Document:

Prepared by MERRILL CORPORATION

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Exhibit 4.2    
  

 
 

CONVERTIBLE PROMISSORY NOTE    
  

NEITHER
THIS CONVERTIBLE PROMISSORY NOTE NOR ANY OF THE SECURITIES ISSUABLE HEREUNDER HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES, OR DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT. 

THE
SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS CONVERTIBLE SECURED PROMISSORY NOTE HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA OR THE STATE OF
DELAWARE OR ANY OTHER STATE AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SUCH SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE, OR APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF DELAWARE OR ANY OTHER STATE.
THE RIGHTS OF THE HOLDER OF THIS CONVERTIBLE PROMISSORY NOTE ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 

	$[                        ]	 	San Diego, California
	

 	
 	

January 22, 2002

TERAGLOBAL
COMMUNICATIONS CORP.

CONVERTIBLE PROMISSORY NOTE 

        TeraGlobal
Communications Corp., a Delaware corporation (the "Company"), for value received, hereby promises to pay
to                        
(the "Holder"), the principal amount of                        
($            ) (the "Issue Price"), together
with interest on the unpaid amount thereof in accordance with the terms hereof, from the date hereof until paid or converted in accordance with the terms hereof. 

1.    Terms of the Convertible Promissory Note.  

        (a)    Interest Rate.    The rate of interest ("Interest Rate") under
this Convertible Promissory Note (this "Note") shall be twenty percent (20%) per annum, compounded monthly, and shall be computed on the basis of a
365 day year for the actual number of days elapsed. 

        (b)    Payment at Maturity Date.    Unless converted pursuant to Section 2 hereof, the Issue Price together
with accrued interest thereon shall be due and payable on the earliest to occur of (i) June 10, 2002, (ii) the consummation of Corporate Transaction (defined in
Section 1(e) below) or (iii) an Event of Default (defined in Section 3 below) (the "Maturity Date");  provided, however, at the election of the Holder, in lieu of cash, the Holder shall have the right to
cause the Company to satisfy all or any part of the Issue Price and accrued interest thereon by issuing to Holder a number of registered shares of the Company's Common Stock, par value $0.001 per
shares ("Common Stock"), determined by dividing such portion of the Issue Price and accrued interest thereon requested by Holder to be paid in shares by
the lesser of (i) $0.20 or (ii) 75% of the average closing bid price per share of Common Stock during the ten trading days immediately preceding the Maturity Date. 

        (c)    Convertible Note and Warrant Purchase Agreement.    This Note is one of a series of notes issued by the Company
in connection with that certain Convertible Promissory Note and Warrant Purchase Agreement, dated as of December 10, 2001, as amended by that certain Waiver of and Amendment to Convertible
Promissory Note and Warrant Purchase Agreement, dated the date hereof as such may be hereafter further amended (the "Agreement") among the Company,
Holder and certain other purchasers of the Company's Notes from time to time, and is subject to, and Holder and Company shall be bound by, all the terms, conditions and provisions of the Agreement.
Pursuant to the Agreement, the Company also issued the Holder that certain Warrant (W-    -    ) dated December 10, 2001, that certain Warrant
(W-    -    ) dated December 10, 2001, that certain Warrant (W-    -    ) dated the date hereof, and that certain Warrant
(W-    -    ) dated the date hereof (collectively, the "Warrants"). This Note and the other convertible promissory notes
issued pursuant to the Agreement are collectively referred to as the "Notes" and the holders thereof are collectively referred to as the
"Holders". The Warrants and other warrants issued pursuant to the Agreement are collectively referred to as the
"Warrants." Capitalized terms not otherwise defined herein shall have the meanings given them in the Agreement. 

