Document:

Subscription Agreement by and among Global ePoint, Inc.

 Exhibit 10.1 
  
 Global ePoint, Inc. 
  
 Shares of Series B Convertible Preferred Stock and Common Stock Warrants 
  
 SUBSCRIPTION AGREEMENT 
  
 May 16, 2005 
  
 M.A.G. Capital, LLC 
 Mercator Momentum Fund, LP 
 Mercator Momentum Fund III, LP 
 Monarch Pointe Fund, Ltd. 
 555 South Flower Street, Suite 4200 
 Los Angeles, California 90071 
  
 Ladies and Gentlemen: 
  
 Global ePoint, Inc., a Nevada corporation (the “Company”), hereby confirms its agreement with Mercator
Momentum Fund, LP, Mercator Momentum Fund III, LP, Monarch Pointe Fund, Ltd. (collectively, the “Purchasers”) and M.A.G. CAPITAL, LLC (“MAG”), as set forth below. 
  
 1. The Securities. Subject to the terms and conditions herein
contained, the Company shall issue and sell to the Purchasers and the Purchasers shall purchase from the Company, an aggregate of: (a) Fifteen Thousand (15,000) shares of its Series B Convertible Preferred Stock (the “Series B
Stock”), which shall be convertible into shares (the “Conversion Shares”) of the Company’s Common Stock (the “Common Stock”) in accordance with the formula
set forth in the Certificate of Designation further described below and (b) Two Hundred Sixty-Seven Thousand Eight Hundred Fifty-Seven (267,857) warrants, substantially in the form attached hereto at Exhibit A (the
“Warrants”), to acquire up to Two Hundred Sixty-Seven Thousand Eight Hundred Fifty-Seven (267,857) shares of Common Stock (the “Warrant Shares”). The rights, preferences and
privileges of the Series B Stock are as set forth in the Certificate of Designation of Series B Preferred Stock as filed with the Secretary of State of the State of Nevada (the “Certificate of Designation”) in the form
attached hereto as Exhibit B. The number of Conversion Shares and Warrant Shares that any Purchaser may acquire at any time are subject to limitation in the Certificate of Designation and in the Warrants, respectively, so that the aggregate
number of shares of Common Stock of which such Purchaser and all persons affiliated with such Purchaser have beneficial ownership (calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended) does not at any time exceed
9.99% of the Company’s then outstanding Common Stock. 
  
 The
Series B Stock and the Warrants sold pursuant to this Agreement are sometimes herein collectively referred to as the “Securities.” This Agreement, the Certificate of Designation, Registration Rights Agreement and the Warrant
Agreements are sometimes herein collectively referred to as the “Transaction Documents.” 
  

 -1- 

 The Securities will be offered and sold to the Purchasers without such offers and sales being registered
under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the “SEC”) promulgated thereunder, the “Securities Act”),
in reliance on exemptions therefrom. 
  
 In connection with
the sale of the Securities, the Company has made available (including electronically via the SEC’s EDGAR system) to the Purchasers its periodic and current reports, forms, schedules, proxy statements and other documents (including exhibits and
all other information incorporated by reference) filed with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) through the Closing Date. These reports, forms, schedules, statements, documents,
filings and amendments, are collectively referred to as the “Disclosure Documents.” All references in this Agreement to financial statements and schedules and other information which are “contained,”
“included” or “stated” in the Disclosure Documents (or other references of like import) shall be deemed to mean and include all such financial statements and schedules, documents, exhibits and other information which is
incorporated by reference in the Disclosure Documents. 
  
 The
offer and sale of the Series B Stock pursuant to this Agreement is part of an offering by the Company of up to 55,000 shares of Series B Stock. The Purchasers acknowledge that the Company may be conducting additional sales of Series B Stock on the
same terms and conditions set forth herein and nothing in the Transaction Documents shall restrict the Company’s right to do so. 
  
 2. Representations and Warranties of the Company. Except as set forth on the Disclosure Schedule (the “Disclosure
Schedule”) delivered by the Company to the Purchasers on the Closing Date (as defined in Section 3 below), the Company represents and warrants to and agrees with the Purchasers and MAG as follows: 
  
 (a) The Disclosure Documents as of the respective dates they
were filed with the SEC did not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Disclosure
Documents and the documents incorporated or deemed to be incorporated by reference therein, at the time they were filed complied, at the time of filing, in all material respects with the requirements of the Securities Act and/or the Exchange Act, as
the case may be, as applicable. 
  
 (b)
Schedule A attached hereto sets forth a complete list of the subsidiaries of the Company (the “Subsidiaries”). Each of the Company and its Subsidiaries has been duly incorporated and each of the Company and the
Subsidiaries is validly existing in good standing as a corporation under the laws of its jurisdiction of incorporation, with the requisite corporate power and authority to own its properties and conduct its business as now conducted as described in
the Disclosure Documents and is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the business, condition (financial or other), properties, prospects or results of operations of the Company and the Subsidiaries,
taken as a whole (any such event, a “Material Adverse Effect”); 

  

 -2- 

 
as of the Closing Date, the Company will have the authorized, issued and outstanding capitalization set forth in on Schedule B attached hereto (the
“Company Capitalization”); except as set forth in the Disclosure Documents or on Schedule A, the Company does not have any subsidiaries or own directly or indirectly any of the capital stock or other equity or
long-term debt securities of or have any equity interest in any other person; all of the outstanding shares of capital stock of the Company and the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights and are owned free and clear of all liens, encumbrances, equities, and restrictions on transferability (other than those imposed by the Securities Act and the state securities or “Blue
Sky” laws) or voting; except as set forth in the Disclosure Documents, all of the outstanding shares of capital stock of the Subsidiaries are owned, directly or indirectly, by the Company; except as set forth on Schedule B or in the
Disclosure Documents, no options, warrants or other rights to purchase from the Company or any Subsidiary, agreements or other obligations of the Company or any Subsidiary to issue or other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of or ownership interests in the Company or any Subsidiary are outstanding; and except as set forth in the Disclosure Documents or on Schedule C, there is no agreement, understanding or arrangement
among the Company or any Subsidiary and each of their respective stockholders or any other person relating to the ownership, registration or disposition of any capital stock of the Company or any Subsidiary or the election of directors of the
Company or any Subsidiary or the governance of the Company’s or any Subsidiary’s affairs, and, if any, such agreements, understandings and arrangements will not be breached or violated as a result of the execution and delivery of, or the
consummation of the transactions contemplated by, the Transaction Documents. 
  
 (c) The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under the Transaction Documents. Each of the Transaction Documents has been duly and validly authorized
by the Company and, when executed and delivered by the Company, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms except as the enforcement thereof may be limited by
(A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally or (B) general principles of equity and the discretion of the
court before which any proceeding therefore may be brought (regardless of whether such enforcement is considered in a proceeding at law or in equity) (collectively, the “Enforceability
Exceptions”). 
  
 (d) The Series B Stock and the Warrants have been duly authorized and, when issued upon payment thereof in accordance with this Agreement, will have been validly issued, fully paid and non-assessable. The Conversion Shares issuable have
been duly authorized and validly reserved for issuance, and when issued upon conversion of the Series B Stock in accordance with the terms of the Certificate of Designation, will have been validly issued, fully paid and non-assessable. The Warrant
Shares have been duly authorized and validly reserved for issuance, and when issued upon exercise of the Warrants in accordance with the terms thereof, will have been validly issued, fully paid and non-assessable. The Common Stock of the Company
conforms to the description thereof contained in the Disclosure Documents. Except as set forth on Schedule C, the stockholders of the Company have no preemptive or similar rights with respect to the Common Stock. 
  

 -3- 

 (e) No consent, approval, authorization, license, qualification, exemption or order of
any court or governmental agency or body or third party is required for the performance of the Transaction Documents by the Company or for the consummation by the Company of any of the transactions contemplated thereby, or the application of the
proceeds of the issuance of the Securities as described in this Agreement, except for such consents, approvals, authorizations, licenses, qualifications, exemptions or orders (i) as have been obtained on or prior to the Closing Date, (ii) as are not
required to be obtained on or prior to the Closing Date that will be obtained when required, or (iii) the failure to obtain which would not, individually or in the aggregate, have a Material Adverse Effect. 
  
 (f) Except as set forth on Schedule D, none of the
Company or the Subsidiaries is (i) in material violation of its articles of incorporation or bylaws (or similar organizational document), (ii) in breach or violation of any statute, judgment, decree, order, rule or regulation applicable to it or any
of its properties or assets, which breach or violation would, individually or in the aggregate, have a Material Adverse Effect, or (iii) except as described in the Disclosure Documents, in default (nor has any event occurred which with notice or
passage of time, or both, would constitute a default) in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate or agreement or instrument to which it is a party or to which it is subject, which default would, individually or in the aggregate, have a Material Adverse Effect. 
  
 (g) The execution, delivery and performance by the Company
of the Transaction Documents and the consummation by the Company of the transactions contemplated thereby and the fulfillment of the terms thereof will not (a) violate, conflict with or constitute or result in a breach of or a default under (or an
event that, with notice or lapse of time, or both, would constitute a breach of or a default under) any of (i) the terms or provisions of any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or agreement or instrument to which any of the Company or the Subsidiaries is a party or to which any of their respective properties or assets are subject, (ii) the articles of incorporation or bylaws of any of the Company or the
Subsidiaries (or similar organizational document) or (iii) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or other body applicable to the Company or the Subsidiaries or any of their respective properties
or assets or (b) result in the imposition of any lien upon or with respect to any of the properties or assets now owned or hereafter acquired by the Company or any of the Subsidiaries; which violation, conflict, breach, default or lien would,
individually or in the aggregate, have a Material Adverse Effect. 
  
 (h) The audited consolidated financial statements included in the Disclosure Documents present fairly the consolidated financial position, results of operations, cash flows and changes in shareholders’ equity of
the entities, at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis; the interim un-audited consolidated financial statements included
in the Disclosure Documents present fairly the consolidated financial position, results of operations and cash flows of the entities, at the dates and for the periods to which they relate subject to year-end audit adjustments and have been prepared
in accordance with generally accepted accounting principles applied on a consistent basis with the audited consolidated 

  

 -4- 

 
financial statements included therein; the selected financial and statistical data included in the Disclosure Documents present fairly the information shown
therein and have been prepared and compiled on a basis consistent with the audited financial statements included therein, except as otherwise stated therein; and each of the auditors previously engaged by the Company or to be engaged in the future
by the Company is an independent certified public accountant as required by the Securities Act for an offering registered thereunder. 
  
 (i) Except as described in the Disclosure Documents, there is not pending or, to the knowledge of the Company, threatened any action,
suit, proceeding, inquiry or investigation, governmental or otherwise, to which any of the Company or the Subsidiaries is a party, or to which their respective properties or assets are subject, before or brought by any court, arbitrator or
governmental agency or body, that, if determined adversely to the Company or any such Subsidiary, would, individually or in the aggregate, have a Material Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge the issuance or sale of the Securities to be sold hereunder or the application of the proceeds therefrom or the other transactions described in the Transaction Documents. 
  
 (j) The Company and the Subsidiaries own or possess adequate licenses or other rights to use all patents,
trademarks, service marks, trade names, copyrights and know-how that are necessary to conduct their businesses as described in the Disclosure Documents. None of the Company or the Subsidiaries has received any written notice of infringement of (or
knows of any such infringement of) asserted rights of others with respect to any patents, trademarks, service marks, trade names, copyrights or know-how that, if such assertion of infringement or conflict were sustained, would, individually or in
the aggregate, have a Material Adverse Effect. 
  
 (k) Each of the Company and the Subsidiaries possesses all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and other tribunals presently required or necessary to own or lease, as the case may be, and to operate its respective properties and to carry on its respective businesses as
now or proposed to be conducted as set forth in the Disclosure Documents (“Permits”), except where the failure to obtain such Permits would not, individually or in the aggregate, have a Material Adverse Effect and none of the
Company or the Subsidiaries has received any notice of any proceeding relating to revocation or modification of any such Permit, except as described in the Disclosure Documents and except where such revocation or modification would not, individually
or in the aggregate, have a Material Adverse Effect. 
  
 (l) Subsequent to the respective dates as of which information is given in the Disclosure Documents or as set forth on Schedule C, and except as described therein, (i) the Company and the Subsidiaries have not incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions not in the ordinary course of business or (ii) the Company and the Subsidiaries have not purchased any of their respective outstanding capital stock, or
declared, paid or otherwise made any dividend or distribution of any kind on any of their respective capital stock or otherwise (other than, with respect to any of such Subsidiaries, the purchase of capital stock by the Company), (iii) there has not
been any material increase in the long-term indebtedness of the Company or any of the Subsidiaries, (iv) there has 

  

 -5- 

 
not occurred any event or condition, individually or in the aggregate, that has a Material Adverse Effect, and (v) the Company and the Subsidiaries have not
sustained any material loss or interference with respect to their respective businesses or properties from fire, flood, hurricane, earthquake, accident or other calamity, whether or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding. 
  
 (m) There are no
material legal or governmental proceedings nor are there any material contracts or other documents required by the Securities Act to be described in a prospectus that are not described in the Disclosure Documents or as set forth on Schedule
C. Except as described in the Disclosure Documents, none of the Company or the Subsidiaries is in default under any of the contracts described in the Disclosure Documents, has received a notice or claim of any such default or has knowledge of
any breach of such contracts by the other party or parties thereto, except for such defaults or breaches as would not, individually or in the aggregate, have a Material Adverse Effect. 
  
 (n) Each of the Company and the Subsidiaries has good and marketable title to all real property described in
the Disclosure Documents as being owned by it and good and marketable title to the leasehold estate in the real property described therein as being leased by it, free and clear of all liens, charges, encumbrances or restrictions, except, in each
case, as described in the Disclosure Documents or such as would not, individually or in the aggregate, have a Material Adverse Effect. All material leases, contracts and agreements to which the Company or any of the Subsidiaries is a party or by
which any of them is bound are valid and enforceable against the Company or any such Subsidiary, are, to the knowledge of the Company, valid and enforceable against the other party or parties thereto and are in full force and effect. 
  
 (o) Each of the Company and the Subsidiaries has filed all
necessary federal, state and foreign income and franchise tax returns, except where the failure to so file such returns would not, individually or in the aggregate, have a Material Adverse Effect, and has paid all taxes shown as due thereon; and
other than tax deficiencies which the Company or any Subsidiary is contesting in good faith and for which adequate reserves have been provided in accordance with generally accepted accounting principles, there is no tax deficiency that has been
asserted against the Company or any Subsidiary that would, individually or in the aggregate, have a Material Adverse Effect. 
  
 (p) None of the Company or the Subsidiaries is, or immediately after the Closing Date will be, required to register as an “investment
company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”). 
  
 (q) None of the Company or the Subsidiaries or, to their
knowledge, any of such entities’ directors, officers, employees, agents or controlling persons, has taken, directly or indirectly, any action designed, or that might reasonably be expected, to cause or result in the stabilization or
manipulation of the price of the Common Stock. 
  
 (r) None of the Company, the Subsidiaries or, to their knowledge, any of their respective Affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act) directly, or through any agent, engaged in any form of general
solicitation or general advertising 

  

 -6- 

 
(as those terms are used in Regulation D under the Securities Act) in connection with the offering of the Securities or engaged in any other conduct that
would cause such offering to be constitute a public offering within the meaning of Section 4(2) of the Securities Act. Assuming the accuracy of the representations and warranties of the Purchasers in Section 6 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Purchasers in the manner contemplated by this Agreement to register any of the Securities under the Securities Act. 
  
 (s) There is no strike, labor dispute, slowdown or work stoppage with the employees of the Company or any of
the Subsidiaries which is pending or, to the knowledge of the Company or any of the Subsidiaries, threatened. 
  
 (t) Each of the Company and the Subsidiaries carries general liability insurance coverage comparable to other companies of its size and
similar business. 
  
 (u) Each of the Company and
the Subsidiaries maintains internal accounting controls which provide reasonable assurance that (A) transactions are executed in accordance with management’s authorization, (B) transactions are recorded as necessary to permit preparation of its
financial statements and to maintain accountability for its assets, and (C) access to its material assets is permitted only in accordance with management’s authorization and (D) the values and amounts reported for its material assets are
compared with its existing assets at reasonable intervals. 
  
 (v) Except as set forth in Section 3(c) or on Schedule C, the Company does not know of any claims for services, either in the nature of a finder’s fee or financial advisory fee, with respect to the
offering of the Securities and the transactions contemplated by the Transaction Documents. 
  
 (w) The Common Stock is traded on the NASDAQ Small Cap (the “NASDAQ Small Cap”). Except as described in the
Disclosure Documents, the Company currently is not in violation of, and the consummation of the transactions contemplated by the Transaction Documents will not violate, any rule of the National Association of Securities Dealers. 
  
 (x) The Company is eligible to use SB-2 for the resale of
the Conversion Shares and the Warrant Shares by the Purchaser or their transferees and the Warrant Shares by the Purchasers, MAG or their transferees. The Company has no reason to believe that it is not capable of satisfying the registration or
qualification requirements (or an exemption therefrom) necessary to permit the resale of the Conversion Shares and the Warrant Shares under the securities or “blue sky” laws of any jurisdiction within the United States. 
  
