Document:

Unassociated Document

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
      UNDER
      THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS
      IS NOT REQUIRED.

    

    WARRANT
      TO PURCHASE

    

    SHARES
      OF
      COMMON STOCK

    

    OF

    

    GLOWPOINT,
      INC.

    

    

    Expires
      September 20, 2012

    

    
      	
              No.:
                W-PA-07- __

            	
              Number
                of Shares: ___________

            

    

    Date
      of
      Issuance: September 21, 2007

    

    

    FOR
      VALUE
      RECEIVED, the undersigned, Glowpoint, Inc., a Delaware corporation (together
      with its successors and assigns, the "Issuer"),
      hereby certifies that _______________________________ or its registered assigns
      is entitled to subscribe for and purchase, during the Term (as hereinafter
      defined), up to ____________________________________ (_____________) shares
      (subject to adjustment as hereinafter provided) of the duly authorized, validly
      issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise
      price per share equal to the Warrant Price then in effect, subject, however,
      to
      the provisions and upon the terms and conditions hereinafter set forth.
      Capitalized terms used in this Warrant and not otherwise defined herein shall
      have the respective meanings specified in Section 8 hereof.

    

    1. Term.
      The
      term of this Warrant shall commence on September 21, 2007 and shall expire
      at
      5:00 p.m., Eastern Time, on September 20, 2012 (such period being the
      "Term").

    

    
      
        2.
          Method
          of Exercise; Payment; Issuance of New Warrant; Transfer and
          Exchange.

      

    

    

    (a) Time
      of Exercise.
      The
      purchase rights represented by this Warrant may be exercised in whole or in
      part
      during the Term. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) Method
      of Exercise.
      The
      Holder hereof may exercise this Warrant, in whole or in part, by the surrender
      of this Warrant (with the exercise form attached hereto duly executed) at the
      principal office of the Issuer, and by the payment to the Issuer of an amount
      of
      consideration therefor equal to the Warrant Price in effect on the date of
      such
      exercise multiplied by the number of shares of Warrant Stock with respect to
      which this Warrant is then being exercised, payable at such Holder's election
      (i) by certified or official bank check or by
      wire
      transfer to an account designated by the Issuer,
      (ii) by
      "cashless exercise" in accordance with the provisions of Section 2(c), or (iii)
      by a combination of the foregoing methods of payment selected by the Holder
      of
      this Warrant.

    

    (c) Cashless
      Exercise.
      Notwithstanding any provisions herein to the contrary if the Per Share Market
      Value of one share of Common Stock is greater than the Warrant Price (at the
      date of calculation as set forth below), in lieu of exercising this Warrant
      by
      payment of cash, the Holder may exercise this Warrant by a cashless exercise
      and
      shall receive the number of shares of Common Stock equal to an amount (as
      determined below) by surrender of this Warrant at the principal office of the
      Issuer together with the properly endorsed Notice of Exercise in which event
      the
      Issuer shall issue to the Holder a number of shares of Common Stock computed
      using the following formula:

    

    X
      = Y -
(A)(Y)

                     B

    

    
      	
              Where

            	
              X
                =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder.

            

    

    

    
      	 	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable upon exercise of all
                of the
                Warrant or, if only a portion of the Warrant is being exercised,
                the
                portion of the Warrant being exercised.

            

    

    

    
      	 	
              A
                =

            	
              the
                Warrant Price. 

            

    

    

    
      	 	
              B
                =

            	
              the
                Per Share Market Value of one share of Common
                Stock.

            

    

    

    (d) Issuance
      of Stock Certificates.
      In the
      event of any exercise of this Warrant in accordance with and subject to the
      terms and conditions hereof, (i) certificates for the shares of Warrant Stock
      so
      purchased shall be dated the date of such exercise and delivered to the Holder
      hereof within a reasonable time, not exceeding three (3) Trading Days after
      the
      exercise notice is delivered to the Issuer (the “Delivery
      Date”)
      or, at
      the request of the Holder (provided that a registration statement under the
      Securities Act providing for the resale of the Warrant Stock is then in effect),
      issued and delivered to the Depository Trust Company (“DTC”)
      account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“DWAC”)
      within
      a reasonable time, not exceeding three (3) Trading Days after such exercise,
      and
      the Holder hereof shall be deemed for all purposes to be the holder of the
      shares of Warrant Stock so purchased as of the date of such exercise and (ii)
      unless this Warrant has expired, a new Warrant representing the number of shares
      of Warrant Stock, if any, with respect to which this Warrant shall not then
      have
      been exercised (less any amount thereof which shall have been canceled in
      payment or partial payment of the Warrant Price as hereinabove provided) shall
      also be issued to the Holder hereof at the Issuer's expense within such
      time.

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    (e) Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Issuer fails to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Stock pursuant to an exercise on or before the Delivery
      Date, and if after such date the Holder is required by its broker to purchase
      (in an open market transaction or otherwise) shares of Common Stock to deliver
      in satisfaction of a sale by the Holder of the Warrant Stock which the Holder
      anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Issuer shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of shares of Warrant Stock that the Issuer was
      required to deliver to the Holder in connection with the exercise at issue
      times
      (B) the price at which the sell order giving rise to such purchase obligation
      was executed, and (2) at the option of the Holder, either reinstate the portion
      of the Warrant and equivalent number of shares of Warrant Stock for which such
      exercise was not honored or deliver to the Holder the number of shares of Common
      Stock that would have been issued had the Issuer timely complied with its
      exercise and delivery obligations hereunder. For example, if the Holder
      purchases Common Stock having a total purchase price of $11,000 to cover a
      Buy-In with respect to an attempted exercise of shares of Common Stock with
      an
      aggregate sale price giving rise to such purchase obligation of $10,000, under
      clause (1) of the immediately preceding sentence the Issuer shall be required
      to
      pay the Holder $1,000. The Holder shall provide the Issuer written notice
      indicating the amounts payable to the Holder in respect of the Buy-In, together
      with applicable confirmations and other evidence reasonably requested by the
      Issuer. Nothing herein shall limit a Holder’s right to pursue any other remedies
      available to it hereunder, at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief with respect to the
      Issuer’s failure to timely deliver certificates representing shares of Common
      Stock upon exercise of this Warrant as required pursuant to the terms
      hereof.

     

    (f) Transferability
      of Warrant.
      Subject
      to Section 2(h) hereof, this Warrant may be transferred by a Holder without
      the
      consent of the Issuer. If transferred pursuant to this paragraph, this Warrant
      may be transferred on the books of the Issuer by the Holder hereof in person
      or
      by duly authorized attorney, upon surrender of this Warrant at the principal
      office of the Issuer, properly endorsed (by the Holder executing an assignment
      in the form attached hereto) and upon payment of any necessary transfer tax
      or
      other governmental charge imposed upon such transfer. This Warrant is
      exchangeable at the principal office of the Issuer for Warrants to purchase
      the
      same aggregate number of shares of Warrant Stock, each new Warrant to represent
      the right to purchase such number of shares of Warrant Stock as the Holder
      hereof shall designate at the time of such exchange. All Warrants issued on
      transfers or exchanges shall be dated the Original Issue Date and shall be
      identical with this Warrant except as to the number of shares of Warrant Stock
      issuable pursuant thereto.

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    (g) Continuing
      Rights of Holder.
      The
      Issuer will, at the time of or at any time after each exercise of this Warrant,
      upon the request of the Holder hereof, acknowledge in writing the extent, if
      any, of its continuing obligation to afford to such Holder all rights to which
      such Holder shall continue to be entitled after such exercise in accordance
      with
      the terms of this Warrant, provided
      that if
      any such Holder shall fail to make any such request, the failure shall not
      affect the continuing obligation of the Issuer to afford such rights to such
      Holder.

    

    (h) Compliance
      with Securities Laws.

    

    (i) The
      Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
      and
      the shares of Warrant Stock to be issued upon exercise hereof are being acquired
      solely for the Holder's own account and not as a nominee for any other party,
      and for investment, and that the Holder will not offer, sell or otherwise
      dispose of this Warrant or any shares of Warrant Stock to be issued upon
      exercise hereof except pursuant to an effective registration statement, or
      an
      exemption from registration, under the Securities Act and any applicable state
      securities laws.

    

    (ii) Except
      as
      provided in paragraph (iii) below, this Warrant and all certificates
      representing shares of Warrant Stock issued upon exercise hereof shall be
      stamped or imprinted with a legend in substantially the following
      form:

    

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
      UNDER
      THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS
      IS NOT REQUIRED.

    

    (iii) The
      Issuer agrees to reissue this Warrant or certificates representing any of the
      Warrant Stock, without the legend set forth above if at such time, prior to
      making any transfer of any such securities, the Holder shall give written notice
      to the Issuer describing the manner and terms of such transfer. Such proposed
      transfer will not be effected until: (a) either (i) the Issuer has received
      an
      opinion of counsel reasonably satisfactory to the Issuer, to the effect that
      the
      registration of such securities under the Securities Act is not required in
      connection with such proposed transfer, (ii) a registration statement under
      the
      Securities Act covering such proposed disposition has been filed by the Issuer
      with the Securities and Exchange Commission and has become effective under
      the
      Securities Act, (iii) the Issuer has received other evidence reasonably
      satisfactory to the Issuer that such registration and qualification under the
      Securities Act and state securities laws are not required, or (iv) the Holder
      provides the Issuer with reasonable assurances that such security can be sold
      pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issuer
      has
      received an opinion of counsel reasonably satisfactory to the Issuer, to the
      effect that registration or qualification under the securities or "blue sky"
      laws of any state is not required in connection with such proposed disposition,
      or (ii) compliance with applicable state securities or "blue sky" laws has
      been
      effected or a valid exemption exists with respect thereto. The Issuer will
      respond to any such notice from a holder within three (3) business days. In
      the
      case of any proposed transfer under this Section 2(h), the Issuer will use
      reasonable efforts to comply with any such applicable state securities or "blue
      sky" laws, but shall in no event be required, (x) to qualify to do business
      in
      any state where it is not then qualified, (y) to take any action that would
      subject it to tax or to the general service of process in any state where it
      is
      not then subject, or (z) to comply with state securities or “blue sky” laws of
      any state for which registration by coordination is unavailable to the Issuer.
      The restrictions on transfer contained in this Section 2(h) shall be in addition
      to, and not by way of limitation of, any other restrictions on transfer
      contained in any other section of this Warrant. Whenever
      a
      certificate representing the Warrant Stock is required to be issued to a Holder
      without a legend, in lieu of delivering physical certificates representing
      the
      Warrant Stock, provided the Issuer’s transfer agent is participating in the DTC
      Fast Automated Securities Transfer program, the Issuer shall use its reasonable
      best efforts to cause its transfer agent to electronically transmit the Warrant
      Stock to the Holder by crediting the account of the Holder's Prime Broker with
      DTC through its DWAC system (to the extent not inconsistent with any provisions
      of this Warrant or the Purchase Agreement). 

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    (i) Accredited
      Investor Status.
      In no
      event may the Holder exercise this Warrant in whole or in part unless the Holder
      is an “accredited investor” as defined in Regulation D under the Securities Act.

    

    3. Stock
      Fully Paid; Reservation and Listing of Shares; Covenants.

    

    (a) Stock
      Fully Paid.
      The
      Issuer represents, warrants, covenants and agrees that all shares of Warrant
      Stock which may be issued upon the exercise of this Warrant or otherwise
      hereunder will, when issued in accordance with the terms of this Warrant, be
      duly authorized, validly issued, fully paid and nonassessable and free from
      all
      taxes, liens and charges created by or through the Issuer. The Issuer further
      covenants and agrees that during the period within which this Warrant may be
      exercised, the Issuer will at all times have authorized and reserved for the
      purpose of issuance upon exercise of this Warrant a number of shares of Common
      Stock equal to at least one hundred twenty percent (120%) of the aggregate
      number of shares of Common Stock to provide for the exercise of this
      Warrant.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    (b) Reservation.
      If any
      shares of Common Stock required to be reserved for issuance upon exercise of
      this Warrant or as otherwise provided hereunder require registration or
      qualification with any governmental authority under any federal or state law
      before such shares may be so issued, the Issuer will in good faith use its
      best
      efforts as expeditiously as possible at its expense to cause such shares to
      be
      duly registered or qualified. If the Issuer shall list any shares of Common
      Stock on any securities exchange or market it will, at its expense, list
      thereon, maintain and increase when necessary such listing, of, all shares
      of
      Warrant Stock from time to time issued upon exercise of this Warrant or as
      otherwise provided hereunder (provided that such Warrant Stock has been
      registered pursuant to a registration statement under the Securities Act then
      in
      effect), and, to the extent permissible under the applicable securities exchange
      rules, all unissued shares of Warrant Stock which are at any time issuable
      hereunder, so long as any shares of Common Stock shall be so listed. The Issuer
      will also so list on each securities exchange or market, and will maintain
      such
      listing of, any other securities which the Holder of this Warrant shall be
      entitled to receive upon the exercise of this Warrant if at the time any
      securities of the same class shall be listed on such securities exchange or
      market by the Issuer.

    (c) Covenants.
      The
      Issuer shall not by any action including, without limitation, amending the
      Certificate of Incorporation or the by-laws of the Issuer, or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other action, avoid or seek to avoid the observance
      or
      performance of any of the terms of this Warrant, but will at all times in good
      faith assist in the carrying out of all such terms and in the taking of all
      such
      actions as may be necessary or appropriate to protect the rights of the Holder
      hereof against dilution (to the extent specifically provided herein) or
      impairment. Without limiting the generality of the foregoing, the Issuer will
      (i) not permit the par value, if any, of its Common Stock to exceed the then
      effective Warrant Price, (ii) not amend or modify any provision of the
      Certificate of Incorporation or by-laws of the Issuer in any manner that would
      adversely affect the rights of the Holders of the Warrants, (iii) take all
      such
      action as may be reasonably necessary in order that the Issuer may validly
      and
      legally issue fully paid and nonassessable shares of Common Stock, free and
      clear of any liens, claims, encumbrances and restrictions (other than as
      provided herein) upon the exercise of this Warrant, and (iv) use its best
      efforts to obtain all such authorizations, exemptions or consents from any
      public regulatory body having jurisdiction thereof as may be reasonably
      necessary to enable the Issuer to perform its obligations under this
      Warrant.

    

    (d) Loss,
      Theft, Destruction of Warrants.
      Upon
      receipt of evidence satisfactory to the Issuer of the ownership of and the
      loss,
      theft, destruction or mutilation of any Warrant and, in the case of any such
      loss, theft or destruction, upon receipt of indemnity or security satisfactory
      to the Issuer or, in the case of any such mutilation, upon surrender and
      cancellation of such Warrant, the Issuer will make and deliver, in lieu of
      such
      lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
      representing the right to purchase the same number of shares of Common
      Stock.

    

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    4. Adjustment
      of Warrant Price.
      The
      price at which such shares of Warrant Stock may be purchased upon exercise
      of
      this Warrant shall be subject to adjustment from time to time as set forth
      in
      this Section 4. The Issuer shall give the Holder notice of any event described
      below which requires an adjustment pursuant to this Section 4 in accordance
      with
      the notice provisions set forth in Section 5.

    (a) Recapitalization,
      Reorganization, Reclassification, Consolidation, Merger or Sale.

     

    (i)
      In
      case the Issuer after the Original Issue Date shall do any of the following
      (each, a "Triggering
      Event"):
      (a)
      consolidate or merge with or into any other Person and the Issuer shall not
      be
      the continuing or surviving corporation of such consolidation or merger, or
      (b)
      permit any other Person to consolidate with or merge into the Issuer and the
      Issuer shall be the continuing or surviving Person but, in connection with
      such
      consolidation or merger, any Capital Stock of the Issuer shall be changed into
      or exchanged for Securities of any other Person or cash or any other property,
      or (c) transfer all or substantially all of its properties or assets to any
      other Person, or (d) effect a capital reorganization or reclassification of
      its
      Capital Stock, then, and in the case of each such Triggering Event, proper
      provision shall be made so that, upon the basis and the terms and in the manner
      provided in this Warrant, the Holder of this Warrant shall be entitled upon
      the
      exercise hereof at any time after the consummation of such Triggering Event,
      to
      the extent this Warrant is not exercised prior to such Triggering Event, to
      receive at the Warrant Price in effect at the time immediately prior to the
      consummation of such Triggering Event in lieu of the Common Stock issuable
      upon
      such exercise of this Warrant prior to such Triggering Event, the Securities,
      cash and property to which such Holder would have been entitled upon the
      consummation of such Triggering Event if such Holder had exercised the rights
      represented by this Warrant immediately prior thereto (including the right
      of a
      shareholder to elect the type of consideration it will receive upon a Triggering
      Event), subject to adjustments (subsequent to such corporate action) as nearly
      equivalent as possible to the adjustments provided for elsewhere in this Section
      4; provided,
      however,
      in the
      event that the Per Share Market Value is less than the Warrant Price at the
      time
      of such Triggering Event, the Holder shall receive an amount in cash equal
      to
      the value of this Warrant calculated in accordance with the Black-Scholes
      formula. Notwithstanding the foregoing to the contrary, this Section 4(a)(i)
      shall only apply if the surviving entity pursuant to any such Triggering Event
      is a company that has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board. In the event that the
      surviving entity pursuant to any such Triggering Event is not a public company
      that is
      registered pursuant to the Securities Exchange Act of 1934, as amended, or
      its
      common stock is not listed or quoted on a national securities exchange, national
      automated quotation system or the OTC Bulletin Board, then the Holder shall
      have
      the right to demand that the Issuer pay to the Holder an amount in cash equal
      to
      the value of this Warrant calculated in accordance with the Black-Scholes
      formula.

    

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    (ii) Notwithstanding
      anything contained in this Warrant to the contrary and so long as the surviving
      entity pursuant to any Triggering Event is a company that has a class of equity
      securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board,
      a
      Triggering Event shall not be deemed to have occurred if, prior to the
      consummation thereof, each Person (other than the Issuer) which may be required
      to deliver any Securities, cash or property upon the exercise of this Warrant
      as
      provided herein shall assume, by written instrument delivered to, and reasonably
      satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
      under this Warrant (and if the Issuer shall survive the consummation of such
      Triggering Event, such assumption shall be in addition to, and shall not release
      the Issuer from, any continuing obligations of the Issuer under this Warrant)
      and (B) the obligation to deliver to such Holder such Securities, cash or
      property as, in accordance with the foregoing provisions of this subsection
      (a),
      such Holder shall be entitled to receive, and such Person shall have similarly
      delivered to such Holder an opinion of counsel for such Person, which counsel
      shall be reasonably satisfactory to such Holder, or in the alternative, a
      written acknowledgement executed by the President or Chief Financial Officer
      of
      the Issuer, stating that this Warrant shall thereafter continue in full force
      and effect and the terms hereof (including, without limitation, all of the
      provisions of this subsection (a)) shall be applicable to the Securities, cash
      or property which such Person may be required to deliver upon any exercise
      of
      this Warrant or the exercise of any rights pursuant hereto. 

    (b) Stock
      Dividends, Subdivisions and Combinations.
      If at
      any time the Issuer shall:

    

       (i) make
      or
      issue or set a record date for the holders of the Common Stock for the purpose
      of entitling them to receive a dividend payable in, or other distribution of,
      shares of Common Stock, 

    

       (ii)
       subdivide
      its outstanding shares of Common Stock into a larger number of shares of Common
      Stock, or

    

       (iii)
       combine
      its outstanding shares of Common Stock into a smaller number of shares of Common
      Stock,

    

    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      immediately after the occurrence of any such event shall be adjusted to equal
      the number of shares of Common Stock which a record holder of the same number
      of
      shares of Common Stock for which this Warrant is exercisable immediately prior
      to the occurrence of such event would own or be entitled to receive after the
      happening of such event, and (2) the Warrant Price then in effect shall be
      adjusted to equal (A) the Warrant Price then in effect multiplied by the number
      of shares of Common Stock for which this Warrant is exercisable immediately
      prior to the adjustment divided by (B) the number of shares of Common Stock
      for
      which this Warrant is exercisable immediately after such
      adjustment.

