exv4w2



 





Exhibit 4.2




REGISTRATION RIGHTS AGREEMENT




     This Registration Rights Agreement (this “Agreement”) dated December 9,
2003 is by and among (i) Glenbrook Group, LLC, a Delaware limited liability
company (the “Buyer”) and (ii) Northgate Innovations, Inc., a California
corporation (the “Seller” and interchangeably, the “Company” and, together with
Buyer, the “Parties” and each individually a “Party”).



RECITALS:




     A. The Parties have entered into (i) that certain Stock Purchase Agreement
dated December 9, 2003, between Buyer and the Company (the “Company Stock
Purchase Agreement”) pursuant to which the Company will issue (a) 4 million
shares of the Company’s Common Stock to Buyer and (b) the Warrants to J & M
Interests, LLC, a Delaware limited liability company (“J & M Interests”) in
exchange for the consideration specified therein, and (ii) that certain Stock
Purchase Agreement dated December 9, 2003, by and among the Buyer and Andy Teng
(the “CEO Stock Purchase Agreement”) pursuant to which Buyer will purchase from
Andy Teng 7.6 million shares of the Company’s Common Stock.



     B. The Company Stock Purchase Agreement provides that the Parties will
enter into this Registration Rights Agreement with respect to the Registrable
Securities.



     C. This Registration Rights Agreement provides for certain rights and
restrictions applicable to the Registrable Securities to be purchased by and
issued to Buyer and J & M Interests pursuant to the Stock Purchase Agreements.
It will be become effective upon completion of the Closing.



     D. Undefined capitalized terms herein are defined in the Stock Purchase
Agreements.



AGREEMENT:




     NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants contained herein and in the Stock Purchase Agreements, each Party
agrees as follows:



ARTICLE 1.

DEFINITIONS




     For purposes of this Agreement:



     “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or is under common control
with such Person. For the purposes of this definition, “Control,” when used
with respect to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms “Affiliated,” “Controlling” and “Controlled” have
meanings correlative to the foregoing.



 









 





     “Blue Sky Application” is defined in Section 5.1 of this Agreement.



     “Business Day” means a day other than (i) a Saturday or Sunday, and (ii)
any other day on which banks in the State of New York are closed or authorized
by law to close.



     “Buyer” is defined in the preamble to this Agreement.



     “CEO Stock Purchase Agreement” is defined in the recitals to this
Agreement.



     “Common Stock” means the Company’s common stock, par value $.03 per share.



     “Company Stock Purchase Agreement” is defined in the recitals to this
Agreement.



     “Delay Notice” is defined in Section 3.1(l) of this Agreement.



     “Holders” is defined in Section 2.4 of this Agreement.



     “Material Development Condition” is defined in Section 3.1(l) of this
Agreement.



     “Maximum Offering Size” is defined in Section 2.3.



     “Prospectus” means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by reference in such prospectus.



     “Register,” “registered” and “registration” refer to a registration made
by preparing and filing a Registration Statement or similar document in
compliance with the Securities Act (as defined below), and the declaration or
ordering of effectiveness of such Registration Statement or document.



     “Registrable Securities” means (i) the Shares, (ii) the Warrant Shares,
(iii) any Common Stock obtained by Buyer or J & M Interests, LLC after the
allocation and conversion of any of the Preferred Stock held in the Lan Plus,
Inc. Employee Stock Option Plan (the “ESOP”) in connection with termination
and/or foreclosure proceedings against the ESOP and (iv) any other securities
issues in exchange for the foregoing securities by virtue of any stock split,
combination, stock dividend, merger, consolidation or other similar event.



     “Registration Statement” means any registration statement of the Company
filed with the SEC on the appropriate form pursuant to the Securities Act which
covers the resale of any of the Registrable Securities pursuant to the
provisions of this Agreement and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the prospectus contained therein, all exhibits thereto and all
materials incorporated by reference therein.



     “Shares” means the shares of Common Stock purchased pursuant to the Stock
Purchase Agreements.



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     “SEC” means the U.S. Securities and Exchange Commission.



     “Stock Purchase Agreements” means (i) the Company Stock Purchase Agreement
and (ii) the CEO Stock Purchase Agreement.



     “Warrants” means the 2,500,000 warrants to purchase an equal number of
shares of the Company’s Common Stock, bearing an exercise price of $.50 per
share and a term of five (5) years, issuable to J & M Interests pursuant to the
Company Stock Purchase Agreement.