 (y) Set forth on Schedule E is the Company’s
intended use of the proceeds from this transaction. 
  
 (z) Except as set forth on Schedule F, none of the officers or directors of the Company (i) has been convicted of any crime (other than traffic violations or misdemeanors not involving fraud) or is currently under investigation or
indictment for any such crime, (ii) has been found by a court or governmental agency to have violated any 

  

 -7- 

 
securities or commodities law or to have committed fraud or is currently a party to any legal proceeding in which either is alleged, (iii) has been the
subject of a proceeding under the bankruptcy laws or any similar state laws, or (iv) has been an officer, director, general partner, or managing member of an entity which has been the subject of such a proceeding. 
  
 3. Purchase, Sale and Delivery of the Securities. 
  
 (a) Issuance of Series B Stock and Warrants. On the
basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each Purchaser, and each Purchaser agrees to purchase from the
Company, the shares of Series B Stock, at the purchase price of $100.00 per share (“Purchase Price”), in the amount attributed to the Purchaser on the signature page hereto. In connection with the purchase and sale of Series
B Stock, for no additional consideration, the Company shall issue to each Purchaser and MAG Warrants, each warrant entitling the holder to purchase one share of Common Stock, subject to adjustment as set forth in the form of Warrant attached hereto
as Exhibit A, in the amounts attributed to each Purchaser and MAG on the signature page hereto. 
  
 (b) Closing. The closing of the transactions described herein (the “Closing”) shall take place at a time
and on a date (the “Closing Date”) to be specified by the parties, which will be no later than 5:00 p.m. (Pacific time) on May 16, 2005. On the Closing Date, the Company shall deliver (a) certificates in definitive form for
the Series B Stock in the names and amounts set forth on the signature page hereto, (b) Warrants, in the names and amounts set forth on the signature page hereto, (c) the Subscription Agreement, Certificate of Designation and Registration Rights
Agreement, each duly executed on behalf of the Company, and (d) the Opinion of Counsel in the form attached hereto as Exhibit C. On the Closing Date, the Purchasers shall deliver (i) the Purchase Price of $ 100.00 per share of Series B Stock
by wire transfer of immediately available funds to an account designated by the Company, and (ii) the Subscription Agreement and Registration Rights Agreement, each duly executed on behalf of the Purchasers and MAG. The Closing will occur when all
documents and instruments necessary or appropriate to effect the transactions contemplated herein are exchanged by the parties and all actions taken at the Closing will be deemed to be taken simultaneously. 
  
 (c) Due Diligence Fees and Expenses. The Company
shall reimburse (i) each Purchaser or its designee for its due diligence in the amount of three percent (3%) of the Purchase Price paid by the Purchaser (“Due Diligence Fees”), and (ii) MAG for its legal fees in
the amount of $10,000. 
  
 4. Certain Covenants of the
Company. The Company covenants and agrees with each Purchaser as follows: 
  
 (a) None of the Company or any of its Affiliates will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any “security” (as defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner which would require the registration under the Securities Act of the Securities. 
  
 (b) The Company will not become, at any time prior to the expiration of three years after the Closing Date, an open-end investment
company, unit investment trust, 

  

 -8- 

 
closed-end investment company or face-amount certificate company that is or is required to be registered under the Investment Company Act. 
  
 (c) None of the proceeds of the Series B Stock will be used
to reduce or retire any insider note or convertible debt held by an officer or director of the Company. 
  
 (d) Subject to Section 8 of this Agreement, the Conversion Shares and the Warrant Shares will be listed for trading on the NASDAQ Small
Cap, or such market on which the Company’s shares are subsequently listed or traded, immediately following the effectiveness of the Registration Statement. 
  
 (e) The Company will use best efforts to do and perform all things required to be done and performed by it
under this Agreement and the other Transaction Documents and to satisfy all conditions precedent on its part to the obligations of the Purchasers to purchase and accept delivery of the Securities. 
  
 5. Conditions of the Purchasers’ Obligations. The obligation of
each Purchaser to purchase and pay for the Securities is subject to the following conditions unless waived in writing by the Purchaser: 
  
 (a) The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects
(other than representations and warranties with a Material Adverse Effect qualifier, which shall be true and correct as written) on and as of the Closing Date; the Company shall have complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date. 
  
 (b) None of the issuance and sale of the Securities pursuant to this Agreement or any of the transactions contemplated by any of the other
Transaction Documents shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order shall have been issued in respect thereof; and there shall not have been any legal action, order, decree or other administrative
proceeding instituted or, to the Company’s knowledge, threatened against the Company or against any Purchaser relating to the issuance of the Securities or any Purchaser’s activities in connection therewith or any other transactions
contemplated by this Agreement, the other Transaction Documents or the Disclosure Documents. 
  
 (c) The Purchasers shall have received certificates, dated the Closing Date and signed by the Chief Executive Officer and the Chief
Financial Officer of the Company, to the effect of paragraphs 5(a) and (b) have been duly satisfied. 
  
 (d) The Purchasers shall have received an opinion of Preston Gates & Ellis LLP with respect to the authorization of the Series B
Stock, the Conversion Shares, the Warrants and the Warrant Shares and other customary matters in the form attached hereto as Exhibit C. 
  
 (e) The Company enters into a letter of intent for the acquisition of Astrophysics, Inc., a copy of which has been provided to the
Purchasers prior to the Closing. 
  

 -9- 

 6. Representations and Warranties of the Purchasers. 
  
 (a) Each Purchaser and MAG represents and warrants to the
Company that the Securities to be acquired by it hereunder (including the Conversion Shares and the Warrant Shares that it may acquire upon conversion or exercise thereof, as the case may be) are being acquired for its own account for investment and
with no intention of distributing or reselling such Securities (including the Conversion Shares and the Warrant Shares that it may acquire upon conversion or exercise thereof, as the case may be) or any part thereof or interest therein in any
transaction which would be in violation of the securities laws of the United States of America or any State. Nothing in this Agreement, however, shall prejudice or otherwise limit a Purchaser’s right to sell or otherwise dispose of all or any
part of such Conversion Shares or Warrant Shares under an effective registration statement under the Securities Act and in compliance with applicable state securities laws or under an exemption from such registration. By executing this Agreement,
each Purchaser further represents that such Purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any Person with respect to any of the Securities. 
  
 (b) Each Purchaser and MAG understands that the Securities
(including the Conversion Shares and the Warrant Shares that it may acquire upon conversion or exercise thereof, as the case may be) have not been registered under the Securities Act and may not be offered, resold, pledged or otherwise transferred
except (a) pursuant to an exemption from registration under the Securities Act (and, if requested by the Company, based upon an opinion of counsel acceptable to the Company) or pursuant to an effective registration statement under the Securities Act
and (b) in accordance with all applicable securities laws of the states of the United States and other jurisdictions. 
  
 Each Purchaser and MAG agrees to the imprinting, so long as appropriate, of the following legend on the Securities (including the Conversion Shares and
the Warrant Shares that it may acquire upon conversion or exercise thereof, as the case may be): 
  
 The shares of stock evidenced by this certificate have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered,
sold, pledged or otherwise transferred (“transferred”) in the absence of such registration or an applicable exemption therefrom. In the absence of such registration, such shares may not be transferred unless, if the Company requests, the
Company has received a written opinion from counsel in form and substance satisfactory to the Company stating that such transfer is being made in compliance with all applicable federal and state securities laws. 
  
 The legend set forth above may be removed if and when the Conversion Shares
or the Warrant Shares, as the case may be, are disposed of pursuant to an effective registration statement under the Securities Act or in the opinion of counsel to the Company experienced in the area of United States Federal securities laws such
legends are no longer required under applicable requirements of the Securities Act. The Series B Stock, the Warrants, the Conversion Shares and the Warrant Shares shall also bear any other legends required by applicable Federal or state securities
laws, which legends may be removed when in the opinion of counsel to the Company experienced in the applicable securities laws, the same are no longer required under 

  

 -10- 

 
the applicable requirements of such securities laws. The Company agrees that it will provide each Purchaser, upon request, with a substitute certificate, not
bearing such legend at such time as such legend is no longer applicable. Each Purchaser agrees that, in connection with any transfer of the Conversion Shares or the Warrant Shares by it pursuant to an effective registration statement under the
Securities Act, the Purchaser will comply with all prospectus delivery requirements of the Securities Act. The Company makes no representation, warranty or agreement as to the availability of any exemption from registration under the Securities Act
with respect to any resale of the Series B Stock, the Warrants, the Conversion Shares or the Warrant Shares. 
  
 (c) Each Purchaser and MAG is an “accredited investor” within the meaning of Rule 501(a) of Regulation D under the Securities
Act. Neither Purchaser nor MAG learned of the opportunity to acquire Securities or any other security issuable by the Company through any form of general advertising or public solicitation. 
  
 (d) Each Purchaser and MAG represents and warrants to the
Company that it has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, having been represented by counsel, and has
so evaluated the merits and risks of such investment and is able to bear the economic risk of such investment and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) Purchaser represents and warrants to the Company that
(i) the purchase of the Securities to be purchased by it has been duly and properly authorized and this Agreement has been duly executed and delivered by it or on its behalf and constitutes the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally
and to general principles of equity; (ii) the purchase of the Securities to be purchased by it does not conflict with or violate its charter, by-laws or any law, regulation or court order applicable to it; and (iii) the purchase of the Securities to
be purchased by it does not impose any penalty or other onerous condition on the Purchaser under or pursuant to any applicable law or governmental regulation. 
  

(f) Each Purchaser and MAG represents and warrants to the Company that neither it nor any of its directors, officers, employees,
agents, partners, members, controlling persons or shareholders holding 5% or more of the Common Stock outstanding on the Closing Date, has taken or will take, directly or indirectly, any actions designed, or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of the Common Stock. 
  
 (g) Each Purchaser and MAG acknowledges it or its representatives have reviewed the Disclosure Documents and further acknowledges that it or its representatives have been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to
information about the Company and the Company’s financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment 

  

 -11- 

 
in the Securities; and (iii) the opportunity to obtain such additional information which the Company possesses or can acquire without unreasonable effort or
expense that is necessary to verify the accuracy and completeness of the information contained in the Disclosure Documents. 
  
 (h) Each Purchaser and MAG represents and warrants to the Company that it has based its investment decision solely upon the information
contained in the Disclosure Documents and such other information as may have been provided to it or its representatives by the Company in response to their inquiries, and has not based its investment decision on any research or other report
regarding the Company prepared by any third party (“Third Party Reports”). Purchaser understands and acknowledges that (i) the Company does not endorse any Third Party Reports and (ii) its actual results may differ
materially from those projected in any Third Party Report. 
  
 (i) Each Purchaser and MAG understands and acknowledges that (i) any forward-looking information included in the Disclosure Documents supplied to Purchaser by the Company or its management is subject to risks and
uncertainties, including those risks and uncertainties set forth in the Disclosure Documents; and (ii) the Company’s actual results may differ materially from those projected by the Company or its management in such forward-looking information.

  
 (j) Each Purchaser and MAG understands and
acknowledges that (i) the Securities are offered and sold without registration under the Securities Act in a private placement that is exempt from the registration provisions of the Securities Act and (ii) the availability of such exemption depends
in part on, and that the Company and its counsel will rely upon, the accuracy and truthfulness of the foregoing representations and the Purchaser hereby consents to such reliance. 
  
 (k) Covenants of Purchasers Not to Short Stock. Purchasers, on behalf of themselves and their
affiliates, hereby covenants and agree not to, directly or indirectly, offer to “short sell”, contract to “short sell” or otherwise “short sell” the securities of the Company, including, without limitation, shares of
Common Stock that will be received as a result of the conversion of the Series B Stock or the exercise of the Warrants. 
  
 7. Termination. 
  
 (a) This Agreement may be terminated in the sole discretion of the Company by notice to each Purchaser if at the Closing Date: 

 
 (i) the representations and warranties made by any
Purchaser in Section 6 are not true and correct in all material respects; or 
  
 (ii) as to the Company, the sale of the Securities hereunder (i) is prohibited or enjoined by any applicable law or governmental regulation or (ii) subjects the Company to any penalty, or in its reasonable judgment,
other onerous condition under or pursuant to any applicable law or government regulation that would materially reduce the benefits to the Company of the sale of the Securities to such Purchaser, so long as such regulation, law or onerous condition
was not in effect in such form at the date of this Agreement. 
  

 -12- 

 (b) This Agreement may be terminated by any Purchaser or MAG as to such party only by
notice to the Company given in the event that the Company shall have failed, refused or been unable to satisfy all material conditions on its part to be performed or satisfied hereunder on or prior to the Closing Date, or if after the execution and
delivery of this Agreement and immediately prior to the Closing Date, trading in securities of the Company on the NASDAQ Small Cap shall have been suspended. 
  

(c) This Agreement may be terminated by mutual written consent of all parties. 
  
 8. Registration. Within 45 days after the Closing Date (the
“Filing Due Date”), the Company shall prepare and file with the SEC a Registration Statement covering the resale of the maximum number of Conversion Shares issuable upon conversion of the Series B Stock and the Warrant Shares
(collectively, the “Registrable Securities”), as set forth in the Registration Rights Agreement attached hereto as Exhibit D. Within 90 days after filing the Registration Statement (the “Effective Due
Date”), such Registration Statement must be declared effective by the SEC. Notwithstanding the forgoing, in the event that the Company is unable to obtain audited financial statements from Astrophysics, Inc., for inclusion in the
Registration Statement on or before 40 days after the Closing Date, then the Filing Due Date shall be 75 days after the Closing Date and the Effective Due Date shall be 100 days after the Registration Statement is filed with the SEC. 
  
 9. Event of Default. If an Event of Default (as defined below) occurs,
the Purchasers and MAG shall have the right to exercise any or all of the rights given to the Purchasers and MAG relating to the Securities, as further described in the Certificate of Designation. 
  
 The Purchaser and MAG need not provide and the Company hereby waives any
presentment, demand, protest or other notice of any kind, and the Purchaser and MAG may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Purchaser and MAG at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

  
 An “Event of Default” shall include
(a) the commencement by the Company of a voluntary case or proceeding under the bankruptcy laws, (b) the breach by Company of any of the covenants or representations made herein, or (c) the Company’s failure to: (i) discharge or stay a
bankruptcy proceeding within 60 days of such action being taken against the Company, (ii) file the Registration Statement with the SEC on or before the Filing Due Date, (iii) have the Registration Statement deemed effective by the SEC on or before
the Filing Due Date; (iv) maintain trading of the Company’s Common Stock on the NASDAQ Small Cap except for any periods when the stock is traded on the OTC BB, the NASDAQ National Stock Market, the AMEX or the NYSE, (v) pay the expenses and Due
Diligence Fees referred to in Section 3(c) within three (3) days after the Closing; or (vi) deliver to Purchasers, or Purchasers’ broker, as directed, Common Stock that Purchasers have converted within three (3) business days of such
conversions. 
  

 -13- 

 IN THE EVENT THAT THE COMPANY FAILS TO FILE THE REGISTRATION STATEMENT WITH THE SEC ON OR BEFORE THE FILING DUE DATE
OR THE REGISTRATION STATEMENT IS NOT DEEMED EFFECTIVE BY THE SEC ON OR BEFORE THE EFFECTIVE DUE DATE, AS A REMEDY FOR SUCH AN EVENT OF DEFAULT, COMPANY SHALL PAY TO PURCHASERS, IN CASH, A TOTAL OF $3,333 FOR EACH DAY THAT THE REGISTRATION STATEMENT
FILING IS DELAYED. THE CASH AMOUNT SHALL BE PAID TO THE PURCHASERS RATABLY BASED ON THEIR PROPORTIONAL SHARE OF THE TOTAL NUMBER OF SHARES OF SERIES B STOCK PURCHASED AT THE CLOSING. PURCHASERS AND COMPANY ACKNOWLEDGE AND AGREE THAT THEY HAVE
MUTUALLY DISCUSSED THE IMPRACTICALITY AND EXTREME DIFFICULTY OF FIXING THE ACTUAL DAMAGES PURCHASER WOULD INCUR IN THE CASE OF SUCH AN EVENT OF DEFAULT, AND THAT AS A RESULT OF SUCH DISCUSSION THE PARTIES AGREE THAT $3,333 FOR EACH DAY THAT THE
REGISTRATION STATEMENT FILING IS DELAYED REPRESENTS A REASONABLE ESTIMATE OF THE ACTUAL DAMAGES WHICH PURCHASERS WOULD INCUR IN THE CASE OF SUCH AN EVENT OF DEFAULT. PURCHASERS AND COMPANY SPECIFICALLY AND EXPRESSLY AGREE TO ABIDE BY THE TERMS AND
PROVISIONS OF THIS PARAGRAPH CONCERNING LIQUIDATED DAMAGES. 
  
 10. Notices. All communications hereunder shall be in writing and shall be hand delivered, mailed by first-class mail, couriered by next-day air courier or by facsimile and confirmed in writing (i) if to the Company, at the addresses
set forth below, or (ii) if to Purchaser or MAG, to the address set forth for such party on the signature page hereto. 
  