        (d)    Security Agreement.    This Note is secured by a Security Agreement, dated December 10, 2001, between
the Company and WallerSutton 2000, L.P., as collateral agent for the Holder and the other purchasers of the Notes (the "Security Agreement"), which
encumbers certain collateral described therein (hereinafter referred to as the "Collateral"). This Note, the Agreement, the Security Agreement, the
Warrant and any and all other agreements presently existing or hereafter entered into which evidence and/or secure any indebtedness from the Company to Holder and the Series A Preferred Stock
and Warrant Purchase Agreement dated as of June 28, 2001 (the "Preferred Stock Purchase Agreement") or any document delivered in connection with
the Preferred Stock Purchase Agreement shall hereinafter be collectively referred to as the "Loan Documents". The terms, covenants, conditions,
provisions, stipulations and agreements of the Loan Documents are hereby made a part of this Note, to the same extent and with the same effect as if they were fully set forth herein. The Company does
hereby covenant to abide by and comply with each and every term, covenant, condition, provision, stipulation and agreement set forth in the Loan Documents. 

        (e)    Corporate Transaction.    "Corporate Transaction" means the
completion of a consolidation of the Company with, or merger of the Company into, another corporation or other business organization (other than a consolidation or merger in which the Company is the
continuing corporation), or any sale or conveyance to another corporation or other business organization of all or substantially all of the assets of the Company. 

2.    Automatic Conversion  

        (a)    At the Next Qualified Financing.    Upon the final closing of the Next Qualified Financing (as defined in the
Agreement), the Issue Price and any accrued but unpaid interest related thereto (the "Conversion
Amount") shall automatically convert into any shares (or fractions thereof) of capital stock of the Company (or any subsidiary thereof which owns all or substantially all of
the assets of the Company) ("Shares") equal to the Conversion Amount divided by the offering price of shares of capital stock sold in the Next Qualified
Financing; provided, however, in the event that the gross proceeds of the Next Qualified Financing
exceed $9,900,000, Holder shall have the right to elect to receive, in lieu of Shares, and the Company shall promptly pay, the Conversion Amount in cash;  provided, however, in no event shall the aggregate cash payments to the holders of the Notes exceed the
amount by which the gross proceeds of the Next Qualified Financing exceed $9,900,000 (the "Overallotment Proceeds"). In the event that the Overallotment
Proceeds are less than the cash amount with respect to which the Holders have elected to receive, then the Overallotment Proceeds shall be allocated among the holders of the Notes pro rata based upon
their respective share of the aggregate unpaid principal amount of the Notes which such Holders have elected to receive in cash. 

        (b)    Termination of Rights Upon Conversion.    The Holder shall have no right to negotiate any of the terms or
conditions upon which the Shares shall be issued, which negotiation shall be conducted solely among the Company and the purchasers of the Shares. Conversion shall be deemed effective on 

the earlier of final closing date of the Next Qualified Financing or the Maturity Date. Upon conversion of this Note, the Holder of this Note shall have no further rights under this Note, whether or
not this Note is surrendered. 

        (c)    Delivery of Stock Certificates.    As promptly as practicable after any conversion of this Note and the
Holder's surrender of this Note, the Company, at its expense, shall issue and deliver to the Holder of this Note the certificate or certificates evidencing the Shares issuable to the Holder upon any
such conversion. 

3.    Events of Default.  

        The occurrence of any one or more of the following events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:

        (a)    The
Company shall fail to make any payment of principal of, or interest on, this Note when due and payable or declared due and payable; 

        (b)    The
Company shall fail or neglect to perform, keep or observe any provision of the Loan Documents; provided,  however, if no Event of Default has otherwise
occurred under any of the Notes, an Event of Default under Section 9.1(a) of the Preferred Stock
Purchase Agreement will not constitute an Event of Default hereunder; 

        (c)    At
any time after March 1, 2002, the Company shall at all times maintain a minimum cash balance of $100,000; 

        (d)    Holders
shall fail to have an enforceable first priority lien on and security interest in the Collateral; 

        (e)    The
Company files a bankruptcy petition, a bankruptcy petition is filed against the Company, or the Company makes a general assignment for the benefit of creditors; or 

        (f)    The
Company materially deviates from its Budget set forth in Exhibit D to the Agreement. 

        Upon
the occurrence of any Event of Default, Holder may (i) declare all indebtedness evidenced by this Note to be immediately due and payable, whereupon all such indebtedness
shall become due and payable, without presentment, demand, protest or further notice of any kind, all of which are expressly waived by the Company, and (ii) exercise all rights and remedies
available under the Security Agreement, the other Loan Documents and applicable law. 