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    (c) Certain
      Other Distributions.
      If at
      any time the Issuer shall make or issue or set a record date for the holders
      of
      the Common Stock for the purpose of entitling them to receive any dividend
      or
      other distribution of:

    (i) cash,

    

    (ii) any
      evidences of its indebtedness, any shares of stock of any class or any other
      securities or property of any nature whatsoever (other than cash, Common Stock
      Equivalents or Additional Shares of Common Stock), or

    

    (iii) any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of stock of any class or any other securities or
      property of any nature whatsoever (other than cash, Common Stock Equivalents
      or
      Additional Shares of Common Stock), 

    

    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      shall
      be adjusted to equal the product of the number of shares of Common Stock for
      which this Warrant is exercisable immediately prior to such adjustment
      multiplied by a fraction (A) the numerator of which shall be the Per Share
      Market Value of Common Stock at the date of taking such record and (B) the
      denominator of which shall be such Per Share Market Value minus the amount
      allocable to one share of Common Stock of any such cash so distributable and
      of
      the fair value (as determined in good faith by the Board of Directors of the
      Issuer) of any and all such evidences of indebtedness, shares of stock, other
      securities or property or warrants or other subscription or purchase rights
      so
      distributable, and (2) the Warrant Price then in effect shall be adjusted to
      equal (A) the Warrant Price then in effect multiplied by the number of shares
      of
      Common Stock for which this Warrant is exercisable immediately prior to the
      adjustment divided by (B) the number of shares of Common Stock for which this
      Warrant is exercisable immediately after such adjustment. A reclassification
      of
      the Common Stock (other than a change in par value, or from par value to no
      par
      value or from no par value to par value) into shares of Common Stock and shares
      of any other class of stock shall be deemed a distribution by the Issuer to
      the
      holders of its Common Stock of such shares of such other class of stock within
      the meaning of this Section 4(c) and, if the outstanding shares of Common Stock
      shall be changed into a larger or smaller number of shares of Common Stock
      as a
      part of such reclassification, such change shall be deemed a subdivision or
      combination, as the case may be, of the outstanding shares of Common Stock
      within the meaning of Section 4(b). 

    

    (d) Issuance
      of Additional Shares of Common Stock.
      

    

    (i) In
      the
      event the Issuer shall at any time following the Original Issue Date issue
      any
      Additional Shares of Common Stock (otherwise than as provided in the foregoing
      subsections (a) through (c) of this Section 4), at a price per share less than
      the Warrant Price then in effect or without consideration, then the Warrant
      Price upon each such issuance shall be adjusted to that price determined by
      multiplying the Warrant Price then in effect by a fraction:

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    (A) the
      numerator of which shall be equal to the sum of (x) the number of shares of
      Outstanding Common Stock immediately prior to the issuance of such Additional
      Shares of Common Stock plus
      (y) the
      number of shares of Common Stock (rounded to the nearest whole share) which
      the
      aggregate consideration for the total number of such Additional Shares of Common
      Stock so issued would purchase at a price per share equal to the Warrant Price
      then in effect, and

     

    (B) the
      denominator of which shall be equal to the number of shares of Outstanding
      Common Stock immediately after the issuance of such Additional Shares of Common
      Stock.

    

    (ii) No
      adjustment of the number of shares of Common Stock for which this Warrant shall
      be exercisable shall be made under paragraph (i) of Section 4(d) upon the
      issuance of any Additional Shares of Common Stock which are issued pursuant
      to
      the exercise of any Common Stock Equivalents, if any such adjustment shall
      previously have been made upon the issuance of such Common Stock Equivalents
      (or
      upon the issuance of any warrant or other rights therefor) pursuant to Section
      4(e).

    

    (e)  Issuance
      of Common Stock Equivalents.
      If at
      any time the Issuer shall issue or sell any Common Stock Equivalents, whether
      or
      not the rights to exchange or convert thereunder are immediately exercisable,
      and the aggregate price per share for which Common Stock is issuable upon such
      conversion or exchange plus the consideration received by the Issuer for
      issuance of such Common Stock Equivalent divided by the number of shares of
      Common Stock issuable pursuant to such Common Stock Equivalent (the
“Aggregate
      Per Common Share Price”)
      shall
      be less than the Warrant Price then in effect, or if, after any such issuance
      of
      Common Stock Equivalents, the price per share for which Additional Shares of
      Common Stock may be issuable thereafter is amended or adjusted, and such price
      as so amended shall make the Aggregate Per Common Share Price be less than
      the
      Warrant Price in effect at the time of such amendment or adjustment, then the
      Warrant Price upon each such issuance or amendment shall be adjusted as provided
      in Section 4(d). No further adjustment of the Warrant Price then in effect
      shall
      be made under this Section 4(e) upon the issuance of any Common Stock
      Equivalents which are issued pursuant to the exercise of any warrants or other
      subscription or purchase rights therefor, if any such adjustment shall
      previously have been made upon the issuance of such warrants or other rights
      pursuant to this Section 4(e). No further adjustments of the Warrant Price
      then
      in effect shall be made upon the actual issue of such Common Stock upon
      conversion or exchange of such Common Stock Equivalents.

    

    (f) Superseding
      Adjustment.
      If, at
      any time after any adjustment of the number of shares of Common Stock for which
      this Warrant is exercisable and the Warrant Price then in effect shall have
      been
      made pursuant to Section 4(e) as the result of any issuance of Common Stock
      Equivalents, and (i) such Common Stock Equivalents, or the right of conversion
      or exchange in such Common Stock Equivalents, shall expire, and all or a portion
      of such or the right of conversion or exchange with respect to all or a portion
      of such Common Stock Equivalents, as the case may be, shall not have been
      exercised, or (ii) the consideration per share for which shares of Common Stock
      are issuable pursuant to such Common Stock Equivalents shall be increased,
      then
      such previous adjustment shall be rescinded and annulled and the Additional
      Shares of Common Stock which were deemed to have been issued by virtue of the
      computation made in connection with the adjustment so rescinded and annulled
      shall no longer be deemed to have been issued by virtue of such computation.
      Upon the occurrence of an event set forth in this Section 4(f), there shall
      be a
      recomputation made of the effect of such Common Stock Equivalents on the basis
      of: (i) treating the number of Additional Shares of Common Stock theretofore
      actually issued or issuable pursuant to the previous exercise of Common Stock
      Equivalents or any such right of conversion or exchange, as having been issued
      on the date or dates of any such exercise and for the consideration actually
      received and receivable therefor, and (ii) treating any such Common Stock
      Equivalents which then remain outstanding as having been granted or issued
      immediately after the time of such increase of the consideration per share
      for
      which Additional Shares of Common Stock are issuable under such Common Stock
      Equivalents; whereupon a new adjustment of the number of shares of Common Stock
      for which this Warrant is exercisable and the Warrant Price then in effect
      shall
      be made, which new adjustment shall supersede the previous adjustment so
      rescinded and annulled.

    

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    (h) Other
      Provisions applicable to Adjustments under this Section.
      The
      following provisions shall be applicable to the making of adjustments of the
      number of shares of Common Stock for which this Warrant is exercisable and
      the
      Warrant Price then in effect provided for in this Section 4:

    

    (i) Computation
      of Consideration.
      To the
      extent that any Additional Shares of Common Stock or any Common Stock
      Equivalents (or any warrants or other rights therefor) shall be issued for
      cash
      consideration, the consideration received by the Issuer therefor shall be the
      amount of the cash received by the Issuer therefor, or, if such Additional
      Shares of Common Stock or Common Stock Equivalents are offered by the Issuer
      for
      subscription, the subscription price, or, if such Additional Shares of Common
      Stock or Common Stock Equivalents are sold to underwriters or dealers for public
      offering without a subscription offering, the initial public offering price
      (in
      any such case subtracting any amounts paid or receivable for accrued interest
      or
      accrued dividends and without taking into account any compensation, discounts
      or
      expenses paid or incurred by the Issuer for and in the underwriting of, or
      otherwise in connection with, the issuance thereof). In connection with any
      merger or consolidation in which the Issuer is the surviving corporation (other
      than any consolidation or merger in which the previously outstanding shares
      of
      Common Stock of the Issuer shall be changed to or exchanged for the stock or
      other securities of another corporation), the amount of consideration therefore
      shall be, deemed to be the fair value, as determined reasonably and in good
      faith by the Board, of such portion of the assets and business of the
      nonsurviving corporation as the Board may determine to be attributable to such
      shares of Common Stock or Common Stock Equivalents, as the case may be. The
      consideration for any Additional Shares of Common Stock issuable pursuant to
      any
      warrants or other rights to subscribe for or purchase the same shall be the
      consideration received by the Issuer for issuing such warrants or other rights
      plus the additional consideration payable to the Issuer upon exercise of such
      warrants or other rights. The consideration for any Additional Shares of Common
      Stock issuable pursuant to the terms of any Common Stock Equivalents shall
      be
      the consideration received by the Issuer for issuing warrants or other rights
      to
      subscribe for or purchase such Common Stock Equivalents, plus the consideration
      paid or payable to the Issuer in respect of the subscription for or purchase
      of
      such Common Stock Equivalents, plus the additional consideration, if any,
      payable to the Issuer upon the exercise of the right of conversion or exchange
      in such Common Stock Equivalents. In the event of any consolidation or merger
      of
      the Issuer in which the Issuer is not the surviving corporation or in which
      the
      previously outstanding shares of Common Stock of the Issuer shall be changed
      into or exchanged for the stock or other securities of another corporation,
      or
      in the event of any sale of all or substantially all of the assets of the Issuer
      for stock or other securities of any corporation, the Issuer shall be deemed
      to
      have issued a number of shares of its Common Stock for stock or securities
      or
      other property of the other corporation computed on the basis of the actual
      exchange ratio on which the transaction was predicated, and for a consideration
      equal to the fair market value on the date of such transaction of all such
      stock
      or securities or other property of the other corporation. In the event any
      consideration received by the Issuer for any securities consists of property
      other than cash, the fair market value thereof at the time of issuance or as
      otherwise applicable shall be as determined in good faith by the Board. In
      the
      event Common Stock is issued with other shares or securities or other assets
      of
      the Issuer for consideration which covers both, the consideration computed
      as
      provided in this Section 4(h)(i) shall be allocated among such securities and
      assets as determined in good faith by the Board.

    

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    (ii) When
      Adjustments to Be Made.
      The
      adjustments required by this Section 4 shall be made whenever and as often
      as
      any specified event requiring an adjustment shall occur, except that any
      adjustment of the number of shares of Common Stock for which this Warrant is
      exercisable that would otherwise be required may be postponed (except in the
      case of a subdivision or combination of shares of the Common Stock, as provided
      for in Section 4(b)) up to, but not beyond the date of exercise if such
      adjustment either by itself or with other adjustments not previously made adds
      or subtracts less than one percent (1%) of the shares of Common Stock for which
      this Warrant is exercisable immediately prior to the making of such adjustment.
      Any adjustment representing a change of less than such minimum amount (except
      as
      aforesaid) which is postponed shall be carried forward and made as soon as
      such
      adjustment, together with other adjustments required by this Section 4 and
      not
      previously made, would result in a minimum adjustment or on the date of
      exercise. For the purpose of any adjustment, any specified event shall be deemed
      to have occurred at the close of business on the date of its
      occurrence.

    

    (iii) Fractional
      Interests.
      In
      computing adjustments under this Section 4, fractional interests in Common
      Stock
      shall be taken into account to the nearest one one-hundredth (1/100th)
      of a
      share.

    

    (iv) When
      Adjustment Not Required.
      If the
      Issuer shall take a record of the holders of its Common Stock for the purpose
      of
      entitling them to receive a dividend or distribution or subscription or purchase
      rights and shall, thereafter and before the distribution to stockholders
      thereof, legally abandon its plan to pay or deliver such dividend, distribution,
      subscription or purchase rights, then thereafter no adjustment shall be required
      by reason of the taking of such record and any such adjustment previously made
      in respect thereof shall be rescinded and annulled.

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    (i) Form
      of Warrant after Adjustments.
      The
      form of this Warrant need not be changed because of any adjustments in the
      Warrant Price or the number and kind of Securities purchasable upon the exercise
      of this Warrant.

    

    (j) Escrow
      of Warrant Stock.
      If
      after any property becomes distributable pursuant to this Section 4 by reason
      of
      the taking of any record of the holders of Common Stock, but prior to the
      occurrence of the event for which such record is taken, and the Holder exercises
      this Warrant, any shares of Common Stock issuable upon exercise by reason of
      such adjustment shall be deemed the last shares of Common Stock for which this
      Warrant is exercised (notwithstanding any other provision to the contrary
      herein) and such shares or other property shall be held in escrow for the Holder
      by the Issuer to be issued to the Holder upon and to the extent that the event
      actually takes place, upon payment of the current Warrant Price. Notwithstanding
      any other provision to the contrary herein, if the event for which such record
      was taken fails to occur or is rescinded, then such escrowed shares shall be
      cancelled by the Issuer and escrowed property returned.

    

    5. Notice
      of Adjustments; Dispute Resolution.
      Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant
      to
      Section 4 hereof (for purposes of this Section 5, each an "adjustment"),
      the
      Issuer shall cause its Chief Financial Officer to prepare and execute a
      certificate setting forth, in reasonable detail, the event requiring the
      adjustment, the amount of the adjustment, the method by which such adjustment
      was calculated (including a description of the basis on which the Board made
      any
      determination hereunder), and the Warrant Price and Warrant Share Number after
      giving effect to such adjustment, and shall cause copies of such certificate
      to
      be delivered to the Holder of this Warrant promptly after each adjustment.
      Notwithstanding any dispute between the Issuer and the Holder of this Warrant
      with respect to the matters set forth in such certificate, the Issuer shall
      cause its transfer agent to promptly issue to the Holder the number of shares
      of
      Warrant Stock that is not disputed. 

    

    6. Fractional
      Shares.
      No
      fractional shares of Warrant Stock will be issued in connection with any
      exercise hereof, but in lieu of such fractional shares, the Issuer shall round
      the number of shares to be issued upon exercise up to the nearest whole number
      of shares.

    

    7. Ownership
      Cap and Certain Exercise Restrictions.
      (a)
      Notwithstanding anything to the contrary set forth in this Warrant, at no time
      may a Holder of this Warrant exercise this Warrant if the number of shares
      of
      Common Stock to be issued pursuant to such exercise would exceed, when
      aggregated with all other shares of Common Stock owned by such Holder at such
      time, the number of shares of Common Stock which would result in such Holder
      beneficially owning (as determined in accordance with Section 13(d) of the
      Exchange Act and the rules thereunder) in excess of 4.9% of the then issued
      and
      outstanding shares of Common Stock; provided,
      however,
      that
      upon a holder of this Warrant providing the Issuer with sixty-one (61) days
      notice (pursuant to Section 12 hereof) (the "Waiver
      Notice")
      that
      such Holder would like to waive this Section 7(a) with regard to any or all
      shares of Common Stock issuable upon exercise of this Warrant, this Section
      7(a)
      will be of no force or effect with regard to all or a portion of the Warrant
      referenced in the Waiver Notice; provided,
      further,
      that
      this provision shall be of no further force or effect during the sixty-one
      (61)
      days immediately preceding the expiration of the term of this
      Warrant.

    

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    (b) The
      Holder may not exercise the Warrant hereunder to the extent such exercise would
      result in the Holder beneficially owning (as determined in accordance with
      Section 13(d) of the Exchange Act and the rules thereunder) in excess of 9.9%
      of
      the then issued and outstanding shares of Common Stock, including shares
      issuable upon exercise of the Warrant held by the Holder after application
      of
      this Section; provided,
      however,
      that
      upon a holder of this Warrant providing the Issuer with a Waiver Notice that
      such holder would like to waive this Section 7(b) with regard to any or all
      shares of Common Stock issuable upon exercise of this Warrant, this Section
      7(b)
      shall be of no force or effect with regard to those shares of Warrant Stock
      referenced in the Waiver Notice; provided,
      further,
      that
      this provision shall be of no further force or effect during the sixty-one
      (61)
      days immediately preceding the expiration of the term of this
      Warrant.

    

    8. Definitions.
      For the
      purposes of this Warrant, the following terms have the following
      meanings:

    

    "2006
      Purchase Agreements"
      means,
      collectively each of the following, as the same may be amended from time to
      time, (i) that certain Note and Warrant Purchase Agreement dated as of March
      31,
      2006, among the Issuer and the Purchasers, and (ii) that certain Note and
      Warrant Purchase Agreement, dated as of April 12, 2006, by and among the Issuer
      and the Purchasers.

     

    "Additional
      Shares of Common Stock"
      means
      all shares of Common Stock issued by the Issuer after the Original Issue Date,
      and all shares of Other Common, if any, issued by the Issuer after the Original
      Issue Date, except: (i) securities issued (other than for cash) in connection
      with a merger, acquisition, or consolidation, (ii) securities issued pursuant
      to
      the conversion or exercise of convertible or exercisable securities issued
      or
      outstanding on or prior to the date hereof (so long as the conversion or
      exercise price in such securities are not amended to lower such price and/or
      adversely affect the Holders) or
      issued
      pursuant to the Purchase Agreements, (iii) securities issued pursuant to the
      terms of that certain Exchange Agreement, dated as of September 21, 2007, by
      and
      among the Maker and the holders signatory thereto, (iv) the issuance of the
      Notes and the Warrants, (v) the shares of Common Stock issuable upon the
      conversion of the Notes, (vi) the Warrant Stock, (vii) securities issued in
      connection with bona fide strategic license agreements or other partnering
      arrangements so long as such issuances are not for the purpose of raising
      capital, (viii) Common Stock issued or the issuance or grants of options to
      purchase Common Stock pursuant to Issuer’s stock option plans and employee stock
      purchase plans approved by the Issuer’s board of directors, so long as such
      issuances in the aggregate do not exceed the number of shares of Common Stock
      (or options to purchase such number of shares of Common Stock) issuable pursuant
      to such plans as they exist on the Original Issue Date, (ix) any warrants issued
      to the placement agent and its designees for the transactions contemplated
      by
      the Purchase Agreements, (x) the payment of any dividends on the Issuer’s Series
      B convertible preferred stock, (xi) securities issued pursuant to a bona fide
      firm underwritten public offering of the Issuer’s securities, (xii) the payment
      of liquidated damages pursuant to the Registration Rights Agreement dated
      February 17, 2004 between the Issuer and the parties listed therein and (xiii)
      the issuance of Common Stock upon the exercise or conversion of any securities
      described in clauses (i) through (xii) above.

    

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    “Board"
      shall
      mean the Board of Directors of the Issuer.

    

    "Capital
      Stock"
      means
      and includes (i) any and all shares, interests, participations or other
      equivalents of or interests in (however designated) corporate stock, including,
      without limitation, shares of preferred or preference stock, (ii) all
      partnership interests (whether general or limited) in any Person which is a
      partnership, (iii) all membership interests or limited liability company
      interests in any limited liability company, and (iv) all equity or ownership
      interests in any Person of any other type.

    

    "Certificate
      of Incorporation"
      means
      the Certificate of Incorporation of the Issuer as in effect on the Original
      Issue Date, and as hereafter from time to time amended, modified, supplemented
      or restated in accordance with the terms hereof and thereof and pursuant to
      applicable law. 

