**Exhibit 4.1**

 

**CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF**

**SERIES B CONVERTIBLE PREFERRED STOCK**

**OF**

**Global ePoint, Inc.**

a Nevadacorporation 

 

The undersigned, John Pan certifies that:

 

1. He is the duly acting President and Secretary of GlobalePoint, Inc., a corporation organized and existing under the Corporation Code of the State of Nevada (the ***“Corporation***”). 

 

2. Pursuant to authority conferred upon the Board of Directors by the Amended and Restated Articles of Incorporation of the Corporation, as amended, andpursuant to the provisions of Section 78.1955 of the General Corporation Law of Nevada, said Board of Directors, has previously designated the Corporation’s Series A Convertible Preferred Stock ***(“Series A PreferredStock”***). 

 

3. Pursuant to authority conferred uponthe Board of Directors by the Amended and Restated Articles of Incorporation of the Corporation, as amended, and pursuant to the provisions of Section 78.1955 of the General Corporation Law of Nevada, said Board of Directors, pursuant to a unanimouswritten consent effective as of May 11, 2005, adopted a resolution establishing the rights, preferences, privileges and restrictions of, and the number of shares comprising, the Corporation’s Series B Convertible Preferred Stock, whichresolution is as follows: 

 

RESOLVED, that a series of PreferredStock in the Corporation, having the rights, preferences, privileges and restrictions, and the number of shares constituting such series and the designation of such series, set forth below be, and it hereby is, authorized by the Board of Directorsof the Corporation pursuant to authority given by the Corporation’s Certificate of Incorporation. 

 

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines the Determinations of, the number of shares constituting, and therights, preferences, privileges and restrictions relating to, a new series of Preferred Stock as follows: 

 

(a) Determination. The series of Preferred Stock is hereby designated Series B Convertible Preferred Stock (the “***Series B PreferredStock***”). 

 

(b) Authorized Shares. The numberof authorized shares constituting the Series B Preferred Stock shall be Fifty-Five Thousand (55,000) shares of such series. 

 

(c) Dividends. Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends and tothe extent permitted by applicable law, the holders of the Series B Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of any assets of the Corporation legally available therefor, such dividends asmay be declared from time to time by the Board of Directors. 

 

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(d) Liquidation Preference. 

 

(i) *Preference upon Liquidation, Dissolution or Winding Up*. In the event of any dissolution orwinding up of the Corporation, whether voluntary or involuntary, holders of each outstanding share of Series B Preferred Stock shall be entitled to be paid first out of the assets of the Corporation available for distribution to shareholders,whether such assets are capital, surplus or earnings, an amount equal to $100.00 (the “***Series B Purchase Price***”) per share of Series B Preferred Stock held (as adjusted for any stock splits, stock dividends orrecapitalizations of the Series B Preferred Stock) and any declared but unpaid dividends on such share, before any payment shall be made to the holders of the Common Stock, or any other stock of the Corporation ranking junior to the Series BPreferred Stock with regard to any distribution of assets upon liquidation, dissolution or winding up of the Corporation. The holders of the Series A Preferred Stock and Series B Preferred Stock, and the holders of any other shares of stock onparity with the Series B Preferred Stock, shall be entitled to share in any distribution which is not sufficient to pay in full the aggregate of the amounts payable thereon. If, upon any liquidation, dissolution or winding up of the Corporation, theassets to be distributed to the holders of the Series A Preferred Stock and Series B Preferred Stock, and the holders of any other shares of stock on parity with the Series B Preferred Stock, shall be insufficient to permit payment to suchshareholders of the full preferential amounts aforesaid, then all of the assets of the Corporation available for distribution to shareholders shall be distributed to the holders of Series A Preferred Stock and Series B Preferred Stock, and theholders of any other shares of stock on parity with the Series B Preferred Stock, ratably, in accordance with the respective preferential amounts payable on such stock. Each holder of the Series B Preferred Stock shall be entitled to receive thatportion of the assets available for distribution to the holders of the Series B Preferred Stock as the number of outstanding shares of Series B Preferred Stock held by such holder bears to the total number of shares of Series B Preferred Stock. Suchpayment shall constitute payment in full to the holders of the Series B Preferred Stock upon the liquidation, dissolution or winding up of the Corporation. After such payment shall have been made in full, or funds necessary for such payment shallhave been set aside by the Corporation in trust for the account of the holders of Series B Preferred Stock, so as to be available for such payment, such holders of Series B Preferred Stock shall be entitled to no further participation in thedistribution of the assets of the Corporation. 