 Global ePoint, Inc. 
 339 South Cheryl Lane

 City of Industry, CA 91789 
 Attention: Toresa Lou 
 Telephone No.: (909) 869-1688 
 Facsimile No.: (909) 598-2936 
  
 with a copy to: 
  
 Preston, Gates & Ellis LLP

 1900 Main Street, Suite 600 
 Irvine, CA 92614-7319 
 Attn: Daniel K. Donahue 
 Telephone No.: (949) 253-0900 
 Facsimile No.: (949) 253-0902 
  
 All such notices and communications shall be deemed to have been duly given:
(i) when delivered by hand, if personally delivered; (ii) five business days after being deposited in the mail, postage prepaid, if mailed certified mail, return receipt requested; (iii) one business day after being timely delivered to a next-day
air courier guaranteeing overnight delivery; (iv) the date of transmission if sent via facsimile to the facsimile number as set forth in this Section or the signature page hereof prior to 3:00 p.m. on a business day, or (v) the business day 

  

 -14- 

 
following the date of transmission if sent via facsimile at a facsimile number set forth in this Section or on the signature page hereof after 3:00 p.m. or
on a date that is not a business day. Change of a party’s address or facsimile number may be designated hereunder by giving notice to all of the other parties hereto in accordance with this Section. 
  
 11. Survival Clause. The respective representations, warranties,
agreements and covenants of the Company and the Purchaser set forth in this Agreement shall survive until the first anniversary of the Closing. 
  
 12. Fees and Expenses. Within three (3) days of Closing, the Company agrees to pay to MAG the legal expenses incurred in connection with the
preparation and negotiation of the Transaction Documents up to $10,000. Any amounts paid by Company upon execution of the Term Sheet will be credited against this amount. 
  
 13. Legal Fees. If any action at law or in equity is necessary to enforce or interpret the terms of the Transaction
Documents, the prevailing party or parties shall be entitled to receive from the other party or parties reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which the prevailing party or parties may
be entitled. 
  
 14. 8-K Filing and Press Releases. The
Company shall file a Form 8-K with the SEC within 5 trading days after the Closing Date setting forth the general terms of the transaction. Neither party shall issue any press release relating to this transaction without the prior written consent of
the other party, which consent shall not be unreasonably withheld or delayed. 
  
 15. Successors. This Agreement shall inure to the benefit of and be binding upon Purchasers, MAG and the Company and their respective successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person. Neither the Company nor any Purchaser may assign this Agreement or any rights or obligation hereunder without the prior
written consent of the other party. 
  
 16. No Waiver;
Modifications in Writing. No failure or delay on the part of the Company, MAG or any Purchaser in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the Company, MAG or
any Purchaser at law or in equity or otherwise. No waiver of or consent to any departure by the Company, MAG or any Purchaser from any provision of this Agreement shall be effective unless signed in writing by the party entitled to the benefit
thereof, provided that notice of any such waiver shall be given to each party hereto as set forth below. Except as otherwise provided herein, no amendment, modification or termination of any provision of this Agreement shall be effective unless
signed in writing by or on behalf of each of the Company, MAG and the Purchasers. Any amendment, supplement or modification 

  

 -15- 

 
each of the Company, MAG and the Purchasers. Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision
of this Agreement, and any consent to any departure by the Company, MAG or any Purchaser from the terms of any provision of this Agreement shall be effective only in the specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances. 
  
 17. Entire Agreement. This Agreement, together with Transaction
Documents, constitutes the entire agreement among the parties hereto and supersedes all prior agreements, understandings and arrangements, oral or written, among the parties hereto with respect to the subject matter hereof and thereof. 

 
 18. Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby. 
  
 19. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO PROVISIONS RELATING TO CONFLICTS OF LAW TO THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY
THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ACTIONS, SUITS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT ONLY IN STATE OR FEDERAL COURTS LOCATED IN THE CITY OF LOS ANGELES, CALIFORNIA AND HEREBY SUBMIT
TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR SUCH PURPOSE. 
  
 20. Counterparts. This Agreement may be executed in two or more counterparts and may be delivered by facsimile transmission, each of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. 
  
 21. Mandatory Conversion. The Series B
Stock shall be subject to mandatory conversion on the terms and conditions set forth in the Certificate of Designation. 
  
 If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon
this Agreement shall constitute a binding agreement among the Company, the Purchaser and MAG. 
  

			
	 Very truly yours,

	
	 Global ePoint, Inc.

		
	By:	 	/s/    TORESA LOU        
	 Name:
	 	Toresa Lou
	 Title:
	 	Chief Executive Officer

  

 -16- 

											
	ACCEPTED AND AGREED:	 	 	 	 	 	 
				
	 	 	 	 	 	 	M.A.G. CAPITAL, LLC
					
	 	 	 	 	 	 	By:	 	 /s/    H. HARRY
AHARONIAN        

	 	 	 	 	 	 	 	 	 Name:
	 	H. Harry Aharonian
	 	 	 	 	 	 	 	 	 Title:
	 	Portfolio Manager
				
	 	 	 	 	 	 	 Purchase Price $-0-

				
	 	 	 	 	 	 	 Number of Shares of Series B Stock: -0-

				
	 	 	 	 	 	 	 Number of Warrants: 53,571

				
	 	 	 	 	 	 	 Address for Notice:

				
	 	 	 	 	 	 	 M.A.G. Capital, LLC
 555 South Flower Street, Suite 4200
 Los Angeles, California 90071
 Facsimile No.: (213) 533-8285
 Attn: David Firestone

			
	With a copy to:	 	 	 	 Sheppard, Mullin, Richter & Hampton LLP
 333 South Hope Street, 48th Floor
 Los Angeles, California 90071
 Facsimile: (213) 620-1398
 David C. Ulich, Esq.

  

 -17- 

											
	ACCEPTED AND AGREED:	 	 	 	 	 	 
				
	 	 	 	 	 	 	MERCATOR MOMENTUM FUND, LP
					
	 	 	 	 	 	 	 By:
	 	 M.A.G. Capital, LLC

	 	 	 	 	 	 	 Its:
	 	 General Partner

					
	 	 	 	 	 	 	By:	 	 /s/    H. HARRY
AHARONIAN        

	 	 	 	 	 	 	 	 	 Name:
	 	H. Harry Aharonian
	 	 	 	 	 	 	 	 	 Title:
	 	Portfolio Manager
				
	 	 	 	 	 	 	 Purchase Price $380,000

				
	 	 	 	 	 	 	 Number of Shares of Series B Stock: 3,800

				
	 	 	 	 	 	 	 Number of Warrants: 54,286

				
	 	 	 	 	 	 	 Address for Notice:

				
	 	 	 	 	 	 	 M.A.G. Capital, LLC
 555 South Flower Street, Suite 4200
 Los Angeles, California 90071
 Facsimile No.: (213) 533-8285
 Attn: David Firestone

			
	With a copy to:	 	 	 	 Sheppard, Mullin, Richter & Hampton LLP
 333 South Hope Street, 48th Floor
 Los Angeles, California 90071
 Facsimile: (213) 620-1398
 David C. Ulich, Esq.

  

 -18- 

											
	ACCEPTED AND AGREED:	 	 	 	 	 	 
				
	 	 	 	 	 	 	MERCATOR MOMENTUM FUND III, LP
					
	 	 	 	 	 	 	 By:
	 	 M.A.G. Capital, LLC

	 	 	 	 	 	 	 Its:
	 	 General Partner

					
	 	 	 	 	 	 	By:	 	 /s/    H. HARRY
AHARONIAN        

	 	 	 	 	 	 	 	 	 Name:
	 	H. Harry Aharonian
	 	 	 	 	 	 	 	 	 Title:
	 	Portfolio Manager
				
	 	 	 	 	 	 	 Purchase Price $240,000

				
	 	 	 	 	 	 	 Number of Shares of Series B Stock: 2,400

				
	 	 	 	 	 	 	 Number of Warrants: 34,286

				
	 	 	 	 	 	 	 Address for Notice:

				
	 	 	 	 	 	 	 M.A.G. Capital, LLC
 555 South Flower Street, Suite 4200
 Los Angeles, California 90071
 Facsimile No.: (213) 533-8285
 Attn: David Firestone

			
	With a copy to:	 	 	 	 Sheppard, Mullin, Richter & Hampton LLP
 333 South Hope Street, 48th Floor
 Los Angeles, California 90071
 Facsimile: (213) 620-1398
 David C. Ulich, Esq.

  

 -19- 

											
	ACCEPTED AND AGREED:	 	 	 	 	 	 
				
	 	 	 	 	 	 	MONARCH POINTE FUND, LTD.
					
	 	 	 	 	 	 	By:	 	 /s/    H. HARRY
AHARONIAN        

	 	 	 	 	 	 	 	 	 Name:
	 	H. Harry Aharonian
	 	 	 	 	 	 	 	 	 Title:
	 	Director
				
	 	 	 	 	 	 	 Purchase Price $880,000

				
	 	 	 	 	 	 	 Number of Shares of Series B Stock: 8,800

				
	 	 	 	 	 	 	 Number of Warrants: 125,714

				
	 	 	 	 	 	 	 Address for Notice:

				
	 	 	 	 	 	 	 M.A.G. Capital, LLC
 555 South Flower Street, Suite 4200
 Los Angeles, California 90071
 Facsimile No.: (213) 533-8285
 Attn: David Firestone

			
	With a copy to:	 	 	 	 Sheppard, Mullin, Richter & Hampton LLP
 333 South Hope Street, 48th Floor
 Los Angeles, California 90071
 Facsimile: (213) 620-1398
 David C. Ulich, Esq.

  

 -20- 

 Schedule A 
  

Direct and Indirect Subsidiaries of Global ePoint, Inc. 
  
 1. The Company’s subsidiaries include Global Telephony, Inc., a Nevada corporation, Global Airworks, Inc., a California corporation, and McDigit,
Inc., a California corporation. 
  
 2. The Company holds a
convertible promissory note in the principal amount of $300,000 from Media Excel. The Company also holds 2,000,000 shares of common stock of ComCam, Inc. 
  

 -1- 

 Schedule B 
  

Company Capitalization 
  

	1.	The Company has authorized 50,000,000 shares of Common Stock, $.03 par value, of which 12,452,885 shares are issued and outstanding. 

  

	2.	The Company has authorized 2,000,000 shares of Preferred Stock, of which 21,000 shares of Series A Convertible Preferred Stock are issued and outstanding and 55,000 shares of
Preferred Stock have been designated as Series B Convertible Preferred Stock, a portion of which will be issued to the Purchasers and MAG at the Closing. 

  

	3.	The following securities have been issued by the Company: 

  
 Option Grants 
  

										
	 	  	Total
Options

	  	Grant
Date

	  	Strike
Price

	  	Maturity
Date

	 John Yuan
	  	25,000	  	1/2/2005	  	$	5.00	  	12/31/2010
	 Jongil Kim
	  	20,000	  	1/2/2005	  	$	5.00	  	12/31/2010
	 Dr. William Dolph
	  	25,000	  	1/2/2005	  	$	5.00	  	12/31/2010
	 Darrell Richardson
	  	20,000	  	1/2/2005	  	$	5.00	  	12/31/2010
	 Owen Lee Barnett
	  	25,000	  	1/2/2005	  	$	5.00	  	12/31/2010
	 Richard Bartol
	  	15,000	  	1/2/2005	  	$	5.00	  	12/31/2010
	 James D. Smith
	  	20,000	  	1/2/2005	  	$	5.00	  	12/31/2010
	 Lawrence Leong
	  	20,000	  	1/2/2005	  	$	5.00	  	12/31/2010
	 Jianshen Cai
	  	5,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 YaJun Li
	  	3,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 Jun Zhou
	  	1,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 Ji Ma
	  	1,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 Jian Liu
	  	1,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 JianHua Zhang
	  	1,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 Yang Xia
	  	2,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 YongLong Deng
	  	1,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 JinHui Fen
	  	1,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 Yan Lou
	  	1,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 David ChangChangHua
	  	20,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 YunFeng Lu
	  	2,000	  	4/1/2005	  	$	3.00	  	3/31/2010
	 	  	
	  	 	  	 	 	  	 
	 Total Options granted
	  	209,000	  	 	  	 	 	  	 

 Schedule C 
  

Other Arrangements 
  

	1.	The Company has entered into a Letter of Intent dated May 11, 2005 with Astrophysics, Inc,. a copy of which has been provided to the Purchasers and MAG, pursuant to which the
Company proposes to: (i) acquire Astrophysics in consideration of the Company’s issuance of a control block of its common stock; (ii) cause the resignation of its current directors at the close of the Astrophysics acquisition in favor of a
slate of directors appointed by Astrophysics; and (iii) and in connection with the Astrophysics acquisition, raise up to $30 million of additional capital through the sale of its equity securities. Pursuant to the Letter of Intent, the Company will
pay Astrophysics a non-refundable deposit of $500,000, loan Astrophysics $500,000 and has agreed to loan Astrophysics an additional $5 million. 

  

	2.	The Company has granted to Iroquois Capital LP, Cranshire Capital, L.P, Omicron Master Trust, DKR Soundshore Oasis Holding Fund Ltd., Bluegrass Growth Fund LP and Bluegrass Growth
Fund, Ltd. limited rights of first refusal to purchase the securities of the Company pursuant to Section 4.5(b) of the Securities Purchase Agreement dated December 19, 2004 between the Company and the aforementioned parties.

  

	3.	The Company has agreed to pay to each Purchaser, or its designee, due diligence fees of up to three percent (3%) of the purchase price paid by such Purchaser for its Series B Stock.
The Company is obligated to pay Ascendiant Securities, LLC a finder’s fee of three percent (3%) of the purchase price paid by the Purchasers for their purchase of Series B Stock. 

 Schedule D 
  

Violations 
  
 None. 
  

 -1- 

 Schedule E 
  

Use of Proceeds 
  
 Pursuant to the Letter of Intent with Astrophysics, Inc., the Company will pay Astrophysics a non-refundable deposit of $500,000 and loan Astrophysics an
additional $500,000. The Company has agreed to pay finders fees of approximately $45,000 to Ascendiant Securities, LLC. The Company will pay approximately $55,000 of due diligence and legal fees to the Purchasers and MAG. The remaining funds will be
used for general working capital purposes. 
  

 -1- 

 Schedule F 
  

Criminal Records and Bankruptcies 
  
 None. 
  

 -1- 

 Exhibit A 
  

Warrant 
  

 -1- 

 WARRANT TO PURCHASE COMMON STOCK 
  
 THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
  

			
	WARRANT TO PURCHASE COMMON STOCK
		
	Number of Shares:	  	Up to                      shares (subject to adjustment)
		
	Warrant Price:	  	$3.50 per share [higher of $3.50 or Purchase Price]
		
	Issuance Date:	  	May 23, 2005
		
	Expiration Date:	  	May 23, 2008

  
 THIS WARRANT CERTIFIES THAT for
value received,                      or its registered assigns (hereinafter called the “Holder”) is entitled to
purchase from Global ePoint, Inc. (hereinafter called the “Company”), the above referenced number of fully paid and nonassessable shares (the “Shares”) of common stock (the “Common
Stock”), of Company, at the Warrant Price per Share referenced above; the number of shares purchasable upon exercise of this Warrant referenced above being subject to adjustment from time to time as described herein. This Warrant is
issued in connection with that certain Subscription Agreement dated as of May 20, 2005, by and between the Company and Holder (the “Subscription Agreement”). The exercise of this Warrant shall be subject to the
provisions, limitations and restrictions contained herein. 
  

	1.	Term and Exercise. 

  
 1.1 Term. Commencing 181 days after the Issuance Date, this Warrant is exercisable in whole or in part (but not as to any fractional share of Common Stock),
at any time and from time to time after the date hereof prior to 6:00 p.m. on the Expiration Date set forth above. 
  
 1.2 Warrant Price. The Warrant shall be exercisable at the Warrant Price described above. 
  
 1.3 Maximum Number of Shares. The maximum number of Shares of Common Stock exercisable pursuant to this Warrant is
Shares. However, notwithstanding anything herein to the contrary, in no event shall the Holder be permitted to exercise this Warrant for a number of Shares greater than the number that would cause the aggregate beneficial ownership of the
Company’s Common Stock (calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of the Holder and its affiliates to equal 9.99% of the Company’s Common Stock then outstanding. 
  
 1.4 Procedure for Exercise of Warrant. Holder may exercise this Warrant by
delivering the following to the principal office of the Company in accordance with Section 5.1 hereof: (i) a duly executed Notice of Exercise in substantially the form attached as Schedule A, (ii) payment of the Warrant Price then in effect for each
of the Shares being purchased, as designated in the Notice of Exercise, and (iii) this Warrant. Payment of the Warrant Price may be by certified or official bank check payable to the order of the Company, or wire transfer of funds to the
Company’s account (or any combination of any of the foregoing) in the amount of the Warrant Price for each share being purchased. 
  
 1.5 Delivery of Certificate and New Warrant. In the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the
shares of Common Stock so purchased, registered in the name of the Holder or such other name or names as may be designated by the Holder, together with any other securities or other property which the Holder is entitled to receive upon exercise of
this Warrant, shall be delivered to the Holder hereof, at the Company’s expense, within a reasonable time, not exceeding fifteen (15) calendar days, after the rights represented by this Warrant shall have been so exercised; and, unless this
Warrant has expired, a new Warrant representing the number of Shares (except a remaining fractional share), if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder hereof within such time. The
person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment
of the Warrant Price was received by the Company in accordance with this Section, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is on a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of such Shares at the close of business on the next succeeding date on which the stock transfer books are open. 
  