    

    "Common
      Stock"
      means
      the Common Stock, $0.0001 par value per share, of the Issuer and any other
      Capital Stock into which such stock may hereafter be changed.

    

    "Common
      Stock Equivalent"
      means
      any Convertible Security or warrant, option or other right to subscribe for
      or
      purchase any Additional Shares of Common Stock or any Convertible
      Security.

    

    "Convertible
      Securities"
      means
      evidences of Indebtedness, shares of Capital Stock or other Securities which
      are
      or may be at any time convertible into or exchangeable for Additional Shares
      of
      Common Stock. The term "Convertible Security" means one of the Convertible
      Securities.

    

    "Governmental
      Authority"
      means
      any governmental, regulatory or self-regulatory entity, department, body,
      official, authority, commission, board, agency or instrumentality, whether
      federal, state or local, and whether domestic or foreign.

    

    "Holders"
      mean
      the Persons who shall from time to time own any Warrant. The term "Holder"
      means
      one of the Holders.

    

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    "Independent
      Appraiser"
      means a
      nationally recognized or major regional investment banking firm or firm of
      independent certified public accountants of recognized standing (which may
      be
      the firm that regularly examines the financial statements of the Issuer) that
      is
      regularly engaged in the business of appraising the Capital Stock or assets
      of
      corporations or other entities as going concerns, and which is not affiliated
      with either the Issuer or the Holder of any Warrant.

    "Issuer"
      means
      Glowpoint, Inc., a Delaware corporation, and its successors. 

    

    "Majority
      Holders"
      means
      at any time the Holders of Warrants exercisable for a majority of the shares
      of
      Warrant Stock issuable under the Warrants at the time outstanding.

    

    "Notes"
      shall
      mean collectively, each of the following, as the same may be amended from time
      to time: (1) the senior secured convertible promissory notes issued pursuant
      to
      the Purchase Agreements, and (2) any additional senior secured convertible
      promissory notes issued from time to time as interest on the outstanding
      principal balance of the foregoing promissory notes. 

    

    "Original
      Issue Date"
      means
      September 21, 2007.

    

    "OTC
      Bulletin Board"
      means
      the over-the-counter electronic bulletin board.

    

    "Other
      Common"
      means
      any other Capital Stock of the Issuer of any class which shall be authorized
      at
      any time after the date of this Warrant (other than Common Stock) and which
      shall have the right to participate in the distribution of earnings and assets
      of the Issuer without limitation as to amount.

    

    “Outstanding
      Common Stock”
means,
      at any given time, the aggregate amount of outstanding shares of Common Stock,
      assuming full exercise, conversion or exchange (as applicable) of all options,
      warrants and other Securities which are convertible into or exercisable or
      exchangeable for, and any right to subscribe for, shares of Common Stock that
      are outstanding at such time.

    

    "Person"
      means
      an individual, corporation, limited liability company, partnership, joint stock
      company, trust, unincorporated organization, joint venture, Governmental
      Authority or other entity of whatever nature.

    

    "Per
      Share Market Value"
      means
      on any particular date (a) the last closing sale price per share of the Common
      Stock on such date on the OTC
      Bulletin Board or
      another registered national stock exchange on which the Common Stock is then
      listed, or if there is no such price on such date, then the closing sale price
      on such exchange or quotation system on the date nearest preceding such date,
      or
      (b) if the Common Stock is not listed then on the OTC Bulletin Board or any
      registered national stock exchange, the last closing sale price for a share
      of
      Common Stock in the over-the-counter market, as reported by the OTC Bulletin
      Board or in the National Quotation Bureau Incorporated or similar organization
      or agency succeeding to its functions of reporting prices) at the close of
      business on such date, or (c) if the Common Stock is not then reported by the
      OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar
      organization or agency succeeding to its functions of reporting prices), then
      the average of the "Pink Sheet" quotes for the five (5) Trading Days preceding
      such date of determination, or (d) if the Common Stock is not then publicly
      traded the fair market value of a share of Common Stock as determined by an
      Independent Appraiser selected in good faith by the Majority Holders;
provided,
      however,
      that
      the Issuer, after receipt of the determination by such Independent Appraiser,
      shall have the right to select an additional Independent Appraiser, in which
      case, the fair market value shall be equal to the average of the determinations
      by each such Independent Appraiser; and provided,
      further
      that all
      determinations of the Per Share Market Value shall be appropriately adjusted
      for
      any stock dividends, stock splits or other similar transactions during such
      period. The determination of fair market value by an Independent Appraiser
      shall
      be based upon the fair market value of the Issuer determined on a going concern
      basis as between a willing buyer and a willing seller and taking into account
      all relevant factors determinative of value, and shall be final and binding
      on
      all parties. 

    

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

    “Purchase
      Agreement”
means
      that certain Note and Warrant Purchase Agreement, dated as of September 21,
      2007, among the Issuer and the Purchasers, as the same may be amended from
      time
      to time.

    

    “Purchase
      Agreements”
means,
      collectively, the 2006 Purchase Agreements and the Purchase
      Agreement.

    

    "Purchasers"
      means
      the purchasers of the Notes and the Warrants issued by the Issuer pursuant
      to
      the Purchase Agreements.

    

    "Securities"
      means
      any debt or equity securities of the Issuer, whether now or hereafter
      authorized, any instrument convertible into or exchangeable for Securities
      or a
      Security, and any option, warrant or other right to purchase or acquire any
      Security. "Security" means one of the Securities.

    

    "Securities
      Act"
      means
      the Securities Act of 1933, as amended, or any similar federal statute then
      in
      effect.

    

    "Subsidiary"
      means
      any corporation at least 50% of whose outstanding Voting Stock shall at the
      time
      be owned directly or indirectly by the Issuer or by one or more of its
      Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

    

    "Term"
      has the
      meaning specified in Section 1 hereof.

    

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

    "Trading
      Day"
      means
      any day during which The New York Stock Exchange shall be open for
      business.

    "Voting
      Stock"
      means,
      as applied to the Capital Stock of any corporation, Capital Stock of any class
      or classes (however designated) having ordinary voting power for the election
      of
      a majority of the members of the Board of Directors (or other governing body)
      of
      such corporation, other than Capital Stock having such power only by reason
      of
      the happening of a contingency.

    

    "Warrants"
      shall
      mean, collectively, each of the following, as the same may be amended from
      time
      to time: (A) the warrants to purchase shares of Common Stock issued pursuant
      to
      the Purchase Agreements (including, without limitation, this Warrant); (B)
      the
      warrants to purchase shares of Common Stock issued in connection with the
      amendment of the senior secured convertible promissory notes issued pursuant
      to
      the 2006 Purchase Agreements; and (C) any other warrants of like tenor issued
      in
      substitution or exchange for any of the foregoing Warrants pursuant to the
      provisions of Section 2(c), 2(d) or 2(e) thereof. 

    

    "Warrant
      Price"
      initially means [$0.55/$0.65], as such price may be adjusted from time to time
      as shall result from the adjustments specified in this Warrant, including
      Section 4 hereto.

    

    "Warrant
      Share Number"
      means
      at any time the aggregate number of shares of Warrant Stock which may at such
      time be purchased upon exercise of this Warrant, after giving effect to all
      prior adjustments and increases to such number made or required to be made
      under
      the terms hereof.

    

    "Warrant
      Stock"
      means
      Common Stock issuable upon exercise of any Warrant or Warrants or otherwise
      issuable pursuant to any Warrant or Warrants.

    

    9. Other
      Notices.
      In case
      at any time:

    

    
      	 	
              (A)

            	
              the
                Issuer shall make any distributions to the holders of Common Stock;
                or

            

    

    

    
      	 	
              (B)

            	
              the
                Issuer shall authorize the granting to all holders of its Common
                Stock of
                rights to subscribe for or purchase any shares of Capital Stock of
                any
                class or other rights; or

            

    

    

    
      	 	
              (C)

            	
              there
                shall be any reclassification of the Capital Stock of the Issuer;
                or

            

    

    

    
      	 	
              (D)

            	
              there
                shall be any capital reorganization by the Issuer;
                or

            

    

    

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

       

    

    
      	 	
              (E)

            	
              there
                shall be any (i) consolidation or merger involving the Issuer or
                (ii)
                sale, transfer or other disposition of all or substantially all of
                the
                Issuer's property, assets or business (except a merger or other
                reorganization in which the Issuer shall be the surviving corporation
                and
                its shares of Capital Stock shall continue to be outstanding and
                unchanged
                and except a consolidation, merger, sale, transfer or other disposition
                involving a wholly-owned Subsidiary);
                or

            

    

     

    
      	 	
              (F)

            	
              there
                shall be a voluntary or involuntary dissolution, liquidation or winding-up
                of the Issuer or any partial liquidation of the Issuer or distribution
                to
                holders of Common Stock;

            

    

    

    then,
      in
      each of such cases, the Issuer shall give written notice to the Holder of the
      date on which (i) the books of the Issuer shall close or a record shall be
      taken
      for such dividend, distribution or subscription rights or (ii) such
      reorganization, reclassification, consolidation, merger, disposition,
      dissolution, liquidation or winding-up, as the case may be, shall take place.
      Such notice also shall specify the date as of which the holders of Common Stock
      of record shall participate in such dividend, distribution or subscription
      rights, or shall be entitled to exchange their certificates for Common Stock
      for
      securities or other property deliverable upon such reorganization,
      reclassification, consolidation, merger, disposition, dissolution, liquidation
      or winding-up, as the case may be. Such notice shall be given at least twenty
      (20) days prior to the action in question and not less than ten (10) days prior
      to the record date or the date on which the Issuer's transfer books are closed
      in respect thereto. Except as otherwise specifically provided herein, no holder,
      as such, of this Warrant shall be entitled to vote or receive dividends or
      be
      deemed the holder of shares of the Issuer for any purpose, nor shall anything
      contained in this Warrant be construed to confer upon the holder hereof, as
      such, any of the rights of a stockholder of the Issuer or any right to vote,
      give or withhold consent to any corporate action (whether any reorganization,
      issue of stock, reclassification of stock, consolidation, merger, conveyance
      or
      otherwise), receive notice of meetings, receive dividends or subscription
      rights, or otherwise, prior to the issuance to the holder of this Warrant of
      the
      Warrant Shares which he or she is then entitled to receive upon the due exercise
      of this Warrant. This Warrant entitles the Holder to receive copies of all
      financial and other information distributed or required to be distributed to
      the
      holders of the Common Stock.

    

    10. Amendment
      and Waiver.
      Any
      term, covenant, agreement or condition in this Warrant may be amended, or
      compliance therewith may be waived (either generally or in a particular instance
      and either retroactively or prospectively), by a written instrument or written
      instruments executed by the Issuer and the Majority Holders; provided,
      however,
      that no
      such amendment or waiver shall reduce the Warrant Share Number, increase the
      Warrant Price, shorten the period during which this Warrant may be exercised
      or
      modify any provision of this Section 10 without the consent of the Holder of
      this Warrant. No consideration shall be offered or paid to any person to amend
      or consent to a waiver or modification of any provision of this Warrant unless
      the same consideration is also offered to all holders of the
      Warrants.

    

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    11. Governing
      Law; Jurisdiction.
      This
      Warrant shall be governed by and construed in accordance with the internal
      laws
      of the State of New York, without giving effect to any of the conflicts of
      law
      principles which would result in the application of the substantive law of
      another jurisdiction. This Warrant shall not be interpreted or construed with
      any presumption against the party causing this Warrant to be drafted. The Issuer
      and the Holder agree that venue for any dispute arising under this Warrant
      will
      lie exclusively in the state or federal courts located in New York County,
      New
      York, and the parties irrevocably waive any right to raise forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The Issuer and the Holder
      irrevocably consent to personal jurisdiction in the state and federal courts
      of
      the state of New York. The Issuer and the Holder consent to process being served
      in any such suit, action or proceeding by mailing a copy thereof to such party
      at the address in effect for notices to it under this Warrant and agrees that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing in this Section 11 shall affect or limit any right to serve
      process in any other manner permitted by law. The parties hereby waive all
      rights to a trial by jury.

    

    12. Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery by telecopy or facsimile at the address or number designated below
      (if
      delivered on a business day during normal business hours where such notice
      is to
      be received), or the first business day following such delivery (if delivered
      other than on a business day during normal business hours where such notice
      is
      to be received) or (b) on the second business day following the date of mailing
      by express courier service, fully prepaid, addressed to such address, or upon
      actual receipt of such mailing, whichever shall first occur. The addresses
      for
      such communications shall be:

     

    
      	
              If
                to the Issuer:

            	
              Glowpoint,
                Inc.

            

    

    225
      Long
      Avenue

    Hillside,
      New Jersey 07205

    Attention:
      Chief Executive Officer

    Tel.
      No.:
      (312) 235-3888 x2053

    Fax
      No.:
      (973) 391-1904

    and

    General
      Counsel

    Glowpoint,
      Inc.

    225
      Long
      Avenue 

    Hillside,
      New Jersey 07205

    Tel.
      No.:
      (312) 235-3888 x 2087

    Fax
      No.:
      (973) 556-1272

    

    with
      copies (which copies 

    shall
      not
      constitute notice 

    to
      the
      Issuer) to:

     

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

    Gibbons
      P.C.

    One
      Gateway Center

    Newark,
      New Jersey 07102

    Attn:
      Frank Cannone, Esq.

    Tel.
      No.:
      (973) 596-4500

    Fax
      No.:
      (973) 596-0545

    
      	
              If
                to any Holder:

            	
              At
                the address of such Holder set forth on Exhibit
                A
                to
                this Agreement, with copies to Holder’s counsel as set forth on
                Exhibit
                A
                or
                as specified in writing by such Holder with copies
                to:

            

    

    

    with
      copies (which copies 

    shall
      not
      constitute notice) 

    
      	
              to:

            	
              Kramer
                Levin Naftalis & Frankel LLP

            

    

    1177
      Avenue of the Americas

    New
      York,
      New York 10036

    Attention:
      Christopher S. Auguste

    Tel.
      No.:
      (212) 715-9100

    Fax
      No.:
      (212) 715-8000

    

    Any
      party
      hereto may from time to time change its address for notices by giving written
      notice of such changed address to the other party hereto.

     

    13. Warrant
      Agent.
      The
      Issuer may, by written notice to each Holder of this Warrant, appoint an agent
      having an office in New York, New York for the purpose of issuing shares of
      Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of
      Section 2 hereof, exchanging this Warrant pursuant to subsection (d) of Section
      2 hereof or replacing this Warrant pursuant to subsection (d) of Section 3
      hereof, or any of the foregoing, and thereafter any such issuance, exchange
      or
      replacement, as the case may be, shall be made at such office by such
      agent.

    

    14. Remedies.
      The
      Issuer stipulates that the remedies at law of the Holder of this Warrant in
      the
      event of any default or threatened default by the Issuer in the performance
      of
      or compliance with any of the terms of this Warrant are not and will not be
      adequate and that, to the fullest extent permitted by law, such terms may be
      specifically enforced by a decree for the specific performance of any agreement
      contained herein or by an injunction against a violation of any of the terms
      hereof or otherwise.

    

    15. Successors
      and Assigns.
      This
      Warrant and the rights evidenced hereby shall inure to the benefit of and be
      binding upon the successors and assigns of the Issuer, the Holder hereof and
      (to
      the extent provided herein) the Holders of Warrant Stock issued pursuant hereto,
      and shall be enforceable by any such Holder or Holder of Warrant
      Stock.

    

    16. Modification
      and Severability.
      If, in
      any action before any court or agency legally empowered to enforce any provision
      contained herein, any provision hereof is found to be unenforceable, then such
      provision shall be deemed modified to the extent necessary to make it
      enforceable by such court or agency. If any such provision is not enforceable
      as
      set forth in the preceding sentence, the unenforceability of such provision
      shall not affect the other provisions of this Warrant, but this Warrant shall
      be
      construed as if such unenforceable provision had never been contained
      herein.

     

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    17. Headings.
      The
      headings of the Sections of this Warrant are for convenience of reference only
      and shall not, for any purpose, be deemed a part of this Warrant.

    

    18. Registration
      Rights.

    

    (a)
      The
      Warrant Stock shall be registered on the resale registration statement obligated
      to be filed by the Issuer pursuant to the Purchase Agreement pursuant to the
      terms of that certain Registration Rights Agreement, dated as of March 31,
      2006,
      by and among the Issuer and the purchasers party thereto.

    

    (b) If
      the
      Issuer shall determine to proceed with the preparation and filing of a
      registration statement under the Securities Act in connection with the proposed
      offer and sale of any of its securities by it or any of its security holders
      (other than a registration statement on Form S-4, S-8 or other limited purpose
      form, or any offering of securities solely to the Issuer’s existing stockholders
      or pursuant to a dividend reinvestment plan or pursuant to a registration under
      Rule 415 of the Securities Act for the account of the Company), then the Issuer
      will give written notice of its determination to the Holder. Upon the written
      request from the Holder, the Issuer will use its best efforts to cause all
      shares of Common Stock issuable upon the exercise of this Warrant to be included
      in such registration statement, on the same basis as the planned method of
      distribution contemplated by the proposed registration, all to the extent
      requisite to permit the resale by the Holder of such shares of Common Stock
      issuable upon the exercise of this Warrant. 

    

    (c) If
      the
      registration is for a registered public offering involving an underwriting,
      the
      Issuer shall so advise the Holder as a part of the written notice given pursuant
      to clause (b) above. In such event, the right of the Holder to registration
      shall be conditioned upon the Holder's participation in such underwriting and
      the inclusion of the Holder's securities in the underwriting to the extent
      provided herein. The Holder shall (together with the Issuer and the other
      holders distributing their securities through such underwriting) enter into
      an
      underwriting agreement in customary form with the underwriter or underwriters
      selected for such underwriting by the Issuer. If the managing underwriter
      determines that marketing factors require a limitation of the number of shares
      to be underwritten, the managing underwriter may limit the number of securities
      to be included in the registration and underwriting. The number of securities
      that may be included in the registration and underwriting shall be allocated
      among all participating holders in proportion, as nearly as practicable, to
      the
      respective amounts of securities held by such holders (including the Holder)
      at
      the time of filing the registration statement.

    

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year
      first above written.

    

    

    
      	 	
              GLOWPOINT,
                INC.

            
	 	 
	 	 
	 	 
	 	
              By:________________________________________

            
	 	
                   
                Name:

            
	 	
                   
                Title:

            

    

    
      
         

      

      
        -23-

        
          

        

      

      
         

      

    

    EXERCISE
      FORM

    WARRANT

    

    GLOWPOINT,
      INC.

    

    The
      undersigned _______________, pursuant to the provisions of the within Warrant,
      hereby elects to purchase _____ shares of Common Stock of Glowpoint, Inc.
      covered by the within Warrant.

    

    
      	
              Dated:
                _________________

            	
              Signature

            	
              ___________________________

            
	 	 	 
	 	
              Address

            	
              _____________________

            
	 	 	
              _____________________

            

    

    

    Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by the
      Holder on the date of Exercise: _________________________

    

    ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the within Warrant and all rights evidenced thereby and
      does
      irrevocably constitute and appoint _____________, attorney, to transfer the
      said
      Warrant on the books of the within named corporation.

    
      

      
        	
                Dated:
                  _________________

              	
                Signature

              	
                ___________________________

              
	 	 	 
	 	
                Address

              	
                _____________________

              
	 	 	
                _____________________

              

      

    PARTIAL
      ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the right to purchase _________ shares of Warrant Stock
      evidenced by the within Warrant together with all rights therein, and does
      irrevocably constitute and appoint ___________________, attorney, to transfer
      that part of the said Warrant on the books of the within named
      corporation.