 

(ii) *Consolidation, Merger and Other Corporate Events*. A consolidation or merger of the Corporation (except into or with a subsidiary corporation) or a sale, lease, mortgage, pledge, exchange, transfer or other disposition of all orsubstantially all of the assets of the Corporation or any reclassification of the stock of the Corporation (other than a change in par value or from no par to par, or from par to no par or as the result of an event described in subsection (v), (vi),(vii) or (viii) of paragraph (f)), shall be regarded as a liquidation, dissolution or winding up of the affairs of the Corporation within the meaning of this paragraph (d), provided, however, in the case of a merger, if (a) the Corporation is thesurviving entity, (b) the Corporation’s shareholders hold a majority of the shares of the surviving entity, and (c) the Corporation’s directors hold a majority of the seats on the board of directors of the surviving entity, then suchmerger shall not be regarded as a liquidation, dissolution or winding up within the meaning of this paragraph (d). In no event shall the issuance of new classes of stock, whether senior, junior or on a parity with the Series B Preferred Stock, orany stock splits, be deemed a “reclassification” under or otherwise limited by the terms hereof. 

 

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(iii) *Distribution of Cash and Other Assets*. In the event of a liquidation,dissolution or winding up of the Corporation resulting in the availability of assets other than cash for distribution to the holders of the Series B Preferred Stock, the holders of the Series B Preferred Stock shall be entitled to a distribution ofcash and/or assets equal to the value of the liquidation preference stated in subsection (i) of this paragraph (d), which valuation shall be made solely by the Board of Directors, and provided that such Board of Directors was acting in good faith,shall be conclusive. 

 

(iv) *Distribution toJunior Security Holders*. After the payment or distribution to the holders of the Series B Preferred Stock of the full preferential amounts aforesaid, the holders of Series B Preferred Stock shall have no further rights in respect at such SeriesB Stock which shall become null and void, and the holders of the Common Stock then outstanding, or any other stock of the Corporation ranking as to assets upon liquidation, dissolution or winding up of the Corporation junior to the Series BPreferred Stock, shall be entitled to receive ratably all of the remaining assets of the Corporation. 

 

(v) *Preference; Priority*. References to a stock that is “***senior***” to, on a “***parity***”with or “***junior***” to other stock as to liquidation shall refer, respectively, to rights of priority of one series or class of stock over another in the distribution of assets on any liquidation, dissolution or winding up ofthe Corporation. With regard to rights and payments upon liquidation, the Series B Preferred Stock shall be senior to the Common Stock of the Corporation, on parity with the Series A Preferred Stock and junior to any subsequent series of PreferredStock issued by the Corporation. 

 

(e) Voting Rights.Except as otherwise required by law, the holder of shares of Series B Preferred Stock shall not have the right to vote on matters that come before the shareholders. 

 

(f) Conversion Rights. The holders of Series B Preferred Stock will have the following conversion rights: 

 

(i) *Right to Convert*. Subject to and in compliancewith the provisions of this paragraph (f), any issued and outstanding shares of Series B Preferred Stock may, at the option of the holder, be converted at any time or from time to time into fully paid and non-assessable shares of Common Stock at theconversion rate in effect at the time of conversion, determined as provided herein; provided, that a holder of Series B Preferred Stock may at any given time convert only up to that number of shares of Series B Preferred Stock so that, uponconversion, the aggregate beneficial ownership of the Corporation’s Common Stock (calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of (a) such holder and all persons affiliated with such holder, or (b)M.A.G. Capital, LLC and its affiliates, is not more than 9.99% of the Corporation’s Common Stock then outstanding. 

 

(ii) *Mechanics of Conversion*. Before any holder of Series B Preferred Stock shall be entitled to convert the same into shares ofCommon Stock, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation, and shall give written notice to the Corporation at such office in the form attached hereto as Annex C (the***“Conversion Notice”***) that he elects to convert the same and shall state therein the number of shares of Series B Preferred Stock being converted. Thereupon, the Corporation shall promptly 

 

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issue and deliver at such office to such holder of Series B Preferred Stock a certificate or certificates for the number of shares of Common Stock to whichhe shall be entitled. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series B Preferred Stock to be converted and delivery of the Conversion Notice to theCorporation, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date to the extent permittedby applicable law. 

 

(iii) *ConversionPrice*. The number of shares into which one share of Series B Preferred Stock shall be convertible shall be determined by dividing the Series B Purchase Price by the then existing Conversion Price (as set forth below) (the ***“ConversionRatio”***). The “***Conversion Price***” per share for the Series B Preferred Stock shall be equal to $2.80 per share. The Conversion Price shall be adjusted upon the occurrence of any event in paragraph (f) (v)-(ix).