 1.6 Restrictive Legend. Each new or replacement Warrant delivered pursuant to Section 1.5 and certificate for Shares shall
bear a restrictive legend in substantially the form as follows, together with any additional legend required by (i) any applicable state securities laws and (ii) any securities exchange upon which such Shares may, at the time of such exercise, be
listed: 
  
 The shares of stock evidenced by this certificate
have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold, pledged or otherwise transferred (“transferred”) in the absence of such registration or an applicable exemption therefrom. In the
absence of such registration, such shares may not be transferred unless, if the Company requests, the Company has received a written opinion from counsel in form and substance satisfactory to the Company stating that such transfer is being made in
compliance with all applicable federal and state securities laws. 
  
 Any
certificate issued at any time in exchange or substitution for any certificate bearing such legend shall also bear such legend unless, in the opinion of counsel for the Holder thereof (which opinion shall be reasonably satisfactory to the Company),
the securities represented thereby are not, at such time, required by law to bear such legend. 
  
 1.7 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant. In the event of a fractional interest, the number of Shares to be issued shall be rounded down to
the nearest whole Share. 
  

			
	 	 	Page 1

	2.	Representations, Warranties and Covenants. 

  
 2.1 Representations and Warranties. As of the date of this Warrant: 
  

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all
necessary power and authority to perform its obligations under this Warrant; 
  
 (b) The execution, delivery and performance of this Warrant has been duly authorized by all necessary actions on the part of the Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms; and 
  
 (c) This Warrant does not violate and is not in conflict with any of the provisions of the Company’s Articles of Incorporation or Certificate of Determination, Bylaws and any resolutions of the Company’s Board of Directors or
stockholders, or any agreement of the Company, and no event has occurred and no condition or circumstance exists that might (with or without notice or lapse of time) constitute or result directly or indirectly in such a violation or conflict.

  
 2.2 Issuance of Shares. The Company covenants and agrees that
all shares of Common Stock that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue
thereof. The Company further covenants and agrees that it will pay when due and payable any and all federal and state taxes which may be payable in respect of the issue of this Warrant or any Common Stock or certificates therefor issuable upon the
exercise of this Warrant. The Company further covenants and agrees that the Company will at all times have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise in full of the
rights represented by this Warrant. If at any time the number of authorized but unissued shares of Common Stock of the Company shall not be sufficient to effect the exercise of the Warrant in full, subject to the limitations set forth in Section 1.3
hereto, then the Company will take all such corporate action as may, in the opinion of counsel to the Company, be necessary or advisable to increase the number of its authorized shares of Common Stock as shall be sufficient to permit the exercise of
the Warrant in full, subject to the limitations set forth in Section 1.3 hereto, including without limitation, using its best efforts to obtain any necessary stockholder approval of such increase. The Company further covenants and agrees that if any
shares of capital stock to be reserved for the purpose of the issuance of shares upon the exercise of this Warrant require registration with or approval of any governmental authority under any federal or state law before such shares may be validly
issued or delivered upon exercise, then the Company will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be. If and so long as the Common Stock issuable upon the exercise of this
Warrant is listed on any national securities exchange or the Nasdaq Stock Market, the Company will, if permitted by the rules of such exchange or market, list and keep listed on such exchange or market, upon official notice of issuance, all shares
of such Common Stock issuable upon exercise of this Warrant. 
  

	3.	Other Adjustments. 

  
 3.1 Subdivision or Combination of Shares. In case the Company shall at any time subdivide its outstanding Common Stock into a greater number of shares, the
Warrant Price in effect immediately prior to such subdivision shall be proportionately reduced, and the number of Shares subject to this Warrant shall be proportionately increased, and conversely, in case the outstanding Common Stock of the Company
shall be combined into a smaller number of shares, the Warrant Price in effect immediately prior to such combination shall be proportionately increased, and the number of Shares subject to this Warrant shall be proportionately decreased. 

 
 3.2 Dividends in Common Stock, Other Stock or Property. If at any time or
from time to time the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefor: 
  
 (a) Common Stock, Options or any shares or other securities which are at any
time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution; 
  
 (b) any cash paid or payable otherwise than as a regular cash dividend; or

  
 (c) Common Stock or additional shares or other securities or
property (including cash) by way of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement (other than Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of
Section 3.1 above) and additional shares, other securities or property issued in connection with a Change (as defined below) (which shall be covered by the terms of Section 3.4 below), then and in each such case, the Holder hereof shall, upon the
exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clause (b) above and this clause (c)) which such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common
Stock received or became entitled to receive such shares or all other additional stock and other securities and property. 
  
 3.3 Reorganization, Reclassification, Consolidation, Merger or Sale. If any recapitalization, reclassification or reorganization of the share capital of the
Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its shares and/or assets or other transaction (including, without limitation, a sale of substantially all of its assets
followed by a liquidation) shall be effected in such a way that holders of Common Stock shall be entitled to receive shares, securities or other assets or property (a “Change”), then, as a condition of such Change, lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby) such shares, securities or other assets or property as may be issued or payable with respect to or in exchange for the number of outstanding Common Stock which such Holder would have been entitled to receive had such
Holder exercised this Warrant immediately prior to the consummation of such Change. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to give effect to the adjustments provided for in this Section 3 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon
exercise of the new Warrant. The provisions of this Section 3.3 shall similarly apply to successive Changes. 
  

	4.	Ownership and Transfer. 

  
 4.1 Ownership of This Warrant. The Company may deem and treat the person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary until presentation of this Warrant for registration of transfer as provided
in this Section 4. 
  
 4.2 Transfer and Replacement. Subject to
compliance with applicable federal securities laws, this Warrant and all rights hereunder are transferable in whole or in part upon the books of the Company by the Holder hereof in person or by duly authorized attorney, and a new Warrant or
Warrants, of the same tenor as this Warrant but registered in the name of the transferee or transferees (and in the name of the Holder, if a partial transfer is effected) shall be made and delivered by the Company upon surrender of this Warrant duly
endorsed, at the office of the Company in accordance with Section 5.1 hereof. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft or 

  

			
	 GEPT Warrant – Monarch Pointe Fund, Ltd.
	 	Page 2

 destruction, and, in such case, of indemnity or security reasonably satisfactory to it, and upon surrender of this
Warrant if mutilated, the Company will make and deliver a new Warrant of like tenor, in lieu of this Warrant; provided that if the Holder hereof is an instrumentality of a state or local government or an institutional holder or a nominee for such an
instrumentality or institutional holder an irrevocable agreement of indemnity by such Holder shall be sufficient for all purposes of this Warrant, and no evidence of loss or theft or destruction shall be necessary. This Warrant shall be promptly
cancelled by the Company upon the surrender hereof in connection with any transfer or replacement. Except as otherwise provided above, in the case of the loss, theft or destruction of a Warrant, the Company shall pay all expenses, taxes and other
charges payable in connection with any transfer or replacement of this Warrant, other than income taxes and stock transfer taxes (if any) payable in connection with a transfer of this Warrant, which shall be payable by the Holder. Holder will not
transfer this Warrant and the rights hereunder except in compliance with federal and state securities laws and except after providing evidence of such compliance reasonably satisfactory to the Company. 
  

	5.	Miscellaneous Provisions. 

  
 5.1 Notices. Any notice or other document required or permitted to be given or delivered to the Holder shall be delivered or forwarded to the Holder at
                        , Attention:
                         (Facsimile No.
                        ), or to such other address or number as shall have been furnished to the Company in writing by
the Holder, with a copy to                                  Attention
                         (Facsimile No.
                        ). Any notice or other document required or permitted to be given or delivered to the Company
shall be delivered or forwarded to the Company at 339 South Cheryl Lane, City of Industry, California 91789, Attention Toresa Lou, with a copy to Preston, Gates & Ellis, LLP, 1900 Main Street, Suite 600, Irvine, California 92614,
Attention: Dan Donahue, or to such other address or number as shall have been furnished to Holder in writing by the Company. 
  
 5.2 All notices, requests and approvals required by this Warrant shall be in writing and shall be conclusively deemed to be given (i) when hand-delivered to the
other party, (ii) when received if sent by facsimile at the address and number set forth above; provided that notices given by facsimile shall not be effective, unless either (a) a duplicate copy of such facsimile notice is promptly given by
depositing the same in the mail, postage prepaid and addressed to the party as set forth below or (b) the receiving party delivers a written confirmation of receipt for such notice by any other method permitted under this paragraph; and further
provided that any notice given by facsimile received after 3:00 p.m. (recipient’s time) or on a non-business day shall be deemed received on the next business day; (iii) five (5) business days after deposit in the United States mail, certified,
return receipt requested, postage prepaid, and addressed to the party as set forth below; or (iv) the next business day after deposit with an international overnight delivery service, postage prepaid, addressed to the party as set forth below with
next business day delivery guaranteed; provided that the sending party receives confirmation of delivery from the delivery service provider. 
  
 5.3 No Rights as Shareholder; Limitation of Liability. This Warrant shall not entitle the Holder to any of the rights of a shareholder of the Company except
upon exercise in accordance with the terms hereof. No provision hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise
to any liability of the Holder for the Warrant Price hereunder or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 
  
 5.4 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California as
applied to agreements among California residents made and to be performed entirely within the State of California, without giving effect to the conflict of law principles thereof. 
  
 5.5 Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Company by merger,
consolidation or acquisition of all or substantially all of the Company’s assets and/or securities. All of the obligations of the Company relating to the Shares issuable upon the exercise of this Warrant shall survive the exercise and
termination of this Warrant. All of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. 
  
 5.6 Waiver, Amendments and Headings. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing
signed by both parties (either generally or in a particular instance and either retroactively or prospectively). The headings in this Warrant are for purposes of reference only and shall not affect the meaning or construction of any of the
provisions hereof. 
  
 5.7 Jurisdiction. Each of the parties
irrevocably agrees that any and all suits or proceedings based on or arising under this Agreement may be brought only in and shall be resolved in the federal or state courts located in the City of Los Angeles, California and consents to the
jurisdiction of such courts for such purpose. Each of the parties irrevocably waives the defense of an inconvenient forum to the maintenance of such suit or proceeding in any such court. Each of the parties further agrees that service of process
upon such party mailed by first class mail to the address set forth in Section 9 shall be deemed in every respect effective service of process upon such party in any such suit or proceeding. Nothing herein shall affect the right of either party to
serve process in any other manner permitted by law. Each of the parties agrees that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any
other lawful manner. 
  
 5.8 Attorneys’ Fees and Disbursements.
If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party or parties shall be entitled to receive from the other party or parties reasonable attorneys’ fees and disbursements in
addition to any other relief to which the prevailing party or parties may be entitled. 
  

			
	GEPT Warrant – Monarch Pointe Fund, Ltd.	  	Page 3

 IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer this 23rd day
of May, 2005. 
  

									
	COMPANY:	 	 	 	GLOBAL EPOINT, INC.
					
	 	 	 	 	 	 	By	 	 
	 	 	 	 	 	 	 Print Name:
	 	Toresa Lou
	 	 	 	 	 	 	 Title:
	 	Chief Executive Officer

  

			
	GEPT Warrant – Monarch Pointe Fund, Ltd.	  	Page 4

 SCHEDULE A 
  

FORM OF NOTICE OF EXERCISE 
  
 [To be signed only upon exercise of the Warrant] 
  
 TO BE EXECUTED BY THE REGISTERED HOLDER 
 TO EXERCISE THE WITHIN WARRANT 
  
 The undersigned hereby elects
to purchase              shares of Common Stock (the “Shares”) of Global ePoint, Inc. under the Warrant to Purchase Common Stock dated May 23, 2005, which the undersigned
is entitled to purchase pursuant to the terms of such Warrant. The undersigned has delivered $                    , the aggregate Warrant
Price for              Shares purchased herewith, in full in cash or by certified or official bank check or wire transfer. 
  
 Please issue a certificate or certificates representing such shares of Common
Stock in the name of the undersigned or in such other name as is specified below and in the denominations as is set forth below: 
  
  

	 	

 [Type Name of Holder as it should appear on the stock certificate]

  

	 	

 [Requested Denominations – if no denomination is specified, a
single certificate will be issued] 
  
 The initial address of such
Holder to be entered on the books of Company shall be: 
  

	 	

  

	 	

  

	 	

  
 The undersigned hereby represents and warrants that the undersigned is acquiring such shares for his own account for investment purposes only, and not for resale or with a view to distribution of such shares or any
part thereof. 
  

			
		
	By:	 	 

			
		
	Print Name:	 	 

			
		
	Title:	 	 

			
		
	Dated:	 	 

  

 -1- 

 FORM OF ASSIGNMENT 
 (ENTIRE) 
  
 [To be
signed only upon transfer of entire Warrant] 
  
 TO BE
EXECUTED BY THE REGISTERED HOLDER 
 TO TRANSFER THE WITHIN WARRANT 
  
 FOR VALUE RECEIVED
                     hereby sells, assigns and transfers unto
                     all rights of the undersigned under and pursuant to the within Warrant, and the undersigned does hereby irrevocably
constitute and appoint                      Attorney to transfer the said Warrant on the books of
                    , with full power of substitution. 
  

			
	 
	[Type Name of Holder]
		
	By:	 	 
	 Title:
	 	 

			
		
	 Dated:
	 	 

  
 NOTICE 
  
 The signature to the foregoing Assignment must correspond exactly to the name as written upon
the face of the within Warrant, without alteration or enlargement or any change whatsoever. 
  

 -1- 

 FORM OF ASSIGNMENT 
 (PARTIAL) 
  
 [To be
signed only upon partial transfer of Warrant] 
  
 TO BE
EXECUTED BY THE REGISTERED HOLDER 
 TO TRANSFER THE WITHIN WARRANT 
  
 FOR VALUE RECEIVED
                     hereby sells, assigns and transfers unto
                         (i) the rights of the undersigned to purchase
                     shares of Common Stock under and pursuant to the within Warrant, and (ii) on a non-exclusive basis, all other rights of
the undersigned under and pursuant to the within Warrant, it being understood that the undersigned shall retain, severally (and not jointly) with the transferee(s) named herein, all rights assigned on such non-exclusive basis. The undersigned does
hereby irrevocably constitute and appoint                      Attorney to transfer the said Warrant on the books of Global ePoint, Inc., with
full power of substitution. 
  

			
	 
	[Type Name of Holder]
		
	By:	 	 
	 Title:
	 	 

			
		
	 Dated:
	 	 

  
 NOTICE 
  
 The signature to the foregoing Assignment must correspond exactly to the name as written upon
the face of the within Warrant, without alteration or enlargement or any change whatsoever. 
  

 -2- 

 Exhibit B 
  

Certificate of Designation of 
 Series B
Convertible Preferred Stock 
 of 
 Global ePoint, Inc. 
  

 -1- 

					
	[LOGO]	 	 DEAN HELLER
 Secretary of
State
 204 North Carson Street, Suite 1
 Carson
City, Nevada 89701-4299
 (775) 684 5708
 Website:
secretaryofstate.biz
	  	Entity #
	 	 	  	C2721-1990
	 	 	  	  
 Document Number:

	 	 	  	20050220517-24
	 	 	  	 
	 	 	  	Date Filed:
	 	 	 	  	6/8/2005 3:37:47 PM
	 	 	Certificate of Designation	  	In the office of
	 	 	(PURSUANT TO NRS 78.1955)	  	  
 /s/    DEAN HELLER        

	 	 	 	  	Dean Heller
	 	 	 	  	Secretary of State

  
 Important: Read attached
instructions before completing form. 
 ABOVE SPACE IS FOR OFFICE USE
ONLY             
  
 Certificate of Designation 
 For Nevada Profit Corporations 
 (Pursuant to NRS 78.1955) 
  

	1.	Name of corporation: 

  
 Global ePoint Inc. 
  

	2.	By resolution of the board of directors pursuant to a provision in the articles of incorporation, this certificate establishes the following regarding the voting powers,
designations, preferences, limitations, restrictions and relative rights of the following class or series of stock: 

  
 SERIES B CONVERTIBLE PREFERRED STOCK – Fifty-five Thousand (55,000) SHARES: 
  

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

  
 NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors
hereby fixes and determines the Determinations, of, the number of shares constituting, and the rights, preferences, privileges and restrictions relating to, a new series of Preferred stock as follows: 
  
 (a) Determination. The series of Preferred stock is hereby designated
Series B Convertible Preferred Stock (the “Series B Preferred Stock”). 
  
 (b) Authorized Shares. The number of authorized shares constituting the Series B Preferred Stock shall be Fifty-five thousand (55,000) shares of such series. 
  
 (c) Dividends. Subject to the prior rights of holders of all classes
of stock at the time outstanding having prior rights as to dividends and to the extent remitted by applicable law, the holders of the Series B Preferred Stock shall be entitled to ...* 
  

	*	CONTINUED ON THE ATTACHED 

  

	3.	Effective date of filing (optional):     _____________________________________________________________________ 

 (must not be later than 90 days after the certificate is filed ) 
  

							
				
	 4.      Officer Signature:
	 	/s/    JOHN PAN        	 	 	 	  
	 	 	John Pan, President	 	 	 	 

  
 Filing Fee: $175.00 

 
 IMPORTANT: Failure to include any of the above information and
submit the proper fees may cause this filing to be rejected. 
  