    
      

      
        	
                Dated:
                  _________________

              	
                Signature

              	
                ___________________________

              
	 	 	 
	 	
                Address

              	
                _____________________

              
	 	 	
                _____________________

              

      

    FOR
      USE
      BY THE ISSUER ONLY:

    

    This
      Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
      ___________, _____, shares of Common Stock issued therefor in the name of
      _______________, Warrant No. W-_____ issued for ____ shares of Common Stock
      in
      the name of _______________.Unassociated Document

    
 

    NOTE
      AND WARRANT PURCHASE

    

    AGREEMENT

    

    

    

    

    Dated
      as of September 21, 2007

    

    

    

    

    by
      and among

    

    

    

    

    GLOWPOINT,
      INC. 

    

    

    

    and

    

    

    

    THE
      PURCHASERS LISTED ON EXHIBIT A

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      TABLE
        OF
        CONTENTS

    

    
      

      
        	 	 	
                Page

              
	
                ARTICLE
                  I    Purchase
                  and Sale of Notes and Warrants

              	
                1

              
	
                Section
                  1.1

              	
                Purchase
                  and Sale of Notes and Warrants.

              	
                1

              
	
                Section
                  1.2

              	
                Purchase
                  Price and Closing

              	
                1

              
	
                Section
                  1.3

              	
                Conversion
                  Shares / Warrant Shares

              	
                2

              
	 	 	 
	
                ARTICLE
                  II    Representations
                  and Warranties

              	
                2

              
	
                Section
                  2.1

              	
                Representations
                  and Warranties of the Company

              	
                2

              
	
                Section
                  2.2

              	
                Representations
                  and Warranties of the Purchasers

              	
                12

              
	 	 	 
	
                ARTICLE
                  III    Covenants

              	
                14

              
	
                Section
                  3.1

              	
                Securities
                  Compliance

              	
                15

              
	
                Section
                  3.2

              	
                Registration
                  and Listing

              	
                15

              
	
                Section
                  3.3

              	
                Inspection
                  Rights

              	
                15

              
	
                Section
                  3.4

              	
                Compliance
                  with Laws

              	
                16

              
	
                Section
                  3.5

              	
                Keeping
                  of Records and Books of Account

              	
                15

              
	
                Section
                  3.6

              	
                Reporting
                  Requirements

              	
                16

              
	
                Section
                  3.7

              	
                Other
                  Agreements

              	
                16

              
	
                Section
                  3.8

              	
                Use
                  of Proceeds

              	
                16

              
	
                Section
                  3.9

              	
                Reporting
                  Status

              	
                16

              
	
                Section
                  3.10

              	
                Disclosure
                  of Transaction

              	
                17
                  

              
	
                Section
                  3.11

              	
                Disclosure
                  of Material Information

              	
                17

              
	
                Section
                  3.12

              	
                Pledge
                  of Securities

              	
                17

              
	
                Section
                  3.13

              	
                Amendments

              	
                17

              
	
                Section
                  3.14

              	
                Distributions

              	
                17

              
	
                Section
                  3.15

              	
                Reservation
                  of Shares

              	
                18

              
	
                Section
                  3.16

              	
                Transfer
                  Agent Instructions

              	
                18

              
	
                Section
                  3.17

              	
                Disposition
                  of Assets

              	
                18

              
	
                Section
                  3.18

              	
                Restrictions
                  on Certain Issuances of Securities

              	
                19

              
	
                Section
                  3.19

              	
                Subsequent
                  Financings

              	
                19

              
	 	 
	
                ARTICLE
                  IV    Conditions

              	
                18

              
	
                Section
                  4.1

              	
                Conditions
                  Precedent to the Obligation of the Company

                to
                  Close and to Sell the Securities

              	
                18

              
	
                Section
                  4.2

              	
                Conditions
                  Precedent to the Obligation of the Purchasers to Close and to

                Purchase
                  the Securities

              	
                19

              
	
                ARTICLE
                  V    Certificate
                  Legend

              	
                21

              
	
                Section
                  5.1

              	
                Legend

              	
                24

              
	 	 	 
	
                ARTICLE
                  VI    Indemnification

              	
                22

              
	
                Section
                  6.1

              	
                General
                  Indemnity.

              	
                22

              
	
                Section
                  6.2

              	
                Indemnification
                  Procedure

              	
                22

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

        TABLE
          OF
          CONTENTS

        (continued)

        
          

          
            	 	
                    Page

                  
	
                    ARTICLE
                      VII    Miscellaneous

                  	
                    23

                  
	
                    Section
                      7.1

                  	
                    Fees
                      and Expenses

                  	
                    23

                  
	
                    Section
                      7.2

                  	
                    Specific
                      Performance; Consent to Jurisdiction; Venue.

                  	
                    24

                  
	
                    Section
                      7.3

                  	
                    Entire
                      Agreement; Amendment

                  	
                    24

                  
	
                    Section
                      7.4

                  	
                    Notices

                  	
                    24

                  
	
                    Section
                      7.5

                  	
                    Waivers

                  	
                    25

                  
	
                    Section
                      7.6

                  	
                    Headings

                  	
                    26

                  
	
                    Section
                      7.7

                  	
                    Successors
                      and Assigns

                  	
                    26

                  
	
                        Section
                      7.8

                  	
                    No
                      Third Party Beneficiaries

                  	
                    26

                  
	
                    Section
                      7.9

                  	
                    Governing
                      Law

                  	
                    26

                  
	
                    Section
                      7.10

                  	
                    Survival

                  	
                    26

                  
	
                    Section
                      7.11

                  	
                    Counterparts

                  	
                    26

                  
	
                    Section
                      7.12

                  	
                    Publicity

                  	
                    26

                  
	
                    Section
                      7.13

                  	
                    Severability

                  	
                    26

                  
	
                    Section
                      7.14

                  	
                    Further
                      Assurances

                  	
                    27

                  

          

           

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    NOTE
      AND WARRANT PURCHASE AGREEMENT

    

    This
      NOTE
      AND WARRANT PURCHASE AGREEMENT dated as of September 21, 2007 (this
“Agreement”)
      by and
      among Glowpoint, Inc., a Delaware corporation (the "Company"),
      and
      each of the purchasers of the senior secured convertible promissory notes of
      the
      Company whose names are set forth on Exhibit
      A
      attached
      hereto (each a "Purchaser"
      and
      collectively, the "Purchasers").
      

    

    The
      parties hereto agree as follows:

     

    ARTICLE
      I  

     

    PURCHASE
      AND SALE OF NOTES AND WARRANTS

     

    Section
      1.1  Purchase
      and Sale of Notes and Warrants. 

     

    (a)  Upon
      the
      following terms and conditions, the Company shall issue and sell to the
      Purchasers, and the Purchasers shall purchase from the Company, (i) senior
      secured convertible promissory notes in the aggregate principal amount of up
      to
      Three Million Six Hundred Thousand Dollars ($3,600,000), convertible into shares
      of the Company's common stock, par value $.0001 per share (the “Common
      Stock”),
      in
      substantially the form attached hereto as Exhibit
      B
      (the
      "Notes").
      The
      Company and the Purchasers are executing and delivering this Agreement in
      accordance with and in reliance upon the exemption from securities registration
      afforded by Section 4(2) of the U.S. Securities Act of 1933, as amended, and
      the
      rules and regulations promulgated thereunder (the "Securities
      Act"),
      including Regulation D ("Regulation
      D"),
      and/or upon such other exemption from the registration requirements of the
      Securities Act as may be available with respect to any or all of the investments
      to be made hereunder. 

     

    (b)  Upon
      the
      following terms and conditions, each Purchaser shall be issued Series A-2
      Warrants, in substantially the form attached hereto as Exhibit
      C
      (the
      "Warrants"),
      to
      purchase a number of shares of Common Stock equal to fifty percent (50%) of
      the
      number of Conversion Shares issuable upon conversion of such Purchaser’s Note at
      an exercise price per share equal to $0.65 and a term of five (5) years
      following issuance. The number of shares of Common Stock issuable upon exercise
      of the Warrants issuable to each Purchaser is set forth opposite such
      Purchaser’s name on Exhibit
      A
      attached
      hereto.

     

    Section
      1.2  Purchase
      Price and Closing.
      Subject
      to the terms and conditions hereof, the Company agrees to issue and sell to
      the
      Purchasers and, in consideration of and in express reliance upon the
      representations, warranties, covenants, terms and conditions of this Agreement,
      the Purchasers, severally but not jointly, agree to purchase the Notes and
      Warrants for an aggregate purchase price of up to Three Million Dollars
      ($3,000,000) (the “Purchase
      Price”).
      The
      closing of the purchase and sale of the Notes and Warrants to be acquired by
      the
      Purchasers from the Company under this Agreement shall take place at the offices
      of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New
      York, New York 10036 (the “Closing”)
      at
      10:00 a.m., New York time on September 21, 2007 or such other date as the
      Purchasers and the Company may agree upon (the "Closing
      Date");
      provided,
      that
      all of the conditions set forth in Article IV hereof and applicable to the
      Closing shall have been fulfilled or waived in accordance herewith. Subject
      to
      the terms and conditions of this Agreement, at the Closing the Company shall
      deliver or cause to be delivered to each Purchaser (x) its Notes for the
      principal amount set forth opposite the name of such Purchaser on Exhibit
      A
      hereto
      and (y) a Warrant to purchase such number of shares of Common Stock as is set
      forth opposite the name of such Purchaser on Exhibit
      A
      attached
      hereto. At the Closing, each Purchaser shall deliver its Purchase Price by
      wire
      transfer to an account
      designated by the Company. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Section
      1.3  Conversion
      Shares / Warrant Shares.
      The
      Company has authorized and has reserved and covenants to continue to reserve,
      free of preemptive rights and other similar contractual rights of stockholders,
      a number of its authorized but unissued shares of Common Stock equal to one
      hundred twenty percent (120%) of the aggregate number of shares of Common Stock
      to effect the conversion of the Notes and any interest accrued and outstanding
      thereon and exercise of the Warrants as of the Closing Date. Any shares of
      Common Stock issuable upon conversion of the Notes and any interest accrued
      and
      outstanding on the Notes are herein referred to as the “Conversion
      Shares”.
      Any
      shares of Common Stock issuable upon exercise of the Warrants (and such shares
      when issued) are herein referred to as the "Warrant
      Shares".
      The
      Notes, the Warrants, the Conversion Shares and the Warrant Shares are sometimes
      collectively referred to herein as the "Securities".

     

    ARTICLE
      II 

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      2.1  Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Purchasers, as of the date hereof
      and the Closing Date (except as set forth on the Schedule of Exceptions attached
      hereto with each numbered Schedule corresponding to the section number herein),
      as follows:

     

    (a)  Organization,
      Good Standing and Power.
      The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Delaware and has the requisite corporate
      power to own, lease and operate its properties and assets and to conduct its
      business as it is now being conducted. The Company does not have any
      Subsidiaries (as defined in Section 2.1(g)) or own securities of any kind in
      any
      other entity except as set forth on Schedule
      2.1(g)
      hereto.
      The Company and each such Subsidiary is duly qualified as a foreign entity
      to do
      business and is in good standing in every jurisdiction in which the nature
      of
      the business conducted or property owned by it makes such qualification
      necessary except for any jurisdiction(s) (alone or in the aggregate) in which
      the failure to be so qualified will not have a Material Adverse Effect. For
      the
      purposes of this Agreement, "Material
      Adverse Effect"
      means
      any material adverse effect on the business, operations, properties, prospects,
      or financial condition of the Company and its Subsidiaries, taken as a whole,
      and/or any condition, circumstance, or situation that would prohibit or
      otherwise materially interfere with the ability of the Company to perform any
      of
      its obligations under this Agreement in any material respect; provided,
      however,
      that
      the foregoing shall not include operating losses in the amounts contemplated
      by
      the Commission Documents (as defined in Section 2.1(f) hereof).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b)  Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and
      perform this Agreement, the Notes, the Warrants, the Registration Rights
      Agreement by and among the Company and the purchasers named therein, dated
      as of
      March 31, 2006, as amended as of the date hereof, a copy of which (together
      with
      the form of amendment) is attached hereto as Exhibit
      D
      (the
“Registration
      Rights Agreement”),
      the
      Security Agreement by and among the Company, on the one hand, and the secured
      parties named therein, on the other hand, dated as of March 31, 2006, as amended
      as of the date hereof, a copy of which (together with the form of amendment)
      is
      attached hereto as Exhibit
      E
      (the
“Security
      Agreement”),
      and
      the Escrow Agreement by and among the Company, the Purchasers and the escrow
      agent, dated as of the date hereof, substantially in the form of Exhibit
      F
      attached
      hereto (the “Escrow
      Agreement”)
      (collectively, the "Transaction
      Documents")
      and to
      issue and sell the Securities in accordance with the terms hereof. The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by it of the transactions contemplated thereby have been
      duly and validly authorized by all necessary corporate action, and no further
      consent or authorization of the Company, its Board of Directors or stockholders
      is required. When executed and delivered by the Company, each of the Transaction
      Documents shall constitute a valid and binding obligation of the Company
      enforceable against the Company in accordance with its terms, except as such
      enforceability may be limited by applicable bankruptcy, reorganization,
      moratorium, liquidation, conservatorship, receivership or similar laws relating
      to, or affecting generally the enforcement of, creditor's rights and remedies
      or
      by other equitable principles of general application.

     

    (c)  Capitalization.
      The
      authorized capital stock and the issued and outstanding shares of capital stock
      of the Company as of the date hereof is set forth on Schedule
      2.1(c)
      hereto.
      All of the outstanding shares of the Common Stock and any other outstanding
      security of the Company have been duly and validly authorized. Except as set
      forth in this Agreement or as set forth on Schedule
      2.1(c)
      hereto,
      no shares of Common Stock or any other security of the Company are entitled
      to
      preemptive rights or registration rights and there are no outstanding options,
      warrants, scrip, rights to subscribe to, call or commitments of any character
      whatsoever relating to, or securities or rights convertible into, any shares
      of
      capital stock of the Company. Furthermore, except as set forth in this Agreement
      and as set forth on Schedule
      2.1(c)
      hereto,
      there are no contracts, commitments, understandings, or arrangements by which
      the Company is or may become bound to issue additional shares of the capital
      stock of the Company or options, securities or rights convertible into shares
      of
      capital stock of the Company. Except for customary transfer restrictions
      contained in agreements entered into by the Company in order to sell restricted
      securities or as provided on Schedule
      2.1(c)
      hereto,
      the Company is not a party to or bound by any agreement or understanding
      granting registration or anti-dilution rights to any person with respect to
      any
      of its equity or debt securities. Except as set forth on Schedule
      2.1(c)
      hereto,
      the Company is not a party to, and it has no knowledge of, any agreement or
      understanding restricting the voting or transfer of any shares of the capital
      stock of the Company. 

     

    (d)  Issuance
      of Securities.
      The
      Notes and the Warrants to be issued at the Closing have been duly authorized
      by
      all necessary corporate action and, when paid for or issued in accordance with
      the terms hereof, the Notes shall be validly issued and outstanding, free and
      clear of all liens, encumbrances and rights of refusal of any kind. When the
      Conversion Shares and Warrant Shares are issued and paid for in accordance
      with
      the terms of this Agreement and as set forth in the Notes and Warrants, such
      shares will be duly authorized by all necessary corporate action and validly
      issued and outstanding, fully paid and nonassessable, free and clear of all
      liens, encumbrances and rights of refusal of any kind and the holders shall
      be
      entitled to all rights accorded to a holder of Common Stock. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

           (e)  No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company,
      the performance by the Company of its obligations under the Notes and the
      consummation by the Company of the transactions contemplated hereby and thereby,
      and the issuance of the Securities as contemplated hereby, do not and will
      not
      (i) violate or conflict with any provision of the Company's Certificate of
      Incorporation (the “Certificate”)
      or
      Bylaws (the “Bylaws”),
      each
      as amended to date, or any Subsidiary's comparable charter documents, (ii)
      conflict with, or constitute a default (or an event which with notice or lapse
      of time or both would become a default) under, or give to others any rights
      of
      termination, amendment, acceleration or cancellation of, any agreement,
      mortgage, deed of trust, indenture, note, bond, license, lease agreement,
      instrument or obligation to which the Company or any of its Subsidiaries is
      a
      party or by which the Company or any of its Subsidiaries' respective properties
      or assets are bound, or (iii) result in a violation of any federal, state,
      local
      or foreign statute, rule, regulation, order, judgment or decree (including
      federal and state securities laws and regulations) applicable to the Company
      or
      any of its Subsidiaries or by which any property or asset of the Company or
      any
      of its Subsidiaries are bound or affected, except, in all cases, for such
      conflicts, defaults, terminations, amendments, acceleration, cancellations
      and
      violations as would not, individually or in the aggregate, have a Material
      Adverse Effect (other than violations pursuant to clauses (i) or (iii) (with
      respect to federal and state securities laws)). Neither
      the Company nor any of its Subsidiaries is required under federal, state,
      foreign or local law, rule or regulation to obtain any consent, authorization
      or
      order of, or make any filing or registration with, any court or governmental
      agency in order for it to execute, deliver or perform any of its obligations
      under the Transaction Documents or issue and sell the Securities in accordance
      with the terms hereof (other than any filings, consents and approvals which
      may
      be required to be made by the Company under applicable state and federal
      securities laws, rules or regulations or any registration provisions provided
      in
      the Registration Rights Agreement).

     

    (f)  Commission
      Documents, Financial Statements.
      The
Common
      Stock of the Company is registered pursuant to Section 12(b) or 12(g) of the
      Securities Exchange Act of 1934, as amended (the "Exchange
      Act"),
      and
      except as set forth on Schedule
      2.1(f)
      hereto,
      the Company
      has timely filed all reports, schedules, forms, statements and other documents
      required to be filed by it with the Commission pursuant to the reporting
      requirements of the Exchange Act (all of the foregoing including filings
      incorporated by reference therein being referred to herein as the "Commission
      Documents").
      Except
      as
      set forth on Schedule
      2.1(f)
      hereto,
      at
      the
      times of their respective filings, the Form 10-K for the fiscal year ended
      December 31, 2006 (the “Form
      10-K”)
      and
      each subsequently filed Form 10-Q (collectively, the "Form
      10-Q")
      complied in all material respects with the requirements of the Exchange Act
      and
      the rules and regulations of the Commission promulgated thereunder and other
      federal, state and local laws, rules and regulations applicable to such
      documents, and the Form 10-Q and Form 10-K did not contain any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary in order to make the statements therein, in light of the
      circumstances under which they were made, not misleading. Except
      as
      set forth on Schedule
      2.1(f)
      hereto,
      as
      of
      their respective dates, the financial statements of the Company included in
      the
      Commission Documents complied as to form in all material respects with
      applicable accounting requirements and the published rules and regulations
      of
      the Commission or other applicable rules and regulations with respect thereto.
      Such financial statements have been prepared in accordance with generally
      accepted accounting principles ("GAAP")
      applied on a consistent basis during the periods involved (except (i) as may
      be
      otherwise indicated in such financial statements or the notes thereto or (ii)
      in
      the case of unaudited interim statements, to the extent they may not include
      footnotes or may be condensed or summary statements), and fairly present in
      all
      material respects the financial position of the Company and its Subsidiaries
      as
      of the dates thereof and the results of operations and cash flows for the
      periods then ended (subject, in the case of unaudited statements, to normal
      year-end audit adjustments). 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (g)  Subsidiaries.
      Schedule
      2.1(g)
      hereto
      sets forth each Subsidiary of the Company, showing the jurisdiction of its
      incorporation or organization and showing the percentage of each person's
      ownership of the outstanding stock or other interests of such Subsidiary. For
      the purposes of this Agreement, "Subsidiary"
      shall
      mean any corporation or other entity of which at least a majority of the
      securities or other ownership interest having ordinary voting power (absolutely
      or contingently) for the election of directors or other persons performing
      similar functions are at the time owned directly or indirectly by the Company
      and/or any of its other Subsidiaries. All of the outstanding shares of capital
      stock of each Subsidiary have been duly authorized and validly issued, and
      are
      fully paid and nonassessable. There are no outstanding preemptive, conversion
      or
      other rights, options, warrants or agreements granted or issued by or binding
      upon any Subsidiary for the purchase or acquisition of any shares of capital
      stock of any Subsidiary or any other securities convertible into, exchangeable
      for or evidencing the rights to subscribe for any shares of such capital stock.
      Neither the Company nor any Subsidiary is subject to any obligation (contingent
      or otherwise) to repurchase or otherwise acquire or retire any shares of the
      capital stock of any Subsidiary or any convertible securities, rights, warrants
      or options of the type described in the preceding sentence. Neither the Company
      nor any Subsidiary is party to, nor has any knowledge of, any agreement
      restricting the voting or transfer of any shares of the capital stock of any
      Subsidiary.