     “Warrant Shares” means the shares of the Company’s Common Stock issuable
upon the exercise of the Warrants.



ARTICLE 2.

REGISTRATION RIGHTS




     2.1 Registration Statements.



     Promptly following the Closing (but not later than one hundred twenty
(120) days thereafter), the Company shall prepare and file with the SEC a
Registration Statement on Form S-1 covering the resale of the Registrable
Securities. Such Registration Statement also shall cover, to the extent
allowable under the Securities Act and the rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions with
respect to the Registrable Securities. The Company shall not permit any
securities other than the Registrable Securities to be included in such
Registration Statement. The Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided in accordance with Section 3.1 hereof to the Buyer and its
counsel prior to its filing or other submission. The Company shall use its
Best Efforts to cause the Registration Statement to be filed pursuant to this
Section 2.1 to be declared effective by the SEC not later than the date that is
165 days after the Closing Date or 195 days following the Closing Date if the
Registration Statement is subject to review by the Securities and Exchange
Commission Staff. The Company shall keep the Registration Statement filed
pursuant to this Section 2.1 effective and current under the Securities Act
until the date that is two (2) years after the Closing Date, unless a
replacement Registration Statement filed pursuant to Section 2.2 hereof shall
have been declared effective by the SEC prior to the expiration of such two (2)
year period, in which case the time provisions set forth in Section 2.2 hereof
shall control, provided, however, that such two (2) year period shall be
extended until the date on which all of the Registrable Securities are eligible
for resale pursuant to Rule 144(k) under the Securities Act.



     2.2 Registration on Form S-3.



     Promptly after such time as the Company is eligible to use Form S-3 (but
not later than fifteen (15) days after becoming eligible), irrespective of any
prior filing of any Registration Statement in respect of any Registrable
Securities, the Company shall prepare and file with the SEC a replacement
Registration Statement on Form S-3 (or, if Form S-3 is not then available to
the Company, on such form of registration statement as is then available to
effect a registration for resale of the Registrable Securities, subject to the
Buyer’s prior written consent), covering the



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resale of the Registrable Securities. Such Registration Statement also shall
cover, to the extent allowable under the Securities Act and the rules
promulgated thereunder (including Rule 416), such indeterminate number of
additional shares of Common Stock resulting from stock splits, stock dividends
or similar transactions with respect to the Registrable Securities. The
Company may permit securities other than the Registrable Securities to be
included in such Registration Statement; provided, that the inclusion of such
securities in such Registration Statement shall not affect or limit the number
of Registrable Securities included in such Registration Statement. The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 3.1 hereof to the Buyer and its counsel prior to its
filing or other submission. The Company shall use its Best Efforts to cause
the Registration Statement to be filed pursuant to this Section 2.2 to be
declared effective by the SEC not later than the earlier of: (A) the date that
is seventy five (75) days after the date on which the Company became eligible
to use Form S-3; and (B) sixty (60) days after the Registration Statement is
filed with the SEC. The Company shall keep the Registration Statement filed
pursuant to this Section 2.2 effective and current under the Securities Act
until the date on which all of the Registrable Securities are eligible for
resale pursuant to Rule 144(k) of the Securities Act.




     2.3 Incidental Registration.



     (a) If the Company at any time proposes to register any of its securities
under the 1933 Act for sale to the public pursuant to an underwritten offering,
whether for its own account or for the account of other stockholders of the
Company or both, each such time it will promptly give written notice to all
holders of the Registrable Securities (whether or not such Registrable
Securities are currently registered under the 1933 Act) of its intention so to
do. Upon the written request of any such holder, which is received by the
Company within fifteen (15) days after the giving of any such notice by the
Company, to register and include any or all of its Registrable Securities
(whether or not currently registered under the 1933 Act) in such underwritten
offering, the Company will use its reasonable commercial efforts to cause such
Registrable Securities as to which registration and inclusion shall have been
so requested to be included in such registration statement. The right of any
holder of such Registrable Securities to include Registrable Securities in such
registration shall be conditioned upon such holder’s participation in such
underwriting to the extent provided herein. The Company may abandon or
withdraw any such registration at any time without any liability or obligation
to any holder of Registrable Securities.



