Document:

Prepared by MerrillDirect

EXHIBIT A

FORM OF WARRANT

             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

  June 30, 2007

WARRANT

OF

TERAGLOBAL COMMUNCIATIONS CORP.

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

             1.          Stock
Purchase Agreement.  This Warrant (“Warrant”) is issued pursuant
to that certain Stock Purchase Agreement dated June 28, 2001 (the “Agreement”)
by and among the Company and the Holder. 
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 June 30,
2007.

             2.2        Exercise Price.  The Exercise Price per share for the Common
Stock shall be equal to ______, 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 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
  purchasable 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        Acquistion or Consolidation. If
TeraGlobal effects 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 the Company shall, at any
time or from time to time after the date hereof, sell or issue any shares of
Common Stock or Common Stock Equivalents (as that term is defined in the
Agreement) for a consideration or effective exercise price of less than $0.54
per share, giving effect to adjustments herein, without the consent of the
holders of a Majority of the shares of the Preferred Stock then outstanding
under the Agreement, then the Exercise Price in effect immediately prior to
such issuance shall be changed to a price (rounded to the nearest cent)
determined by multiplying the Exercise Price in effect immediately prior thereto
by a fraction, the numerator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to the sale or issuance of such
additional shares or such subdivision or combination and the number of shares
of Common Stock which the aggregate consideration received for the issuance of
such additional shares would purchase at the Exercise Price in effect on the
date of such issuance, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after the sale or issuance of
such additional shares or such subdivision or combination.  Such adjustment shall be made successively
whenever such an issuance is made.

             3.7        Reset Right.  If as of the first anniversary of the date
of this Warrant the Market Price for the Common Stock is less than the Exercise
Price, the Exercise Price shall be automatically reduced to the Market Price on
the first anniversary.[This would only apply to the $.54 warrant, not the $1.00
or $1.50 warrant.]

             3.8        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 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.

             3.9        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 Section 5.3 of 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 15 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 California,
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 June 28,
2001 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 isuance
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:  June 28, 2001	TERAGLOBAL
  COMMUNICATIONS CORP.
	 	a
  Delaware corporation

 

	By:	 	 
	 	 	

	 	 	Robert
  E. Randall, Chief Executive Officer

 

ACKNOWLEDGED AND AGREED:

 

	

	 
	(Print Name of Holder)	 
	 	 
	

	 
	(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 2.7 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:Prepared by MerrillDirect

EXHIBIT
C

 

REGISTRATION
RIGHTS AGREEMENT

between

TERAGLOBAL
COMMUNICATIONS CORP.,

and

WALLERSUTTON 2000, L.P.

and

The
Parties Set Forth On Exhibit A Hereto

 

Dated
as of June 28, 2001

TABLE OF CONTENTS

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

 

REGISTRATION RIGHTS AGREEMENT

             This
AGREEMENT, is made as of June 28, 2001, between TERAGLOBAL COMMUNICATIONS
CORP., a Delaware corporation (the “Company”), WALLERSUTTON 2000, L.P., a
Delaware limited partnership (“WallerSutton”) and the parties set forth on
Exhibit A attached hereto (the “Bridge Financiers” and, collectively, with
WallerSutton, the “Purchasing Parties”).

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

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

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

             ACCORDINGLY,
the parties hereto agree as follows:

             1.          Certain
Definitions.

             As
used in this Agreement, the following terms shall have the meanings ascribed to
them below:

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

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

             “Common
Stock Equivalents” means any securities convertible into, or exercisable or
exchangeable for, shares of Common Stock, including, but in no way limited to,
the shares of Common Stock issuable upon exercise of the Warrants pursuant to
the Purchase Agreement.

             “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

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

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

             “Preferred
Stock” means the Series A Preferred Stock.

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

             “SEC”
means the Securities and Exchange Commission.

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

             2.          Registration
Rights.

             2.1.       Demand Registrations.

                           (a)         (i)          Subject
to Sections 2.1(b) and 2.3 below, at any time and from time to time, so long as
any Holder holds Registrable Securities constituting at least $1,500,000 of
Common Stock (assuming for purposes of making this computation that any shares
of Preferred Stock held by such Holder have been converted into shares of
Common Stock), each Holder shall have the right to require the Company to file
a registration statement under the Securities Act covering all or any part of
their respective Registrable Securities, by delivering a written request
therefor to the Company specifying the number of Registrable Securities to be
included in such registration by such Holder(s) and the intended method of
distribution thereof. All such requests by any Holder pursuant to this
Section 2.1(a)(i) are referred to herein as “Demand Registration
Requests,” and the registrations so requested are referred to herein as “Demand
Registrations” (with respect to any Demand Registration, the Holder(s) making
such demand for registration being referred to as the “Initiating
Holder”).  As promptly as practicable,
but no later than ten days after receipt of a Demand Registration Request, the
Company shall give written notice (the “Demand Exercise Notice”) of such Demand
Registration Request to all Holders of record of Registrable Securities.