     

    (h)  No
      Material Adverse Change.
      Except
      as set forth in the Commission Documents or on Schedule
      2.1(h)
      hereto,
      since December 31, 2006, the Company has not experienced or suffered any
      Material Adverse Effect.

     

    (i)  No
      Undisclosed Liabilities.
      Except
      as set forth in the Commission Documents, neither the Company nor any of its
      Subsidiaries has incurred any liabilities, obligations, claims or losses
      (whether liquidated or unliquidated, secured or unsecured, absolute, accrued,
      contingent or otherwise) other than those incurred in the ordinary course of
      the
      Company's or its Subsidiaries respective businesses or which, individually
      or in
      the aggregate, are not reasonably likely to have a Material Adverse
      Effect.

     

    (j)  No
      Undisclosed Events or Circumstances.
      Since
      December 31, 2006, no event or circumstance has occurred or exists with respect
      to the Company or its Subsidiaries or their respective businesses, properties,
      prospects, operations or financial condition, which, under applicable law,
      rule
      or regulation, requires public disclosure or announcement by the Company but
      which has not been so publicly announced or disclosed. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (k)  Indebtedness.
      Schedule
      2.1(k)
      hereto
      sets forth as of the date hereof all outstanding secured and unsecured
      Indebtedness of the Company or any Subsidiary, or for which the Company or
      any
      Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
shall mean (a) any liabilities for borrowed money or amounts owed in excess
      of
      $100,000 (other than trade accounts payable incurred in the ordinary course
      of
      business), (b) all guaranties, endorsements and other contingent obligations
      in
      respect of Indebtedness of others, whether or not the same are or should be
      reflected in the Company’s balance sheet (or the notes thereto), except
      guaranties by endorsement of negotiable instruments for deposit or collection
      or
      similar transactions in the ordinary course of business; and (c) the present
      value of any lease payments in excess of $25,000 due under leases required
      to be
      capitalized in accordance with GAAP. Neither the Company nor any Subsidiary
      is
      in default with respect to any Indebtedness.

     

    (l)  Title
      to Assets.
      Each of
      the Company and the Subsidiaries has good and valid title to all of its real
      and
      personal property reflected in the Commission Documents, free and clear of
      any
      mortgages, pledges, charges, liens, security interests or other encumbrances,
      except for those that, individually or in the aggregate, do not cause a Material
      Adverse Effect. Any leases of the Company and each of its Subsidiaries are
      valid
      and subsisting and in full force and effect.

     

    (m)  Actions
      Pending.
      There
      is no action, suit, claim, investigation, arbitration, alternate dispute
      resolution proceeding or other proceeding pending or, to the knowledge of the
      Company, threatened against the Company or any Subsidiary which questions the
      validity of this Agreement or any of the other Transaction Documents or any
      of
      the transactions contemplated hereby or thereby or any action taken or to be
      taken pursuant hereto or thereto. There is no action, suit, claim,
      investigation, arbitration, alternate dispute resolution proceeding or other
      proceeding pending or, to the knowledge of the Company, threatened against
      or
      involving the Company, any Subsidiary or any of their respective properties
      or
      assets, which individually or in the aggregate, would reasonably be expected,
      if
      adversely determined, to have a Material Adverse Effect. There are no
      outstanding orders, judgments, injunctions, awards or decrees of any court,
      arbitrator or governmental or regulatory body against the Company or any
      Subsidiary or any officers or directors of the Company or Subsidiary in their
      capacities as such, which individually or in the aggregate, could reasonably
      be
      expected to have a Material Adverse Effect. 

     

    (n)  Compliance
      with Law.
      The
      business of the Company and the Subsidiaries has been and is presently being
      conducted in accordance with all applicable federal, state and local
      governmental laws, rules, regulations and ordinances, except for any
      noncompliance therewith that, individually or in the aggregate, could not
      reasonably be expected to have a Material Adverse Effect. The Company and each
      of its Subsidiaries have all franchises, permits, licenses, consents and other
      governmental or regulatory authorizations and approvals necessary for the
      conduct of its business as now being conducted by it except to the extent that
      the failure to possess such franchises, permits, licenses, consents and other
      governmental or regulatory authorizations and approvals, individually or in
      the
      aggregate, could not reasonably be expected to have a Material Adverse
      Effect.

     

    (o)  Taxes.
      The
      Company and each of the Subsidiaries has accurately prepared and filed all
      federal, state and other tax returns required by law to be filed by it, has
      paid
      or made provisions for the payment of all taxes shown to be due and all
      additional assessments, and adequate provisions have been and are reflected
      in
      the financial statements of the Company and the Subsidiaries for all current
      taxes and other charges to which the Company or any Subsidiary is subject and
      which are not currently due and payable. None of the federal income tax returns
      of the Company or any Subsidiary have been audited by the Internal Revenue
      Service. Except
      as
      set forth on Schedule
      2.1(o)
      hereto,
      the Company
      has no knowledge of any additional assessments, adjustments or contingent tax
      liability (whether federal or state) of any nature whatsoever, whether pending
      or threatened against the Company or any Subsidiary for any period, nor of
      any
      basis for any such assessment, adjustment or contingency.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (p)  Certain
      Fees.
      Except
      as set forth on Schedule
      2.1(p)
      hereto,
      the Company has not employed any broker or finder or incurred any liability
      for
      any brokerage or investment banking fees, commissions, finders' structuring
      fees, financial advisory fees or other similar fees in connection with the
      Transaction Documents.

     

    (q)  Disclosure.
      Except
      for the transactions contemplated by this Agreement, the Company confirms that
      neither it nor any other person acting on its behalf has provided any of the
      Purchasers or their agents or counsel with any information that constitutes
      or
      might constitute material, nonpublic information. To the best of the Company's
      knowledge, neither this Agreement or the Schedules hereto nor any other
      documents, certificates or instruments furnished to the Purchasers by or on
      behalf of the Company or any Subsidiary in connection with the transactions
      contemplated by this Agreement contain any untrue statement of a material fact
      or omit to state a material fact necessary in order to make the statements
      made
      herein or therein, in the light of the circumstances under which they were
      made
      herein or therein, not misleading.

     

    (r)  Operation
      of Business.
      The
      Company and each of the Subsidiaries owns or possesses the rights to all
      patents, trademarks, domain names (whether or not registered) and any patentable
      improvements or copyrightable derivative works thereof, websites and
      intellectual property rights relating thereto, service marks, trade names,
      copyrights, licenses and authorizations which are necessary for the conduct
      of
      its business as now conducted without any conflict with the rights of
      others.

     

    (s)  Environmental
      Compliance.
      To the
      best knowledge of the Company, the Company and each of its Subsidiaries have
      obtained all material approvals, authorization, certificates, consents,
      licenses, orders and permits or other similar authorizations of all governmental
      authorities, or from any other person, that are required under any Environmental
      Laws. “Environmental
      Laws”
shall
      mean all applicable laws relating to the protection of the environment
      including, without limitation, all requirements pertaining to reporting,
      licensing, permitting, controlling, investigating or remediating emissions,
      discharges, releases or threatened releases of hazardous substances, chemical
      substances, pollutants, contaminants or toxic substances, materials or wastes,
      whether solid, liquid or gaseous in nature, into the air, surface water,
      groundwater or land, or relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of hazardous
      substances, chemical substances, pollutants, contaminants or toxic substances,
      material or wastes, whether solid, liquid or gaseous in nature. To the best
      of
      the Company’s knowledge, the Company has all necessary governmental approvals
      required under all Environmental Laws as necessary for the Company’s business or
      the business of any of its subsidiaries. To the best of the Company’s knowledge,
      the Company and each of its subsidiaries are also in compliance with all other
      limitations, restrictions, conditions, standards, requirements, schedules and
      timetables required or imposed under all Environmental Laws. Except for such
      instances as would not, individually or in the aggregate, reasonably be expected
      to have a Material Adverse Effect, there are no past or present events,
      conditions, circumstances, incidents, actions or omissions relating to or in
      any
      way affecting the Company or its Subsidiaries that violate or may reasonably
      be
      expected to violate any Environmental Law after the Closing Date or that may
      give rise to any environmental liability, or otherwise form the basis of any
      claim, action, demand, suit, proceeding, hearing, study or investigation (i)
      under any Environmental Law, or (ii) based on or related to the manufacture,
      processing, distribution, use, treatment, storage (including without limitation
      underground storage tanks), disposal, transport or handling, or the emission,
      discharge, release or threatened release of any hazardous substance.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (t)  Books
      and Records; Internal Accounting Controls.
      The
      records and documents of the Company and its Subsidiaries accurately reflect
      in
      all material respects the information relating to the business of the Company
      and the Subsidiaries, the location and collection of their assets, and the
      nature of all transactions giving rise to the obligations or accounts receivable
      of the Company or any Subsidiary. Except as set forth in the Commission
      Documents, the Company and each of its Subsidiaries maintain a system of
      internal accounting controls sufficient, in the judgment of the Company's
      management, to provide reasonable assurance that (i) transactions are executed
      in accordance with management's general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management's general or specific authorization and (iv) the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate actions are taken with respect to any
      differences.

     

    (u)  Material
      Agreements.
      Except
      as set forth on Schedule
      2.1(u)
      hereto
      and except for the Transaction Documents (with respect to clause (i) of this
      Section 2.1(u) only) or as would not be reasonably likely to have a Material
      Adverse Effect, (i) the Company and each of its Subsidiaries have performed
      all
      obligations required to be performed by them to date under any written or oral
      contract, instrument, agreement, commitment, obligation, plan or arrangement,
      filed or required to be filed with the Commission (the "Material
      Agreements"),
      (ii)
      neither the Company nor any of its Subsidiaries has received any notice of
      default under any Material Agreement and, (iii) to the best of the Company's
      knowledge, neither the Company nor any of its Subsidiaries is in default under
      any Material Agreement now in effect. 

     

    (v)  Transactions
      with Affiliates.
      There
      are no loans, leases, agreements, contracts, royalty agreements, management
      contracts or arrangements or other continuing transactions between (a) the
      Company, any Subsidiary or any of their respective customers or suppliers on
      the
      one hand, and (b) on the other hand, any officer, employee, consultant or
      director of the Company, or any of its Subsidiaries, or any person owning at
      least 5% of the outstanding capital stock of the Company or any Subsidiary
      or
      any member of the immediate family of such officer, employee, consultant,
      director or stockholder or any corporation or other entity controlled by such
      officer, employee, consultant, director or stockholder, or a member of the
      immediate family of such officer, employee, consultant, director or stockholder
      which, in each case, is required to be disclosed in the Commission Documents
      or
      in the Company’s most recently filed definitive proxy statement on Schedule 14A,
      that is not so disclosed in the Commission Documents or in such proxy
      statement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (w)  Securities
      Act of 1933.
      Based
      in material part upon the representations herein of the Purchasers, the Company
      has complied and will comply with all applicable federal and state securities
      laws in connection with the offer, issuance and sale of the Securities
      hereunder. Neither the Company nor anyone acting on its behalf, directly or
      indirectly, has or will sell, offer to sell or solicit offers to buy any of
      the
      Securities or similar securities to, or solicit offers with respect thereto
      from, or enter into any negotiations relating thereto with, any person, or
      has
      taken or will take any action so as to bring the issuance and sale of any of
      the
      Securities under the registration provisions of the Securities Act and
      applicable state securities laws, and neither the Company nor any of its
      affiliates, nor any person acting on its or their behalf, has engaged in any
      form of general solicitation or general advertising (within the meaning of
      Regulation D under the Securities Act) in connection with the offer or sale
      of
      any of the Securities.

     

    (x)  Employees.
      Neither
      the Company nor any Subsidiary has any collective bargaining arrangements or
      agreements covering any of its employees. Neither the Company nor any Subsidiary
      has any employment contract, agreement regarding proprietary information,
      non-competition agreement, non-solicitation agreement, confidentiality
      agreement, or any other similar contract or restrictive covenant, relating
      to
      the right of any officer, employee or consultant to be employed or engaged
      by
      the Company or such Subsidiary required to be disclosed in the Commission
      Documents that is not so disclosed. Except
      as
      set forth on Schedule
      2.1(x)
      hereto,
      no
      officer, consultant or key employee of the Company or any Subsidiary whose
      termination, either individually or in the aggregate, would be reasonably likely
      to have a Material Adverse Effect, has terminated or, to the knowledge of the
      Company, has any present intention of terminating his or her employment or
      engagement with the Company or any Subsidiary.

     

    (y)  Absence
      of Certain Developments.
      Except
      as set forth in the Commission Documents or on Schedule
      2.1(y)
      hereto,
      since December 31, 2006, neither the Company nor any Subsidiary
      has:

    

    (i)  issued
      any stock, bonds or other corporate securities or any right, options or warrants
      with respect thereto;

     

    (ii)  borrowed
      any amount in excess of $100,000 or incurred or become subject to any other
      liabilities in excess of $100,000 (absolute or contingent) except current
      liabilities incurred in the ordinary course of business which are comparable
      in
      nature and amount to the current liabilities incurred in the ordinary course
      of
      business during the comparable portion of its prior fiscal year, as adjusted
      to
      reflect the current nature and volume of the business of the Company and its
      Subsidiaries;

     

     

    (iii)  discharged
      or satisfied any lien or encumbrance in excess of $100,000 or paid any
      obligation or liability (absolute or contingent) in excess of $100,000, other
      than current liabilities paid in the ordinary course of business;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (iv)  declared
      or made any payment or distribution of cash or other property to stockholders
      with respect to its stock, or purchased or redeemed, or made any agreements
      so
      to purchase or redeem, any shares of its capital stock, in each case in excess
      of $50,000 individually or $100,000 in the aggregate;

     

     

    (v)  sold,
      assigned or transferred any other tangible assets, or canceled any debts or
      claims, in each case in excess of $100,000, except in the ordinary course of
      business;

     

     

    (vi)  sold,
      assigned or transferred any patent rights, trademarks, trade names, copyrights,
      trade secrets or other intangible assets or intellectual property rights in
      excess of $100,000, or disclosed any proprietary confidential information to
      any
      person except to customers in the ordinary course of business or to the
      Purchasers or their representatives;

     

     

    (vii)  suffered
      any material losses or waived any rights of material value, whether or not
      in
      the ordinary course of business, or suffered the loss of any material amount
      of
      prospective business;

     

     

    (viii)  made
      any
      changes in employee compensation except in the ordinary course of business
      and
      consistent with past practices;

     

     

    (ix)  made
      capital expenditures or commitments therefor that aggregate in excess of
      $100,000;

     

     

    (x)  entered
      into any material transaction, whether or not in the ordinary course of
      business;

     

     

    (xi)  made
      charitable contributions or pledges in excess of $10,000;

     

     

    (xii)  suffered
      any material damage, destruction or casualty loss, whether or not covered by
      insurance;

     

     

    (xiii)  experienced
      any material problems with labor or management in connection with the terms
      and
      conditions of their employment; or 

     

     

    (xiv)  entered
      into an agreement, written or otherwise, to take any of the foregoing
      actions.

     

    

    (z)  Public
      Utility Holding Company Act and Investment Company Act Status.
      The
      Company is not a “holding company” or a “public utility company” as such terms
      are defined in the Public Utility Holding Company Act of 1935, as amended.
      The
      Company is not, and as a result of and immediately upon the Closing will not
      be,
      an “investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as
      amended.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (aa)  ERISA.
      No
      liability to the Pension Benefit Guaranty Corporation has been incurred with
      respect to any Plan by the Company or any of its Subsidiaries which is or would
      be materially adverse to the Company and its Subsidiaries. The execution and
      delivery of this Agreement and the issuance and sale of the Securities will
      not
      involve any transaction which is subject to the prohibitions of Section 406
      of
      the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or in
      connection with which a tax could be imposed pursuant to Section 4975 of the
      Internal Revenue Code of 1986, as amended, provided that, if any of the
      Purchasers, or any person or entity that owns a beneficial interest in any
      of
      the Purchasers, is an “employee pension benefit plan” (within the meaning of
      Section 3(2) of ERISA) with respect to which the Company is a “party in
      interest” (within the meaning of Section 3(14) of ERISA), the requirements of
      Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met. As used in
      this
      Section 2.1(aa), the term “Plan” shall mean an “employee pension benefit plan”
(as defined in Section 3 of ERISA) which is or has been established or
      maintained, or to which contributions are or have been made, by the Company
      or
      any Subsidiary or by any trade or business, whether or not incorporated, which,
      together with the Company or any Subsidiary, is under common control, as
      described in Section 414(b) or (c) of the Code.

     

    (bb)  Independent
      Nature of Purchasers.
      The
      Company acknowledges that the obligations of each Purchaser under the
      Transaction Documents are several and not joint with the obligations of any
      other Purchaser, and no Purchaser shall be responsible in any way for the
      performance of the obligations of any other Purchaser under the Transaction
      Documents. The Company acknowledges that nothing contained herein, or in any
      Transaction Document, and no action taken by any Purchaser pursuant hereto
      or
      thereto, shall be deemed to constitute the Purchasers as a partnership, an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by the
      Transaction Documents. The Company acknowledges that for reasons of
      administrative convenience only, the Transaction Documents have been prepared
      by
      counsel for one of the Purchasers and such counsel does not represent all of
      the
      Purchasers but only such Purchaser and the other Purchasers have retained their
      own individual counsel with respect to the transactions contemplated
      hereby.  The Company acknowledges that it has elected to provide all
      Purchasers with the same terms and Transaction Documents for the convenience
      of
      the Company and not because it was required or requested to do so by the
      Purchasers. The Company acknowledges that such procedure with respect to the
      Transaction Documents in no way creates a presumption that the Purchasers are
      in
      any way acting in concert or as a group with respect to the Transaction
      Documents or the transactions contemplated hereby or thereby.

     

    (cc)  No
      Integrated Offering.
      Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offering of the Securities pursuant to this Agreement to be integrated
      with
      prior offerings by the Company for purposes of the Securities Act which would
      prevent the Company from selling the Securities pursuant to Regulation D and
      Rule 506 thereof under the Securities Act, or any applicable exchange-related
      stockholder approval provisions, nor will the Company or any of its affiliates
      or subsidiaries take any action or steps that would cause the offering of the
      Securities to be integrated with other offerings.
      The
      Company does not have any registration statement pending before the Commission
      or currently under the Commission’s review and since February 1, 2007, the
      Company has not offered or sold any of its equity securities or debt securities
      convertible into shares of Common Stock.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (dd)  Sarbanes-Oxley
      Act. 
      Except
      as
      set forth on Schedule
      2.1(dd)
      hereto,
      the
      Company is in compliance with the applicable provisions of the Sarbanes-Oxley
      Act of 2002 (the “Sarbanes-Oxley
      Act”),
      and
      the rules and regulations promulgated thereunder, that are effective and intends
      to comply with other applicable provisions of the Sarbanes-Oxley Act, and the
      rules and regulations promulgated thereunder, upon the effectiveness of such
      provisions.