     (b) Notwithstanding any other provision of this Section 2.3, if the
managing underwriter or underwriters determine that the number of shares to be
included in such registration (including any securities that the Company, the
holders of Registrable Securities and any other stockholders with registration
rights (other than Registrable Securities) exceeds the largest number of shares
that can be sold without having an adverse effect on such offering (the
“Maximum Offering Size”), the Company will include in such registration, in the
following priority, up to the Maximum Offering Size:




     (w) first, that number of the securities held by any
stockholders exercising a demand registration pursuant to a
written agreement between such stockholders and the Company,
if any, as would not cause the offering to exceed the Maximum
Offering Size (allocated, if necessary for the


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offering not to exceed the Maximum Offering Size, pro
rata among such holders on the basis of the number of shares
of registrable securities so requested to be included in such
registration); and




     (x) second, if the Maximum Offering Size has not been
exceeded, that number of securities proposed to be registered
for the account of the Company; and




     (y) third, if the Maximum Offering Size has not been
exceeded, all Registrable Securities requested to be included
in such registration by the holders of Registrable Securities
and any other securities proposed to be registered for the
account of any person with incidental registration rights
pursuant to a written agreement executed prior to the delivery
of the notice set forth in Section 2.3(a) hereof (allocated, if
necessary for the offering not to exceed the Maximum Offering
Size, pro rata among such holders on the basis of the number of
            shares of Registrable Securities and other securities so
requested to be included in such registration); and




     (z) fourth, if the Maximum Offering Size has not been
exceeded, any securities proposed to be registered for the
account of any other persons with such priorities among them as
the Company shall determine.



     2.4 Expenses.



     The Company will pay all expenses associated with each registration under
this Agreement, including, without limitation, filing and printing fees,
counsel and accounting fees and expenses, costs associated with clearing the
Registrable Securities for sale under applicable state securities laws, listing
fees and the reasonable expenses of the Buyer and other holders of Registrable
Securities (collectively, the “Holders”) in connection with the registration
including, without limitation, the reasonable attorney fees of one counsel to
the Holders, but excluding discounts, commissions, fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals
with respect to the Registrable Securities being sold.



     2.5 Failure to Comply.



          If a Registration Statement: (i) is not filed within the time periods set
forth in any of Section 2.1 — 2.2 hereof, as the case may be; (ii) is not
effective by the time set forth in any of Section 2.1 — 2.2 hereof, as the case
may be; or (iii) is suspended or otherwise is not effective or current for any
reason for at least thirty (30) days during any period that it is to be
effective or current as provided in any of Section 2.1 — 2.2 and Section 3.1
hereof, as the case may be (any such occurrence described in the immediately
preceding clauses (i), (ii) or (iii), a “Registration Default”), the Company
will make payments to each Holder as partial liquidated damages for the minimum
amount of damages to the Holders by reason thereof, and not as a penalty, at
the rate of $0.05 per share of Common Stock held by such Holder per month, for
each calendar month during which the Registration Default continues (pro rated
for any period less than 30 days). Each such payment shall be due and payable
within five (5) days after the end of each calendar month during the
Registration Default until the termination of such Registration Default and



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within five (5) days after such termination. Such payments shall be in
partial compensation to each Holder, and shall not constitute such Holder’s
exclusive remedy for such events. The Registration Default shall terminate
upon (x) the filing of the Registration Statement in the case of clause (i) of
this Section 2.5, (y) the effective date of the Registration Statement in the
case of clause (ii) of this Section 2.5, and (z) the ability of each Holder to
effect sales pursuant to the Registration Statement in the case of clause (iii)
of this Section 2.5. The amounts payable as partial liquidated damages
pursuant to this paragraph shall be payable in lawful money of the United
States. Amounts payable as partial liquidated damages to each Holder hereunder
shall cease when such Holder no longer holds the Registrable Securities.



     2.6 Underwritten Offering.



     If any of the Registrable Securities are to be sold in an underwritten
offering at the request of the Holders, the investment banker that will
administer the offering will be selected by the Company with the consent of the
holders of a majority of the Registrable Securities included in such offering,
which consent shall not be unreasonably withheld. No Holder may participate in
any underwritten offering hereunder unless such Holder: (i) agrees to sell its
Registrable Securities on the basis provided in any underwriting agreements
approved by the Persons entitled hereunder to approve such arrangements; and
(ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such arrangements.



ARTICLE 3.