 

(iv) *Mandatory Conversion*. Subject tothe conditions set forth in this subpart (iv), the Corporation, at its option, may by delivery of written notice to a holder of Series B Preferred Stock convert all, or a portion, of the then outstanding Series B Preferred Stock held by such holderinto Common Stock, at the Conversion Ratio then in effect. The conversion shall be effective on the fifth day following the holder’s receipt of written notice from the Corporation. Notwithstanding the foregoing the Corporation shall not bepermitted to effect a mandatory conversion hereunder unless (i) as a result, the holder and its affiliates shall be holders of record of outstanding shares of Common Stock of no more than 9.99% of the total shares of Common Stock outstanding as ofsuch time, (ii) the Common Stock to be issued upon conversion of the Series B Preferred Stock shall be registered; and (iii) the closing price of the Common Stock for the 20 preceding trading days is equal to or greater than $3.75 per share (asadjusted for any subdivisions or combinations of the outstanding Common Stock). For purposes of calculating the record ownership of the outstanding shares of Common Stock held of record by the holder and its affiliates, the records maintained by thetransfer agent and registrar for the Common Stock shall be the exclusive source considered for purposes of determining share ownership and the holder’s affiliates shall be deemed to consist exclusively of such parties identified to theCorporation in writing from time to time. 

 

(v)*Adjustment for Stock Splits and Combinations*. If the Corporation shall at any time, or from time to time after the date shares of the Series B Preferred Stock are first issued (the “**Original Issue Date**”), effect a subdivisionof the outstanding Common Stock, the Conversion Price in effect immediately prior thereto shall be proportionately decreased, and conversely, if the Corporation shall at any time or from time to time after the Original Issue Date combine theoutstanding shares of Common Stock, the Conversion Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this paragraph (f)(v) shall become effective at the close of business on the date thesubdivision or combination becomes effective. 

 

(vi) *Adjustment for Certain Dividends and Distributions*. In the event the Corporation at any time, or from time to time after the Original Issue Date, shall make or issue, or fix a record date for the determination of holders ofCommon Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, then and in each 

 

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such event the Conversion Price then in effect shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed,as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction: 

 

the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of suchissuance or the close of business on such record date, and 

 

the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of sharesof Common Stock issuable in payment of such dividend or distribution; provided, however, if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixedtherefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter, the Conversion Price shall be adjusted pursuant to this paragraph (f)(vi) as of the time of actual payment of suchdividends or distributions. 

 

(vii)*Adjustments for Other Dividends and Distributions*. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitledto receive, a dividend or other distribution payable in securities of the Corporation other than shares of Common Stock, then and in each such event provision shall be made so that the holders of such Series B Preferred Stock shall receive uponconversion thereof in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation that they would have received had their Series B Preferred Stock been converted into Common Stock on the date ofsuch event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities receivable by them as aforesaid during such period giving application to all adjustments called for duringsuch period under this paragraph (f) with respect to the rights of the holders of the Series B Preferred Stock. 

 

(viii) *Adjustment for Reclassification**Exchange or Substitution*. If the Common Stock issuable upon the conversion of theSeries B Preferred Stock shall be changed into the same or a 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 stockdividend provided for above, or a reorganization, merger, consolidation or sale of assets provided for elsewhere in this paragraph (f)), then and in each such event the holder of each share of Series B Preferred Stock shall have the right thereafterto convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, by holders of the number of shares of Common Stock into which such shares ofSeries B Preferred Stock might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein. 

 

(ix) *Reorganization, Mergers, Consolidations or Sales of Assets*. If at any time or from time to timethere shall be a capital reorganization of the Common Stock (other than a subdivision, combination, reclassification or exchange of shares provided for elsewhere in this paragraph (f)) or a merger or consolidation of the Corporation with or intoanother corporation, 

 

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or the sale of all or substantially all of the Corporation’s properties and assets to any other person, then, as a part of such reorganization, merger,consolidation or sale, provision shall be made so that the holders of the Series B Preferred Stock shall thereafter be entitled to receive upon conversion of such Series B Preferred Stock, the number of shares of stock or other securities orproperty of the Corporation or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger,consolidation or sale. In any such case, appropriate adjustment shall be made in the application of the provisions of this paragraph (f) with respect to the rights of the holders of the Series B Preferred Stock after the reorganization, merger,consolidation or sale to the end that the provisions of this paragraph (f) (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of the Series B Preferred Stock) shall be applicable afterthat event as nearly equivalent as may be practicable. 

 

(x) *Certificate of Adjustment*. In each case of an adjustment or readjustment of the Conversion Price or the securities issuable upon conversion of the Series B Preferred Stock, the Corporation shall compute such adjustment orreadjustment in accordance herewith and the Corporation’s Chief Financial Officer shall prepare and sign a certificate showing such adjustment or readjustment, and shall mail such certificate by first class mail, postage prepaid, to eachregistered holder of the Series B Preferred Stock at the holder’s address as shown in the Corporation’s books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment orreadjustment is based. 

