**Exhibit 10.2**

 

**EXHIBIT D**

**to Subscription Agreement**

 

**REGISTRATION RIGHTS AGREEMENT**

 

**AGREEMENT** dated as of May 20, 2005, between M.A.G. Capital, LLC, Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP and Monarch Pointe Fund, Ltd. (collectively, the “Funds”) and M.A.G. Capital, LLC(“MAG”) (the Funds and MAG are referred to individually as a “Holder” and collectively as the “Holders”), and Global ePoint, Inc., a Nevada corporation (the “Company”). 

 

**WHEREAS**, the Funds have purchased, for an aggregate of $1,500,000, anaggregate of 15,000 shares of Series B Convertible Preferred Stock (the “Series B Stock”) from the Company, and have the right to cause their Series B Stock to be converted into shares of Common Stock, $.03 par value (the“Common Stock”), of the Company, pursuant to the conversion formula set forth in the Certificate of Determination; 

 

**WHEREAS**, each Fund and MAG have acquired Warrants (together, the “Warrants”) from the Company, pursuant to which the Holders havethe right to purchase in the aggregate up to 267,857 shares of the Common Stock through the exercise of the Warrants; 

 

**WHEREAS**, the Company desires to grant to the Holders the registration rights set forth herein with respect to the shares of Common Stock issuableupon the conversion of the Series B Stock and the exercise of the Warrants. 

 

**NOW, THEREFORE**, the parties hereto mutually agree as follows: 

 

1. **Registrable Securities**. As used herein the terms “Registrable Security” means each of the shares of Common Stock (i)issued upon the conversion of the Series B Stock (the “Conversion Shares”) or (ii) upon exercise of the Warrants (the “Warrant Shares”), provided, however, that with respect to any particular Registrable Security,such security shall cease to be a Registrable Security when, as of the date of determination that (a) it has been effectively registered under the Securities Act of 1933, as amended (the “Securities Act”), and disposed of pursuantthereto, or (b) registration under the Securities Act is no longer required for the immediate public distribution of such security. The term “Registrable Securities” means any and/or all of the securities falling within theforegoing definition of a “Registrable Security.” In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the Common Stock, such adjustment shall be made in thedefinition of “Registrable Security” as is appropriate in order to prevent any dilution or enlargement of the rights granted pursuant to this Section 1. 

 

2. **Registration.**

 

(a) The Company shall file a registration statement (the “Registration Statement”) with the Securities and ExchangeCommission (the “SEC”) within forty-five (45) days after the date of this Agreement in order to register the resale of the Registrable Securities under the Securities Act (the “Filing Due Date”); provided, however, in theevent that the Company enters into an agreement to acquire another business (“Target”) within the first two 

 

weeks following the date of this Agreement and is unable to obtain audited financial statements from the Target for inclusion in the Registration Statementon or before 40 days after the date of this Agreement, then the Filing Due Date shall be 75 days after the date of this Agreement. Once effective, the Company shall maintain the effectiveness of the Registration Statement until the earlier of (i)the date that all of the Registrable Securities have been sold, or (ii) the date that the Company receives an opinion of counsel to the Company that all of the Registrable Securities may be freely traded without registration under the SecuritiesAct, under Rule 144 promulgated under the Securities Act or otherwise. The Holders will cooperate with the Company and its counsel in connection with any such determination by providing current information, at the request of the Company, concerningthe Holders’ beneficial ownership of securities of the Company. 

 

(b) The Company will initially include in the Registration Statement as Registrable Securities Eight Hundred Three Thousand Five Hundred Seventy-One (803,571) shares of Common Stock. 

 

3. **Covenants of the Company with Respect to Registration.**

 

The Company covenants and agrees as follows:

 

(a) The Company shall use best efforts tocause the Registration Statement to become effective with the SEC as promptly as possible and in no event more than 90 days after filing the Registration Statement with the SEC (the “Effectiveness Due Date”); provided, however, in theevent that the Company is unable to obtain audited financial statements from a Target for inclusion in the Registration Statement on or before 40 days after the date of this Agreement, the Effective Due Date shall be 100 days after the RegistrationStatement is filed with the SEC. If any stop order shall be issued by the SEC in connection therewith, the Company shall use best efforts to obtain promptly the removal of such order. Following the effective date of the Registration Statement, theCompany shall supply one unbound of copy the definitive prospectus meeting the requirements of the Securities Act, and any supplements or amendments thereto, as shall be reasonably required by the Holder to permit the Holder to make a publicdistribution of the Holder’s Registrable Securities. The obligations of the Company hereunder with respect to the Holder’s Registrable Securities are subject to the Holder’s furnishing to the Company such appropriate informationconcerning the Holder, the Holder’s Registrable Securities and the terms of the Holder’s offering of such Registrable Securities as the Company may reasonably request in writing. 