COMPANY OBLIGATIONS




     3.1 Company Obligations



     The Company will use its Best Efforts to effect the registration of the
Registrable Securities in accordance with the terms hereof, and pursuant
thereto the Company will, as expeditiously as possible:




     (a) use its Best Efforts to cause such Registration Statement to
become effective and to remain continuously effective for the periods
provided in Section 2.1 hereof;




     (b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement and the Prospectus as may be
necessary to keep the Registration Statement effective for the period
specified in Section 2.1 hereof and to comply with the provisions of the
Securities Act and the Exchange Act with respect to the distribution of
all of the Registrable Securities covered thereby;




     (c) provide copies to and permit counsel designated by the Holders

to review each Registration Statement and all amendments and supplements
thereto no fewer than seven (7) days prior to their filing with the SEC
and not file any document to which such counsel reasonably objects;



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     (d) furnish to the Holders and their designated legal counsel: (i)
promptly after the same is prepared and publicly distributed, filed with
the SEC, or received by the Company (but not later than two (2) Business
Days after the filing date, receipt date or sending date, as the case may
be) one (1) copy of any Registration Statement and any amendment thereto,
each preliminary prospectus and Prospectus and each amendment or
supplement thereto, and each letter written by or on behalf of the
Company to the SEC or the staff of the SEC, and each item of
correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought
confidential treatment); and (ii) such number of copies of a Prospectus,
including a preliminary prospectus, and all amendments and supplements
thereto and such other documents as each Buyer may reasonably request in
order to facilitate the disposition of the Registrable Securities owned
by such Buyer that are covered by the related Registration Statement;




     (e) in the event of an underwritten offering, the Company shall
enter into and perform its reasonable obligations under an underwriting
agreement, in usual and customary form, including, without limitation,
customary indemnification and contribution obligations, with the
underwriter of such offering;




     (f) if required by the underwriter, or if any Holder is described in
the Registration Statement as an underwriter, the Company shall furnish,
on the effective date of the Registration Statement (except with respect
to clause 3.1(f)(i) below) and on the date that Registrable Securities
are delivered to an underwriter, if any, for sale in connection with the
Registration Statement (including any Holder deemed to be an
underwriter): (i) in the case of an underwritten offering, an opinion,
dated as of the closing date of the sale of Registrable Securities to the
underwriters, from independent legal counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as
is customarily given in an underwritten public offering, addressed to the
underwriters and the Holders participating in such underwritten offering
and (ii) a letter, dated as of the effective date of such Registration
Statement and confirmed as of the applicable dates described above, from
the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed
to the underwriters (including any Holder deemed to be an underwriter);




     (g) use its Best Efforts to: (i) prevent the issuance of any stop
order or other suspension of effectiveness and; (ii) if such order is
issued, obtain the withdrawal of any such order at the earliest possible
moment;




     (h) prior to any public offering of Registrable Securities, use its
Best Efforts to register or qualify or cooperate with the Holders and
their counsel in connection with the registration or qualification of
such Registrable Securities for offer and sale under the securities or
blue sky laws of such jurisdictions requested by the Holders and do any
and all other commercially reasonable acts or things necessary or
advisable to enable the distribution in such jurisdictions of the
Registrable Securities covered by the Registration Statement; and provide
evidence of any such action so taken to such Holder promptly upon such
filing; and continue such qualification at all times through the resale
of all


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Registrable Securities; provided, however, that the Company will not
be required to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (h),
(y) subject itself to general taxation in any such jurisdiction or (z)
file a general consent to service of process in any such jurisdiction.




     (i) use its Best Efforts to cause all Registrable Securities covered
by a Registration Statement to be listed on each securities exchange,
interdealer quotation system or other market on which similar securities
issued by the Company are then listed;




     (j) immediately notify the Holders, at any time when a Prospectus
relating to Registrable Securities is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event
as a result of which, the Prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing or is no longer current, and at the request
of any such Holder, as promptly as reasonably practicable prepare and
furnish to such Holder a reasonable number of copies of a supplement to
or an amendment of such Prospectus as may be necessary such that, as
thereafter delivered to the purchasers of such Registrable Securities,
such Prospectus shall (i) not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing and (ii) be current; and




     (k) otherwise use its Best Efforts to comply in all material
respects with all applicable rules and regulations of the SEC under the
Securities Act and the Exchange Act, take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon
as reasonably practicable, but not later than the date on which such
filings are made with the SEC, copies of the Company’s filings under the
Securities Act and Exchange Act made with the SEC.




