WALLERSUTTON 2000, L.P.
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December 10, 2001
TERAGLOBAL COMMUNICATIONS CORP.
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Re: SERIES A PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT between
TERAGLOBAL COMMUNICATIONS CORP. ("TERAGLOBAL") and WALLERSUTTON 2000,
L.P. ("WALLERSUTTON"), Dated as of June 28, 2001 (the "PURCHASE
AGREEMENT")
TERAGLOBAL COMMUNICATIONS CORP.:
You have notified us that an "Event of Default" has occurred under the
Purchase Agreement, Section 9.1(a). Pursuant to the Purchase Agreement, Section
9.2, WallerSutton has the right to demand and require (i) redemption of the
Series "A" Preferred Stock, (ii) a sale of the Company and (iii) the right to
elect a majority of the directors of the Board (collectively, the "ACTIONS").
▇▇▇▇▇▇▇▇▇▇▇▇ is willing to "stand off" of enforcing its Actions as remedies for
the breach of Section 9.1(a) on the following terms and conditions.
TeraGlobal shall enter into the Note and Warrant Purchase Agreement of even date
herewith between TeraGlobal and certain investors named therein (the "Note
Purchase Agreement"). For so long as no default exists under the terms of the
Note Purchase Agreement and the related documents and agreements, WallerSutton
will stand off of, and agree not to pursue, its remedies under Section 9.2 of
the Purchase Agreement.
Other than with respect to the provisions and sections specifically referenced
in this letter, nothing herein shall in any way alter, amend, or constitute a
waiver under the Purchase Agreement. WallerSutton is specifically not agreeing
to the waiver of any other breach under Section 9.1, or any other provision of
the Purchase Agreement. ▇▇▇▇▇▇▇▇▇▇▇▇ is entering into this letter agreement at
the request and for the benefit of TeraGlobal, which hereby agrees that it will
not claim that as a result ▇▇▇▇▇▇▇▇▇▇▇▇ has waived any rights, is otherwise
estopped from exercising all rights and privileges that it had prior to entering
into this letter agreement or take any similar action or make any similar claim.
This letter also evidences WallerSutton's consent, as the majority holder of the
outstanding Series A Convertible Preferred Stock, to the transactions
contemplated by the Note Purchase Agreement as required by Section 6(e) of the
Certificate of Designation, Preferences and Rights of Series A Convertible
Preferred Stock.
TeraGlobal hereby agrees that WallerSutton will have no obligation to make any
Subsequent Purchase or to provide any future funding pursuant to the terms of
the Purchase Agreement. Further TeraGlobal acknowledges that neither this letter
nor the Note Purchase Agreement shall
compel WallerSutton to provide additional financing to TeraGlobal in order to
avoid the declaration of a default under the Purchase Agreement, the Note
Purchase Agreement or the securities and Notes issuable pursuant to either of
such agreements. WallerSutton's decision to not fund any portion of the bridge
financing pursuant to the Note Purchase Agreement, for any reason and at any
time, will in no way limit WallerSutton from pursuing its rights under the
Purchase Agreement.
All terms used but not defined herein shall have the respective meanings set
forth in the Purchase Agreement.
If you are in agreement with the terms hereof, please sign below and return the
letter to our attention.
Thank you.
WallerSutton 2000, L.P.
By:______________________________________
Name:
Title:
TeraGlobal Communications Corp.
By:______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
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