 

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

             (iii)        The Company shall, as expeditiously as possible, use its best
efforts to (x) effect the registration under the Securities Act
(including, without limitation, by means of a shelf registration pursuant to
Rule 415 under the Securities Act if so requested and if the Company is
then eligible to use such a registration) of the Registrable Securities which
the Company has been so requested to register, for distribution in accordance
with such intended method of distribution and (y) if requested by the
Initiating Holder, obtain acceleration of the effective date of the
registration statement relating to such registration.

             (b)        The Demand Registration rights granted
in Section 2.1(a) to the Holders are subject to the following limitations:
(i) each registration in respect of a Demand Registration Request shall be
made on Form S-3 or any equivalent form then in effect (or, if Form S-3 or any
equivalent form is not available, on a Form S-1 or S-2 as determined by the
Company, if the use of such forms is then available); (ii) the Company
shall not be required to cause a registration pursuant to
Section 2.1(a)(i) to be declared effective within a period of 90 days
after the date any registration statement of the Company declared effective
pursuant to a Demand Registration Request was filed; (iii) if the Board of
Directors of the Company, in its good faith judgment, determines that any registration
of Registrable Securities should not be made or continued because it would
materially interfere with any material financing, acquisition, corporate
reorganization or merger or other transaction involving the Company or any of
its subsidiaries (a “Valid Business Reason”), (x) the Company may postpone
filing a registration statement relating to a Demand Registration Request until
such Valid Business Reason no longer exists, but in no event for more than 90
days, and (y) in case a registration statement has been filed relating to
a Demand Registration Request, if the Valid Business Reason has not resulted
from actions taken by the Company, the Company may cause such registration
statement to be withdrawn and its effectiveness terminated or may postpone
amending or supplementing such registration statement until such Valid Business
Reason no longer exists, but in no event for more than three months (such
period of postponement or withdrawal under subclause(s) (x) or (y) of this
clause (iii), the “Postponement Period”); and the Company shall give
written notice of its determination to postpone or withdraw a registration
statement and of the fact that the Valid Business Reason for such postponement
or withdrawal no longer exists, in each case, promptly after the occurrence
thereof, provided, however, the Company shall not be permitted to postpone or
withdraw a registration statement after the expiration of any Postponement
Period until 4 months after the expiration of such Postponement Period; and
(iv) the Company shall not be required to effect an effective registration
with respect to more than three Demand Registration Requests pursuant to this
Agreement.

             If
the Company shall give any notice of postponement or withdrawal of any
registration statement, the Company shall not, during the period of
postponement or withdrawal, register any Common Stock, other than pursuant to a
registration statement on Form S-4 or S-8 (or an equivalent registration form
then in effect). Each Holder of Registrable Securities agrees that, upon
receipt of any notice from the Company that the Company has determined to
withdraw any registration statement pursuant to clause (iii) above, such
Holder will discontinue its disposition of Registrable Securities pursuant to
such registration statement and, if so directed by the Company, will deliver to
the Company (at the Company’s expense) all copies, other than permanent file
copies, then in such Holder’s possession of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such
notice.  If the Company shall have
withdrawn or prematurely terminated a registration statement filed under
Section 2.1(a)(i) (whether pursuant to clause (iii) above or as a result
of any stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court), the Company shall not be considered to
have effected an effective registration for the purposes of this Agreement
until the Company shall have filed a new registration statement covering the
Registrable Securities covered by the withdrawn registration statement and such
registration statement shall have been declared effective and shall not have
been withdrawn.  If the Company shall
give any notice of withdrawal or postponement of a registration statement, the
Company shall, at such time as the Valid Business Reason that caused such
withdrawal or postponement no longer exists (but in no event later than three
months after the date of the postponement or withdrawal), use its best efforts
to effect the registration under the Securities Act of the Registrable
Securities covered by the withdrawn or postponed registration statement in
accordance with this Section 2.1 (unless the Initiating Holder shall have
withdrawn such request, in which case the Company shall not be considered to
have effected an effective registration for the purposes of this Agreement).

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

             (d)        In connection with any Demand
Registration, the Initiating Holder participating in such registration shall
have the right to designate the lead managing underwriter for such registration
and each other managing underwriter for such registration, provided that each
such managing underwriter is reasonably satisfactory to the Company.