     (l) with respect to any Registration Statement filed or to be filed
pursuant to Section 2.1 above, if the Board of Directors of the Company
determines that, in its reasonable good faith judgment, it would (because
of the existence of, or in reasonable anticipation of, any acquisition or
corporate reorganization or other transaction, financing activity, or
other development involving the Company, or the unavailability for
reasons beyond the Company’s control of any required financial statements
related to such acquisition or corporate reorganization or any other
event or condition of similar significance to the Company) be materially
disadvantageous (a “Material Development Condition”) to the Company to
file such Registration Statement with the SEC, or to amend or supplement
a Registration Statement that has been filed with the SEC, then the
Company shall, notwithstanding any other provisions of this Agreement, be
entitled, upon the giving to the Holders of a certificate signed by an
executive officer of the Company stating that in the reasonable good
faith judgment of the Board of Directors that a Material Development
Condition has occurred (a “Delay Notice”), (i) to cause sales of
Registrable Securities by the Holders pursuant to such Registration
Statement to cease or (ii) in the event no such Registration Statement
has yet been filed or declared effective, to


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delay the filing of any such Registration Statement until, in the
reasonable good faith judgment of the Board of Directors, such Material
Development Condition no longer exists (notice of which the Company shall
promptly deliver to the Holders of the Registrable Securities).
Notwithstanding the foregoing provisions of this Section 3.1(l): (1) in
no event may such cessation or delay be, for each such Registration
Statement, for a period of more than ninety (90) consecutive days in any
twelve-month period from the giving of its Delay Notice to the Holders
with respect to such Material Development Condition, as above provided;
and (2) in the event a Registration Statement is filed and subsequently
withdrawn or if the Holders are required to cease using an effective
Registration Statement, by reason of any existing or anticipated Material
Development Condition as provided above, the Company shall cause a new
Registration Statement or an amendment or supplement to an effective
Registration Statement covering the Registrable Securities to be filed
with the SEC as soon as practicable, but in no event more than thirty
(30) days, after such Material Development Condition ceases to exist or,
if sooner, as soon as practicable after the expiration of such ninety
(90) day period.



     3.2 Due Diligence Review; Information.




     (a) The Company shall make available, during normal business hours
and on reasonable notice, for inspection and review by the Holders,
advisors to and representatives of the Holders (who may or may not be
affiliated with the Holders and who are reasonably acceptable to the
Company), any underwriter participating in any disposition of Registrable
Securities on behalf of the Holders pursuant to a Registration Statement
or amendments or supplements thereto or any blue sky, NASD or other
filing, all financial and other records, all SEC Filings (as defined in
the Stock Purchase Agreements) and other filings with the SEC, and all
other corporate documents and properties of the Company as may be
reasonably necessary for the purpose of such review, and cause the
Company’s officers, directors and employees, within a reasonable time
period, to supply all such information reasonably requested by the
Holders or any such representative, advisor or underwriter in connection
with such Registration Statement (including, without limitation, in
response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after the
filing and effectiveness of the Registration Statement for the sole
purpose of enabling the Holders and such representatives, advisors and
underwriters and their respective accountants and attorneys to conduct
initial and ongoing due diligence with respect to the Company and the
accuracy of such Registration Statement.




     (b) The Company shall not disclose material nonpublic information to
the Holders, or to advisors to or representatives of the Holders, unless
prior to disclosure of such information the Company identifies such
information as being material nonpublic information and provides the
Holders, such advisors and representatives with the opportunity to accept
or refuse to accept such material nonpublic information for review. If
the Holders decide to accept such material nonpublic information, they
shall not receive such information until they shall have entered into a
confidentiality agreement with the Company, in form and substance
satisfactory to the Company.



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ARTICLE 4.

BUYERS OBLIGATIONS




     4.1 Obligations of the Holder.




     (a) Each Holder shall furnish in writing to the Company such
information regarding itself, the Registrable Securities held by it, the
intended method of disposition of the Registrable Securities held by it
and such other information as may be required to be disclosed by it under
the Securities Act, as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request. At least ten (10) Business Days prior to the first
anticipated filing date of any Registration Statement, the Company shall
notify each Holder of the information the Company requires from such
Holder if such Holder elects to have any of the Registrable Securities
included in the Registration Statement. A Holder shall provide such
information to the Company at least five (5) Business Days prior to the
first anticipated filing date of such Registration Statement if such
Holder elects to have any of the Registrable Securities included in such
Registration Statement.




     (b) Each Holder, by its acceptance of the Registrable Securities
agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a Registration
Statement hereunder, unless such Buyer has notified the Company in
writing of its election to exclude all of its Registrable Securities from
such Registration Statement.




     (c) In the event of an underwritten offering which includes
Registrable Securities of the Holders, each such Holder agrees to enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing
underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of
the Registrable Securities.