4.    Miscellaneous.  

        (a)    Transfer of Note.    This Note shall not be transferable or assignable in any manner, except to affiliates of
the Holder, and no interest shall be pledged or otherwise encumbered by the Holder without the express written consent of the Company, and any such attempted disposition of this Note or any portion
hereof shall be of no force or effect. 

        (b)    Titles and Subtitles.    The titles and subtitles used in this Note are for convenience only and are not to be
considered in construing or interpreting this Note. 

        (c)    Notices.    Any notice required or permitted under this Note shall be given in writing and in accordance with
the notice provision of the Agreement (for purposes of which the term "Investor" shall mean the Holder hereunder), except as otherwise expressly provided in this Note. 

        (d)    Attorneys' Fees.    In the event that Holder institutes legal proceedings to enforce the Loan Documents, the
Company agrees to pay to Holder, in addition to any indebtedness due and unpaid, all costs and expenses of such proceedings, including reasonable attorneys' fees. 

        (e)    Amendments and Waivers.    This Note is issued by the Company pursuant to the Agreement. Other than the right
to the payment of the Issue Price and all accrued but unpaid interest thereon, which may only be amended or waived with the written consent of the Holder, any other term of this Note may be amended
and the observance of any other term of this Note may be waived (either 

generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the holders of at least 75% of the aggregate Issue Price of the Notes
then outstanding, and in accordance with the Agreement; provided, however, that any amendments made to
this Note must be made to each of the Notes and in accordance with the Agreement. Any amendment or waiver effected in accordance with this Section shall be binding upon the Holder of this Note, each
future holder of all such securities and the Company. 

        (f)    Beneficiaries.    This Note and all the provisions, conditions, promises and covenants hereof shall inure to
the benefit of Holder, its successors and assigns, and shall be binding in accordance with the terms hereof upon the Company, its successors and assigns,  provided nothing herein shall be deemed consent
to any assignment restricted or prohibited by the terms of the Loan Documents. 

        (g)    Governing Law; Severability.    This Note shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to its conflicts of laws principles. If any provision of this Note is prohibited by, or is unlawful or unenforceable under, any applicable law
of any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition without invalidating the remaining provisions hereof;  provided that where the
provisions of any such applicable law may be waived, they hereby are waived by the Company to the full extent permitted by law
in order that this Note shall be deemed to be a valid and binding promissory note in accordance with its terms. 

        (h)    Presentment; Demand; Protest.    Except as expressly provided for in this Note or any other Loan Document,
every person at any time liable for the payment of the debt evidenced hereby waives presentment for payment, demand, notice of nonpayment of this Note, protest and notice of protest, all exemptions
and homestead laws and all rights thereunder and consents that Holder may extend the time of payment of any part or the whole of the debt, or grant any other modifications or indulgence pertaining to
payment of this Note at any time, at the request of any other person liable for said debt. 

        (i)    Independent Counsel.    Holder acknowledges and agrees that Holder has been provided the opportunity and
encouraged to consult with counsel of Holder's own choosing with respect to this Note. 

        (j)    Usury.    Notwithstanding any provision to the contrary contained in this Note, or any and all other
instruments or documents executed in connection herewith, Holder and the Company intend that the obligations evidenced by this Note conform strictly to the applicable usury laws from time to time in
force. All agreements between the Company and Holder, whether now existing or hereafter arising and whether oral or written, hereby are expressly limited so that in no case, contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise, shall the amount paid or agreed to be paid to Holder, or collected by Holder, by or on behalf of the Company for the use,
forbearance or detention of the money to be loaned to the Company hereunder or otherwise, or for the payment or performance of any covenant or obligation contained herein of the Company to Holder, or
in any other document evidencing, securing or pertaining to such indebtedness evidenced hereby, exceed the maximum amount permissible under applicable usury law. If, under any circumstances
whatsoever, fulfillment of any provisions thereof or any other document, at the time performance of such provisions shall be due, shall involve transcending the limit of validity prescribed by law,
then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity; and if under any circumstances Holder ever shall receive from or on behalf of the Company an amount
deemed interest, by applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the
Company's unpaid Issue Price owing hereunder and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and such other indebtedness, the excess shall be
deemed to have been a payment as a result of an error on the part of Holder and the Company and the party receiving such excess payment shall promptly, upon discovery of such error or upon notice
thereof from the party making such payment, refund to the Company or to any other person making such payment on the Company's behalf, and this Note shall be automatically deemed reformed so as to
permit only the collection of the maximum non-usurious rate and amount of interest allowed by applicable law. All sums paid or agreed 