             2.2.       Piggyback Registration.

             (a)         If, at any time, the Company proposes
or is required to register any of its equity securities (including pursuant to
any registration statement which generally registers equity and debt securities
without specifying the type of security or the amount) under the Securities Act
(other than pursuant to (i) registrations on such form or similar form(s)
solely for registration of securities in connection with an employee benefit
plan or dividend reinvestment plan or a merger or consolidation or (ii) a
Demand Registration under Section 2.1) on a registration statement on Form
S-1, Form S-2 or Form S-3 (or an equivalent general registration form then in
effect), whether or not for its own account, the Company shall give prompt
written notice of its intention to do so to each of the Holders of record of
Registrable Securities.  Upon the
written request of any Holder, made within 15 days following the receipt of any
such written notice (which request shall specify the maximum number of
Registrable Securities intended to be disposed of by such Holder and the
intended method of distribution thereof), the Company shall, subject to
Sections 2.2(b), 2.3 and 2.6 hereof, use its best efforts to cause all such
Registrable Securities, the Holders of which have so requested the registration
thereof, to be registered under the Securities Act (with the securities which
the Company at the time proposes to register) to permit the sale or other
disposition by the Holders (in accordance with the intended method of
distribution thereof) of the Registrable Securities to be so registered. There
is no limitation on the number of such piggyback registrations pursuant to the
preceding sentence which the Company is obligated to effect. No registration
effected under this Section 2.2(a) shall relieve the Company of its
obligations to effect Demand Registrations hereby.

             (b)        If, at any time after giving written
notice of its intention to register any equity securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such equity securities, the Company may, at its election,
give written notice of such determination to all Holders of record of
Registrable Securities who have requested registration of the Registrable
Securities pursuant to this Section 2.2 and in the case of a determination
not to register, shall be relieved of its obligation to register any
Registrable Securities in connection with such abandoned registration, without
prejudice, however, to the rights of Holders under Section 2.1.

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

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

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

 

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

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

             (b)        If any registration pursuant to
Section 2.2 involves an underwritten offering and the Manager shall advise
the Company that, in its view, the number of securities requested to be
included in such registration exceeds the number (the “Section 2.2 Sale
Number”) that can be sold in an orderly manner in such registration within a
price range acceptable to the Company, the Company shall include in such
registration:

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

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

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

             (a)         prepare and file with the SEC a
registration statement on an appropriate registration form of the SEC for the
disposition of such Registrable Securities in accordance with the intended
method of disposition thereof, which form (i) shall be selected by the
Company and (ii) shall, in the case of a shelf registration, be available
for the sale of the Registrable Securities by the selling Holders thereof and
such registration statement shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and the Company shall use
its best efforts to cause such registration statement to become and remain
effective (provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, or comparable statements under
securities or blue sky laws of any jurisdiction, the Company will furnish to
one counsel for the Holders participating in the planned offering (selected by
the Initiating Holder, in the case of a registration pursuant to
Section 2.1, and selected by the Holders of a majority of the Registrable
Securities included in such registration, in the case of a registration
pursuant to Section 2.2) and the underwriters, if any, copies of all such
documents proposed to be filed (including all exhibits thereto), which
documents will be subject to the reasonable review and reasonable comment of
such counsel, and the Company shall not file any registration statement or
amendment thereto or any prospectus or supplement thereto to which the holders
of a majority of the Registrable Securities covered by such registration
statement or the underwriters, if any, shall reasonably object in writing);

             (b)        prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for such period (which shall not be required to exceed 180
days in the case of a registration pursuant to Section 2.1 or 120 days in
the case of a registration pursuant to Section 2.2, unless reasonably
requested by any underwriter pursuant to an underwritten offering) as any
seller of Registrable Securities pursuant to such registration statement shall
request and to comply with the provisions of the Securities Act with respect to
the sale or other disposition of all Registrable Securities covered by such
registration statement in accordance with the intended methods of disposition
by the seller or sellers thereof set forth in such registration statement;

             (c)         furnish, without charge, to each seller
of such Registrable Securities and each underwriter, if any, of the securities
covered by such registration statement such number of copies of such
registration statement, each amendment and supplement thereto (in each case including
all exhibits), and the prospectus included in such registration statement
(including each preliminary prospectus) in conformity with the requirements of
the Securities Act, and other documents, as such seller and underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such seller (the Company hereby
consenting to the use in accordance with all applicable law of each such
registration statement (or amendment or posteffective amendment thereto) and
each such prospectus (or preliminary prospectus or supplement thereto) by each
such seller of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such registration statement or prospectus);

             (d)        use its best efforts to register or
qualify the Registrable Securities covered by such registration statement under
such other securities or “blue sky” laws of such jurisdictions as any sellers
of Registrable Securities or any managing underwriter, if any, shall reasonably
request, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such sellers or underwriter, if any, to
consummate the disposition of the Registrable Securities in such jurisdictions,
except that in no event shall the Company be required to qualify to do business
as a foreign corporation in any jurisdiction where it would not, but for the
requirements of this paragraph (d), be required to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction;