     (d) Each Holder agrees that, upon receipt of any Delay Notice or any
notice from the Company of the happening of an event pursuant to Section
3.1(j) hereof, such Holder will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering
such Registrable Securities, until the Holder’s receipt of the copies of
the supplemented or amended Prospectus filed with the SEC and declared
effective and, if so directed by the Company, the Holder shall deliver to
the Company (at the expense of the Company) or destroy (and deliver to
the Company a certificate of destruction) all copies in the Holder’s
possession of the Prospectus covering the Registrable Securities current
at the time of receipt of such notice.




     (e) No Holder may participate in any third party underwritten
registration hereunder unless it: (i) agrees to sell the Registrable
Securities on the basis provided in any underwriting arrangements in
usual and customary form entered into by the Company; (ii) completes and
executes all questionnaires, powers of attorney, custody agreements,
indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements; and (iii)
agrees to pay its


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pro rata share of all underwriting discounts and commissions.
Notwithstanding the foregoing, no Holder shall be required to make any
representations to such underwriter, other than those with respect to
itself and the Registrable Securities owned by it, including its right to
sell the Registrable Securities, and any indemnification in favor of the
underwriter by the Holders shall be several and not joint and limited in
the case of any Holder, to the proceeds received by such Holder from the
sale of its Registrable Securities. The scope of any such
indemnification in favor of an underwriter shall be limited to the same
extent as the indemnity provided in Section 5.2 hereof.



ARTICLE 5.

INDEMNIFICATION




     5.1 Indemnification by the Company.



     The Company will, to the fullest extent permitted by law, indemnify and
hold harmless each Holder and its officers, directors, members, employees and
agents, successors and assigns, and each other person, if any, who controls
such Holder (within the meaning of the Securities Act), against any losses,
claims, damages, liabilities and expenses (including reasonable attorney fees),
joint or several, to which such Holder, officer, director, member, or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof; (ii) any blue sky application or other
document executed by the Company specifically for that purpose or based upon
written information furnished by the Company filed in any state or other
jurisdiction in order to qualify any or all of the Registrable Securities under
the securities laws thereof (any such application, document or information
herein called a “Blue Sky Application”); (iii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; (iv) any violation by
the Company or its agents of any rule or regulation promulgated under the
Securities Act applicable to the Company or its agents and relating to action
or inaction required of the Company in connection with such registration; or
(v) any failure to register or qualify the Registrable Securities included in
any such Registration in any state where the Company or its agents has
affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on a Holder’s behalf (the undertaking of any
underwriter chosen by the Company being attributed to the Company) and will
reimburse such Holder, and each such officer, director or member and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Holder or any such controlling person in
writing specifically for use in such Registration Statement or Prospectus.
This Section 5.1 shall not inure to the benefit of any Holder from whom the
person asserting any such losses, claims, damages or liabilities purchased
Registrable Securities if a copy of the Prospectus (as then



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amended or supplemented and furnished by the Company to the Holder) was not
sent or given by or on behalf of such Holder to such person, if such is
required by law, within the time required by the Securities Act and if such
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.



     5.2 Indemnification by the Holders.



     In connection with any registration pursuant to the terms of this
Agreement, each Holder will furnish to the Company in writing such information
as the Company reasonably requests concerning the Holders or the proposed
manner of distribution for use in connection with any Registration Statement or
Prospectus and agrees, severally but not jointly, to indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors,
officers, employees, stockholders and each person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses (including reasonable attorney fees) resulting from
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be stated in the
Registration Statement or Prospectus or preliminary prospectus or amendment or
supplement thereto or necessary to make the statements therein not misleading,
to the extent, but only to the extent that such untrue statement or omission is
contained in any information furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or Prospectus or
amendment or supplement thereto. In no event shall the liability of a Holder
be greater in amount than the dollar amount of the proceeds (net of all
expenses paid by such Holder and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by such Holder upon the
sale of the Registrable Securities included in the Registration Statement
giving rise to such indemnification obligation.