    

    (ee)  Dilutive
      Effect.
      The
      Company understands and acknowledges that its obligation to issue Conversion
      Shares upon conversion of the Notes in accordance with this Agreement and the
      Notes and its obligations to issue the Warrant Shares upon the exercise of
      the
      Warrants in accordance with this Agreement and the Warrants, is, in each case,
      absolute and unconditional regardless of the dilutive effect that such issuance
      may have on the ownership interest of other stockholders of the
      Company.

     

    (ff)  DTC
      Status.
      The
      Company’s transfer agent is a participant in and the Common Stock is eligible
      for transfer pursuant to the Depository Trust Company Automated Securities
      Transfer Program. The name, address, telephone number, fax number, contact
      person and email address of the Company’s transfer agent is set forth on
Schedule
      2.1(ff)
      hereto.

     

    Section
      2.2  Representations
      and Warranties of the Purchasers.
      Each of
      the Purchasers hereby represents and warrants to the Company with respect solely
      to itself and not with respect to any other Purchaser as follows as of the
      date
      hereof and as of the Closing Date:

     

    (a)  Organization
      and Standing of the Purchasers.
      If the
      Purchaser is an entity, such Purchaser is a corporation, limited liability
      company or partnership duly incorporated or organized, validly existing and
      in
      good standing under the laws of the jurisdiction of its incorporation or
      organization.

     

    (b)  Authorization
      and Power.
      Each
      Purchaser has the requisite power and authority to enter into and perform the
      Transaction Documents and to purchase the Securities being sold to it hereunder.
      The execution, delivery and performance of the Transaction Documents by each
      Purchaser and the consummation by it of the transactions contemplated hereby
      have been duly authorized by all necessary corporate or partnership action,
      and
      no further consent or authorization of such Purchaser or its Board of Directors,
      stockholders, or partners, as the case may be, is required. When executed and
      delivered by the Purchasers, the other Transaction Documents shall constitute
      valid and binding obligations of each Purchaser enforceable against such
      Purchaser in accordance with their terms, except as such enforceability may
      be
      limited by applicable bankruptcy, insolvency, reorganization, moratorium,
      liquidation, conservatorship, receivership or similar laws relating to, or
      affecting generally the enforcement of, creditor's rights and remedies or by
      other equitable principles of general application.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (c)  No
      Conflict.
      The
      execution, delivery and performance of the Transaction Documents by the
      Purchaser and the consummation by the Purchaser of the transactions contemplated
      thereby and hereby do not and will not (i) violate any provision of the
      Purchaser’s charter or organizational documents, (ii) conflict with, or
      constitute a default (or an event which with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any agreement, mortgage, deed of
      trust, indenture, note, bond, license, lease agreement, instrument or obligation
      to which the Purchaser is a party or by which the Purchaser’s respective
      properties or assets are bound, or (iii) result in a violation of any federal,
      state, local or foreign statute, rule, regulation, order, judgment or decree
      (including federal and state securities laws and regulations) applicable to
      the
      Purchaser or by which any property or asset of the Purchaser are bound or
      affected, except, in all cases, other than violations pursuant to clauses (i)
      or
      (iii) (with respect to federal and state securities laws) above, except, for
      such conflicts, defaults, terminations, amendments, acceleration, cancellations
      and violations as would not, individually or in the aggregate, materially and
      adversely affect the Purchaser’s ability to perform its obligations under the
      Transaction Documents. 

     

    (d)  Acquisition
      for Investment.
      Each
      Purchaser is purchasing the Securities solely for its own account and not with
      a
      view to or for sale in connection with distribution. Each Purchaser does not
      have a present intention to sell any of the Securities, nor a present
      arrangement (whether or not legally binding) or intention to effect any
      distribution of any of the Securities to or through any person or entity;
provided,
      however,
      that by
      making the representations herein, such Purchaser does not agree to hold the
      Securities for any minimum or other specific term and reserves the right to
      dispose of the Securities at any time in accordance with Federal and state
      securities laws applicable to such disposition. Each Purchaser acknowledges
      that
      it (i) has such knowledge and experience in financial and business matters
      such
      that Purchaser is capable of evaluating the merits and risks of Purchaser's
      investment in the Company, (ii) is able to bear the financial risks associated
      with an investment in the Securities and (iii) has been given full access to
      such records of the Company and the Subsidiaries and to the officers of the
      Company and the Subsidiaries as it has deemed necessary or appropriate to
      conduct its due diligence investigation.

     

    (e)  Rule
      144.
      Each
      Purchaser understands that the Securities must be held indefinitely unless
      such
      Securities are registered under the Securities Act or an exemption from
      registration is available. Each Purchaser acknowledges that such person is
      familiar with Rule 144 of the rules and regulations of the Commission, as
      amended, promulgated pursuant to the Securities Act ("Rule
      144"),
      and
      that such Purchaser has been advised that Rule 144 permits resales only under
      certain circumstances. Each Purchaser understands that to the extent that Rule
      144 is not available, such Purchaser will be unable to sell any Securities
      without either registration under the Securities Act or the existence of another
      exemption from such registration requirement.

     

    (f)  General.
      Each
      Purchaser understands that the Securities are being offered and sold in reliance
      on a transactional exemption from the registration requirements of federal
      and
      state securities laws and the Company is relying upon the truth and accuracy
      of
      the representations, warranties, agreements, acknowledgments and understandings
      of such Purchaser set forth herein in order to determine the applicability
      of
      such exemptions and the suitability of such Purchaser to acquire the Securities.
      Each Purchaser understands that no United States federal or state agency or
      any
      government or governmental agency has passed upon or made any recommendation
      or
      endorsement of the Securities. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (g)  No
      General Solicitation.
      Each
      Purchaser acknowledges that the Securities were not offered to such Purchaser
      by
      means of any form of general or public solicitation or general advertising,
      or
      publicly disseminated advertisements or sales literature, including (i) any
      advertisement, article, notice or other communication published in any
      newspaper, magazine, or similar media, or broadcast over television or radio,
      or
      (ii) any seminar or meeting to which such Purchaser was invited by any of the
      foregoing means of communications. Each Purchaser, in making the decision to
      purchase the Securities, has relied upon independent investigation made by
      it
      and has not relied on any information or representations made by third
      parties.

     

    (h)  Accredited
      Investor.
      Each
      Purchaser is an “accredited investor” (as defined in Rule 501 of Regulation D),
      and such Purchaser has such experience in business and financial matters that
      it
      is capable of evaluating the merits and risks of an investment in the
      Securities. Such Purchaser is not required to be registered as a broker-dealer
      under Section 15 of the Exchange Act and such Purchaser is not a broker-dealer.
      Each Purchaser acknowledges that an investment in the Securities is speculative
      and involves a high degree of risk. 

     

    (i)  Certain
      Fees.
      The
      Purchasers have not employed any broker or finder or incurred any liability
      for
      any brokerage or investment banking fees, commissions, finders' structuring
      fees, financial advisory fees or other similar fees in connection with the
      Transaction Documents.

     

    (j)  Independent
      Investment.
      Except
      as may be disclosed in any filings by a Purchaser with the Commission, no
      Purchaser has agreed to act with any other Purchaser for the purpose of
      acquiring, holding, voting or disposing of the Securities purchased hereunder
      for purposes of Section 13(d) under the Exchange Act, and each Purchaser is
      acting independently with respect to its investment in the Securities. The
      decision of each Purchaser to purchase Securities pursuant to this Agreement
      has
      been made by such Purchaser independently of any other Purchaser and
      independently of any information, materials, statements or opinions as to the
      business, affairs, operations, assets, properties, liabilities, results of
      operations, condition (financial or otherwise) or prospects of the Company
      or of
      its Subsidiaries which may have been made or given by any other Purchaser or
      by
      any agent or employee of any other Purchaser, and no Purchaser or any of its
      agents or employees shall have any liability to any Purchaser (or any other
      person) relating to or arising from any such information, materials, statements
      or opinions.

     

    (k)  Insider
      Purchasers.
      Each
      Insider Purchaser (as defined on Exhibit A hereto) acknowledges that he or
      she
      is subject to the Company’s insider trading policy, as the same may be amended
      from time to time, and agrees not to sell, convert, or exercise the Notes or
      the
      Warrants, as applicable, in violation of such policy.

     

    ARTICLE
      III

     

    COVENANTS

     

    The
      Company covenants with each Purchaser as follows, which covenants are for the
      benefit of each Purchaser and their respective permitted assignees.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      3.1  Securities
      Compliance.
      The
      Company shall notify the Commission in accordance with its rules and
      regulations, of the transactions contemplated by any of the Transaction
      Documents and shall take all other necessary action and proceedings as may
      be
      required and permitted by applicable law, rule and regulation, for the legal
      and
      valid issuance of the Securities to the Purchasers, or their respective
      subsequent holders.

     

    Section
      3.2  Registration
      and Listing.
      The
      Company shall cause its Common Stock to continue to be registered under Sections
      12(b) or 12(g) of the Exchange Act, to comply in all respects with its reporting
      and filing obligations under the Exchange Act, to comply with all requirements
      related to any registration statement filed pursuant to this Agreement, and
      to
      not take any action or file any document (whether or not permitted by the
      Securities Act or the rules promulgated thereunder) to terminate or suspend
      such
      registration or to terminate or suspend its reporting and filing obligations
      under the Exchange Act or Securities Act, except as permitted herein. Upon
      the
      Company becoming eligible to quote its Common Stock on the OTC Bulletin Board,
      the Company will take all action necessary once its Common Stock is eligible
      for
      quotation on the OTC Bulletin Board to continue the listing or trading of its
      Common Stock on the OTC Bulletin Board or other exchange or market on which
      the
      Common Stock is trading. Subject to the terms of the Transaction Documents,
      the
      Company further covenants that it will take such further action as the
      Purchasers may reasonably request, all to the extent required from time to
      time
      to enable the Purchasers to sell the Securities without registration under
      the
      Securities Act within the limitation of the exemptions provided by Rule 144
      promulgated under the Securities Act. Upon the request of the Purchasers, the
      Company shall deliver to the Purchasers a written certification of a duly
      authorized officer as to whether it has complied with such
      requirements.

     

    Section
      3.3  Inspection
      Rights.
      Provided
      same would not be in violation of Regulation FD, the Company shall permit,
      during normal business hours and upon reasonable request and reasonable notice,
      each Purchaser or any employees, agents or representatives thereof, so long
      as
      such Purchaser shall be obligated hereunder to purchase the Notes or shall
      beneficially own any Conversion Shares or Warrant Shares, for purposes
      reasonably related to such Purchaser's interests as a stockholder, to examine
      the publicly available, non-confidential records and books of account of, and
      visit and inspect the properties, assets, operations and business of the Company
      and any Subsidiary, and to discuss the publicly available, non-confidential
      affairs, finances and accounts of the Company and any Subsidiary with any of
      its
      officers, consultants, directors, and key employees.

     

    Section
      3.4  Compliance
      with Laws.
      The
      Company shall comply, and cause each Subsidiary to comply, with all applicable
      laws, rules, regulations and orders, noncompliance with which would be
      reasonably likely to have a Material Adverse Effect.

     

    Section
      3.5  Keeping
      of Records and Books of Account.
      The
      Company shall keep and cause each Subsidiary to keep adequate records and books
      of account, in which complete entries will be made in accordance with GAAP
      consistently applied, reflecting all financial transactions of the Company
      and
      its Subsidiaries, and in which, for each fiscal year, all proper reserves for
      depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
      purposes in connection with its business shall be made.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Section
      3.6  Reporting
      Requirements.
      If the
      Commission ceases making the Company’s periodic reports available via the
      Internet without charge, then the Company shall furnish the following to each
      Purchaser so long as such Purchaser shall be obligated hereunder to purchase
      the
      Securities or shall beneficially own Securities:

     

    (a)  Quarterly
      Reports filed with the Commission on Form 10-Q as soon as practical after the
      document is filed with the Commission, and in any event within five (5) days
      after the document is filed with the Commission;

     

    (b)  Annual
      Reports filed with the Commission on Form 10-K or Form 10-KSB as soon as
      practical after the document is filed with the Commission, and in any event
      within five (5) days after the document is filed with the Commission;
      and

     

     (c)  Copies
      of
      all notices, information and proxy statements in connection with any meetings,
      that are, in each case, provided to holders of shares of Common Stock,
      contemporaneously with the delivery of such notices or information to such
      holders of Common Stock.

     

    Section
      3.7  Other
      Agreements.
      The
      Company shall not enter into any agreement in which the terms of such agreement
      would restrict or impair the right or ability to perform of the Company or
      any
      Subsidiary under any Transaction Document.

     

    Section
      3.8  Use
      of
      Proceeds.
      The net
      proceeds from the sale of the Securities hereunder shall be used by the Company
      for working capital and general corporate purposes and to fund its restructuring
      plan and not to redeem any Common Stock or securities convertible, exercisable
      or exchangeable into Common Stock or to settle any outstanding
      litigation.

    

    Section
      3.9  Reporting
      Status. Except
      as
      set forth on Schedule
      2.1(f)
      hereto,
      so long as a Purchaser beneficially owns any of the Securities, the Company
      shall timely file all reports required to be filed with the Commission pursuant
      to the Exchange Act, and the Company shall not terminate its status as an issuer
      required to file reports under the Exchange Act even if the Exchange Act or
      the
      rules and regulations thereunder would permit such termination. 

    

    Section
      3.10  Disclosure
      of Transaction.
      The
      Company shall issue a press release describing the material terms of the
      transactions contemplated hereby (the “Press
      Release”)
      on the
      day of the Closing but in no event later than one hour after the Closing;
provided,
      however,
      that if
      the Closing occurs after 4:00 P.M. Eastern Time on any Trading Day, the Company
      shall issue the Press Release no later than 9:00 A.M. Eastern Time on the first
      Trading Day following the Closing Date. The Company shall also file with the
      Commission a Current Report on Form 8-K (the “Form
      8-K”)
      describing the material terms of the transactions contemplated hereby (and
      attaching as exhibits thereto this Agreement, the form of Note, the Registration
      Rights Agreement, the Security Agreement, the form of Warrant and the Press
      Release) as soon as practicable following the Closing Date but in no event
      more
      than two (2) Trading Days following the Closing Date, which Press Release and
      Form 8-K shall be subject to prior review and comment by the Purchasers.
      "Trading
      Day"
      means
      any day during which The New York Stock Exchange shall be open for
      business.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Section
      3.11  Disclosure
      of Material Information.
      The
      Company covenants and agrees that neither it nor any other person acting on
      its
      behalf has provided or will provide any Purchaser or its agents or counsel
      with
      any information that the Company believes constitutes material non-public
      information, unless prior thereto such Purchaser shall have executed a written
      agreement regarding the confidentiality and use of such information.  The
      Company understands and confirms that each Purchaser shall be relying on the
      foregoing representations in effecting transactions in securities of the
      Company.

     

    Section
      3.12  Pledge
      of Securities.
      The
      Company acknowledges that the Securities may be pledged by a Purchaser in
      connection with a bona fide
      margin
      agreement or other loan or financing arrangement that is secured by the
      Securities. The pledge of Securities shall not be deemed to be a transfer,
      sale
      or assignment of the Securities hereunder, and no Purchaser effecting a pledge
      of the Securities shall be required to provide the Company with any notice
      thereof or otherwise make any delivery to the Company pursuant to this Agreement
      or any other Transaction Document; provided that a Purchaser and its pledgee
      shall be required to comply with the provisions of Article V hereof in order
      to
      effect a sale, transfer or assignment of Securities to such pledgee. At the
      Purchasers' expense, the Company hereby agrees to execute and deliver such
      documentation as a pledgee of the Securities may reasonably request in
      connection with a pledge of the Securities to such pledgee by a
      Purchaser.

     

    Section
      3.13  Amendments.
      The
      Company shall not amend or waive any provision of the Certificate or Bylaws
      of
      the Company in any way that would adversely affect exercise rights, voting
      rights, conversion rights, prepayment rights or redemption rights of the holder
      of the Notes.

     

    Section
      3.14  Distributions.
      So long
      as any Notes or Warrants remain outstanding, the Company agrees that it shall
      not (i) declare
      or pay any dividends or make any distributions to any holder(s) of Common Stock
      or (ii) purchase or otherwise acquire for value, directly or indirectly, any
      Common Stock or other equity security of the Company.

     

    Section
      3.15  Reservation
      of Shares.
      So long
      as any of the Notes or Warrants remain outstanding, the Company shall take
      all
      action necessary to at all times have authorized and reserved for the purpose
      of
      issuance, one hundred twenty percent (120%) of the aggregate number of shares
      of
      Common Stock needed to provide for the issuance of the Conversion Shares and
      the
      Warrant Shares.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
      3.16  Transfer
      Agent Instructions.
      The
      Company shall issue irrevocable instructions to its transfer agent, and any
      subsequent transfer agent, to issue certificates, registered in the name of
      each
      Purchaser or its respective nominee(s), for the Conversion Shares and the
      Warrant Shares in such amounts as specified from time to time by each Purchaser
      to the Company upon conversion of the Notes or exercise of the Warrants in
      the
      form of Exhibit
      G
      attached
      hereto (the “Irrevocable
      Transfer Agent Instructions”).
      Prior
      to registration of the Conversion Shares and the Warrant Shares under the
      Securities Act, all such certificates shall bear the restrictive legend
      specified in Section 5.1 of this Agreement. The Company warrants that no
      instruction other than the Irrevocable Transfer Agent Instructions referred
      to
      in this Section 3.16 will be given by the Company to its transfer agent and
      that
      the Conversion Shares and Warrant Shares shall otherwise be freely transferable
      on the books and records of the Company as and to the extent provided in this
      Agreement and the Registration Rights Agreement. Nothing in this Section 3.16
      shall affect in any way each Purchaser’s obligations and agreements set forth in
      Section 5.1 to comply with all applicable prospectus delivery requirements,
      if
      any, upon resale of the Conversion Shares and the Warrant Shares. If a Purchaser
      provides the Company with an opinion of counsel, in a generally acceptable
      form,
      to the effect that a public sale, assignment or transfer of the Conversion
      Shares or Warrant Shares may be made without registration
      under the Securities Act or the Purchaser provides the Company with reasonable
      assurances that the Conversion Shares or Warrant Shares can be sold pursuant
      to
      Rule 144 without any restriction as to the number of securities acquired as
      of a
      particular date that can then be immediately sold, the Company shall permit
      the
      transfer, and, in the case of the Conversion Shares and the Warrant Shares,
      promptly instruct its transfer agent to issue one or more certificates in such
      name and in such denominations as specified by such Purchaser and without any
      restrictive legend. The Company acknowledges that a breach by it of its
      obligations under this Section 3.16 will cause irreparable harm to the
      Purchasers by vitiating the intent and purpose of the transaction contemplated
      hereby. Accordingly, the Company acknowledges that the remedy at law for a
      breach of its obligations under this Section 3.16 will be inadequate and
      agrees, in the event of a breach or threatened breach by the Company of the
      provisions of this Section 3.16, that the Purchasers shall be entitled, in
      addition to all other available remedies, to an order and/or injunction
      restraining any breach and requiring immediate issuance and transfer, without
      the necessity of showing economic loss and without any bond or other security
      being required. 