to be paid to Holder or any other holders hereof for the use, forbearance or detention of the indebtedness evidenced hereby shall, to the full extent permitted by applicable law, be amortized,
prorated, allocated and spread through the full term of this Note. 

        (k)    Jurisdiction.    TO INDUCE HOLDER TO EXTEND TO THE COMPANY THE LOAN EVIDENCED BY THIS NOTE, THE COMPANY
IRREVOCABLY AGREES THAT, SUBJECT TO HOLDERS' SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE OR ANY LOAN DOCUMENT WILL BE LITIGATED IN COURTS
HAVING SITUS IN NEW YORK. THE COMPANY HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY COURT LOCATED WITHIN NEW YORK COUNTY, WAIVES PERSONAL SERVICE OF PROCESS UPON THE COMPANY, AND AGREES THAT
ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED TO THE COMPANY AT THE ADDRESS STATED ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL
RECEIPT. 

        (l)    Waiver of Jury Trial.    THE COMPANY AND HOLDER EACH WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE OR ANY DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
WITH THIS NOTE AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE COMPANY AGREES THAT THE COMPANY WILL NOT ASSERT ANY CLAIM AGAINST
HOLDER ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES. 

	 	 	 	 	TERAGLOBAL COMMUNICATIONS CORP.
 a Delaware corporation
	

 	
 	

 	
 	

By:	

 
	 	 	 	 	 	
 Robert E. Randall, Chief Executive Officer
	

ACKNOWLEDGED AND AGREED:	
 	

 	

 
	

Spencer Trask Investment Partners, LLC
 (Print Name of Holder)	
 	

 	

 
	

By:	
 	

 	
 	

 	

 
	 	 	
 (Signature of Holder)	 	 	 
	

 (Title of Holder Not an Individual)	
 	

 	

 

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Exhibit 4.2

CONVERTIBLE PROMISSORY NOTEPrepared by MERRILL CORPORATION

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Exhibit 4.3    
  

        THIS
WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO AN EXEMPTION UNDER SUCH ACT.   

	W-            -            	 	Void after

December 10, 2004

 
 

WARRANT
  of
  TERAGLOBAL COMMUNCIATIONS CORP.    
  

        THIS CERTIFIES THAT, for value received,                        ,
together with its successors and assigns (the "Holder")
is entitled to subscribe for and purchase, on the terms hereof,                        shares of common stock, par value $.001 per
share ("Common Stock") of
TeraGlobal Communications Corp., a Delaware corporation (the "Company" or "TeraGlobal"), subject to the
following terms and conditions: 

1.    Convertible Promissory Note and Warrant Purchase Agreement.  

        This Warrant ("Warrant") is issued pursuant to that certain Convertible Promissory Note and Warrant Purchase
Agreement, dated December 10, 2001, as amended by that certain Waiver of and Amendment to Convertible Promissory Note and Warrant Purchase Agreement, dated the date hereof, as such may be
hereafter further amended by and among the Company and the Holder (the "Agreement"). The Warrant and other warrants issued pursuant to the Agreement are
collectively referred to as the "Warrants." 

2.    Exercise of Warrant.  

        The terms and conditions upon which this Warrant may be exercised, and the Common Stock covered hereby may be purchased, are as follows: 

        2.1.    Term.    Subject to the terms hereof, this Warrant may be exercised at any time, or from time to time, in
whole or in part (the "Exercise Date"), after the date hereof; provided,  however, that in no event may this
Warrant be exercised later than 5:00 p.m. (Pacific Time) on the close of business on December 10, 2004. 