     5.3 Conduct of Indemnification Proceedings.



     Any person entitled to indemnification hereunder shall: (i) give prompt
notice to the indemnifying party of any claim with respect to which it seeks
indemnification; and (ii) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party;
provided that any person entitled to indemnification hereunder shall have the
right to employ separate counsel and to participate in (but not control) the
defense of such claim, but the fees and expenses of such counsel shall be at
the expense of such person unless: (A) the indemnifying party has agreed to pay
such fees or expenses; or (B) the indemnifying party shall have failed to
assume the defense of such claim and employ counsel reasonably satisfactory to
such person; or (C) in the reasonable judgment of any such person, based upon
written advice of its counsel, a conflict of interest exists between such
person and the indemnifying party with respect to such claims (in which case,
if the person notifies the indemnifying party in writing that such person
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such person); provided, further, that the indemnifying party shall
not be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party; and provided, further, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially adversely affect the



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indemnifying party in the defense of any such claim or litigation. No
indemnifying party will, except with the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or litigation. The indemnifying party will not be subject to any
liability for any settlement made without its consent.



     5.4 Contribution.



     If for any reason the indemnification provided for in Sections 5.1 – 5.2
of this Agreement is unavailable to an indemnified party or insufficient to
hold it harmless, other than as expressly specified therein, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant equitable
considerations. No person guilty of fraudulent misrepresentation within the
meaning of Section 11(f) of the Securities Act shall be entitled to
contribution from any person not guilty of such fraudulent misrepresentation.
In no event shall the contribution obligation of a holder of Registrable
Securities be greater in amount than the dollar amount of the proceeds (net of
all expenses paid by such holder and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.



ARTICLE 6.

MISCELLANEOUS




     6.1 Amendments and Waivers.



     Any term of this Agreement may be amended and the observance of any term
of this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of
the Company and holders of at least 70% of the Registrable Securities. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any Registrable Securities, each future holder of all such
securities, and the Company.



     6.2 Notices.



     All notices and other communications provided for or permitted hereunder
shall be made as set forth in Section 10.5 of the Stock Purchase Agreements.



     6.3 Assignments and Transfers by Holders.



     The provisions of this Agreement shall be binding upon and inure to the
benefit of the Buyers and their respective successors and assigns. The
registration rights granted to the Holders pursuant to this Agreement may not
be transferred without the prior written consent of Buyer; provided that such
registration rights may be transferred, in whole or in part, (i) by the Buyer
in connection with any distribution of Registrable Securities to an equity
owner of Buyer,



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(ii) to a partner or other equity owner (or their partners, shareholders,
or members) in or an Affiliate of one of more Holder(s) in connection with a
transfer of an equity interest in Buyer to such Person.




     6.4 Assignments and Transfers by the Company.



     This Agreement may not be assigned by the Company (whether by operation of
law or otherwise) without the prior written consent of the holders of at least
70% of the Registrable Securities.



     6.5 Benefits of the Agreement.



     The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.



     6.9 Further Assurances.



     The parties shall execute and deliver all such further instruments and
documents and take all such other actions as may reasonably be required to
carry out the transactions contemplated hereby and to evidence the fulfillment
of the agreements herein contained.



     6.10 Entire Agreement.



     This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.



     6.11 Specific Performance.



     Each Party acknowledges and agrees that the other Parties would be damaged
irreparably if any provision of this Agreement is not performed in accordance
with its specific terms or is otherwise Breached. Accordingly, each Party
agrees that the other Parties will be entitled to an injunction or injunctions
to prevent Breaches of the provisions of this Agreement and to enforce
specifically this Agreement and its terms and provisions in any Action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter, subject to Sections 6.12 and
6.16, in addition to any other remedy to which they may be entitled, at Law or
in equity.



     6.12 Submission to Jurisdiction; No Jury Trial.




     (a) Submission to Jurisdiction. Each Party submits to the
jurisdiction of any state or federal court sitting in the State of
California in any Action arising out of or relating to this Agreement and agrees that all claims in respect of
the Action may be heard and determined in any such court. Each Party
also agrees not to bring any Action


14









 





arising out of or relating to this
Agreement in any other court. Each Party agrees that a final judgment in
any Action so brought will be conclusive and may be enforced by Action on
the judgment or in any other manner provided at Law or in equity. Each
Party waives any defense of inconvenient forum to the maintenance of any
Action so brought and waives any bond, surety, or other security that
might be required of any other Party with respect thereto.




     (b) Waiver of Jury Trial. THE PARTIES EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR
ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS. The scope of this
waiver is intended to be all encompassing of any and all Actions that may
be filed in any court and that relate to the subject matter of the
Transactions, including, Contract claims, tort claims, breach of duty
claims, and all other common Law and statutory claims. The Parties each
acknowledge that this waiver is a material inducement to enter into a
business relationship and that they will continue to rely on the waiver
in their related future dealings. Each Party further represents and
warrants that it has reviewed this waiver with its legal counsel, and
that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT
BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of an
Action, this Agreement may be filed as a written consent to trial by a
court.