 

(b) The Company shall pay all costs, fees and expenses inconnection with the Registration Statement filed pursuant to Section 2 hereof including, without limitation, the Company’s legal and accounting fees, printing expenses, and blue sky fees and expenses; provided, however, that each Holder shallbe solely responsible for the fees of any counsel retained by the Holder in connection with such registration and any transfer taxes or underwriting discounts, commissions or fees applicable to the Registrable Securities sold by the Holder pursuantthereto. 

 

(c) The Company will take allactions which may be required to qualify or register the Registrable Securities included in the Registration Statement for the offer and sale 

 

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under the securities or blue sky laws of such states as are reasonably requested by each Holder of such securities, provided that the Company shall not beobligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction. 

 

4. **Additional Terms.**

 

(a) The Company shall indemnify and hold harmless the Holders and each underwriter, within the meaning of the Securities Act, who maypurchase from or sell for any Holder, any Registrable Securities, from and against any and all losses, claims, damages and liabilities caused by any untrue statement of a material fact contained in the Registration Statement, any other registrationstatement filed by the Company under the Securities Act with respect to the registration of the Registrable Securities, any post-effective amendment to such registration statements, or any prospectus included therein or caused by any omission tostate therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission based uponinformation furnished or required to be furnished in writing to the Company by the Holders or underwriter expressly for use therein, which indemnification shall include each person, if any, who controls any Holder or underwriter within the meaningof the Securities Act and each officer, director, employee and agent of each Holder and underwriter; provided, however, that the indemnification in this Section 4(a) with respect to any prospectus shall not inure to the benefit of any Holder orunderwriter (or to the benefit of any person controlling any Holder or underwriter) on account of any such loss, claim, damage or liability arising from the sale of Registrable Securities by the Holder or underwriter, if a copy of a subsequentprospectus correcting the untrue statement or omission in such earlier prospectus was provided to such Holder or underwriter by the Company prior to the subject sale and the subsequent prospectus was not delivered or sent by the Holder orunderwriter to the purchaser prior to such sale and provided further, that the Company shall not be obligated to so indemnify any Holder or any such underwriter or other person referred to above unless the Holder or underwriter or other person, asthe case may be, shall at the same time indemnify the Company, its directors, each officer signing the Registration Statement and each person, if any, who controls the Company within the meaning of the Securities Act, from and against any and alllosses, claims, damages and liabilities caused by any untrue statement of a material fact contained in the Registration Statement, any registration statement or any prospectus required to be filed or furnished by reason of this Agreement or causedby any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission basedupon information furnished in writing to the Company by the Holder or underwriter expressly for use therein. 

 

(b) If for any reason the indemnification provided for in the preceding section is held by a court of competent jurisdiction to beunavailable to an indemnified party with respect to any loss, claim, damage, liability or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid orpayable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitableconsiderations. 

 

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(c) Neither the filing of a Registration Statement by the Company pursuant to thisAgreement nor the making of any request for prospectuses by the Holder shall impose upon any Holder any obligation to sell the Holder’s Registrable Securities. 

 

(d) Each Holder, upon receipt of notice from the Company that an event has occurred which requires aPost-Effective Amendment to the Registration Statement or a supplement to the prospectus included therein, shall promptly discontinue the sale of Registrable Securities until the Holder receives a copy of a supplemented or amended prospectus fromthe Company, which the Company shall provide as soon as practicable after such notice. 

 

(e) If the Company fails to keep the Registration Statement referred to above continuously effective during the requisite period, then theCompany shall, promptly upon the request of any Holder, use best efforts to update the Registration Statement or file a new registration statement covering the Registrable Securities remaining unsold, subject to the terms and provisions hereof.

 

(f) Each Holder agrees to provide the Companywith any information or undertakings reasonably requested by the Company in order for the Company to include any appropriate information concerning the Holder in the Registration Statement or in order to promote compliance by the Company or theHolder with the Securities Act. 

 

(g) EachHolder, on behalf of itself and its affiliates, hereby covenants and agrees not to, directly or indirectly, offer to “short sell”, contract to “short sell” or otherwise “short sell” any securities of the Company,including, without limitation, shares of Common Stock that will be received as a result of the conversion of the Series B Stock or the exercise of the Warrants. 

 

5. **Governing Law**. The Registrable Securities will be, if and when issued, delivered in California. This Agreement shall be deemed to havebeen made and delivered in the State of California and shall be governed as to validity, interpretation, construction, effect and in all other respects by the internal substantive laws of the State of California, without giving effect to the choiceof law rules thereof. 