 

(xi) *Notices ofRecord Date*. In the event of (A) any taking by the Corporation of a record of the holders of any class or series of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution or(B) any reclassification or recapitalization of the capital stock of the Corporation, any merger or consolidation of the Corporation or any transfer of all or substantially all of the assets of the Corporation to any other corporation, entity orperson, or any voluntary or involuntary dissolution, liquidation or winding up of the Corporation, the Corporation shall mail to each holder of Series B Preferred Stock at least 10 days prior to the record date specified therein, a notice specifying(1) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (2) the date on which any such reorganization, reclassification, transfer, consolidation,merger, dissolution, liquidation or winding up is expected to become effective and (3) the time, if any is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares, of CommonStock (or other securities) for securities or other property deliverable upon such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up. 

 

(xii) *Fractional Shares*. No fractional shares ofCommon Stock shall be issued upon conversion of the Series B Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall round down to the nearest whole number. 

 

(xiii) *Reservation of Stock Issuable Upon Conversion*.The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series B Preferred Stock, 

 

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One Million Seven Hundred Eighty-Five Thousand Seven Hundred Fourteen (1,785,714) shares of Common Stock, and if at any time the number of authorized butunissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary toincrease its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. 

 

(xiv) *Notices*. Any notice required by the provisions of this paragraph (f) to be given to the holders of shares of Series BPreferred Stock shall be deemed given (A) if deposited in the United States mail, postage prepaid, or (B) if given by any other reliable or generally accepted means (including by facsimile or by a nationally recognized overnight courier service), ineach case addressed to each holder of record at his address (or facsimile number) appearing on the books of the Corporation. 

 

(xv) *Payment of Taxes*. The Corporation will pay all transfer taxes and other governmental charges that may be imposed in respect ofthe issue or delivery of shares of Common Stock upon conversion of shares of Series B Preferred Stock. 

 

(xvi) *No Dilution or Impairment*. The Corporation shall not amend its Articles of Incorporation or participate in anyreorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, for the purpose of avoiding or seeking to avoid the observance or performance of any of the terms to be observed orperformed hereunder by the Corporation, without the approval of a majority of the then outstanding Series B Preferred Stock. 

 

(g) No Re-issuance of Preferred Stock. Any shares of Series B Preferred Stock acquired by the Corporation by reason of purchase, conversion orotherwise shall be canceled, retired and eliminated from the shares of Series B Preferred Stock that the Corporation shall be authorized to issue. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stockand may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth in the Articles of Incorporation or in any certificate of Determination creating a series of Preferred Stock or anysimilar stock or as otherwise required by law. 

 

(h)Severability. If any right, preference or limitation of the Series B Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule, law or public policy, all other rights, preferences andlimitations set forth herein that can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall nevertheless remain in full force and effect, and no right, preference or limitation herein shall be deemeddependent upon any other such right, preference or limitation unless so expressed herein. 

 

3. The number of authorized shares of Preferred Stock of the Corporation is 2,000,000 and the number of shares of Series B Stock, none of which has been issued, is 55,000. 

 

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Each of the undersigned declares under penalty of perjury that the matters set out in the foregoingCertificate are true of his own knowledge. Executed at City of Industry, California, on this 23th day of May, 2005.

 

/s/ John Pan

Name:
 
John Pan

Title:
 
President and Secretary

 

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**ANNEX A**

 

**NOTICE OF CONVERSION**

 

The undersigned hereby elects to convert shares of Series B Convertible Preferred Stock, no par value per share (the “Series A Preferred Stock”)of Global ePoint, Inc., a Nevada corporation (the “Company”) into shares of common stock, $0.03 par value per share (the “Common Stock”), of the Company according to the conditions hereof, as of later of the date of theCompany’s receipt of this Notice, together with the certificate representing the shares of Series B Preferred Stock to be converted, or such later date written below. If Common Stock is to be issued in the name of a person other than theundersigned, the undersigned will pay all transfer taxes payable with respect thereto and deliver such certificates and opinions as reasonably requested by the Company in accordance therewith. 

 

By the delivery of this Notice of Conversion, the undersigned represents andwarrants to the Company that its ownership of the Common Stock does not exceed the amounts determined in accordance with Section 13(d) of the Exchange Act, specified under Section (f)(i) of the Certificate of Designations for the Series B PreferredStock. 

 

The undersigned agrees to comply with the prospectusdelivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock. 

 

Conversion calculations: 

 

Date to Effect Conversion:                                                                                                                                                                                           

 

Number of shares of Preferred Stock to be Converted:                                                                                                                                       

 

Number of shares of Common Stock to be issued:                                                                                                                                               

 

Shares to be issued in the name of:                                                                                                                                                                            

 

Holder:                                                                                                                                                                                                            

 

Authorized Signature:                                                                                                                                                                                 

 

Name:                                                                                                                                                                                                              

 

Title:                                                                                                                                                                                                                

 

Address:                                                                                                                                                                                                          

 

                                                                                                                                                                                                                        

 

                                                                                                                                                                                                                        

 

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