     6.13 Time.



     Time is of the essence in the performance of this Agreement.


     6.14 Counterparts.



     This Agreement may be executed in two or more counterparts, each of which
will be deemed an original but all of which together will constitute one and
the same instrument.



     6.15 Headings.



     The article and section headings contained in this Agreement are inserted
for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.



     6.16 Governing Law.



     This Agreement and the performance of the Transactions and obligations of
the Parties hereunder will be governed by and construed in accordance with the
laws of the State of California, without giving effect to any choice of Law
principles.



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     6.17 Severability.



     The provisions of this Agreement will be deemed severable and the
invalidity or unenforceability of any provision will not affect the validity or
enforceability of the other provisions hereof; provided that if any provision
of this Agreement, as applied to any Party or to any circumstance, is adjudged
by a Governmental Body, arbitrator, or mediator not to be enforceable in
accordance with its terms, the Parties agree that the Governmental Body,
arbitrator, or mediator making such determination will have the power to modify
the provision in a manner consistent with its objectives such that it is
enforceable, and/or to delete specific words or phrases, and in its reduced
form, such provision will then be enforceable and will be enforced.



     6.18 Construction.



     The Parties have participated jointly in the negotiation and drafting of
this Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the Parties
and no presumption or burden of proof will arise favoring or disfavoring any
Party because of the authorship of any provision of this Agreement. Any
reference to any federal, state, local, or foreign Law will be deemed also to
refer to Law as amended and all rules and regulations promulgated thereunder,
unless the context requires otherwise. words “include,” “includes,” and
“including” will be deemed to be followed by “without limitation.” Pronouns in
masculine, feminine, and neuter genders will be construed to include any other
gender, and words in the singular form will be construed to include the plural
and vice versa, unless the context otherwise requires. The words “this
Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The Parties intend that each representation,
warranty, and covenant contained herein will have independent significance. If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached will not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.



     6.19 Incorporation of Exhibits, Annexes, and Schedules.



     The Exhibits, Annexes, Schedules, and other attachments identified in this
Agreement are incorporated herein by reference and made a part hereof.



     6.20 Remedies.



     Except as expressly provided herein, the rights, obligations and remedies
created by this Agreement are cumulative and in addition to any other rights,
obligations, or remedies otherwise available at Law or in equity. Except as
expressly provided herein, nothing herein will be considered an election of
remedies.



     6.21 Electronic Signatures.




     (a) Notwithstanding the Electronic Signatures in Global and National
Commerce Act (15 U.S.C. Sec. 7001 et.seq.), the Uniform Electronic
Transactions Act, or any other
Law relating to or enabling the creation, execution, delivery, or
recordation of any Contract or signature by electronic means, and
notwithstanding any course of conduct


16









 





engaged in by the Parties, no Party
will be deemed to have executed a Transaction Document or other document
contemplated thereby (including any amendment or other change thereto)
unless and until such Party shall have executed such Transaction Document
or other document on paper by a handwritten original signature or any
other symbol executed or adopted by a Party with current intention to
authenticate such Transaction Document or such other document
contemplated.




     (b) Delivery of a copy of a Transaction Document or such other
document bearing an original signature by facsimile transmission (whether
directly from one facsimile device to another by means of a dial-up
connection or whether mediated by the worldwide web), by electronic mail
in “portable document format” (“.pdf”) form, or by any other electronic
means intended to preserve the original graphic and pictorial appearance
of a document, will have the same effect as physical delivery of the
paper document bearing the original signature, provided a copy bearing an
original signature on paper is subsequently physically delivered.
“Originally signed” or “original signature” means or refers to a
signature that has not been mechanically or electronically reproduced.



[Remainder of page intentionally blank; signature pages follow]




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     IN WITNESS WHEREOF, the Parties have executed this Agreement on the date
first above written.


	 	 	 	 	 
	 	GLENBROOK GROUP, LLC

 	 
	 	By:  	 	 
	 	Name: 	Samuel J. Furrow, Jr. 	 
	 	Title: 	Manager 	 
	 



	 	 	 	 	 
	 	NORTHGATE INNOVATIONS, INC.

 	 
	 	By:  	 	 
	 	Name: 	Andy Teng 	 
	 	Title: 	Chief Executive Officer 	 
	 





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