 

6. **Amendment**. ThisAgreement may only be amended by a written instrument executed by the Company and the Holders. 

 

7. **Entire Agreement**. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of theparties, oral and written, with respect to the subject matter hereof. 

 

8. **Execution in Counterparts**. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. 

 

9. **Notices**. All communications hereunder shall be in writingand shall be hand delivered, mailed by first-class mail, couriered by next-day air courier or by facsimile at the addresses set forth below. 

 

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If to MAG or 

 
Robinson Reed, Inc.:  
M.A.G. Capital, LLC

Mercator Momentum Fund,LP

Mercator Momentum Fund III, LP

Monarch Pointe Fund,Ltd.

555 South Flower Street, Suite 4200

Los Angeles, CA90071

Attention: David Firestone

Facsimile No.: (213)533-8285
With a copy to:  
Sheppard Mullin Richter & Hampton LLP

333 SouthHope Street

48thFloor

Los Angeles, CA 90071-1448

Attention: David C.Ulich

Telephone No.: (213) 620-1780

Facsimile No.: (213)620-1398
If to the Company:  
Global ePoint, Inc.

339 South Cheryl Lane

City of Industry, CA 91789

Attention: Toresa Lou, Chief ExecutiveOfficer

Telephone No.: (909) 869-1688

Facsimile No.: (909)598-2936
With a copy to:  
Preston, Gates & Ellis LLP

1900 Main Street,Suite 600

Irvine, CA 92614-7319

Attention: Daniel K.Donahue

Telephone No.: (949) 253-0900

Facsimile No.: (949)253-0902

 

All such notices and communicationsshall be deemed to have been duly given: (i) when delivered by hand, if personally delivered; (ii) five business days after being deposited in the mail, postage prepaid, if mailed certified mail, return receipt requested; (iii) one business dayafter being timely delivered to a next-day air courier guaranteeing overnight delivery; (iv) the date of transmission if sent via facsimile to the facsimile number as set forth in this Section or the signature page hereof prior to 3:00 p.m. on abusiness day, or (v) the business day following the date of transmission if sent via facsimile at a facsimile number set forth in this Section or on the signature page hereof after 3:00 p.m. or on a date that is not a business day. Change of aparty’s address or facsimile number may be designated hereunder by giving notice to all of the other parties hereto in accordance with this Section. 

 

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10. **Binding Effect; Benefits**. Any Holder may assign its rights hereunder. This Agreementshall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and assigns. Nothing herein contained, express or implied, is intended to confer upon any person other than theparties hereto and their respective heirs, legal representatives and successors, any rights or remedies under or by reason of this Agreement. 

 

11. **Headings**. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affectthe meaning or interpretation of any of the terms or provisions of this Agreement. 

 

12. **Severability**. Any provision of this Agreement which is held by a court of competent jurisdiction to be prohibited or unenforceable in any jurisdiction(s) shall be, as to such jurisdiction(s),ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 

 

13. **Jurisdiction**. Each of the parties irrevocably agrees thatany and all suits or proceedings based on or arising under this Agreement may be brought only in and shall be resolved in the federal or state courts located in the City of Los Angeles, California and consents to the jurisdiction of such courts forsuch purpose. Each of the parties irrevocably waives the defense of an inconvenient forum to the maintenance of such suit or proceeding in any such court. Nothing herein shall affect the right of either party to serve process in any other mannerpermitted by law. Each of the parties agrees that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner. 

 

14. **Attorneys’ Fees and Disbursements**. If any action atlaw or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party or parties shall be entitled to receive from the other party or parties reasonable attorneys’ fees and disbursements in addition to anyother relief to which the prevailing party or parties may be entitled. 

 

**IN WITNESS WHEREOF**, this Agreement has been executed and delivered by the parties hereto as of the date first above written. 

 
**Global ePoint, Inc.**
By:
 
/s/ Toreas Lou

Name:
 
Toresa Lou

Its:
 
Chief Executive Officer

 

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**M.A.G. CAPITAL, LLC**
By:
 
/s/ David Firestone

Name:
 
David Firestone

Its:
 
Managing Member
**MERCATOR MOMENTUM FUND, LP**
By:
 
/s/ David Firestone

Name:
 
David Firestone

Its:
 
Managing Member
**MERCATOR MOMENTUM FUND III, LP**
By:
 
/s/ David Firestone

Name:
 
David Firestone

Its:
 
Managing Member
**MONARCH POINTE FUND, LTD.**
By:
 
/s/ David Firestone

Name:
 
David Firestone

Its:
 
Managing Member

 

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