State of New Yorkwithout giving effect to the conflicts of law principles thereof.

             (d)        The headings in this Agreement are forconvenience of reference only and shall not limit or otherwise affect themeaning hereof.  All section referencesare to this Agreement unless otherwise expressly provided.

             (e)         This Agreement may be executed in anynumber of counterparts, each of which shall be an original, but all of whichtogether shall constitute one instrument.

             (f)         Any term or provision of this Agreementwhich is invalid or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such invalidity orunenforceability without rendering invalid or unenforceable the remaining termsand provisions of this Agreement or affecting the validity or enforceability ofany of the terms or provisions of this Agreement in any other jurisdiction.

             (g)        The parties hereto acknowledge thatthere would be no adequate remedy at law if any party fails to perform any ofits obligations hereunder, and accordingly agree that each party, in additionto any other remedy to which it may be entitled at law or in equity, shall beentitled to injunctive relief, including specific performance, to enforce suchobligations without the posting of any bond, and, if any action should bebrought in equity to enforce any of the provisions of this Agreement, none ofthe parties hereto shall raise the defense that there is an adequate remedy atlaw.

             (h)        Each party hereto shall do and performor cause to be done and performed all such further acts and things and shallexecute and deliver all such other agreements, certificates, instruments, anddocuments as any other party hereto reasonably may request in order to carryout the intent and accomplish the purposes of this Agreement and theconsummation of the transactions contemplated hereby.
             (i)          This Agreement may be amended,supplemented or modified only by a written instrument (which may be executed inany number of counterparts) duly executed by or on behalf of each of theCompany and WallerSutton.

             (j)          Subject to Section 4.7(i), any term orcondition of this Agreement may be waived at any time by the party that isentitled to the benefit thereof, but no such waiver shall be effective unlessset forth in a written instrument duly executed by or on behalf of the partywaiving such term or condition.  Nowaiver by any party of any term or condition of this Agreement, in any one ormore instances, shall be deemed to be or construed as a waiver of the same termor condition of this Agreement on any future occasion.

             (k)         The terms and provisions of thisAgreement are intended solely for the benefit of each party hereto, theirrespective successors or permitted assigns and any other holder of RegistrableSecurities, and it is not the intention of the parties to confer third-partybeneficiary rights upon any other person other than any person entitled toindemnity hereunder.

4.7.          No InconsistentAgreements. The rights granted to the holders ofRegistrable Securities hereunder do not in any way conflict with and are notinconsistent with any other agreements to which the Company is a party or bywhich it is bound.  Without the priorwritten consent of WallerSutton, the Company will not, on or after the date ofthis Agreement, enter into any agreement with respect to its securities which isinconsistent with the rights granted in this Agreement or otherwise conflictswith the provisions hereof, other than any lock-up agreement with and requiredby the underwriters in connection with any registered offering effectedhereunder, pursuant to which the Company shall agree not to register for sale,and the Company shall agree not to sell or otherwise dispose of, Common Stockor any securities convertible into or exercisable or exchangeable for CommonStock, for a specified period following the registered offering.  The Company further agrees that if any otherregistration rights agreement entered into after the date of this Agreementwith respect to any of its securities contains terms which are more favorableto, or less restrictive on, the other party thereto than the terms and conditionsin this Agreement are (insofar as they are applicable) to the Purchasing Parties, then the terms and conditions of this Agreementshall immediately be deemed to have been amended without further action by theCompany or any of the Holders of Registrable Securities so that the PurchasingParties shall be entitled to the benefit of any such more favorable or lessrestrictive terms or conditions.  TheCompany promptly shall deliver a copy of all such agreements to the Holders.
             IN WITNESS WHEREOF, the undersignedhave executed this Agreement as of the date set forth above.
 TERAGLOBAL  COMMUNICATIONS CORP.          By:/s/  ROBERT E. RANDALL      Name:  Robert E. Randall   Title:    Chief Executive Officer      WALLERSUTTON  2000, L.P.      By:WallerSutton  2000, L.L.C., general partner          By:/s/  JACK WOODRUFF      Name:  Jack Woodruff   Title:    Member      /s/  JOHN C. STISKA     John C. Stiska      /s/  JOHN F.A.V. CECIL     John  F.A.V. Cecil      CECIL  VENTURES, LLC      By:/s/  JOHN F.A.V. CECIL      Name:  John F.A.V. Cecil   Title:    Managing Member 
 
 /s/  ROBERT E. RANDALL     Robert  E. Randall      /s/  LAWRENCE LACERTE     Lawrence  Lacerte       WILLIAM  OR BONNIE LUPIEN TRUST   U/A  DTD 8/4/76 WA Lupien TTEE      By:       Name:     Title:       Spencer  Trask Investment Partners, LLC      By:       Name:  Kevin B. Kimberlin   Title:       GIRARD  INVESTMENT PARTNERS, INC.      By:       /s/  KENT ANDREWS   Name:  Kent Andrews   Title: 
**EXHIBIT A**

 

**SCHEDULE OF BRIDGE INVESTORS**

 
**Name and Address****Principal  Amount of Note**  John C. Stiska$50,0004275 Executive Square,  Suite 350 La Jolla, CA 92037   John F.A.V. Cecil$50,000One Vanderbilt Asheville, NC  28803   Cecil Ventures, LLC$50,000One Vanderbilt Asheville, NC  28803   Robert E. Randall$50,0009171 Towne Centre  Drive Suite 600 San Diego, CA  92122   Lawrence Lacerte$200,0005950 Sherry Lane Suite 900 Dallas, TX  75225   William or Bonnie  Lupien Trust$50,000U/A DTD 8/4/76 WA  Lupien TTEE BR Lupien TTEE 2544 C.R. 124 Hesperus, CO  81326   WallerSutton 2000,  L.P.$500,000One Rockefeller Plaza,  Suite 3300 New York, NY 10020-2102   Spencer Trask  Investment Partners LLC$500,000535 Madison Avenue New York, NY 10022   Girard Investment  Partners, Inc.$50,0007855 Ivanhoe Avenue,  Suite 222 La Jolla, CA  92037