 SUBMIT IN DUPLICATE 
  

							
	This form must be accompanied by appropriate fees. See attached fee schedule.	 	 ____________________
 ___________________

 CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF 
 SERIES B CONVERTIBLE PREFERRED STOCK 
 OF 
 Global ePoint, Inc. 
 a Nevada corporation 
  
 The
undersigned, John Pan certifies that: 
  
 1. He is the duly acting
President and Secretary of Global ePoint, Inc., a corporation organized and existing under the Corporation Code of the State of Nevada (the “Corporation”). 
  
 2. Pursuant to authority conferred upon the Board of Directors by the Amended and Restated Articles of Incorporation of the
Corporation, as amended, and pursuant to the provisions of Section 78.1955 of the General Corporation Law of Nevada, said Board of Directors, has previously designated the Corporation’s Series A Convertible Preferred Stock (“Series A
Preferred Stock”). 
  
 3. Pursuant to authority
conferred upon the Board of Directors by the Amended and Restated Articles of Incorporation of the Corporation, as amended, and pursuant to the provisions of Section 78.1955 of the General Corporation Law of Nevada, said Board of Directors, pursuant
to a unanimous written consent effective as of May 11, 2005, adopted a resolution establishing the rights, preferences, privileges and restrictions of, and the number of shares comprising, the Corporation’s Series B Convertible Preferred Stock,
which resolution is as follows: 
  
 RESOLVED, that a series of
Preferred Stock in the Corporation, having the rights, preferences, privileges and restrictions, and the number of shares constituting such series and the designation of such series, set forth below be, and it hereby is, authorized by the Board of
Directors of the Corporation pursuant to authority given by the Corporation’s Certificate of Incorporation. 
  
 NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines the Determinations of, the number of shares constituting, and the
rights, preferences, privileges and restrictions relating to, a new series of Preferred Stock as follows: 
  
 (a) Determination. The series of Preferred Stock is hereby designated Series B Convertible Preferred Stock (the “Series B Preferred
Stock”). 
  
 (b) Authorized Shares. The
number of authorized shares constituting the Series B Preferred Stock shall be Fifty-Five Thousand (55,000) shares of such series. 
  
 (c) Dividends. Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends and to
the extent permitted by applicable law, the holders of the Series B Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of any assets of the Corporation legally available therefor, such dividends as
may be declared from time to time by the Board of Directors. 
  

 -1- 

 (d) Liquidation Preference. 
  
 (i) Preference upon Liquidation, Dissolution or Winding Up. In the event of any dissolution or
winding up of the Corporation, whether voluntary or involuntary, holders of each outstanding share of Series B Preferred Stock shall be entitled to be paid first out of the assets of the Corporation available for distribution to shareholders,
whether such assets are capital, surplus or earnings, an amount equal to $100.00 (the “Series B Purchase Price”) per share of Series B Preferred Stock held (as adjusted for any stock splits, stock dividends or
recapitalizations of the Series B Preferred Stock) and any declared but unpaid dividends on such share, before any payment shall be made to the holders of the Common Stock, or any other stock of the Corporation ranking junior to the Series B
Preferred Stock with regard to any distribution of assets upon liquidation, dissolution or winding up of the Corporation. The holders of the Series A Preferred Stock and Series B Preferred Stock, and the holders of any other shares of stock on
parity with the Series B Preferred Stock, shall be entitled to share in any distribution which is not sufficient to pay in full the aggregate of the amounts payable thereon. If, upon any liquidation, dissolution or winding up of the Corporation, the
assets to be distributed to the holders of the Series A Preferred Stock and Series B Preferred Stock, and the holders of any other shares of stock on parity with the Series B Preferred Stock, shall be insufficient to permit payment to such
shareholders of the full preferential amounts aforesaid, then all of the assets of the Corporation available for distribution to shareholders shall be distributed to the holders of Series A Preferred Stock and Series B Preferred Stock, and the
holders of any other shares of stock on parity with the Series B Preferred Stock, ratably, in accordance with the respective preferential amounts payable on such stock. Each holder of the Series B Preferred Stock shall be entitled to receive that
portion of the assets available for distribution to the holders of the Series B Preferred Stock as the number of outstanding shares of Series B Preferred Stock held by such holder bears to the total number of shares of Series B Preferred Stock. Such
payment shall constitute payment in full to the holders of the Series B Preferred Stock upon the liquidation, dissolution or winding up of the Corporation. After such payment shall have been made in full, or funds necessary for such payment shall
have been set aside by the Corporation in trust for the account of the holders of Series B Preferred Stock, so as to be available for such payment, such holders of Series B Preferred Stock shall be entitled to no further participation in the
distribution of the assets of the Corporation. 
  
 (ii) Consolidation, Merger and Other Corporate Events. A consolidation or merger of the Corporation (except into or with a subsidiary corporation) or a sale, lease, mortgage, pledge, exchange, transfer or other disposition of all or
substantially all of the assets of the Corporation or any reclassification of the stock of the Corporation (other than a change in par value or from no par to par, or from par to no par or as the result of an event described in subsection (v), (vi),
(vii) or (viii) of paragraph (f)), shall be regarded as a liquidation, dissolution or winding up of the affairs of the Corporation within the meaning of this paragraph (d), provided, however, in the case of a merger, if (a) the Corporation is the
surviving entity, (b) the Corporation’s shareholders hold a majority of the shares of the surviving entity, and (c) the Corporation’s directors hold a majority of the seats on the board of directors of the surviving entity, then such
merger shall not be regarded as a liquidation, dissolution or winding up within the meaning of this paragraph (d). In no event shall the issuance of new classes of stock, whether senior, junior or on a parity with the Series B Preferred Stock, or
any stock splits, be deemed a “reclassification” under or otherwise limited by the terms hereof. 
  

 -2- 

 (iii) Distribution of Cash and Other Assets. In the event of a liquidation,
dissolution or winding up of the Corporation resulting in the availability of assets other than cash for distribution to the holders of the Series B Preferred Stock, the holders of the Series B Preferred Stock shall be entitled to a distribution of
cash and/or assets equal to the value of the liquidation preference stated in subsection (i) of this paragraph (d), which valuation shall be made solely by the Board of Directors, and provided that such Board of Directors was acting in good faith,
shall be conclusive. 
  
 (iv) Distribution to
Junior Security Holder. After the payment or distribution to the holders of the Series B Preferred Stock of the full preferential amounts aforesaid, the holders of Series B Preferred Stock shall have no further rights in respect at such Series B
Stock which shall become null and void, and the holders of the Common Stock then outstanding, or any other stock of the Corporation ranking as to assets upon liquidation, dissolution or winding up of the Corporation junior to the Series B Preferred
Stock, shall be entitled to receive ratably all of the remaining assets of the Corporation. 
  
 (v) Preference; Priority. References to a stock that is “senior” to, on a “parity”
with or “junior” to other stock as to liquidation shall refer, respectively, to rights of priority of one series or class of stock over another in the distribution of assets on any liquidation, dissolution or winding up of
the Corporation. With regard to rights and payments upon liquidation, the Series B Preferred Stock shall be senior to the Common Stock of the Corporation, on parity with the Series A Preferred Stock and junior to any subsequent series of Preferred
Stock issued by the Corporation. 
  
 (e) Voting Rights.
Except as otherwise required by law, the holder of shares of Series B Preferred Stock shall not have the right to vote on matters that come before the shareholders. 
  
 (f) Conversion Rights. The holders of Series B Preferred Stock will have the following conversion rights: 

 
 (i) Right to Convert. Subject to and in compliance
with the provisions of this paragraph (f), any issued and outstanding shares of Series B Preferred Stock may, at the option of the holder, be converted at any time or from time to time into fully paid and non-assessable shares of Common Stock at the
conversion rate in effect at the time of conversion, determined as provided herein; provided, that a holder of Series B Preferred Stock may at any given time convert only up to that number of shares of Series B Preferred Stock so that, upon
conversion, the aggregate beneficial ownership of the Corporation’s Common Stock (calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of (a) such holder and all persons affiliated with such holder, or (b)
M.A.G. Capital, LLC and its affiliates, is not more than 9.99% of the Corporation’s Common Stock then outstanding. 
  
 (ii) Mechanics of Conversion. Before any holder of Series B Preferred Stock shall be entitled to convert the same into shares of
Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation, and shall give written notice to the Corporation at such office in the form attached hereto as Annex C (the
“Conversion Notice”) that he elects to convert the same and shall state therein the number of shares of Series B Preferred Stock being converted. Thereupon, the Corporation shall promptly 

  

 -3- 

 
issue and deliver at such office to such holder of Series B Preferred Stock a certificate or certificates for the number of shares of Common Stock to which
he shall be entitled. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series B Preferred Stock to be converted and delivery of the Conversion Notice to the
Corporation, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date to the extent permitted
by applicable law. 
  
 (iii) Conversion Price.
The number of shares into which one share of Series B Preferred Stock shall be convertible shall be determined by dividing the Series B Purchase Price by the then existing Conversion Price (as set forth below) (the “Conversion
Ratio”). The “Conversion Price” per share for the Series B Preferred Stock shall be equal to $2.80 per share. The Conversion Price shall be adjusted upon the occurrence of any event in paragraph (f) (v)-(ix).

  
 (iv) Mandatory Conversion. Subject to
the conditions set forth in this subpart (iv), the Corporation, at its option, may by delivery of written notice to a holder of Series B Preferred Stock convert all, or a portion, of the then outstanding Series B Preferred Stock held by such holder
into Common Stock, at the Conversion Ratio then in effect. The conversion shall be effective on the fifth day following the holder’s receipt of written notice from the Corporation. Notwithstanding the foregoing the Corporation shall not be
permitted to effect a mandatory conversion hereunder unless (i) as a result, the holder and its affiliates shall be holders of record of outstanding shares of Common Stock of no more than 9.99% of the total shares of Common Stock outstanding as of
such time, (ii) the Common Stock to be issued upon conversion of the Series B Preferred Stock shall be registered; and (iii) the closing price of the Common Stock for the 20 preceding trading days is equal to or greater than $3.75 per share (as
adjusted for any subdivisions or combinations of the outstanding Common Stock). For purposes of calculating the record ownership of the outstanding shares of Common Stock held of record by the holder and its affiliates, the records maintained by the
transfer agent and registrar for the Common Stock shall be the exclusive source considered for purposes of determining share ownership and the holder’s affiliates shall be deemed to consist exclusively of such parties identified to the
Corporation in writing from time to time. 
  
 (v)
Adjustment for Stock Splits and Combinations. If the Corporation shall at any time, or from time to time after the date shares of the Series B Preferred Stock are first issued (the “Original Issue Date”), effect a subdivision
of the outstanding Common Stock, the Conversion Price in effect immediately prior thereto shall be proportionately decreased, and conversely, if the Corporation shall at any time or from time to time after the Original Issue Date combine the
outstanding shares of Common Stock, the Conversion Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this paragraph (f)(v) shall become effective at the close of business on the date the
subdivision or combination becomes effective. 
  
 (vi) Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time, or from time to time after the Original Issue Date, shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, then and in each 

  

 -4- 

 
such event the Conversion Price then in effect shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction: 
  
 the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and 
  
 the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution; provided, however, if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter, the Conversion Price shall be adjusted pursuant to this paragraph (f)(vi) as of the time of actual payment of such
dividends or distributions. 
  
 (vii)
Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled
to receive, a dividend or other distribution payable in securities of the Corporation other than shares of Common Stock, then and in each such event provision shall be made so that the holders of such Series B Preferred Stock shall receive upon
conversion thereof in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation that they would have received had their Series B Preferred Stock been converted into Common Stock on the date of
such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities receivable by them as aforesaid during such period giving application to all adjustments called for during
such period under this paragraph (f) with respect to the rights of the holders of the Series B Preferred Stock. 
  
 (viii) Adjustment for Reclassification Exchange or Substitution. If the Common Stock issuable upon the conversion of the Series B
Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend
provided for above, or a reorganization, merger, consolidation or sale of assets provided for elsewhere in this paragraph (f)), then and in each such event the holder of each share of Series B Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, by holders of the number of shares of Common Stock into which such shares of
Series B Preferred Stock might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein. 
  
 (ix) Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time
there shall be a capital reorganization of the Common Stock (other than a subdivision, combination, reclassification or exchange of shares provided for elsewhere in this paragraph (f)) or a merger or consolidation of the Corporation with or into
another corporation, 

  

 -5- 

 
or the sale of all or substantially all of the Corporation’s properties and assets to any other person, then, as a part of such reorganization, merger,
consolidation or sale, provision shall be made so that the holders of the Series B Preferred Stock shall thereafter be entitled to receive upon conversion of such Series B Preferred Stock, the number of shares of stock or other securities or
property of the Corporation or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger,
consolidation or sale. In any such case, appropriate adjustment shall be made in the application of the provisions of this paragraph (f) with respect to the rights of the holders of the Series B Preferred Stock after the reorganization, merger,
consolidation or sale to the end that the provisions of this paragraph (f) (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of the Series B Preferred Stock) shall be applicable after
that event as nearly equivalent as may be practicable. 
  
 (x) Certificate of Adjustment. In each case of an adjustment or readjustment of the Conversion Price or the securities issuable upon conversion of the Series B Preferred Stock, the Corporation shall compute such adjustment or
readjustment in accordance herewith and the Corporation’s Chief Financial Officer shall prepare and sign a certificate showing such adjustment or readjustment, and shall mail such certificate by first class mail, postage prepaid, to each
registered holder of the Series B Preferred Stock at the holder’s address as shown in the Corporation’s books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or
readjustment is based. 
  
 (xi) Notices of
Record Date. In the event of (A) any taking by the Corporation of a record of the holders of any class or series of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution or
(B) any reclassification or recapitalization of the capital stock of the Corporation, any merger or consolidation of the Corporation or any transfer of all or substantially all of the assets of the Corporation to any other corporation, entity or
person, or any voluntary or involuntary dissolution, liquidation or winding up of the Corporation, the Corporation shall mail to each holder of Series B Preferred Stock at least 10 days prior to the record date specified therein, a notice specifying
(1) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (2) the date on which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective and (3) the time, if any is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares, of Common
Stock (or other securities) for securities or other property deliverable upon such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up. 
  
 (xii) Fractional Shares. No fractional shares of
Common Stock shall be issued upon conversion of the Series B Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall round down to the nearest whole number. 
  
 (xiii) Reservation of Stock Issuable Upon Conversion.
The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series B Preferred Stock, 

  

 -6- 

 
One Million Seven Hundred Eighty-Five Thousand Seven Hundred Fourteen (1,785,714) shares of Common Stock, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to Such number of shares as shall be sufficient for such purpose. 
  
 (xiv) Notices. Any notice required by the provisions of this paragraph (f) to be given to the holders of shares of Series B
Preferred Stock shall be deemed given (A) if deposited in the United States mail, postage prepaid, or (B) if given by any other reliable or generally accepted means (including by facsimile or by a nationally recognized overnight courier service), in
each case addressed to each holder of record at his address (or facsimile number) appearing on the books of the Corporation. 
  
 (xv) Payment of Taxes. The Corporation will pay all transfer taxes and other governmental charges that may be imposed in respect of
the issue or delivery of shares of Common Stock upon conversion of shares of Series B Preferred Stock. 
  
 (xvi) No Dilution or Impairment. The Corporation shall not amend its Articles of Incorporation or participate in any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, for the purpose of avoiding or seeking to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, without the approval of a majority of the then outstanding Series B Preferred Stock. 
  
 (g) No Re-issuance of Preferred Stock. Any shares of Series B Preferred Stock acquired by the Corporation by reason of purchase, conversion or
otherwise shall be canceled, retired and eliminated from the shares of Series B Preferred Stock that the Corporation shall be authorized to issue. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth in the Articles of Incorporation or in any certificate of Determination creating a series of Preferred Stock or any
similar stock or as otherwise required by law. 
  
 (h)
Severability. If any right, preference or limitation of the Series B Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule, law or public policy, all other rights, preferences and
limitations set forth herein that can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall nevertheless remain in full force and effect, and no right, preference or limitation herein shall be deemed
dependent upon any other such right, preference or limitation unless so expressed herein. 
  
 3. The number of authorized shares of Preferred Stock of the Corporation is 2,000,000 and the number of shares of Series B Stock, none of which has been issued, is 55,000. 
  

 -7- 

 Each of the undersigned declares under penalty of perjury that the matters set out in the foregoing
Certificate are true of his own knowledge. Executed at City of Industry, California, on this 16th day of May, 2005.

  

			
	
	/s/    JOHN
PAN        
	 Name:
	 	John Pan
	 Title:
	 	President and Secretary

  

 -8- 

 ANNEX A 
  
 NOTICE OF CONVERSION 
  
 The undersigned hereby elects to convert shares of Series B Convertible Preferred Stock, no par value per share (the “Series B Preferred Stock”)
of Global ePoint, Inc., a Nevada corporation (the “Company”) into shares of common stock, $0.03 par value per share (the “Common Stock”), of the Company according to the conditions hereof, as of later of the date of the
Company’s receipt of this Notice, together with the certificate representing the shares of Series B Preferred Stock to be converted, or such later date written below. If Common Stock is to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect thereto and deliver such certificates and opinions as reasonably requested by the Company in accordance therewith. 
  