        2.2.    Exercise Price.    The Exercise Price per share for the Common Stock shall be equal to the lesser of
(i) $0.20 or (ii) 75% of the average closing bid price per share of Common Stock during the ten trading days immediately preceding the respective closing
("Warrant Exercise Price"), subject to adjustment as set forth below. 

        2.3.    Method of Exercise.    The exercise of the purchase rights evidenced by this Warrant shall be effected by
(a) the surrender of the Warrant, together with a duly executed copy of the form of subscription attached hereto as Exhibit A, to the
Company at its principal offices and (b) the delivery of the purchase price by check payable to the Company's order or by wire transfer of same day funds to the Company's account for the number
of shares for which the purchase rights hereunder are being exercised or any other form of consideration approved by the Company's Board of Directors (the
"Board"). Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided herein or at such later date as may be specified in the executed form of subscription, and at 

such time, the person or persons in whose name or names any certificate or certificates for Common Stock shall be issuable upon such exercise, as provided herein, shall be deemed to have become the
holder or holders of record thereof. 

        2.4.    Net Issue Exercise.    In lieu of exercising this Warrant by paying the Exercise Price in cash or by check,
Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the Company's principal office together with the Notice of
Cashless Exercise attached hereto as Exhibit B duly completed and executed in which event the Company shall issue to Holder a number of shares of
Common Stock computed using the following formula: 

	Z    =	 	(Y) (X-W)

	 	 	X

where:

	Z
	=    The
number of Common Stock to be issued to Holder.

	Y
	=    The
number of Common Stock being purchased under this Warrant.

	X
	=    The
fair market value of one Common Stock Share at the date of such calculation.

	W
	=    Exercise
Price (as adjusted to the date of such calculations). 

For
purposes of this Section, the fair market value of one Common Stock Share shall be equal to the average closing bid price for the Common Stock for the twenty (20) trading days prior to the
date of exercise; or, if the Common Stock is no longer traded on an exchange, the fair market value of such share as determined in good faith by the Board. 

3.    Adjustments to Exercise Price.  

        The number of shares of Common Stock issuable upon the exercise of this Warrant and the exercise price hereunder shall be subject to adjustment from time to time
upon the happening of certain events, as follows: 

        3.1.    Splits and Subdivisions.    If the Company should at any time or from time to time fix a record date for the
effectuation of a split or subdivision of the outstanding Common Stock or the determination of the holders of Common Stock entitled to receive a dividend or other distribution payable in additional
Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional Common Stock (hereinafter referred to as the
"New Equity Equivalents") without payment of any consideration by such holder for the additional Common Stock or New Equity Equivalents, then, as of
such record date (or the date of such distribution, split or subdivision if no record date is fixed), the purchase price shall be appropriately decreased and the number of Common Stock which this
Warrant is exercisable for, if any, shall be appropriately increased in proportion to such increase of outstanding shares. 

        3.2.    Combination of Shares.    If the number of Common Stock outstanding at any time after the date hereof is
decreased by a combination of the outstanding Common Stock, the purchase price shall be appropriately increased and the number of Common Stock which this Warrant is exercisable for, if any, shall be
appropriately decreased in proportion to such decrease in outstanding shares. 

        3.3.    Adjustments for Other Distributions.    In the event the Company shall declare a distribution payable in
securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights not referred to in Section 3.1, then, in
each such case for the purpose of this Section 3.3, upon exercise of this Warrant the Holder shall be entitled to a proportionate share of any such distribution as though such Holder was the
holder of the number of Common Stock into which this Warrant may be exercised as of the record date fixed for the determination of the holders of Common Stock entitled to receive such distribution. 