             (e)         promptly notify each Holder selling
Registrable Securities covered by such registration statement and each managing
underwriter, if any: (i) when the registration statement, any
pre-effective amendment, the prospectus or any prospectus supplement related
thereto or post-effective amendment to the registration statement has been
filed and, with respect to the registration statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the
SEC or state securities authority for amendments or supplements to the
registration statement or the prospectus related thereto or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the registration statement or the initiation of any
proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose; (v) of
the existence of any fact of which the Company becomes aware which results in the
registration statement, the prospectus related thereto or any document
incorporated therein by reference containing an untrue statement of a material
fact or omitting to state a material fact required to be stated therein or
necessary to make any statement therein not misleading; and (vi) if at any
time the representations and warranties contemplated by any underwriting
agreement, securities sale agreement, or other similar agreement relating to
the offering shall cease to be true and correct in all material respects; and,
if the notification relates to an event described in clause (v), the
Company shall promptly prepare and furnish to each such seller and each
underwriter, if any, a reasonable number of copies of a prospectus supplemented
or amended so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall 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 in the light of the
circumstances under which they were made not misleading;

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

             (g)        (i) cause all such Registrable
Securities covered by such registration statement to be listed on the principal
securities exchange on which similar securities issued by the Company are then
listed (if any), if the listing of such Registrable Securities is then
permitted under the rules of such exchange or (ii) if no similar securities
are then so listed, to either cause all such Registrable Securities to be
listed on a national securities exchange or to secure designation of all such
Registrable Securities as a National Association of Securities Dealers, Inc.
(the “NASD”) Automated Quotation System (“NASDAQ”) “national market system
security” within the meaning of Rule 11Aa2-1 of the Exchange Act or,
failing that, secure NASDAQ authorization for such shares and, without limiting
the generality of the foregoing, take all actions that may be required by the
Company as the issuer of such Registrable Securities in order to facilitate the
managing underwriter’s arranging for the registration of at least two market
makers as such with respect to such shares with the NASD;

             (h)        provide and cause to be maintained a
transfer agent and registrar for all such Registrable Securities covered by
such registration statement not later than the effective date of such
registration statement;

             (i)          enter into such customary agreements
(including, if applicable, an underwriting agreement) and take such other
actions as the Holders of a majority of the Registrable Securities
participating in such offering shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities. The Holders of the
Registrable Securities which are to be distributed by such underwriters shall
be parties to such underwriting agreement and may, at their option, require
that the Company make to and for the benefit of such Holders the representations,
warranties and covenants of the Company which are being made to and for the
benefit of such underwriters and which are of the type customarily provided to
institutional investors in secondary offerings. The Holders of a majority of
the Registrable Securities participating in such offering shall have the right
to participate in due diligence activities in the preparation of the
registration statement through their counsel;

             (j)          for underwritten offerings, obtain an
opinion from the Company’s counsel and a “cold comfort” letter from the
Company’s independent public accountants in customary form and covering such
matters as are customarily covered by such opinions and “cold comfort” letters
delivered to underwriters in underwritten public offerings, which opinion and
letter shall be reasonably satisfactory to the underwriter, if any, and to the
Holders of a majority of the Registrable Securities participating in such
offering, and furnish to each Holder participating in the offering and to each
underwriter, if any, a copy of such opinion and letter addressed to such Holder
or underwriter;

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

             (l)          use its best efforts to obtain the
withdrawal of an order suspending the effectiveness of the registration
statement;

             (m)        provide a CUSIP number for all
Registrable Securities, not later than the effective date of the registration
statement;

             (n)        make reasonably available its employees
and personnel and otherwise provide reasonable assistance to the underwriters
(taking into account the needs of the Company’s businesses and the requirements
of the marketing process) in the marketing of Registrable Securities in any
underwritten offering;

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

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

             The
Company may require as a condition precedent to the Company’s obligations under
this Section 2.4 that each seller of Registrable Securities as to which
any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company
may from time to time reasonably request provided that such information shall
be used only in connection with such registration.  No seller of Registrable Securities shall be required to make any
representations or warranties to or agreements with the Company or the
Underwriters (except, with respect to the Underwriter, such as are required for
the consumation of the registration and are customary and reasonable for
registrations of such type) other than as specifically set forth herein and any
other representation required by law.

             Each
Holder of Registrable Securities agrees that upon receipt of any notice from
the Company of the happening of any event of the kind described in
clause (v) of paragraph (e) of this Section 2.4, such Holder
will discontinue such Holder’s disposition of Registrable Securities pursuant
to the registration statement covering such Registrable Securities until such
Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (e) of this Section 2.4 and, if so directed
by the Company, will deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies, then in such Holder’s possession of
the prospectus covering such Registrable Securities that was in effect at the
time of receipt of such notice. In the event the Company shall give any such
notice, the applicable period mentioned in paragraph (b) of this
Section 2.4 shall be extended by the number of days during such period
from and including the date of the giving of such notice to and including the
date when each seller of any Registrable Securities covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by paragraph (e) of this Section 2.4.

             If
any such registration statement or comparable statement under “blue sky” - laws
refers to any Holder by name or otherwise as the Holder of any securities of
the Company, then such Holder shall have the right to require (i) the
insertion therein of language, in form and substance satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company’s securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company or (ii) in the event that such
reference to such Holder by name or otherwise is not in the judgment of the
Company, as advised by counsel, required by the Securities Act or any similar
federal statute or any state “blue sky” or securities law then in force, the
deletion of the reference to such Holder.