 By the delivery of this Notice of Conversion, the undersigned represents and
warrants to the Company that its ownership of the Common Stock does not exceed the amounts determined in accordance with Section 13(d) of the Exchange Act, specified under Section (f)(i) of the Certificate of Designations for the Series B Preferred
Stock. 
  
 The undersigned agrees to comply with the prospectus
delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock. 
  
 Conversion calculations: 
  

			
	 Date to Effect Conversion:
	  	 

			
		
	 Number of shares of Preferred Stock to be Converted:
	  	 

			
		
	 Number of shares of Common Stock to be issued:
	  	 

			
		
	 Shares to be issued in the name of:
	  	 

			
		
	 Holder:
	  	 

			
		
	 Authorized Signature:
	  	 

			
		
	 Name:
	  	 

			
		
	 Title:
	  	 

			
		
	 Address:
	  	 
		
	 	  	 
		
	 	  	 

  

 -9- 

 Exhibit C 
  

Legal Opinion 
  
 May     , 2005 
  
 Ladies and Gentlemen: 
  
 We have
acted as counsel to Global ePoint, Inc., a Nevada corporation (the “Company”), in connection with the sale by the Company to you (collectively, the “Purchasers”), of an aggregate of 15,000 shares (the
“Shares”) of the Company’s Series B Preferred stock, no par value per share (“Preferred Stock”), and the issuance by the Company to you of warrants (the “Warrants”) to purchase up to 267,857
shares of the Company’s Common Stock, $.03 par value (“Common Stock”), pursuant to that certain Subscription Agreement dated as of May 16, 2005 by and among the Company and the Purchasers (the “Subscription
Agreement”). This opinion is being furnished to you pursuant to Section 3(b) of the Subscription Agreement. All terms used herein have the meanings defined for them in the Subscription Agreement unless otherwise defined herein. 

 
 In acting as counsel for the Company and arriving at the opinions
expressed below, we have examined and relied upon originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company, agreements and other instruments, certificates of officers and representatives of the
Company, certificates of public officials, public filings and other documents we have deemed necessary or appropriate as a basis for the opinions expressed herein. As to various questions of fact relating to such opinions, we have relied solely upon
the representations of the Company and the Purchasers contained in the Subscription Agreement or made to us in certificates of officers of the Company delivered at closing. In such examination we have assumed the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted to us as originals, the conformity to original documents of all copies submitted to us as copies thereof, the legal capacity of natural persons, and the due execution
and delivery of all documents (except as to due execution and delivery by the Company) where due execution and delivery are a prerequisite to the effectiveness thereof. 
  
 Based upon and subject to the foregoing, and subject to the qualifications and limitations stated herein, we are of the
opinion that: 
  
 1. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with corporate power to own its properties and to conduct its business. 
  
 2. The Company has the corporate power to execute, deliver and perform the Transaction Documents, including
the Exhibits thereto. The Transaction Documents have been duly authorized by all requisite corporate action by the Company and constitute the valid and binding obligations of the Company, enforceable in accordance with their terms (subject to
bankruptcy, equitable principles and other customary exceptions). 
  

 -1- 

 (a) The authorized capital stock of the Company consists of 2,000,000 shares of Preferred
Stock, and 50,000,000 shares of Common Stock. 
  
 (b) The shares of the Company’s Series B Stock have been duly authorized and, upon issuance, delivery, and payment therefor in accordance with the Subscription Agreement, will be validly issued, fully paid and non-assessable.

  
 (c) The shares of the Company’s Common
Stock initially issuable upon conversion of the shares of Series B Stock sold have been duly authorized and reserved for issuance and, upon issuance and delivery upon conversion of the Series B Stock in accordance with the Certificate of
Designation, will be validly issued, fully paid and non-assessable. 
  
 (d) The shares of the Company’s Common Stock issuable upon exercise of the Warrants have been duly authorized and reserved for issuance, and upon issuance, delivery, and payment therefor in accordance with the
Warrants, will be validly issued, fully paid and non-assessable. 
  
 3. The Company’s execution and delivery of the Transaction Documents and the issue and sale of the Series B Stock and the Warrants, on the terms and conditions set forth in the Subscription Agreement, will not,
to our knowledge, violate any law of the United States or the State of Nevada, any rule or regulation of any governmental authority or regulatory body of the United States or the State of Nevada, or any provision of the Company’s Articles of
Incorporation or Bylaws. 
  
 4. To our knowledge,
no consent, approval, order or authorization of, and no notice to or filing with, any governmental agency or body or any court is required to be obtained or made by the Company for the issuance and sale of the Series B Stock and the Warrants
pursuant to the Transaction Documents, except such as have been obtained or made and such as may be required under applicable securities laws. 
  
 5. The offer and sale of the Series B Stock and the Warrants pursuant to the terms of the Subscription Agreement are exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as amended, and from the qualification requirements of California securities statutes and regulations. 
  
 6. We know of no pending or overtly threatened action, proceeding or governmental investigation with respect
to the Company’s sale of Series B Stock and Warrants pursuant to the Transaction Documents. 
  
 In addition to the qualifications and limitations set forth above, the opinions expressed herein are subject to the following qualifications and
limitations: 
  
 (a) We express no opinion with
respect to laws other than those of the State of California, the State of Nevada and the federal securities laws of the United States of America, and we assume no responsibility as to the applicability thereto, or the effect thereon, of the laws of
any other jurisdiction. 
  

 -2- 

 (b) To the extent that this opinion relates to the enforceability of the Transaction
Documents, the opinion is subject to the effect of applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting the rights of creditors generally or the availability or specific performance, injunctive relief and other
equitable remedies, and to general principles of equity, whether in a proceeding in equity or at law. 
  
 (c) We express no opinion as to the validity or enforceability of indemnification or contribution provisions of the Transaction Documents,
including the Registration Rights Agreement. 
  
 (d) Where we render an opinion based upon factual matters “to our knowledge” or that “we know of” or similar expressions, it is based upon the actual knowledge of this firm’s attorneys who have devoted substantive
legal attention as counsel to the Company solely in connection with the Subscription Agreement and the transactions contemplated thereby, and without any independent investigation of any underlying facts or situations. 
  
 (e) In giving the opinions expressed in paragraph nos. 3, 4
and 5 above, we have assumed that (i) neither the Company nor any person acting on its behalf offered or sold the Shares and Warrants by any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under
the Act; and (ii) the representations and warranties of the Purchasers and MAG in the Subscription Agreement and all Exhibits thereto executed by the Purchasers are true and accurate in all respects. 
  
 This letter constitutes our opinions only and shall not be deemed a guarantee
of the matters set forth herein. We are furnishing this letter to you solely for your benefit in connection with the above-described transaction. It is not to be used, circulated, quoted or otherwise referred to for any other purpose, and no one
other than you is entitled to rely on this opinion. This letter speaks only as of the date above written, and we hereby expressly disclaim any duty to update any of the statements made herein. 
  
 Very truly yours, 
  

 -3- 

 Exhibit D 
  

Registration Rights Agreement 
  

 -1- 

 REGISTRATION RIGHTS AGREEMENT 
  
 AGREEMENT dated as of May 16, 2005, between M.A.G. Capital, LLC, Mercator Momentum Fund, LP, Mercator Momentum Fund
III, LP and Monarch Pointe Fund, Ltd. (collectively, the “Funds”) and M.A.G. Capital, LLC (“MAG”) (the Funds and MAG are referred to individually as a “Holder” and collectively as the “Holders”),
and Global ePoint, Inc., a Nevada corporation (the “Company”). 
  
 WHEREAS, the Funds have purchased, for an aggregate of $1,500,000, an aggregate of 15,000 shares of Series B Convertible Preferred Stock (the “Series B Stock”) from the Company, and have the
right to cause their Series B Stock to be converted into shares of Common Stock, $.03 par value (the “Common Stock”), of the Company, pursuant to the conversion formula set forth in the Certificate of Determination; 
  
 WHEREAS, each Fund and MAG have acquired Warrants (together, the
“Warrants”) from the Company, pursuant to which the Holders have the right to purchase in the aggregate up to 267,857 shares of the Common Stock through the exercise of the Warrants; 
  
 WHEREAS, the Company desires to grant to the Holders the registration
rights set forth herein with respect to the shares of Common Stock issuable upon the conversion of the Series B Stock and the exercise of the Warrants. 
  
 NOW, THEREFORE, the parties hereto mutually agree as follows: 
  
 1. Registrable Securities. As used herein the terms “Registrable Security” means each
of the shares of Common Stock (i) issued upon the conversion of the Series B Stock (the “Conversion Shares”) or (ii) upon exercise of the Warrants (the “Warrant Shares”), provided, however, that with respect to any
particular Registrable Security, such security shall cease to be a Registrable Security when, as of the date of determination that (a) it has been effectively registered under the Securities Act of 1933, as amended (the “Securities
Act”), and disposed of pursuant thereto, or (b) registration under the Securities Act is no longer required for the immediate public distribution of such security. The term “Registrable Securities” means any and/or all of
the securities falling within the foregoing definition of a “Registrable Security.” In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the Common Stock, such
adjustment shall be made in the definition of “Registrable Security” as is appropriate in order to prevent any dilution or enlargement of the rights granted pursuant to this Section 1. 
  
 2. Registration. 
  
 (a) The Company shall file a registration statement (the
“Registration Statement”) with the Securities and Exchange Commission (the “SEC”) within forty-five (45) days after the date of this Agreement in order to register the resale of the Registrable Securities under the
Securities Act (the “Filing Due Date”); provided, however, in the event that the Company is unable to obtain audited financial statements from Astrophysics, Inc. for inclusion in 

 
the Registration Statement on or before 40 days after the date of this Agreement, then the Filing Due Date shall be 75 days after the date of this Agreement.
Once effective, the Company shall maintain the effectiveness of the Registration Statement until the earlier of (i) the date that all of the Registrable Securities have been sold, or (ii) the date that the Company receives an opinion of counsel to
the Company that all of the Registrable Securities may be freely traded without registration under the Securities Act, under Rule 144 promulgated under the Securities Act or otherwise. The Holders will cooperate with the Company and its counsel in
connection with any such determination by providing current information, at the request of the Company, concerning the Holders’ beneficial ownership of securities of the Company. 
  
 (b) The Company will initially include in the Registration Statement as Registrable Securities Eight Hundred
Three Thousand Five Hundred Seventy-One (803,571) shares of Common Stock. 
  
 3. Covenants of the Company with Respect to Registration. 
  
 The Company covenants and agrees as follows: 
  
 (a) The Company shall use best efforts to cause the Registration Statement to become effective with the SEC as promptly as possible and in
no event more than 90 days after filing the Registration Statement with the SEC (the “Effectiveness Due Date”); provided, however, in the event that the Company is unable to obtain audited financial statements from Astrophysics, Inc. for
inclusion in the Registration Statement on or before 40 days after the date of this Agreement, the Effective Due Date shall be 100 days after the Registration Statement is filed with the SEC. If any stop order shall be issued by the SEC in
connection therewith, the Company shall use best efforts to obtain promptly the removal of such order. Following the effective date of the Registration Statement, the Company shall supply one unbound of copy the definitive prospectus meeting the
requirements of the Securities Act, and any supplements or amendments thereto, as shall be reasonably required by the Holder to permit the Holder to make a public distribution of the Holder’s Registrable Securities. The obligations of the
Company hereunder with respect to the Holder’s Registrable Securities are subject to the Holder’s furnishing to the Company such appropriate information concerning the Holder, the Holder’s Registrable Securities and the terms of the
Holder’s offering of such Registrable Securities as the Company may reasonably request in writing. 
  
 (b) The Company shall pay all costs, fees and expenses in connection with the Registration Statement filed pursuant to Section 2 hereof
including, without limitation, the Company’s legal and accounting fees, printing expenses, and blue sky fees and expenses; provided, however, that each Holder shall be solely responsible for the fees of any counsel retained by the Holder in
connection with such registration and any transfer taxes or underwriting discounts, commissions or fees applicable to the Registrable Securities sold by the Holder pursuant thereto. 
  
 (c) The Company will take all actions which may be required to qualify or register the Registrable
Securities included in the Registration Statement for the offer and sale under the securities or blue sky laws of such states as are reasonably requested by each Holder of such securities, provided that the Company shall not be obligated to execute
or file any general 

  

 -2- 

 
consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction. 
  
 4. Additional Terms. 
  
 (a) The Company shall indemnify and hold harmless the
Holders and each underwriter, within the meaning of the Securities Act, who may purchase from or sell for any Holder, any Registrable Securities, from and against any and all losses, claims, damages and liabilities caused by any untrue statement of
a material fact contained in the Registration Statement, any other registration statement filed by the Company under the Securities Act with respect to the registration of the Registrable Securities, any post-effective amendment to such registration
statements, or any prospectus included therein or caused by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission based upon information furnished or required to be furnished in writing to the Company by the Holders or underwriter expressly for use therein, which indemnification shall include each
person, if any, who controls any Holder or underwriter within the meaning of the Securities Act and each officer, director, employee and agent of each Holder and underwriter; provided, however, that the indemnification in this Section 4(a) with
respect to any prospectus shall not inure to the benefit of any Holder or underwriter (or to the benefit of any person controlling any Holder or underwriter) on account of any such loss, claim, damage or liability arising from the sale of
Registrable Securities by the Holder or underwriter, if a copy of a subsequent prospectus correcting the untrue statement or omission in such earlier prospectus was provided to such Holder or underwriter by the Company prior to the subject sale and
the subsequent prospectus was not delivered or sent by the Holder or underwriter to the purchaser prior to such sale and provided further, that the Company shall not be obligated to so indemnify any Holder or any such underwriter or other person
referred to above unless the Holder or underwriter or other person, as the case may be, shall at the same time indemnify the Company, its directors, each officer signing the Registration Statement and each person, if any, who controls the Company
within the meaning of the Securities Act, from and against any and all losses, claims, damages and liabilities caused by any untrue statement of a material fact contained in the Registration Statement, any registration statement or any prospectus
required to be filed or furnished by reason of this Agreement or caused by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission based upon information furnished in writing to the Company by the Holder or underwriter expressly for use therein. 
  
 (b) If for any reason the indemnification provided for in the preceding section is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as
any other relevant equitable considerations. 
  

 -3- 

 (c) Neither the filing of a Registration Statement by the Company pursuant to this
Agreement nor the making of any request for prospectuses by the Holder shall impose upon any Holder any obligation to sell the Holder’s Registrable Securities. 
  
 (d) Each Holder, upon receipt of notice from the Company that an event has occurred which requires a
Post-Effective Amendment to the Registration Statement or a supplement to the prospectus included therein, shall promptly discontinue the sale of Registrable Securities until the Holder receives a copy of a supplemented or amended prospectus from
the Company, which the Company shall provide as soon as practicable after such notice. 
  
 (e) If the Company fails to keep the Registration Statement referred to above continuously effective during the requisite period, then the
Company shall, promptly upon the request of any Holder, use best efforts to update the Registration Statement or file a new registration statement covering the Registrable Securities remaining unsold, subject to the terms and provisions hereof.

  
 (f) Each Holder agrees to provide the Company
with any information or undertakings reasonably requested by the Company in order for the Company to include any appropriate information concerning the Holder in the Registration Statement or in order to promote compliance by the Company or the
Holder with the Securities Act. 
  
 (g) Each
Holder, on behalf of itself and its affiliates, hereby covenants and agrees not to, directly or indirectly, offer to “short sell”, contract to “short sell” or otherwise “short sell” any securities of the Company,
including, without limitation, shares of Common Stock that will be received as a result of the conversion of the Series B Stock or the exercise of the Warrants. 
  

5. Governing Law. The Registrable Securities will be, if and when issued, delivered in California. This Agreement shall be
deemed to have been made and delivered in the State of California and shall be governed as to validity, interpretation, construction, effect and in all other respects by the internal substantive laws of the State of California, without giving effect
to the choice of law rules thereof. 
  
 6.
Amendment. This Agreement may only be amended by a written instrument executed by the Company and the Holders. 
  
 7. Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. 
  
 8. Execution in Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same document. 
  
 9. Notices. All communications hereunder shall be in writing and shall be hand delivered, mailed by first-class mail, couriered by next-day air courier or by facsimile at the addresses set
forth below. 
  

 -4- 

			
	If to MAG or Robinson Reed, Inc.:	 	M.A.G. Capital, LLC
	 	 	 Mercator Momentum Fund, LP
 Mercator Momentum Fund
III, LP
 Monarch Pointe Fund, Ltd.
 555 South Flower Street,
Suite 4200
 Los Angeles, CA 90071
 Attention: David
Firestone
 Facsimile No.: (213) 533-8285

		
	With a copy to:	 	 Sheppard Mullin Richter & Hampton LLP
 333 South
Hope Street
 48th
Floor
 Los Angeles, CA 90071-1448
 Attention: David C.
Ulich
 Telephone No.: (213) 620-1780
 Facsimile
No.:  (213) 620-1398

		
	If to the Company:	 	 Global ePoint, Inc.
 339 South Cheryl Lane

City of Industry, CA 91789
 Attention: Toresa Lou, Chief Executive
Officer
 Telephone No.: (909) 869-1688
 Facsimile
No.:  (909) 598-2936

		
	With a copy to:	 	 Preston, Gates & Ellis LLP
 1900 Main Street,
Suite 600
 Irvine, CA 92614-7319
 Attention: Daniel K.
Donahue
 Telephone No.: (949) 253-0900
 Facsimile
No.:  (949) 253-0902

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

 -5- 

 10. Binding Effect; Benefits. Any Holder may assign its rights hereunder. This
Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and assigns. Nothing herein contained, express or implied, is intended to confer upon any person other
than the parties hereto and their respective heirs, legal representatives and successors, any rights or remedies under or by reason of this Agreement. 
  