        3.4.    Reclassification or Reorganization.    If the Common Stock (or any shares of stock or other securities which
may be) issuable upon the exercise of this Warrant shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares or stock dividend provided for in Sections 3.1, 3.2 and 3.3 above), then and in each such event the Holder shall be entitled to receive
upon the exercise of this Warrant the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, to which a holder of
the number of Common Stock (or any shares of stock or other securities which may be) issuable upon the exercise of this Warrant would have received if this Warrant had been exercised immediately prior
to such reorganization, reclassification or other change, all subject to further adjustment as provided herein. 

        3.5.    Acquisition or Consolidation.    If TeraGlobal effects a consolidation or merger with another corporation, or
the sale of all or substantially all of its assets or other transaction in such a way that holders of Common Stock shall be entitled to receive stock, securities, or other assets or property (a
"Transaction"), then, as a condition of such Transaction, lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the Shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights
represented hereby) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock
equal to the number of shares of such stock immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby. In the event
of any Transaction, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without
limitation, provisions for adjustments of the Stock Purchase Price and of the number of Shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation
to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. 

        3.6.    Antidilution.    In the event that TeraGlobal issues or grants any warrants or other convertible security
pursuant to which Common Stock of TeraGlobal may be acquired at a price less than the Warrant Exercise Price, the Warrant Exercise Price of all Warrants issued or to be issued in connection with this
financing will automatically be reduced to such lower exercise price (this is intended to be a "full ratchet" adjustment); provided, however, at the
closing of a Next Qualified Financing, as the term is defined the Agreement, in which TeraGlobal has received at least $6.6 million, the Warrant Exercise Price of all Warrants issued or to be
issued in connection with this financing will be the same as the price at which the debt issued in connection with the Next Qualified Financing will convert into Common Stock of TeraGlobal, and will
have antidilution rights equal to the antidilution protection of investors in the Next Qualified Financing. Such adjustment shall be made successively whenever such an issuance is made. 

        3.7.    Notice of Adjustments and Record Dates.    The Company shall promptly notify the Holder in writing of each
adjustment or readjustment of the exercise price hereunder and the number of shares of Common Stock issuable upon the exercise of this Warrant. Such notice shall state the adjustment or readjustment
and show in reasonable detail the facts on which that adjustment or readjustment is based. In the event of any taking by the Company of a record of the holders of Common Stock for the purpose of
determining the holders thereof who are entitled to receive any dividend or other distribution, the Company shall notify the Holder in writing of such record date at least twenty (20) days
prior to the date specified therein. 

        3.8.    No Impairment.    The Company shall not avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant. 

4.    Replacement of the Warrant.  

        On receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of the Warrant, the Company at its expense shall execute and deliver to the Holder, in lieu thereof, a new Warrant of like tenor. 

5.    Investment Intent.  

        Unless a current registration statement under the Securities Act of 1933, as amended, shall be in effect with respect to the securities to be issued upon exercise
of this Warrant, the Holder, by accepting this Warrant, covenants and agrees that, at the time of exercise hereof, and at the time of any proposed transfer of any securities acquired upon exercise
hereof, the Holder shall deliver to the Company a written statement that the securities acquired by the Holder upon exercise hereof are for the account of the Holder for investment and are not
acquired with a view to, or for sale in connection with, any distribution thereof (or any portion thereof) and are being acquired with no present intention (at any such time) of offering or
distributing such securities (or any portion thereof). 

6.    No Rights or Liability as a Stockholder.  

        This Warrant does not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company. No provisions hereof, in the absence of
affirmative action by the Holder to purchase Common Stock, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder as a stockholder of the
Company. 

7.    Miscellaneous.  

        7.1.    Transfer of Warrant.    The rights represented by this Warrant are transferable only on the books of the
Company at its corporate office in San Diego, California, by the Holder upon surrender of this Warrant properly endorsed. 

        7.2.    Titles and Subtitles.    The titles and subtitles used in this Warrant are for convenience only and are not to
be considered in construing or interpreting this Warrant. 

        7.3.    Notices.    Any notice required or permitted under this Warrant shall be given in writing and in accordance
with the notice provision in the Agreement (for purposes of which, the term "Investors" shall mean Holder hereunder), except as otherwise expressly provided in this Warrant. 