             2.5.       Registration Expenses.

             (a)         “Expenses” shall mean any and all fees
and expenses incident to the Company’s performance of or compliance with this
Article 2, including, without limitation: (i) SEC, stock exchange or NASD
registration and filing fees and all listing fees and fees with respect to the
inclusion of securities in NASDAQ, (ii) fees and expenses of compliance
with state securities or “blue sky” laws and in connection with the preparation
of a “blue sky” survey, including without limitation, reasonable fees and
expenses of blue sky counsel, (iii) printing and copying expenses,
(iv) messenger and delivery expenses, (v) expenses incurred in
connection with any road show, (vi) fees and disbursements of counsel for
the Company, (vii) with respect to each registration, the fees and
disbursements of one counsel for the selling Holder(s) (selected by the
Initiating Holder, in the case of a registration pursuant to Section 2.1,
and selected by the Holders of a majority of the Registrable Securities
included in such registration, in the case of a registration pursuant to
Section 2.2), (viii) fees and disbursements of all independent public
accountants (including the expenses of any audit and/or “cold comfort” letter)
and fees and expenses of other Persons, including special experts, retained by
the Company, (ix) fees and expenses payable to a Qualified Independent
Underwriter (as such term is defined in Conduct Rule 2720 of the NASD’s
By-Laws) and (x) any other fees and disbursements of underwriters, if any,
customarily paid by issuers or sellers of securities.

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

             (c)         Notwithstanding the foregoing,
(x) the provisions of this Section 2.5 shall be deemed amended to the
extent necessary to cause these expense provisions to comply with “blue sky”
laws of each state in which the offering is made and (y) in connection
with any registration hereunder, each Holder of Registrable Securities being
registered shall pay all underwriting discounts and commissions and any
transfer taxes, if any, attributable to the sale of such Registrable Securities,
pro rata with respect to payments of discounts and commissions in accordance
with the number of shares sold in the offering by such Holder and (z) the
Company shall, in the case of all registrations under this Article 2, be
responsible for all its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties).

             2.6.       Certain
Limitations on Registration Rights. In the
case of any registration under Section 2.1 pursuant to an underwritten
offering, or in the case of a registration under
Section 2.2 if the Company has determined to enter
into an underwriting agreement in connection therewith, all securities to be
included in such registration shall be subject to an underwriting agreement and
no Person may participate in such registration unless such Person agrees to
sell such Person’s securities on the basis provided therein and completes and
executes all reasonable questionnaires, and other documents (other than powers
of attorney) which must be executed in connection therewith, and provides such
other information to the Company or the underwriter as may be necessary to
register such Person’s securities.

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

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

             2.9.       Indemnification.

             (a)         In the event of any registration of any
securities of the Company under the Securities Act pursuant to this Article 2,
the Company will, and hereby does, indemnify and hold harmless, to the fullest
extent permitted by law, each Holder of Registrable Securities, its directors,
officers, fiduciaries, employees and stockholders or general and limited
partners (and the directors, officers, employees and stockholders thereof),
each other Person who participates as an underwriter or a Qualified Independent
Underwriter, if any, in the offering or sale of such securities, each officer,
director, employee, stockholder or partner of such underwriter or Qualified
Independent Underwriter, and each other Person, if any, who controls such
seller or any such underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) in respect thereof
(“Claims”) and expenses (including reasonable fees of counsel and any amounts
paid in any settlement effected with the Company’s consent, which consent shall
not be unreasonably withheld or delayed) to which each such indemnified party
may become subject under the Securities Act or otherwise, insofar as such
Claims or expenses arise out of or are based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement under which such securities were registered under the Securities Act
or the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary prospectus or any
amendment or supplement thereto, together with the documents incorporated by reference
therein, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (iii) any violation by the Company of any federal, state or
common law rule or regulation applicable to the Company and relating to action
required of or inaction by the Company in connection with any such
registration, and the Company will reimburse any such indemnified party for any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim as such expenses are
incurred; provided, however, that the Company shall not be liable to any such indemnified
party in any such case to the extent such Claim or expense arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission of a material fact made in such registration
statement or amendment thereof or supplement thereto or in any such prospectus
or any preliminary, final or summary prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnified party specifically for use therein. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by as on behalf of such indemnified party and shall
survive the transfer of such securities by such Holder.