 11. Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this Agreement. 
  
 12. Severability. Any provision of this Agreement which is held by a court of competent jurisdiction to be prohibited or unenforceable in any jurisdiction(s) shall be, as to such jurisdiction(s),
ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 
  
 13. Jurisdiction. Each of the parties irrevocably agrees
that any and all suits or proceedings based on or arising under this Agreement may be brought only in and shall be resolved in the federal or state courts located in the City of Los Angeles, California and consents to the jurisdiction of such courts
for such purpose. Each of the parties irrevocably waives the defense of an inconvenient forum to the maintenance of such suit or proceeding in any such court. Nothing herein shall affect the right of either party to serve process in any other manner
permitted by law. Each of the parties agrees that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner. 
  
 14. Attorneys’ Fees and Disbursements. If any
action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party or parties shall be entitled to receive from the other party or parties reasonable attorneys’ fees and disbursements in addition
to any other relief to which the prevailing party or parties may be entitled. 
  
 IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date first above written. 
  

			
	Global ePoint, Inc.
		
	By:	 	/s/    TORESA LOU        
	 Name:
	 	Toresa Lou
	 Its:
	 	Chief Executive Officer

  

 -6- 

			
	HOLDERS:
	
	MERCATOR MOMENTUM FUND, L.P.
	
	BY: M.A.G. CAPITAL, LLC
	ITS: GENERAL PARTNER
		
	By:	 	/s/    H. HARRY
AHARONIAN        
	 Name:
	 	H. Harry Aharonian
	 Its:
	 	Portfolio Manager
	
	MERCATOR MOMENTUM FUND III, L.P.
	
	BY: M.A.G. CAPITAL, LLC
	ITS: GENERAL PARTNER
		
	By:	 	/s/    H. HARRY
AHARONIAN        
	 Name:
	 	H. Harry Aharonian
	 Its:
	 	Portfolio Manager
	
	MONARCH POINTE FUND, LTD.
		
	By:	 	/s/    H. HARRY
AHARONIAN        
	 Name:
	 	H. Harry Aharonian
	 Its:
	 	Director
	
	M.A.G. CAPITAL, LLC
		
	By:	 	/s/    H. HARRY
AHARONIAN        
	 Name:
	 	H. Harry Aharonian
	 Its:
	 	Portfolio Manager

  

 -7-Securities Purchase Agreement

 Exhibit 10.1 
  
 EXECUTION VERSION 
  
 SECURITIES PURCHASE AGREEMENT 
  
 This Securities Purchase Agreement (this “Agreement”) is dated as of June 2, 2005, among Global ePoint, Inc., a Nevada corporation
(the “Company”), and the purchasers identified on the signature pages hereto (each, a “Purchaser” and collectively, the “Purchasers”). 
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities
Act of 1933, as amended (the “Securities Act”), and Rule 506 thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, certain
securities of the Company as more fully described in this Agreement. 
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each of the Purchasers, severally
and not jointly, agree as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated: 
  
 “Actual Minimum” means, as of any date, the maximum
aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise or conversion in full of all Warrants and Shares, ignoring any
limits on the number of shares of Common Stock that may be owned by a Purchaser at any one time and (i) assuming that (a) any previously unconverted Shares are held until the third anniversary of the Closing Date and all dividends thereon
are paid in shares of Common Stock, and (b) the Closing Price at all times on and after the date of determination equals 100% of the actual Closing Price on the Trading Day immediately prior to the date of determination, and (ii) giving
effect to the Conversion Price (as defined in the Certificate of Designations) as in effect on such date, without regard to potential changes in the Closing Price that may occur thereafter. 
  
 “Affiliate” means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. 
  
 “Bankruptcy Event” means any of the following events: (a) the Company or any Subsidiary commences a case or other proceeding under
any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or 

 
similar law of any jurisdiction relating to the Company or any Subsidiary thereof; (b) there is commenced against the Company or any Subsidiary any such
case or proceeding that is not dismissed within 60 days after commencement; (c) the Company or any Subsidiary is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered;
(d) the Company or any Subsidiary suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) the Company or any Subsidiary makes a general
assignment for the benefit of creditors; (f) the Company or any Subsidiary fails to pay, or states that it is unable to pay or is unable to pay, its debts generally as they become due; (g) the Company or any Subsidiary calls a meeting of
its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (h) the Company or any Subsidiary, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing. 
  
 “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or
required by law to remain closed. 
  
 “Certificate of
Designations” means a certificate of designations of the Series C Preferred Stock, in the form of Exhibit A. 
  
 “Change of Control” means the occurrence of any of the following in one or a series of related transactions other than a transaction or
transactions contemplated by the Letter of Intent: (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) under the Exchange Act) of more than one-half of the voting
rights or equity interests in the Company; (iii) a merger or consolidation of the Company or any significant Subsidiary or a sale of more than one-half of the assets of the Company (other than non-homeland security assets) in one or a series of
related transactions, unless following such transaction or series of transactions, the holders of the Company’s securities prior to the first such transaction continue to hold at least two-thirds of the voting rights and equity interests in the
surviving entity or acquirer of such assets; (iv) a recapitalization, reorganization or other transaction involving the Company or any significant Subsidiary that constitutes or results in a transfer of more than one-half of the voting rights
or equity interests in the Company; (v) consummation of a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act with respect to the Company, or (vi) the execution by the Company or its controlling shareholders
of an agreement providing for or reasonably likely to result in any of the foregoing events. 
  
 “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.2 upon the satisfaction of each of the conditions set forth in Sections 5.1 and 5.2.

  
 “Closing Date” means the date of the Closing.

  
 “Closing Price” means, for any date, the
price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on an Eligible Market or any other national securities exchange, the closing bid price per share of the Common Stock for such
date (or the nearest preceding date) on the primary Eligible Market or exchange on which the Common Stock is then listed or quoted; (b) if prices for the Common Stock are then quoted on the OTC Bulletin Board, the closing bid price per share of
the 

  

 2 

 
Common Stock for such date (or the nearest preceding date) so quoted; (c) if prices for the Common Stock are then reported in the “Pink
Sheets” published by Pink Sheets LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent closing bid price per share of the Common Stock so reported; or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an independent appraiser selected in good faith by Purchasers holding a majority of the Securities, the cost of which shall be paid by the Company. 
  
 “Commission” means the Securities and Exchange Commission.

  
 “Common Stock” means the common stock of the
Company, par value $0.03 per share. 
  
 “Company
Counsel” means Preston Gates & Ellis LLP, counsel to the Company. 
  
 “Convertible Securities” shall mean any evidence of indebtedness, shares, options, warrants or other securities directly or indirectly convertible into or exercisable or exchangeable for shares of
Common Stock. 
  
 “Effective Date” means the date
that an Underlying Shares Registration Statement is declared effective by the Commission. 
  
 “Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as
amended. 
  
 “GAAP” means United States generally
accepted accounting principles, as recognized by the American Institute of Certified Public Accountants or the Financial Accounting Standards Board, consistently applied and maintained on a consistent basis for the Company and its Subsidiaries
throughout the period indicated and consistent with the prior financial practice of the Company; provided, however, that any accounting principle or practice required to be changed by the American Institute of Certified Public
Accountants or the Financial Accounting Standards Board (or other appropriate board or committee of either) in order to continue as a generally accepted accounting principle or practice may be so changed. 
  
 “Letter of Intent” means that certain letter dated
May 27, 2005 between the Company and Astrophysics, Inc. regarding the proposed acquisition of Astrophysics, Inc. by the Company and the related financing (the “Financing”) described therein. 
  
 “Lien” means any lien, charge, claim, security interest,
encumbrance, right of first refusal or other restriction. 
  
 “Losses” means any and all losses, claims, damages, liabilities, settlement costs and expenses, including without limitation costs of preparation of legal action and reasonable attorneys’ fees. 
  
 “Options” means any rights, warrants or options to subscribe
for or purchase Common Stock or Convertible Securities. 
  

 3 

 “Person” means any individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or any court or other federal, state, local or other governmental authority or other entity of any kind.

  
 “Proceeding” means an action, claim, suit,
investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Registration Rights Agreement” means the Registration Rights Agreement, dated on or around the Closing Date, among the Company and the
Purchasers, in the form of Exhibit B. 
  
 “Required
Effectiveness Date” means the date on which an Underlying Shares Registration Statement is required to become effective pursuant to the Registration Rights Agreement. 
  
 “Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then
issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise or conversion in full of all Warrants and Convertible Securities, ignoring any limits on the number of shares
of Common Stock that may be owned by a Purchaser at any one time and (i) assuming that (a) any previously unconverted Shares are held until the third anniversary of the Closing Date or, if earlier, until maturity, and all dividends thereon
are paid in shares of Common Stock, and (b) the Closing Price at all times on and after the date of determination equals 50% of the actual Closing Price on the Trading Day immediately prior to the date of determination, and (ii) giving
effect to the Conversion Price (as defined in the Certificate of Designations) as in effect on such date, without regard to potential changes in the Closing Price that may occur thereafter. 
  
 “Rule 144,” “Rule 415,” and “Rule
424” means Rule 144, Rule 415 and Rule 424, respectively, promulgated by the Commission pursuant to the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule. 
  
 “Securities” means the Shares, the Warrants and the Underlying Shares. 
  
 “Senior Debt” means any indebtedness of the Company from the date hereof that is senior to any indebtedness set forth on Schedule
3.1(bb) in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise. 
  
 “Series C Preferred Stock” means the Series C Convertible Preferred Stock, no par value, of the Company, which is convertible into shares
of Common Stock. 
  
 “Shares” means an aggregate
of 1,250,007 shares of Series C Preferred Stock, which are being purchased by the Purchasers pursuant to this Agreement. 
  
 “Subsidiary” means any subsidiary of the Company that is required to be listed in Schedule 3.1(a). 
  

 4 

 “Trading Day” means (a) any day on which the Common Stock is listed or quoted and
traded on an Eligible Market or (b) if trading ceases to occur on an Eligible Market, any Business Day. 
  
 “Trading Market” means the NASDAQ SmallCap Market or any other national securities exchange, market or trading or quotation facility on
which the Common Stock is then listed or quoted. 
  
 “Transaction Documents” means this Agreement, the Securities, the Registration Rights Agreement, the Certificate of Designations, and any other documents or agreements executed in connection with the transactions
contemplated hereunder. 
  
 “Transfer Agent
Instructions” means the Irrevocable Transfer Agent Instructions, in the form of Exhibit D, executed by the Company and delivered to the Company’s transfer agent. 
  
 “Triggering Event” means any of the following events: (a) immediately prior to any Bankruptcy Event;
(b) the Common Stock is not listed or quoted, or is suspended from trading, on an Eligible Market for a period of seven consecutive Trading Days or for a period of twenty Trading Days (which need not be consecutive Trading Days) in any 12 month
period; (c) the Company fails for any reason to deliver a certificate evidencing any Securities to a Purchaser as required pursuant to any Transaction Document within five Trading Days after delivery of notice of failure to deliver by Purchaser
or the exercise or conversion rights of the Holders pursuant to the Transaction Documents are otherwise suspended for any reason other than a breach of the Transaction Documents by the Purchasers; (d) the Company fails to have available a
sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock available to issue Underlying Shares upon any exercise of the Warrants or any conversion of convertible Securities; (e) any other Event (as defined in
the Registration Rights Agreement) occurs and remains uncured for 90 days; (f) the Company fails to make any cash payment required under the Transaction Documents and such failure is not cured within ten Trading Days after notice of such
default is first given to the Company by a Purchaser; or (i) the Company shall issue equity securities of the Company (other than any such securities issued in connection with the acquisition of Astrophysics, Inc as described in the Letter of
Intent or the financing described therein) which shall be senior to the Series C Preferred Stock in right of payment, or with respect to dividends, liquidation, or dissolution. 
  
 “Underlying Shares” means the shares of Common Stock issuable upon conversion of the Shares and upon
exercise of the Warrants and in satisfaction of any other obligation of the Company to issue shares of Common Stock pursuant to the Transaction Documents. 
  
 “Underlying Shares Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale of the Securities by the Purchasers. 
  
 “Volume Weighted Average Price” means, with respect to any particular Trading Day or for any particular period, the volume weighted average trading price per share of Common Stock on such date or for such period on an
Eligible Market as reported by Bloomberg, L.P., or any successor performing similar functions. 
  

 5 

 “Warrant” means a Common Stock purchase warrant, in the form of Exhibit C.

  
 ARTICLE II 
 PURCHASE AND SALE 
  
 2.1 Sale and Issuance of Series C Preferred Stock at Closing. Subject to the terms and conditions of this Agreement, each Purchaser agrees,
severally and not jointly, to purchase at the Closing and the Company agrees to sell and issue to each Purchaser at the Closing, that number of shares of Series C Preferred Stock set forth opposite such Purchaser’s name on Schedule A
hereto under the heading “Shares” and a Warrant to acquire that number of shares of Common Stock indicated on Schedule A hereto under the heading “Warrant Shares”, for the aggregate purchase price set forth opposite such
Purchaser’s name on Schedule A hereto under the heading “Purchase Price”. 
  
 2.2 Closing. The purchase and sale of the Shares pursuant to the terms of Section 2.1 shall take place at the offices of Proskauer Rose
LLP in New York, New York, at 10:00 a.m. on the date each of the conditions set forth in Sections 5.1 and 5.2 have been satisfied, or at such other time and place as the Company and the Purchasers mutually agree upon in writing (which time
and place are designated as the “Closing”). 
  
 2.3 Closing Deliveries. 
  
 (a)
At the Closing, the Company shall deliver or cause to be delivered to each Purchaser the following: 
  
 (i) one or more stock certificates evidencing that number of Shares indicated on Schedule A hereto under the heading
“Shares”, registered in the name of such Purchaser; 
  
 (ii) a Warrant, registered in the name of such Purchaser, pursuant to which such Purchaser shall have the right to acquire that number of shares of Common Stock indicated on Schedule A hereto under the heading
“Warrant Shares”; 
  
 (iii) evidence
that the Certificate of Designations has been filed and become effective on or prior to the Closing Date with the Secretary of State of Nevada, in form and substance mutually agreed to by the parties; 
  
 (iv) the legal opinion of Company Counsel, in the form of
Exhibit E, executed by such counsel and delivered to the Purchasers; 
  
 (v) the Registration Rights Agreement duly executed by the Company; 
  
 (vi) duly executed Transfer Agent Instructions delivered to the Company’s transfer agent; and 
  
 (vii) any other documents reasonably requested by a
Purchaser or counsel to any Purchaser in connection with the Closing. 
  

 6 

 (b) At the Closing, each Purchaser shall deliver or cause to be delivered to the Company
the following: 
  
 (i) the purchase price set
forth opposite such Purchaser’s name on Schedule A hereto under the heading “Purchase Price”, in United States dollars and in immediately available funds, by wire transfer to an account designated in writing by the Company for
such purpose; and 
  
 (ii) the Registration
Rights Agreement duly executed by such Purchaser. 
  
 ARTICLE III

 REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each of the Purchasers:

  
 (a) Subsidiaries. The Company has no
direct or indirect Subsidiaries other than those listed in Schedule 3.1(a). Except as disclosed in Schedule 3.1 (a), the Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each Subsidiary free and clear
of any Lien and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights. 
  
 (b) Organization and Qualification. Each of the
Company and the Subsidiaries is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it
makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually or in the aggregate, (i) adversely affect the legality, validity or enforceability of any
Transaction Document, (ii) have or result in a material adverse effect on the results of operations, assets, prospects, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole on a consolidated
basis, or (iii) adversely impair the Company’s ability to perform fully on a timely basis its obligations under any of the Transaction Documents (any of (i), (ii) or (iii), a “Material Adverse Effect”). 
  
 (c) Authorization; Enforcement. The Company has the
requisite corporate power and authority to enter into and to consummate the 

  

 7 

 
transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further consent or action
is required by the Company, its Board of Directors or its shareholders. Each of the Transaction Documents has been (or upon delivery will be) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will
constitute, the valid and binding obligation of the Company enforceable against the Company in accordance with its terms. 
  
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational
or charter documents, (ii) conflict with, or constitute a default (or an event that 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 (with
or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or (iii) assuming the accuracy of Purchasers’ representations and warranties and compliance by the Purchasers’ of their respective covenants as set forth in this
Agreement, result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities
laws and regulations and the rules and regulations of any self-regulatory organization to which the Company or its securities are subject), or by which any property or asset of the Company or a Subsidiary is bound or affected. 
  