     

    Section
      3.17  Disposition
      of Assets.
      So long
      as the Notes remain outstanding, neither the Company nor any subsidiary shall
      sell, transfer or otherwise dispose of any of its properties, assets and rights
      including, without limitation, its software and intellectual property, to any
      person except for sales of obsolete assets and sales to customers in the
      ordinary course of business or with the prior written consent of the holders
      of
      a majority of the principal amount of the Notes then outstanding.

     

    Section
      3.18  Restrictions
      on Certain Issuances of Securities.
      The
      Company shall not issue any securities that rank pari passu or senior to the
      Notes without the prior written consent of at least seventy-five percent (75%)
      of the principal amount of the Notes outstanding at such time.

     

    ARTICLE
      IV

     

    CONDITIONS

     

    Section
      4.1  Conditions
      Precedent to the Obligation of the Company to Close and to Sell the
      Securities.
      The
      obligation hereunder of the Company to close and issue and sell the Securities
      to the Purchasers at the Closing is subject to the satisfaction or waiver,
      at or
      before the Closing of the conditions set forth below. These conditions are
      for
      the Company's sole benefit and may be waived by the Company at any time in
      its
      sole discretion.

     

    (a)  Accuracy
      of the Purchasers’ Representations and Warranties.
      The
      representations and warranties of each Purchaser shall be true and correct
      in
      all material respects as of the date when made and as of the Closing Date as
      though made at that time, except for representations and warranties that are
      expressly made as of a particular date, which shall be true and correct in
      all
      material respects as of such date.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (b)  Performance
      by the Purchasers.
      Each
      Purchaser shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Purchasers at or prior to the
      Closing Date.

     

    (c)  No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    (d)  Delivery
      of Purchase Price.
      The
      Purchase Price for the Securities shall have been delivered to the Company
      on
      the Closing Date.

     

    (e)  Delivery
      of Transaction Documents.
      The
      Transaction Documents shall have been duly executed and delivered by the
      Purchasers and, with respect to the Escrow Agreement, the escrow agent, to
      the
      Company.

     

    Section
      4.2  Conditions
      Precedent to the Obligation of the Purchasers to Close and to Purchase the
      Securities.
      The
      obligation hereunder of the Purchasers to purchase the Securities and consummate
      the transactions contemplated by this Agreement is subject to the satisfaction
      or waiver, at or before the Closing, of each of the conditions set forth below.
      These conditions are for the Purchasers’ sole benefit and may be waived by the
      Purchasers at any time in their sole discretion.

     

    (a)  Accuracy
      of the Company's Representations and Warranties.
      Each of
      the representations and warranties of the Company in this Agreement and the
      other Transaction Documents shall be true and correct in all material respects
      as of the Closing Date, except for representations and warranties that speak
      as
      of a particular date, which shall be true and correct in all material respects
      as of such date.

     

    (b)  Performance
      by the Company.
      The
      Company shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Company at or prior to the Closing
      Date.

     

    (c)  No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    (d)  No
      Proceedings or Litigation.
      No
      action, suit or proceeding before any arbitrator or any governmental authority
      shall have been commenced, and no investigation by any governmental authority
      shall have been threatened, against the Company or any Subsidiary, or any of
      the
      officers, directors or affiliates of the Company or any Subsidiary seeking
      to
      restrain, prevent or change the transactions contemplated by this Agreement,
      or
      seeking damages in connection with such transactions.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (e)  Opinion
      of Counsel.
      The
      Purchasers shall have received an opinion of counsel to the Company, dated
      the
      date of the Closing, substantially in the form of Exhibit
      H
      hereto,
      with such exceptions and limitations as shall be reasonably acceptable to
      counsel to the Purchasers.

     

    (f)  Notes
      and Warrants.
      At or
      prior to the Closing, the Company shall have delivered to the Purchasers the
      Notes (in such denominations as each Purchaser may request) and the Warrants
      (in
      such denominations as each Purchaser may request). 

     

    (g)  Secretary's
      Certificate.
      The
      Company shall have delivered to the Purchasers a secretary's certificate, dated
      as of the Closing Date, as to (i) the resolutions adopted by the Board of
      Directors approving the transactions contemplated hereby, (ii) the Certificate,
      (iii) the Bylaws, each as in effect at the Closing, and (iv) the authority
      and
      incumbency of the officers of the Company executing the Transaction Documents
      and any other documents required to be executed or delivered in connection
      therewith.

     

    (h)  Officer's
      Certificate.
      On the
      Closing Date, the Company shall have delivered to the Purchasers a certificate
      signed by an executive officer on behalf of the Company, dated as of the Closing
      Date, confirming the accuracy of the Company's representations, warranties
      and
      covenants as of the Closing Date and confirming the compliance by the Company
      with the conditions precedent set forth in this Section 4.2 as of the Closing
      Date (provided that, with respect to the matters in paragraphs (c) and (d)
      of
      this Section 4.2, such confirmation shall be based on the knowledge of the
      executive officer after due inquiry).

     

    (i)  Registration
      Rights Agreement.
      As of
      the Closing Date, the Company shall have executed and delivered the Registration
      Rights Agreement to each Purchaser.

     

    (j)  Material
      Adverse Effect.
      No
      Material Adverse Effect shall have occurred at or before the Closing
      Date.

     

    (k)  Transfer
      Agent Instructions.
      The
      Irrevocable Transfer Agent Instructions, in the form of Exhibit
      G
      attached
      hereto, shall have been delivered to the Company’s transfer agent. 

     

    (l)  Escrow
      Agreement.
      At the
      Closing, the Company and the escrow agent shall have executed and delivered
      the
      Escrow Agreement to each Purchaser.

     

    (m)  Security
      Agreement.
      At the
      Closing, the Company shall have executed and delivered the Security Agreement
      to
      each Purchaser.

     

    (n)  UCC
      Financing Statements.
      The
      Company shall have filed all UCC financing statements in form and substance
      satisfactory to the Purchasers at the appropriate offices to create a valid
      and
      perfected security interest in the Collateral (as defined in the Security
      Agreement).

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

     

    CERTIFICATE
      LEGEND 

     

    Section
      5.1  Legend.
      Each
      certificate representing the Securities shall be stamped or otherwise imprinted
      with a legend substantially in the following form (in addition to any legend
      required by applicable state securities or "blue sky" laws):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
      OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR GLOWPOINT, INC. SHALL HAVE RECEIVED AN OPINION OF
      COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER
      THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

     

    The
      Company agrees to issue or reissue certificates representing any of the
      Conversion Shares and the Warrant Shares, without the legend set forth above
      if
      at such time, prior to making any transfer of any such Conversion Shares or
      Warrant Shares, such holder thereof shall give written notice to the Company
      describing the manner and terms of such transfer and removal as the Company
      may
      reasonably request, and provided the conditions set forth in this paragraph
      shall have been met. Such proposed transfer and removal will not be effected
      until: (a) either (i) the Company has received an opinion of counsel reasonably
      satisfactory to the Company, to the effect that the registration of the
      Conversion Shares or Warrant Shares under the Securities Act is not required
      in
      connection with such proposed transfer, (ii) a registration statement under
      the
      Securities Act covering such proposed disposition has been filed by the Company
      with the Commission and has become effective under the Securities Act, (iii)
      the
      Company has received other evidence reasonably satisfactory to the Company
      that
      such registration and qualification under the Securities Act and state
      securities laws are not required, or (iv) the holder provides the Company with
      reasonable assurances that such security can be sold pursuant to Rule 144 under
      the Securities Act; and (b) either (i) the Company has received an opinion
      of
      counsel reasonably satisfactory to the Company, to the effect that registration
      or qualification under the securities or "blue sky" laws of any state is not
      required in connection with such proposed disposition, (ii) compliance with
      applicable state securities or "blue sky" laws has been effected, or (iii)
      the
      holder provides the Company with reasonable assurances that a valid exemption
      exists with respect thereto. The Company will respond to any such notice from
      a
      holder within three (3) business days. In the case of any proposed transfer
      under this Section 5.1, the Company will use reasonable efforts to comply with
      any such applicable state securities or "blue sky" laws, but shall in no event
      be required, (x) to qualify to do business in any state where it is not then
      qualified, (y) to take any action that would subject it to tax or to the general
      service of process in any state where it is not then subject, or (z) to comply
      with state securities or “blue sky” laws of any state for which registration by
      coordination is unavailable to the Company. The restrictions on transfer
      contained in this Section 5.1 shall be in addition to, and not by way of
      limitation of, any other restrictions on transfer contained in any other section
      of this Agreement. Whenever
      a
      certificate representing the Conversion Shares or Warrant Shares is required
      to
      be issued to a Purchaser without a legend, in lieu of delivering physical
      certificates representing the Conversion Shares or Warrant Shares, provided
      the
      Company's transfer agent is participating in the Depository Trust Company
      ("DTC")
      Fast
      Automated Securities Transfer program, the Company shall use its best efforts
      to
      cause its transfer agent to electronically transmit the Conversion Shares or
      Warrant Shares to a Purchaser by crediting the account of such Purchaser's
      Prime
      Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC")
      system
      (to the extent not inconsistent with any provisions of this
      Agreement).

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VI

     

    INDEMNIFICATION

     

    Section
      6.1  General
      Indemnity.
      The
      Company agrees to indemnify and hold harmless the Purchasers (and their
      respective directors, officers, managers, partners, members, shareholders,
      affiliates, agents, successors and assigns) from and against any and all losses,
      liabilities, deficiencies, costs, damages and expenses (including, without
      limitation, reasonable attorneys’ fees, charges and disbursements) incurred by
      the Purchasers as a result of any inaccuracy in or breach of the
      representations, warranties or covenants made by the Company herein. Each
      Purchaser severally but not jointly agrees to indemnify and hold harmless the
      Company and its directors, officers, affiliates, agents, successors and assigns
      from and against any and all losses, liabilities, deficiencies, costs, damages
      and expenses (including, without limitation, reasonable attorneys’ fees, charges
      and disbursements) incurred by the Company as result of any inaccuracy in or
      breach of the representations, warranties or covenants made by such Purchaser
      herein. The maximum aggregate liability of each Purchaser pursuant to its
      indemnification obligations under this Article VI shall not exceed the portion
      of the Purchase Price paid by such Purchaser hereunder. 

     

    Section
      6.2  Indemnification
      Procedure.
      Any
      party entitled to indemnification under this Article VI (an "indemnified party")
      will give written notice to the indemnifying party of any matter giving rise
      to
      a claim for indemnification; provided, that the failure of any party entitled
      to
      indemnification hereunder to give notice as provided herein shall not relieve
      the indemnifying party of its obligations under this Article VI except to the
      extent that the indemnifying party is actually prejudiced by such failure to
      give notice. In case any such action, proceeding or claim is brought against
      an
      indemnified party in respect of which indemnification is sought hereunder,
      the
      indemnifying party shall be entitled to participate in and, unless in the
      reasonable judgment of the indemnifying party a conflict of interest between
      it
      and the indemnified party exists with respect to such action, proceeding or
      claim (in which case the indemnifying party shall be responsible for the
      reasonable fees and expenses of one separate counsel for the indemnified
      parties), to assume the defense thereof with counsel reasonably satisfactory
      to
      the indemnified party. In the event that the indemnifying party advises an
      indemnified party that it will not contest such a claim for indemnification
      hereunder, or fails, within thirty (30) days of receipt of any indemnification
      notice to notify, in writing, such person of its election to defend, settle
      or
      compromise, at its sole cost and expense, any action, proceeding or claim (or
      discontinues its defense at any time after it commences such defense), then
      the
      indemnified party may, at its option, defend, settle or otherwise compromise
      or
      pay such action or claim. In any event, unless and until the indemnifying party
      elects in writing to assume and does so assume the defense of any such claim,
      proceeding or action, the indemnified party's costs and expenses arising out
      of
      the defense, settlement or compromise of any such action, claim or proceeding
      shall be losses subject to indemnification hereunder. The indemnified party
      shall cooperate fully with the indemnifying party in connection with any
      negotiation or defense of any such action or claim by the indemnifying party
      and
      shall furnish to the indemnifying party all information reasonably available
      to
      the indemnified party which relates to such action or claim. The indemnifying
      party shall keep the indemnified party fully apprised at all times as to the
      status of the defense or any settlement negotiations with respect thereto.
      If
      the indemnifying party elects to defend any such action or claim, then the
      indemnified party shall be entitled to participate in such defense with counsel
      of its choice at its sole cost and expense. The indemnifying party shall not
      be
      liable for any settlement of any action, claim or proceeding effected without
      its prior written consent. Notwithstanding anything in this Article VI to the
      contrary, the indemnifying party shall not, without the indemnified party's
      prior written consent, settle or compromise any claim or consent to entry of
      any
      judgment in respect thereof which imposes any future obligation on the
      indemnified party or which does not include, as an unconditional term thereof,
      the giving by the claimant or the plaintiff to the indemnified party of a
      release from all liability in respect of such claim. The indemnification
      obligations to defend the indemnified party required by this Article VI shall
      be
      made by periodic payments of the amount thereof during the course of
      investigation or defense, as and when bills are received or expense, loss,
      damage or liability is incurred, so long as the indemnified party shall refund
      such moneys if it is ultimately determined by a court of competent jurisdiction
      that such party was not entitled to indemnification. The
      indemnity agreements contained herein shall be in addition to (a) any cause
      of
      action or similar rights of the indemnified party against the indemnifying
      party
      or others, and (b) any liabilities the indemnifying party may be subject to
      pursuant to the law.
      No
      indemnifying party will be liable to the indemnified party under this Agreement
      to the extent, but only to the extent that a loss, claim, damage or liability
      is
      attributable to the indemnified party’s breach of any of the representations,
      warranties or covenants made by such party in this Agreement or in the other
      Transaction Documents.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII

     

    MISCELLANEOUS

     

    Section
      7.1  Fees
      and Expenses.
      Each
      party shall pay the fees and expenses of its advisors, counsel, accountants
      and
      other experts, if any, and all other expenses, incurred by such party incident
      to the negotiation, preparation, execution, delivery and performance of this
      Agreement; provided,
      however,
      that
      the Company shall pay all actual attorneys' fees and expenses (including
      disbursements and out-of-pocket expenses) incurred by the Purchasers in
      connection with (i) the preparation, negotiation, execution and delivery of
      the
      Transaction Documents and the transactions contemplated thereunder, including
      disbursements and out-of-pocket expenses, (ii) the review of the Registration
      Statement in accordance with the Section 4(iv) of the Registration Rights
      Agreement, and (iii) any amendments, modifications or waivers of this Agreement
      or any of the other Transaction Documents. In addition, the Company shall pay
      all reasonable fees and expenses incurred by the Purchasers in connection with
      the enforcement of this Agreement or any of the other Transaction Documents,
      including, without limitation, all reasonable attorneys' fees and expenses.
       

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    Section
      7.2  Specific
      Performance; Consent to Jurisdiction; Venue. 

     

    (a)  The
      Company and the Purchasers acknowledge and agree that irreparable damage would
      occur in the event that any of the provisions of this Agreement or the other
      Transaction Documents were not performed in accordance with their specific
      terms
      or were otherwise breached. It is accordingly agreed that the parties shall
      be
      entitled to an injunction or injunctions to prevent or cure breaches of the
      provisions of this Agreement or the other Transaction Documents and to enforce
      specifically the terms and provisions hereof or thereof, this being in addition
      to any other remedy to which any of them may be entitled by law or
      equity.

     

    (b)  The
      parties agree that venue for any dispute arising under this Agreement will
      lie
      exclusively in the state or federal courts located in New York County, New
      York,
      and the parties irrevocably waive any right to raise forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The parties irrevocably
      consent to personal jurisdiction in the state and federal courts of the state
      of
      New York. The Company and each Purchaser consent to process being served in
      any
      such suit, action or proceeding by mailing a copy thereof to such party at
      the
      address in effect for notices to it under this Agreement and agrees that such
      service shall constitute good and sufficient service of process and notice
      thereof. Nothing in this Section 7.2 shall affect or limit any right to serve
      process in any other manner permitted by law. The Company and the Purchasers
      hereby agree that the prevailing party in any suit, action or proceeding arising
      out of or relating to the Securities, this Agreement or the other Transaction
      Documents, shall be entitled to reimbursement for reasonable legal fees from
      the
      non-prevailing party. The parties hereby waive all rights to a trial by jury.
      

     

    Section
      7.3  Entire
      Agreement; Amendment.
      This
      Agreement and the Transaction Documents contain the entire understanding and
      agreement of the parties with respect to the matters covered hereby and, except
      as specifically set forth herein or in the other Transaction Documents, neither
      the Company nor any Purchaser make any representation, warranty, covenant or
      undertaking with respect to such matters, and they supersede all prior
      understandings and agreements with respect to said subject matter, all of which
      are merged herein. No provision of this Agreement may be waived or amended
      other
      than by a written instrument signed by the Company and the Purchasers holding
      at
      least a majority of the principal amount of the Notes then held by the
      Purchasers. Any amendment or waiver effected in accordance with this Section
      7.3
      shall be binding upon each Purchaser (and their permitted assigns) and the
      Company. 

     

    Section
      7.4  Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery by telecopy or facsimile at the address or number designated below
      (if
      delivered on a business day during normal business hours where such notice
      is to
      be received), or the first business day following such delivery (if delivered
      other than on a business day during normal business hours where such notice
      is
      to be received) or (b) on the second business day following the date of mailing
      by express courier service, fully prepaid, addressed to such address, or upon
      actual receipt of such mailing, whichever shall first occur. The addresses
      for
      such communications shall be:

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    If
      to the
      Company:  Glowpoint,
      Inc.

    225
      Long
      Avenue 

    Hillside,
      New Jersey 07205

    Attention:
      Chief Executive Officer 

    Tel.
      No.:
      (312) 235-3888

    Fax
      No.:
      (973) 391-1901

    

    with
      copies (which copies 

    shall
      not
      constitute notice 

    to
      the
      Company) to:            
      General
      Counsel 

    Glowpoint,
      Inc.

    Hillside,
      New Jersey 07205

    Tel.
      No.:
      (312) 235-3888 x2087

    Fax
      No.:
      (973) 565-1272

    and

    Gibbons
      P.C.

    One
      Gateway Center

    Newark,
      New Jersey 07102

    Attn:
      Frank Cannone, Esq.

    Tel.
      No.:
      (973) 596-4500

    Fax
      No.:
      (973) 596-0545

    

    

    If
      to any
      Purchaser:           
      At
      the
      address of such Purchaser set forth on Exhibit
      A
      to this
      Agreement, with copies to Purchaser’s counsel as set forth on Exhibit
      A
      or as
      specified in writing by such Purchaser with copies to:

    

    Kramer
      Levin Naftalis & Frankel LLP

    1177
      Avenue of the Americas

    New
      York,
      New York 10036

    Attention:
      Christopher S. Auguste

    Tel.
      No.:
      (212) 715-9100

    Fax
      No.:
      (212) 715-8000

    

    Any
      party
      hereto may from time to time change its address for notices by giving written
      notice of such changed address to the other party hereto.

     

    Section
      7.5  Waivers.
      No
      waiver by either party of any default with respect to any provision, condition
      or requirement of this Agreement shall be deemed to be a continuing waiver
      in
      the future or a waiver of any other provision, condition or requirement hereof,
      nor shall any delay or omission of any party to exercise any right hereunder
      in
      any manner impair the exercise of any such right accruing to it thereafter.
      No
      consideration shall be offered or paid to any Purchaser to amend or consent
      to a
      waiver or modification of any provision of any of the Transaction Documents
      unless the same consideration is also offered to all of the parties to the
      Transaction Documents. This provision constitutes a separate right granted
      to
      each Purchaser by the Company and shall not in any way be construed as the
      Purchasers acting in concert or as a group with respect to the purchase,
      disposition or voting of Securities or otherwise.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    Section
      7.6  Headings.
      The
      article, section and subsection headings in this Agreement are for convenience
      only and shall not constitute a part of this Agreement for any other purpose
      and
      shall not be deemed to limit or affect any of the provisions
      hereof.