             (b)        Each Holder of Registrable Securities
that are included in the securities as to which any registration under
Section 2.1 or 2.2 is being effected (and, if the Company requires as a
condition to including any Registrable Securities in any registration statement
filed in accordance with Section 2.1 or 2.2, any underwriter and Qualified
Independent Underwriter, if any) shall, severally and not jointly, indemnify
and hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 2.9) to the fullest extent permitted by
law the Company, its officers and directors, each Person controlling the
Company within the meaning of the Securities Act and all other prospective
sellers and their directors, officers, general and limited partners and
respective controlling Persons with respect to any untrue statement or alleged
untrue statement of any material fact in, or omission or alleged omission of
any material fact from, such registration statement, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company or its representatives by or on behalf of such Holder or underwriter or
Qualified Independent Underwriter, if any, specifically for use therein and
reimburse such indemnified party for any legal or other expenses reasonably
incurred in connection with investigating or defending any such Claim as such
expenses are incurred; provided, however, that the aggregate amount which any
such Holder shall be required to pay pursuant to this Section 2.9(b) and
Sections 2.9(c) and (e) shall in no case be greater than the amount of the
net proceeds received by such Holder upon the sale of the Registrable
Securities pursuant to the registration statement giving rise to such
claim.  Such indemnity and reimbursement
of expenses shall remain in full force and effect regardless of any
investigation made by or on behalf of such indemnified party and shall survive
the transfer of such securities by such Holder.

             (c)         Indemnification similar to that
specified in the preceding paragraphs (a) and (b) of this Section 2.9
(with appropriate modifications) shall be given by the Company and each seller
of Registrable Securities with respect to any required registration or other
qualification of securities under any state securities and “blue sky” laws.

             (d)        Any Person entitled to indemnification
under this Agreement shall notify promptly the indemnifying party in writing of
the commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 2.9, but the failure
of any indemnified party to provide such notice shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 2.9, except to the extent the indemnifying party is materially
prejudiced thereby and shall not relieve the indemnifying party from any liability
which it may have to any indemnified party otherwise than under this Article
2.  In case any action or proceeding is
brought against an indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside counsel to
the indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof jointly with any other indemnifying party similarly notified, to the
extent that it chooses, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party that it so chooses, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that (i) if the
indemnifying party fails to take reasonable steps necessary to defend
diligently the action or proceeding within 20 days after receiving notice from
such indemnified party; or (ii) if such indemnified party who is a
defendant in any action or proceeding which is also brought against the
indemnifying party reasonably shall have concluded that there may be one or
more legal defenses available to such indemnified party which are not available
to the indemnifying party; or (iii) if representation of both parties by
the same counsel is otherwise inappropriate under applicable standards of
professional conduct, then, in any such case, the indemnified party shall have
the right to assume or continue its own defense as set forth above (but with no
more than one firm of counsel for all indemnified parties in each jurisdiction,
except to the extent any indemnified party or parties reasonably shall have
concluded that there may be legal defenses available to such party or parties
which are not available to the other indemnified parties or to the extent
representation of all indemnified parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct) and the
indemnifying party shall be liable for any expenses therefor.  No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (A) includes an unconditional release of the indemnified party
from all liability arising out of such action or claim and (B) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.

             (e)         If for any reason the foregoing
indemnity is unavailable or is insufficient to hold harmless an indemnified
party under Sections 2.9(a), (b) or (c), then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of any Claim in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and the indemnified
party, on the other hand, with respect to such offering of securities.  The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party or the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.  If, however, the allocation
provided in the second preceding sentence is not permitted by applicable law,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative faults but also the relative benefits of the indemnifying party
and the indemnified party as well as any other relevant equitable
considerations.  The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
Section 2.9(e) were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this
Section 2.9(e).  The amount paid or
payable in respect of any Claim shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. 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 who was not guilty of
such fraudulent misrepresentation. 
Notwithstanding anything in this Section 2.9(e) to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to this
Section 2.9(e) to contribute any amount in excess of the net proceeds
received by such indemnifying party from the sale of Registrable Securities in
the offering to which the Claims of the indemnified parties relate, less the
amount of any indemnification payment made by such indemnifying party pursuant
to Sections 2.9(b) and (c).

             (f)         The indemnification and contribution
agreements contained herein shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant
to law or contract and shall remain operative and in full force and effect
regardless of any investigation made or omitted by or on behalf of any
indemnified party and shall survive the transfer of the Registrable Securities
by any such party.

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

             3.          Underwritten
Offerings.

             3.1.       Requested
Underwritten Offerings. If requested by the underwriters for any
underwritten offering by the Holders pursuant to a Demand Registration under
Section 2.1, the Company shall enter into a
customary underwriting agreement with the underwriters.  Such underwriting agreement shall be
satisfactory in form and substance to the Initiating Holder and shall contain
such representations and warranties by, and such other agreements on the part
of,
the Company and such other terms as are generally
prevailing in agreements of that type, including, without limitation,
indemnities and contribution agreements. 
Any Holder participating in the offering shall be a party to such
underwriting agreement and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Holder and that any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holder; provided, however, that
the Company shall not be required to make any representations or warranties
with respect to written information specifically provided by a selling Holder
for inclusion in the registration statement. 
Such underwriting agreement shall also contain such representations and
warranties by the participating Holders as are customary in agreements of that
type.