        7.4.    Attorneys' Fees.    If any action at law or in equity is necessary to enforce or interpret the terms of this
Warrant, the prevailing party shall be entitled to reasonable attorneys' fees, costs and disbursements in addition to any other relief to which such party may be entitled. 

        7.5.    Amendments and Waivers.    This Warrant is issued by the Company pursuant to the Agreement. Any term of this
Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), in accordance with
Section 7.7 of the Agreement. Any amendment or waiver effected in accordance with this Section 7.5 shall be binding upon the Holder of this Warrant (and of any securities into which this
Warrant is convertible), each future holder of all such securities, and the Company. 

        7.6.    Severability.    If one or more provisions of this Warrant are held to be unenforceable under applicable law,
such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 

        7.7.    Governing Law.    This Warrant shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to its conflicts of laws principles. 

        7.8.    Registration Rights.    The Common Stock issuable upon the exercise of this Warrant constitutes "Registrable
Securities" under that certain Registration Rights Agreement dated December 10, 2001, as amended as of January 22, 2002, as such may be hereafter further amended, between the Company and
certain investors and, accordingly, has the benefit of registration rights pursuant to that agreement. 

        7.9.    Reservation and Authorization of Common Stock.    The Company shall at all times reserve a sufficient number
of shares of common stock for issuance upon exercise of this Warrant, which stock, upon issuance in accordance with the terms of this Warrant, will be duly authorized, validly issued, fully paid and
non-assessable. 

        7.10.    Binding Effect on Successors.    This Warrant shall be binding upon any corporation succeeding the Company by
merger, consolidation or acquisition of all or substantially all of the Company's assets. All of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant
(and the Common Stock issuable upon conversion thereof) shall survive the exercise and termination of this Warrant. All of the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof. 

Date:
January 22, 2002 

	 	 	 	 	TERAGLOBAL COMMUNICATIONS CORP.
 a Delaware corporation
	

 	
 	

 	
 	

By:	

 
	 	 	 	 	 	
 Robert E. Randall, Chief Executive Officer
	

ACKNOWLEDGED AND AGREED:	
 	

 	

 
	

 (Print Name of Holder)	
 	

 	

 
	

By:	
 	

 	
 	

 	

 
	 	 	
 (Signature of Holder)	 	 	 
	

 (Title of Holder Not an Individual)	
 	

 	

 

 
 

EXHIBIT A
  FORM OF SUBSCRIPTION
  (To be signed only on exercise of Warrant)    
  

To:    TERAGLOBAL
COMMUNICATIONS CORP. 

        The
undersigned, the holder of the Warrant attached hereto, hereby irrevocably elects to exercise the purchase rights represented by such Warrant for, and to purchase thereunder,
                        * shares of Common Stock of TeraGlobal Communications Corp., and herewith makes payment of
$                        and requests that the certificates for such shares be issued in the name of,
and delivered to                        , whose address
is                        , and whose social security number/taxpayer identification number
is                        .
 

Dated:

	 	
 (Signature must conform in all respects to name of the Holder as specified on the face of the Warrant)
	

 	

 (Print Name)
	

Address:	

	

 	

	

 	

	*
	Insert
here the number of shares as to which the Warrant is being exercised. 

 
 

EXHIBIT B
  NOTICE OF CASHLESS EXERCISE    
  

To:    TERAGLOBAL
COMMUNICATIONS CORP. 

	(1)
	The
undersigned hereby elects to acquire in a cashless exercise                        shares of Common Stock (as defined in the
attached Warrant) of TeraGlobal Communications Corp. pursuant
to the terms of Section 2.4 of the attached Warrant.

	(2)
	Please
issue a certificate or certificates representing such Common Stock in the name of the undersigned or in such other name as is specified below: 

	 	 	

	

 	
 	

By:	

	

 	
 	

Name:	

QuickLinks

Exhibit 4.3

WARRANT of TERAGLOBAL COMMUNCIATIONS CORP.

EXHIBIT A FORM OF SUBSCRIPTION (To be signed only on exercise of Warrant)

EXHIBIT B NOTICE OF CASHLESS EXERCISE

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