     

    Section
      7.7  Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and assigns. After the Closing, the assignment by a party
      to
      this Agreement of any rights hereunder shall not affect the obligations of
      such
      party under this Agreement. Subject to Section 5.1 hereof, the Purchasers may
      assign the Securities and its rights under this Agreement and the other
      Transaction Documents and any other rights hereto and thereto without the
      consent of the Company.

     

    Section
      7.8  No
      Third Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

     

    Section
      7.9  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York, without giving effect to any of the conflicts
      of
      law principles which would result in the application of the substantive law
      of
      another jurisdiction. This
      Agreement shall not be interpreted or construed with any presumption against
      the
      party causing this Agreement to be drafted.

     

    Section
      7.10  Survival.
      The
      representations and warranties of the Company and the Purchasers shall survive
      the execution and delivery hereof and the Closing until the second anniversary
      of the Closing Date, except the agreements and covenants set forth in Articles
      I, III, V, VI and VII of this Agreement shall survive the execution and delivery
      hereof and the Closing hereunder.

     

    Section
      7.11  Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which taken
      together shall constitute one and the same instrument and shall become effective
      when counterparts have been signed by each party and delivered to the other
      parties hereto, it being understood that all parties need not sign the same
      counterpart. 

     

    Section
      7.12  Publicity.
      The
      Company agrees that it will not disclose, and will not include in any public
      announcement, the names of the Purchasers without the consent of the Purchasers,
      which consent shall not be unreasonably withheld or delayed, or unless and
      until
      such disclosure is required by law, rule or applicable regulation, including
      without limitation any disclosure pursuant to the Registration Statement, and
      then only to the extent of such requirement. 

     

    Section
      7.13  Severability.
      The
      provisions of this Agreement are severable and, in the event that any court
      of
      competent jurisdiction shall determine that any one or more of the provisions
      or
      part of the provisions contained in this Agreement shall, for any reason, be
      held to be invalid, illegal or unenforceable in any respect, such invalidity,
      illegality or unenforceability shall not affect any other provision or part
      of a
      provision of this Agreement and this Agreement shall be reformed and construed
      as if such invalid or illegal or unenforceable provision, or part of such
      provision, had never been contained herein, so that such provisions would be
      valid, legal and enforceable to the maximum extent possible.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    Section
      7.14  Further
      Assurances.
      From
      and after the date of this Agreement, upon the request of the Purchasers or
      the
      Company, the Company and each Purchaser shall execute and deliver such
      instruments, documents and other writings as may be reasonably necessary or
      desirable to confirm and carry out and to effectuate fully the intent and
      purposes of this Agreement and the other Transaction Documents.

     

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Note and Warrant Purchase
      Agreement to be duly executed by their respective authorized officers as of
      the
      date first above written.

     

    
      	 	 	 
	 	GLOWPOINT,
              INC. 
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	Title:
              

    

    
      	 	 
	 	 
	 	 
	
            	PURCHASER:

    

    
      	 	 	 
	 	If an entity	 
	 	 	
              

              Name:

              
                Title:

              

            
	 	 	 

    

    
      	 	 	 
	 	If an individual: 
	 	 	 

              
Name:

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A 

    LIST
      OF PURCHASERS

    

    

    Purchasers
      who are directors or officers of the Company at the time of the Closing (each
      an
“Insider Purchaser”, and collectively, the “Insider Purchasers”; provided,
      however, that for purposes of the Transaction Documents, such Purchasers shall
      cease to be “Insider Purchasers” at any time they are no longer serving in the
      capacity of a director or officer of the Company):

    

    
      	
              Names
                and Addresses

            	 	
              Investment
                Amount and

              Number
                of Warrants Purchased

            
	 	 	 

    

    

     

    

    Purchasers
      other than Insider Purchasers:

    

    
      	
              Names
                and Addresses

            	 	
              Investment
                Amount and

              Number
                of Warrants Purchased

            
	 	 	 

    

    

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
      B

    FORM
      OF NOTE 

     

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

    FORM
      OF SERIES A-2 WARRANT

     

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

    FORM
      OF REGISTRATION RIGHTS AGREEMENT

     

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

    FORM
      OF SECURITY AGREEMENT

     

     

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      F

    FORM
      OF ESCROW AGREEMENT

    

    

    
      
        
        

      

      
        vi

        
          

        

      

      
        
        

      

    

    EXHIBIT
      G

    FORM
      OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

    

    GLOWPOINT,
      INC. 

    

     

    as
      of
      September [l],
      2007

     

    [Name
      and
      address of Transfer Agent]

    Attn:
      _____________

    

    Ladies
      and Gentlemen:

     

    Reference
      is made to that certain Note and Warrant Purchase Agreement (the “Purchase
      Agreement”),
      dated
      as of September [l],
      2007,
      by and among Glowpoint, Inc., a Delaware corporation (the “Company”),
      and
      the purchasers named therein (collectively, the “Purchasers”)
      pursuant to which the Company is issuing to the Purchasers senior secured
      convertible promissory notes (the “Notes”)
      and
      warrants (the “Warrants”)
      to
      purchase shares of the Company’s common stock, par value $.0001 per share (the
“Common
      Stock”).
      This
      letter shall serve as our irrevocable authorization and direction to you
      (provided that you are the transfer agent of the Company at such time) to issue
      shares of Common Stock upon conversion of the Notes (the “Conversion
      Shares”)
      and
      exercise of the Warrants (the “Warrant
      Shares”)
      to or
      upon the order of a Purchaser from time to time upon (i) surrender to you of
      a
      properly completed and duly executed Conversion Notice or Exercise Notice,
      as
      the case may be, in the form attached hereto as Exhibit I and Exhibit II,
      respectively, (ii) in the case of the conversion of Notes, a copy of the Note
      (with the original delivered to the Company) representing the Notes being
      converted or, in the case of Warrants being exercised, a copy of the Warrants
      (with the original Warrants delivered to the Company) being exercised (or,
      in
      each case, an indemnification undertaking with respect to such Notes or the
      Warrants in the case of their loss, theft or destruction), and (iii) delivery
      of
      a treasury order or other appropriate order duly executed by a duly authorized
      officer of the Company. So long as you have previously received (x) written
      confirmation from counsel to the Company that a registration statement covering
      resales of the Conversion Shares or Warrant Shares, as applicable, has been
      declared effective by the Securities and Exchange Commission (the “SEC”)
      under
      the Securities Act of 1933, as amended (the “1933
      Act”),
      and
      no subsequent notice by the Company or its counsel of the suspension or
      termination of its effectiveness and (y) a copy of such registration statement,
      and if the Purchaser represents that the Conversion Shares or the Warrant
      Shares, as the case may be, were sold pursuant to the Registration Statement,
      then certificates representing the Conversion Shares and the Warrant Shares,
      as
      the case may be, shall not bear any legend restricting transfer of the
      Conversion Shares and the Warrant Shares, as the case may be, thereby and should
      not be subject to any stop-transfer restriction. Provided, however, that if
      you
      have not previously received (i) written confirmation from counsel to the
      Company that a registration statement covering resales of the Conversion Shares
      or Warrant Shares, as applicable, has been declared effective by the SEC under
      the 1933 Act, and (ii) a copy of such registration statement, then the
      certificates for the Conversion Shares and the Warrant Shares shall bear the
      following legend:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT”), OR ANY STATE
      SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
      REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS, OR
      GLOWPOINT, INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION
      OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF
      APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.”

     

    
      
        
        

      

      
        vii

        
          

        

      

      
        
        

      

    

     

    and,
      provided further, that the Company may from time to time notify you to place
      stop-transfer restrictions on the certificates for the Conversion Shares and
      the
      Warrant Shares in the event a registration statement covering the Conversion
      Shares and the Warrant Shares is subject to amendment for events then
      current.

     

    A
      form of
      written confirmation from counsel to the Company that a registration statement
      covering resales of the Conversion Shares and the Warrant Shares has been
      declared effective by the SEC under the 1933 Act is attached hereto as Exhibit
      III.

     

    Please
      be
      advised that the Purchasers are relying upon this letter as an inducement to
      enter into the Purchase Agreement and, accordingly, each Purchaser is a third
      party beneficiary to these instructions.

     

    Please
      execute this letter in the space indicated to acknowledge your agreement to
      act
      in accordance with these instructions. Should you have any questions concerning
      this matter, please contact me at ___________.

     

     

    
      	 	Very truly yours,	 
	 	
            	 
	 	GLOWPOINT, INC.
              	 
	 	
            	 
	 	By:	 	 
	 	
            	 
	 	Name:
              	 	 
	 	Title:
              	 	 
	 	
            	 

    

     

    ACKNOWLEDGED
      AND AGREED:

     

    [TRANSFER
      AGENT]

     

    
      	By: 	 	 
	
              Name:

            	 	 
	
              Title:

            	 	 

    

    
      	Date:	 	 

    

           

    
      
        
        

      

      
        viii

        
          

        

      

      
        
        

      

    

        

    EXHIBIT
      I

     

    GLOWPOINT,
      INC. 

    CONVERSION
      NOTICE

     

    (To
      be
      Executed by the Registered Holder in order to Convert the Note)

     

    The
      undersigned hereby irrevocably elects to convert $ ________________ of the
      principal amount of the above Note No. ___ into shares of Common Stock of
      GLOWPOINT, INC. (the “Maker”) according to the conditions hereof, as of the date
      written below.

     

    Date
      of
      Conversion
      _________________________________________________________

     

    Applicable
      Conversion Price __________________________________________________

     

    Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by the
      Holder on the Date of Conversion: _________________________

    

     

    Name
      of
      bank/broker due to receive the underlying Common
      Stock: _______________________ 

     

    Bank/broker's
      four digit "DTC" participant number

    (obtained
      from the receiving
      bank/broker): __________________________________________

     

    

    Signature___________________________________________________________________

     

    [Name]

     

    Address:__________________________________________________________________

     

    _______________________________________________________________________

     

    
      
        
        

      

      
        ix

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      II

     

    FORM
      OF EXERCISE NOTICE

     

    EXERCISE
      FORM

     

    GLOWPOINT,
      INC. 

     

    The
      undersigned _______________, pursuant to the provisions of the within Warrant,
      hereby elects to purchase _____ shares of Common Stock of Glowpoint, Inc.
      covered by the within Warrant.

     

     

    
      	Dated: _________________	 Signature 	___________________________
	
            	 Address 	_____________________
	
            	 	 _____________________

    

    Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by the
      Holder on the date of Exercise: _________________________

    

    

    ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the within Warrant and all rights evidenced thereby and
      does
      irrevocably constitute and appoint _____________, attorney, to transfer the
      said
      Warrant on the books of the within named corporation.

    
      
        	Dated: _________________	 Signature 	___________________________
	
              	 Address 	_____________________
	
              	 	 _____________________

      

    

     

    PARTIAL
      ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the right to purchase _________ shares of Warrant Stock
      evidenced by the within Warrant together with all rights therein, and does
      irrevocably constitute and appoint ___________________, attorney, to transfer
      that part of the said Warrant on the books of the within named
      corporation.

    
      
        	Dated: _________________	 Signature 	___________________________
	
              	 Address 	_____________________
	
              	 	 _____________________

      

    

     

    FOR
      USE
      BY THE ISSUER ONLY:

    

    This
      Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of
      ___________, _____, shares of Common Stock issued therefor in the name of
      _______________, Warrant No. W-_____ issued for ____ shares of Common Stock
      in
      the name of _______________.

     

    
      
        
        

      

      
        x

        
          

        

      

      
        
        

      

    

    EXHIBIT
      III

     

    FORM
      OF NOTICE OF EFFECTIVENESS

    OF
      REGISTRATION STATEMENT

     

    [Name
      and
      address of Transfer Agent]

    Attn:
      _____________

    

    Re: Glowpoint,
      Inc. 

     

    Ladies
      and Gentlemen:

     

    We
      are
      counsel to Glowpoint, Inc., a Delaware corporation (the “Company”),
      and
      have represented the Company in connection with that certain Note and Warrant
      Purchase Agreement (the “Purchase
      Agreement”),
      dated
      as of September [l],
      2007,
      by and among the Company and the purchasers named therein (collectively, the
      “Purchasers”)
      pursuant to which the Company issued to the Purchasers senior secured
      convertible promissory notes (the “Notes”)
      and
      warrants (the “Warrants”)
      to
      purchase shares of the Company’s common stock, par value $.0001 per share (the
“Common
      Stock”).
      Pursuant to the Purchase Agreement, the Company has also entered into a
      Registration Rights Agreement with the Purchasers (the “Registration
      Rights Agreement”),
      dated
      as of September [l],
      2007,
      pursuant to which the Company agreed, among other things, to register the
      Registrable Securities (as defined in the Registration Rights Agreement),
      including the shares of Common Stock issuable upon conversion of the Notes
      and
      exercise of the Warrants, under the Securities Act of 1933, as amended (the
      “1933
      Act”).
      In
      connection with the Company’s obligations under the Registration Rights
      Agreement, on ________________, 2007, the Company filed a Registration Statement
      on Form S-1 (File No. 333-________) (the “Registration
      Statement”)
      with
      the Securities and Exchange Commission (the “SEC”)
      relating to the resale of the Registrable Securities which names each of the
      present Purchasers as a selling stockholder thereunder.

     

    In
      connection with the foregoing, we advise you that a member of the SEC’s staff
      has advised us by telephone that the SEC has entered an order declaring the
      Registration Statement effective under the 1933 Act at [ENTER
      TIME OF EFFECTIVENESS]
      on
[ENTER
      DATE OF EFFECTIVENESS]
      and we
      have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that
      any stop order suspending its effectiveness has been issued or that any
      proceedings for that purpose are pending before, or threatened by, the SEC
      and
      accordingly, the Registrable Securities are available for resale under the
      1933
      Act pursuant to the Registration Statement.

     

    Very
      truly yours,

     

    [COMPANY
      COUNSEL]

     

     

    By:___________________________

     

    cc: [LIST
      NAMES OF PURCHASERS]

     

    
      
        
        

      

      
        xi

        
          

        

      

      
        
        

      

    

    EXHIBIT
      H

    FORM
      OF OPINION

    

    1. The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Delaware and has the requisite corporate
      power to own, lease and operate its properties and assets, and to carry on
      its
      business as presently conducted. The Company is duly qualified as a foreign
      corporation to do business and is in good standing in every jurisdiction in
      which the failure to so qualify would have a Material Adverse
      Effect.

     

    2. The
      Company has the requisite corporate power and authority to enter into and
      perform its obligations under the Transaction Documents and to issue the Notes,
      the Warrants and the Common Stock issuable upon conversion of the Notes and
      exercise of the Warrants. The execution, delivery and performance of each of
      the
      Transaction Documents by the Company and the consummation by it of the
      transactions contemplated thereby have been duly and validly authorized by
      all
      necessary corporate action and no further consent or authorization of the
      Company, its Board of Directors or its stockholders is required. Each of the
      Transaction Documents have been duly executed and delivered, and the Notes
      and
      the Warrants have been duly executed, issued and delivered by the Company and
      each of the Transaction Documents constitutes a legal, valid and binding
      obligation of the Company enforceable against the Company in accordance with
      its
      respective terms. The Common Stock issuable upon conversion of the Notes and
      exercise of the Warrants are not subject to any preemptive rights under the
      Certificate of Incorporation or the Bylaws.

     

    3. The
      Notes
      and the Warrants have been duly authorized and, when delivered against payment
      in full as provided in the Purchase Agreement, will be validly issued, fully
      paid and nonassessable. The shares of Common Stock issuable upon conversion
      of
      the Notes and exercise of the Warrants have been duly authorized and reserved
      for issuance, and when delivered upon conversion or against payment in full
      as
      provided in the Notes and the Warrants, as applicable, will be validly issued,
      fully paid and nonassessable.

     

    4. The
      execution, delivery and performance of and compliance with the terms of the
      Transaction Documents and the issuance of the Notes, the Warrants and the Common
      Stock issuable upon conversion of the Notes and exercise of the Warrants do
      not
      (a) violate any provision of the Certificate of Incorporation or Bylaws,
      (b) conflict with, or constitute a default (or an event which with notice or
      lapse of time or both would become a default) under, or give to others any
      rights of termination, amendment, acceleration or cancellation of, any material
      agreement, mortgage, deed of trust, indenture, note, bond, license, lease
      agreement, instrument or obligation to which the Company is a party and which
      is
      set forth on Schedule I, (c) create or impose a lien, charge or encumbrance
      on
      any property of the Company under any agreement or any commitment which is
      set
      forth on Schedule I to which the Company is a party or by which the Company
      is
      bound or by which any of its respective properties or assets are bound, or
      (d)
      result in a violation of any Federal, state, local or foreign statute, rule,
      regulation, order, judgment, injunction or decree (including Federal and state
      securities laws and regulations) applicable to the Company or by which any
      property or asset of the Company is bound or affected, except, in all cases
      other than violations pursuant to clauses (a) and (d) above, for such conflicts,
      default, terminations, amendments, acceleration, cancellations and violations
      as
      would not, individually or in the aggregate, have a Material Adverse
      Effect.

     

    
      
        
        

      

      
        xii

        
          

        

      

      
        
        

      

    

     

    5. No
      consent, approval or authorization of or designation, declaration or filing
      with
      any governmental authority on the part of the Company is required under Federal,
      state or local law, rule or regulation in connection with the valid execution,
      delivery and performance of the Transaction Documents, or the offer, sale or
      issuance of the Notes, the Warrants and the Common Stock issuable upon
      conversion of the Notes and exercise of the Warrants other than filings as
      may
      be required by applicable Federal and state securities laws and regulations
      and
      any applicable stock exchange rules and regulations.

     

    6. To
      our
      knowledge, there is no action, suit, claim, investigation or proceeding pending
      or threatened against the Company which questions the validity of the Purchase
      Agreement or the transactions contemplated thereby or any action taken or to
      be
      taken pursuant thereto. There is no action, suit, claim, investigation or
      proceeding pending, or to our knowledge, threatened, against or involving the
      Company or any of its properties or assets and which, if adversely determined,
      is reasonably likely to result in a Material Adverse Effect. To our knowledge,
      there are no outstanding orders, judgments, injunctions, awards or decrees
      of
      any court, arbitrator or governmental or regulatory body against the Company
      or
      any officers or directors of the Company in their capacities as
      such.

     

    7. Assuming
      that all of the Purchasers’ representations and warranties in the Purchase
      Agreement are complete and accurate, the offer, issuance and sale of the Notes
      and the Warrants and the offer, issuance and sale of the Common Stock issuable
      upon conversion of the Notes and exercise of the Warrants are exempt from the
      registration requirements of the Securities Act of 1933, as amended.

     

    8. The
      Company is not, and as a result of and immediately upon Closing will not be,
      an
      "investment company" or a company "controlled" by an "investment company,"
      within the meaning of the Investment Company Act of 1940, as
      amended.

     

    9. The
      Security Agreement will create a valid security interest in favor of the
      Purchasers in such assets of the Company that is subject to such Security
      Agreement. Upon the filing of a UCC financing statement with the Secretary
      of
      State of the State of Delaware, the Purchasers will have a perfected security
      interest in such assets of the Company that is subject to the Security
      Agreement.

     

    
      
        
        

      

      
        xiii

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]