             3.2.       Piggyback Underwritten
Offerings. In the case of a registration pursuant to
Section 2.2 hereof, if the Company shall have determined to enter into an
underwriting agreement in connection therewith, all of the Holders’ Registrable
Securities to be included in such registration shall be subject to such
underwriting agreement.  Any Holder
participating in such registration may, at its option, require that any or all
of the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of such Holder and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such Holder. Such
underwriting agreement shall also contain such representations and warranties
by the participating Holders as are customary in agreements of that type.

             4.          General.

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

             4.2.       Nominees for Beneficial
Owners.  If Registrable Securities are held by a
nominee for the beneficial owner thereof, the beneficial owner thereof may, at
its option, be treated as the Holder of such Registrable Securities for
purposes of any request or other action by any Holder or Holders of Registrable
Securities pursuant to this Agreement (or any determination of any number or
percentage of shares constituting Registrable Securities held by any Holder or
Holders of Registrable Securities contemplated by this Agreement), provided
that the Company shall have received assurances reasonably satisfactory to it
of such beneficial ownership.

             4.3.       Amendments and Waivers. This Agreement may be amended, modified, supplemented or waived
only upon the written agreement of the party against whom enforcement of such
amendment, modification, supplement or waiver is sought.

             4.4.       Notices. Except as otherwise provided in this
Agreement, all notices, requests, consents and other communications hereunder
to any party shall be deemed to be sufficient if contained in a written
instrument delivered in person or by telecopy, nationally recognized overnight
courier or first class registered or certified mail, return receipt requested,
postage prepaid, addressed to such party at the address set forth below or such
other address as may hereafter be designated in writing by such party to the
other parties:

	(i)	if
  to the Company, to:
	 	 
	 	TeraGlobal
  Communications Corp.
	 	9171
  Towne Centre Drive, 6th Floor
	 	San
  Diego, CA  92122
	 	Telecopy:  (858) 404-5555
	 	Attention:
  Chief Executive Officer
	 	 
	(ii)	if
  to the Purchaser, to the address listed on Exhibit A of the Purchase
  Agreement
	 	 
	 	with
  a copy to:
	 	Cadwalader,
  Wickersham & Taft
	 	100
  Maiden Lane
	 	New
  York, New York  10038
	 	Telecopy:  (212) 504-6666
	 	Attention:  Jonathan M. Wainwright, Esq.

All such notices, requests, consents and
other communications shall be deemed to have been given when received.

             4.5.       Transfer
or Assignment of Registration Rights. The rights to cause the Company to register
securities granted to a Holder by the Company under this Agreement may be
transferred or assigned by a Holder only to a transferee or assignee of not
less than 250,000 shares of Registrable Securities (as presently constituted
and subject to subsequent adjustments for stock splits, stock dividends,
reverse stock splits and the like); provided, however, that, a Holder may
transfer such rights to affiliates or associates of such Holder without the
foregoing share restriction.

             4.6.       Miscellaneous.

             (a)         This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and the
respective successors, personal representatives and assigns of the parties
hereto, whether so expressed or not.  If
any Person shall acquire Registrable Securities from any Holder, in any manner,
whether by operation of law or otherwise, such transferee shall promptly notify
the Company and such Registrable Securities acquired from such Holder shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such Person shall be entitled to receive the
benefits of and be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement.  If the Company shall so request, any such
successor or assign shall agree in writing to acquire and hold the Registrable
Securities acquired from such Holder subject to all of the terms hereof.  If any Holder shall acquire additional
Registrable Securities, such Registrable Securities shall be subject to all of
the terms, and entitled to all the benefits, of this Agreement.

             (b)        This Agreement (with the documents referred
to herein or delivered pursuant hereto and the Stockholders Agreement that the
parties hereto have entered into as of the date hereof) embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings relating to the subject matter hereof.

             (c)         This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of New York
without giving effect to the conflicts of law principles thereof.

             (d)        The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.  All section references
are to this Agreement unless otherwise expressly provided.

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

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

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

             (h)        Each party hereto shall do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

             (i)          This Agreement may be amended,
supplemented or modified only by a written instrument (which may be executed in
any number of counterparts) duly executed by or on behalf of each of the
Company and WallerSutton.

             (j)          Subject to Section 4.7(i), any term or
condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition.  No
waiver by any party of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same term
or condition of this Agreement on any future occasion.

             (k)         The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto, their
respective successors or permitted assigns and any other holder of Registrable
Securities, and it is not the intention of the parties to confer third-party
beneficiary rights upon any other person other than any person entitled to
indemnity hereunder.

4.7.          
No Inconsistent
Agreements. The rights granted to the holders of
Registrable Securities hereunder do not in any way conflict with and are not
inconsistent with any other agreements to which the Company is a party or by
which it is bound.  Without the prior
written consent of WallerSutton, the Company will not, on or after the date of
this Agreement, enter into any agreement with respect to its securities which is
inconsistent with the rights granted in this Agreement or otherwise conflicts
with the provisions hereof, other than any lock-up agreement with and required
by the underwriters in connection with any registered offering effected
hereunder, pursuant to which the Company shall agree not to register for sale,
and the Company shall agree not to sell or otherwise dispose of, Common Stock
or any securities convertible into or exercisable or exchangeable for Common
Stock, for a specified period following the registered offering.  The Company further agrees that if any other
registration rights agreement entered into after the date of this Agreement
with respect to any of its securities contains terms which are more favorable
to, or less restrictive on, the other party thereto than the terms and conditions
in this Agreement are (insofar as they are applicable) to the Purchasing Parties, then the terms and conditions of this Agreement
shall immediately be deemed to have been amended without further action by the
Company or any of the Holders of Registrable Securities so that the Purchasing
Parties shall be entitled to the benefit of any such more favorable or less
restrictive terms or conditions.  The
Company promptly shall deliver a copy of all such agreements to the Holders.

             IN WITNESS WHEREOF, the undersigned
have executed this Agreement as of the date set forth above.

	 	TERAGLOBAL
  COMMUNICATIONS CORP.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/
  ROBERT E. RANDALL	 
	 	 	

	 
	 	 	Name:  Robert E. Randall	 
	 	 	Title:    Chief Executive Officer	 
	 	 	 	 
	 	WALLERSUTTON
  2000, L.P.	 
	 	 	 	 
	 	By:	WallerSutton
  2000, L.L.C., general partner	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/
  JACK WOODRUFF	 
	 	 	

	 
	 	 	Name:  Jack Woodruff	 
	 	 	Title:    Member	 
	 	 	 	 
	 	/s/
  JOHN C. STISKA	 
	 	

	 
	 	 	John C. Stiska	 
	 	 	 	 
	 	/s/
  JOHN F.A.V. CECIL	 
	 	

	 
	 	 	John
  F.A.V. Cecil	 
	 	 	 	 
	 	CECIL
  VENTURES, LLC	 
	 	 	 	 
	 	By:	/s/
  JOHN F.A.V. CECIL	 
	 	 	

	 
	 	 	Name:  John F.A.V. Cecil	 
	 	 	Title:    Managing Member	 

 

	 	/s/
  ROBERT E. RANDALL	 
	 	

	 
	 	 	Robert
  E. Randall	 
	 	 	 	 
	 	/s/
  LAWRENCE LACERTE	 
	 	

	 
	 	 	Lawrence
  Lacerte	 
	 	 	 	 
	 	 	WILLIAM
  OR BONNIE LUPIEN TRUST	 
	 	 	U/A
  DTD 8/4/76 WA Lupien TTEE	 
	 	 	 	 
	 	By:	 	 
	 	 	

	 
	 	 	Name:  	 
	 	 	Title:	 
	 	 	 	 
	 	 	Spencer
  Trask Investment Partners, LLC	 
	 	 	 	 
	 	By:	 	 
	 	 	

	 
	 	 	Name:  Kevin B. Kimberlin	 
	 	 	Title:	 
	 	 	 	 
	 	 	GIRARD
  INVESTMENT PARTNERS, INC.	 
	 	 	 	 
	 	By:	 	 
	 	 	

	 
	 	 	/s/
  KENT ANDREWS	 
	 	 	Name:  Kent Andrews	 
	 	 	Title:	 

EXHIBIT A

 

SCHEDULE OF BRIDGE INVESTORS

 

	Name and Address	Principal
  Amount of Note
	 	 
	John C. Stiska	$	50,000
	4275 Executive Square,
  Suite 350	 
	La Jolla, CA 92037	 
	 	 
	John F.A.V. Cecil	$	50,000
	One Vanderbilt	 
	Asheville, NC  28803	 
	 	 
	Cecil Ventures, LLC	$	50,000
	One Vanderbilt	 
	Asheville, NC  28803	 
	 	 
	Robert E. Randall	$	50,000
	9171 Towne Centre
  Drive	 
	Suite 600	 
	San Diego, CA  92122	 
	 	 
	Lawrence Lacerte	$	200,000
	5950 Sherry Lane	 
	Suite 900	 
	Dallas, TX  75225	 
	 	 
	William or Bonnie
  Lupien Trust	$	50,000
	U/A DTD 8/4/76 WA
  Lupien TTEE	 
	BR Lupien TTEE	 
	2544 C.R. 124	 
	Hesperus, CO  81326	 
	 	 
	WallerSutton 2000,
  L.P.	$	500,000
	One Rockefeller Plaza,
  Suite 3300	 
	New York, NY 10020-2102	 
	 	 
	Spencer Trask
  Investment Partners LLC	$	500,000
	535 Madison Avenue	 
	New York, NY 10022	 
	 	 
	Girard Investment
  Partners, Inc.	$	50,000
	7855 Ivanhoe Avenue,
  Suite 222	 
	La Jolla, CA  92037

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