 (e) Issuance of the Securities. Except as described
in Schedule 3.1(e), the Securities (including the Underlying Shares) are duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens (other than restrictions under applicable securities laws) and shall not be subject to preemptive rights or similar rights of shareholders. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common
Stock issuable upon exercise of the Warrants. 
  
 (f) Capitalization. The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for
shares of capital stock of the Company) is set forth in Schedule 3.1(f). All outstanding shares of capital stock are duly authorized, validly issued, fully paid and nonassessable and have been issued in compliance with all 

  

 8 

 
applicable securities laws. Except as disclosed in Schedule 3.1(f), (i) there are no outstanding options, warrants, script rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock and (ii) there
are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that would cause the issue and sale of the Securities (including the Underlying Shares) to
obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) or result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such
securities. To the knowledge of the Company, except as specifically disclosed in Schedule 3.1(f), no Person or group of related Persons beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act), or has the right to acquire, by
agreement with or by obligation binding upon the Company, beneficial ownership of in excess of 5% of the outstanding Common Stock, ignoring for such purposes any limitation on the number of shares of Common Stock that may be owned at any single
time. 
  
 (g) SEC Reports; Financial
Statements. The Company has filed all reports required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such shorter period as the Company
was required by law to file such material) (the foregoing materials filed by the Company since April 12, 2004 . (together with any materials filed since such date by the Company under the Exchange Act, whether or not required) being
collectively referred to herein as the “SEC Reports” and, together with this Agreement and the Schedules to this Agreement, the “Disclosure Materials”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States GAAP, except as may be otherwise specified in such financial
statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the 

  

 9 

 
case of unaudited statements, to normal, immaterial, year-end audit adjustments. All material agreements to which the Company or any Subsidiary is a party or
to which the property or assets of the Company or any Subsidiary are subject are included as part of or specifically identified in the SEC Reports. 
  
 (h) Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports or in Schedule 3.1(h), (i) there has been no event, occurrence or development that, individually or in the aggregate, has had or that could result in a Material Adverse Effect, (ii) the Company has
not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice or (B) liabilities not required to be reflected in
the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not materially altered its method of accounting or the identity of its auditors, except as disclosed
in its SEC Reports, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and
(v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock-based plans. 
  
 (i) Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries that could, individually or in the aggregate, have a Material Adverse
Effect. 
  
 (j) Compliance. Neither the
Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each
case as could not, individually or in the aggregate, have or result in a Material Adverse Effect. 
  
 (k) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by
them that is material to the business of the Company and the Subsidiaries and good and 

  

 10 

 
marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of
all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries. Any real property and facilities held
under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance. 
  
 (l) Certain Fees. Except for the fees described in Schedule 3.1(1), all of which are payable to
registered broker-dealers, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement, and the Company has not taken any action that would cause any Purchaser to be liable for any such fees or commissions. 
  
 (m) Private Placement. Neither the Company nor any Person acting on the Company’s behalf has
sold or offered to sell or solicited any offer to buy the Securities by means of any form of general solicitation or advertising. Neither the Company nor any of its Affiliates nor any Person acting on the Company’s behalf has, directly or
indirectly, at any time within the past six months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under
Regulation D under the Securities Act in connection with the offer and sale of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction Documents to be integrated with prior offerings by the
Company for purposes of any stockholder approval provisions under the rules and regulations of any Trading Market. The Company is not, and is not an Affiliate of, an “investment company” within the meaning of the Investment Company Act of
1940, as amended. The Company is not a United States real property holding corporation within the meaning of the Foreign Investment in Real Property Tax Act of 1980. 
  
 (n) Listing and Maintenance Requirements. The Company has not, in the two years preceding the date
hereof, received notice (written or oral) from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The
Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. 
  
 (o) Registration Rights. Except as described in Schedule 3.1(o), the Company has not granted or
agreed to grant to any Person any rights (including “piggy-back” registration rights) to have any securities of the Company registered with the Commission or any other governmental authority that have not been satisfied. 
  

 11 

 (p) Application of Takeover Protections. There is no control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s charter documents or the laws of its state of incorporation that is or could become applicable
to any of the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation, as a result of the Company’s issuance of the
Securities and the Purchasers’ ownership of the Securities. 
  
 (q) Disclosure. The Company confirms that it has not provided any of the Purchasers or their agents or counsel with any information that constitutes or might constitute material, nonpublic information, except
as may be disclosed in the Press Release described in Section 4.8, below or in the press release to be issued prior to 8:30 a.m. on June 3, 2005 disclosing all material terms of the Letter of Intent (the “Astrophysics Press
Release”). The Company understands and confirms that each of the Purchasers will rely on the foregoing representations in effecting transactions in securities of the Company. This Agreement, including the Schedules hereto, furnished by or on
behalf of the Company are true and correct and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were
made, not misleading. Except as may be disclosed in the Press Release described in Section 4.8 or the Astrophysics Press Release, no event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries
or its or their business, properties, prospects, operations or financial conditions, 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. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2. 
  
 (r) Acknowledgment Regarding Purchasers’ Purchase of
Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby. The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice to the Company given by any Purchaser or
any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser
that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives. 
  

 12 

 (s) Patents and Trademarks. The Company and the Subsidiaries have, or have rights
to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a written notice that the
Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person where the alleged violation or infringement, if true, could have a Material Adverse Effect. To the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. 
  
 (t) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. 
  
 (u) Regulatory Permits. The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the
failure to possess such permits could not, individually or in the aggregate, have or result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit. 
  
 (v) Transactions With Affiliates and Employees. Except as set forth in SEC Reports filed at least ten days prior to the date hereof, none of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. 
  
 (w) Form S-3 Eligibility. The Company is eligible to register the resale of its Common Stock for resale by the Purchasers under
Form S-3 promulgated under the Securities Act. 
  

 13 

 (x) Solvency. Based on the financial condition of the Company as of the Closing
Date, (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they
mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). 
  
 (y) Internal Accounting Controls. Except as disclosed in the SEC Reports, the Company and the Subsidiaries maintain a system of
internal accounting controls sufficient 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 action is taken with respect to any differences. 
  
 (z) Sarbanes-Oxley Act. The Company is in compliance
with applicable requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and regulations promulgated by the Commission thereunder in effect as of the date of this Agreement, except where such noncompliance could not be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect. 
  
 (aa) Ranking. The Series C Preferred Stock is (i) senior to the Company’s Series B Preferred Stock and to all other equity interests in the Company outstanding as of the Closing Date in right of
payment, whether with respect to dividends or upon liquidation or dissolution, or otherwise other than the Series A Preferred Stock and (ii) will be senior to all other equity or equity equivalent securities issued by the Corporation after the
Closing Date, other than preferred stock issued by the Corporation contemporaneously, and in connection, with the Corporation’s acquisition of Astrophysics, Inc. described in the Letter of Intent. 
  
 (bb) Indebtedness. Except as set forth on Schedule
3.1(bb) and (i) trade payables arising in the ordinary course of business not more than sixty 

  

 14 

 
(60) days past due, and (ii) other indebtedness incurred in the ordinary course of business not exceeding $100,000, the Company does not have any
indebtedness. 
  
 3.2 Representations and Warranties of the
Purchasers. Each Purchaser hereby, as to itself only and for no other Purchaser, represents and warrants to the Company as follows: 
  
 (a) Organization: Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The purchase by such Purchaser of the Securities hereunder has been duly authorized by all necessary action on the part of such Purchaser. Each of this Agreement and the Registration Rights Agreement has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms. 
  
 (b) Investment Intent. Such Purchaser is acquiring
the Securities for investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Purchaser’s right, subject to the provisions of this Agreement and the
Registration Rights Agreement, at all times to sell or otherwise dispose of all or any part of such Securities pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold Securities for any period of time. Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business. Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  
 (c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and at the date
hereof it is an “accredited investor” as defined in Rule 501(a) under the Securities Act. 
  
 (d) Experience of such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. 
  
 (e) Restrictions on Securities. Each Purchaser
understands that the Securities have not been registered under the Securities Act and may not be offered, resold, pledged or otherwise transferred except (a) pursuant to an 

  

 15 

 
exemption from registration under the Securities Act or pursuant to an effective registration statement in compliance with Section 5 under the
Securities Act and (b) in accordance with all applicable securities laws of the states of the United States and other jurisdictions. 
  
 (f) No Conflicts. Each Purchaser represents and warrants to the Company that (i) the purchase of the Securities to be
purchased by it has been duly and properly authorized and this Agreement has been duly executed and delivered by it or on its behalf and constitutes the valid and legally binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity;
and (ii) the purchase of the Securities to be purchased by it does not conflict with or violate its charter, other organizational documents or any law, regulation or court order applicable to it. 
  
 (g) Compliance with Laws. Each Purchaser represents
and warrants to the Company is in compliance with all securities laws applicable to it and the transactions contemplated by the Transaction Documents, including all securities laws, rules and regulations in respect of the stabilization or
manipulation of the price of the Common Stock. 
  
 (h) Access to Information. Each Purchaser acknowledges it or its representatives have reviewed the Disclosure Materials and further acknowledges that it or its representatives have been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to
information about the Company and the Company’s financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment in the Securities; and (iii) the opportunity to
obtain such additional information which the Company possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy and completeness of the information contained in the Disclosure Materials. 
  
 (i) Reliance on Disclosure Materials. Each Purchaser
represents and warrants to the Company that it has based its investment decision solely upon the information contained in the Disclosure Materials and such other information as may have been provided to it or its representatives by the Company in
response to their inquiries, and has not based its investment decision on any research or other report regarding the Company prepared by any third party (“Third Party Reports”). Each Purchaser understands and acknowledges that
(i) the Company does not endorse any Third Party Reports and (ii) its actual results may differ materially from those projected in any Third Party Report. 
  

 16 

 (j) Forward Looking Statements. Each Purchaser understands and acknowledges that
(i) any forward-looking information included in the Disclosure Materials supplied to Purchaser by the Company or its management is subject to risks and uncertainties, including those risks and uncertainties set forth in the Disclosure
Materials; and (ii) the Company’s actual results may differ materially from those projected by the Company or its management in such forward-looking information. 
  
 (k) Private Placement. Each Purchaser understands and acknowledges that (i) the Securities are
offered and sold without registration under the Securities Act in a private placement that is exempt from the registration provisions of the Securities Act and (ii) the availability of such exemption depends in part on, and that the Company and
its counsel will rely upon, the accuracy and truthfulness of the foregoing representations and Purchaser hereby consents to such reliance. 
  
 (l) Certain Trading Limitations. Each Purchaser agrees that, for as long it owns any outstanding shares of Series C Preferred
Stock, it will not enter into any Short Sales. For purposes of this Section 3.2(h), a “Short Sale” by a Purchaser means a sale of Common Stock that is marked as a short sale and that is executed at a time when such Purchaser has no
equivalent offsetting long position in the Common Stock. For purposes of determining whether a Purchaser has an equivalent offsetting long position in the Common Stock, all Common Stock and all Common Stock that would be issuable upon conversion or
exercise in full of all Options then held by such Purchaser (assuming that such Options were then fully convertible or exercisable, notwithstanding any provisions to the contrary, and giving effect to any conversion or exercise price adjustments
scheduled to take effect in the future) shall be deemed to be held long by such Purchaser. 
  
 ARTICLE IV 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 Transfer Restrictions. 
  

(a) Securities may only be disposed of pursuant to an effective registration statement under the Securities Act or pursuant to an
available exemption from the registration requirements of the Securities Act, and in compliance with any applicable state securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or to
the Company or pursuant to Rule 144(k), except as otherwise set forth herein, the Company may require the transferor to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does not require registration under the Securities Act. Notwithstanding the foregoing, the Company hereby consents to and agrees to register on the books of the 

  

 17 

 
Company and with its transfer agent, without any such legal opinion required of such Purchaser, any transfer of Securities by a Purchaser to an Affiliate of
such Purchaser, provided that the transferee certifies to the Company that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act. 
  
 (b) The Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of
the following legend on any certificate evidencing Securities: 
  
 [NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE FOREGOING, THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES SUBJECT TO THE PROVISIONS OF THIS LEGEND AND THE
SECURITIES ACT. 
  
 Subject to and in reliance upon compliance of
Purchasers with Section 6 of the Registration Rights Agreement, certificates evidencing Securities shall not be required to contain such legend or any other legend (i) while a Registration Statement covering the resale of such Securities
is effective under the Securities Act, or (ii) following any sale of such Securities pursuant to Rule 144, or (iii) if such Securities are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause its counsel to issue the letter included in the Transfer Agent Instructions to the
Company’s transfer agent on the Effective Date. Following the Effective Date or at such earlier time as a legend is no longer required for certain Securities, the Company will, no later than three Trading Days following the receipt by the
Company of notice that a Purchaser has delivered to the Company or the Company’s transfer agent a legended certificate representing such Securities, deliver or cause to be delivered to such Purchaser a certificate representing such Securities
that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. 
  
 (c) The Company acknowledges and agrees that a Purchaser may
from time to time pledge or grant a security interest in some or all of the 

  

 18 

 
Securities in connection with a bona fide margin agreement or other loan or financing arrangement secured by the Securities and, if required under the terms
of such agreement, loan or arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of the pledgee,
secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or
secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of selling stockholders thereunder. 
  
 (d) In addition to any other rights available to a Purchaser, if the Company fails to deliver to such Purchaser a certificate representing
Common Stock by the third Trading Day after the date on which delivery of such certificate is required by any Transaction Document, and if after such third Trading Day such Purchaser purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by such Purchaser of the shares that the Purchaser anticipated receiving from the Company (a “Buy-In”), then, in the Purchaser’s sole discretion, the Company shall, within three
Trading Days after such Purchaser’s request either (i) pay cash to such Purchaser in an amount equal to such Purchaser’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to such Purchaser a certificate or
certificates representing such Common Stock and pay cash to such Purchaser in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Price on the date
of the event giving rise to the Company’s obligation to deliver such certificate. 
  
 4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities will result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain
market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including without limitation its obligation to issue the Securities pursuant to the Transaction Documents, are unconditional and absolute and
not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim that the Company may have against any Purchaser. 
  
 4.3 Furnishing of Information. As long as any Purchaser owns Securities, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. Upon the request of any such Person, the Company shall deliver to
such Person a written certification of a duly authorized officer as to whether it has complied with the preceding sentence. As long as any Purchaser owns Securities, if the Company is not 

  

 19 

 
required to file reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly available in accordance with paragraph
(c) of Rule 144 such information as is required for the Purchasers to sell the Securities under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent
required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. 
  
 4.4 Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company
shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities to the Purchasers, or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market. 
  
 4.5 Reservation and Listing of Securities. 
  
 (a) The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents. 
  
 (b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock
(the “Remaining Authorized Shares”) is less than 125% of (i) the Actual Minimum on such date, minus (ii) the number of shares of Common Stock previously issued pursuant to the Transaction Documents, then the Board of
Directors of the Company shall use its best efforts to amend the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time (minus
the number of shares of Common Stock previously issued pursuant to the Transaction Documents), as soon as possible and in any event not later than the 90th day after such date; provided that the Company will not be required at any time to authorize
a number of shares of Common Stock greater than the maximum remaining number of shares of Common Stock that could possibly be issued after such time pursuant to the Transaction Documents. 
  
 (c) If, at the time any Purchaser requests an exercise or
conversion of any Securities, the Actual Minimum minus the number of shares of Common Stock previously issued pursuant to the Transaction Documents exceeds the Remaining Authorized Shares, then the Company shall issue to the Purchaser requesting
such exercise or conversion a number of Underlying Shares not exceeding such Purchaser’s pro-rata portion of the Remaining Authorized Shares (based on such Purchaser’s share of the aggregate purchase price paid hereunder and provided that
the number of Remaining Authorized Shares issued to such Purchaser shall not exceed the difference between (x) such Purchaser’s pro rata 

  

 20 

 
portion (vis-à-vis other Purchasers) of the difference between (i) the Actual Minimum and (ii) the total number of Remaining Authorized
Shares prior to the issuance by the Company of any Underlying Shares and (y) the total number of Underlying Shares issued to such Purchaser as of the date of such exercise or conversion), and the remainder of the Underlying Shares issuable in
connection with such exercise or conversion (if any) shall constitute “Excess Shares” issuable only in accordance with the procedures described in Section 4.5(g) below. 
  
 (d) The Company shall (i) in the time and manner
required by each Trading Market, prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the greater of (A) the Required Minimum on the Closing Date and
(B) the Required Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing on each Trading Market as soon as possible thereafter, (iii) provide to the
Purchasers evidence of such listing, and (iv) maintain the listing of such Common Stock on each such Trading Market or another Eligible Market. 
  
 (e) If, on any date, the number of shares of Common Stock previously listed on a Trading Market is less than 125% of the Actual Minimum on
such date, then the Company shall take the necessary actions to list on such Trading Market, as soon as reasonably possible, a number of shares of Common Stock at least equal to the Required Minimum on such date; provided that the Company will not
be required at any time to list a number of shares of Common Stock greater than the maximum number of shares of Common Stock that could possibly be issued pursuant to the Transaction Documents. 
  
 (f) Notwithstanding anything to the contrary in any of the
Transaction Documents, the maximum number of shares of Common Stock that the Company may issue on the Closing Date pursuant to the Transaction Documents at an effective purchase price less than the Closing Price on the Trading Day immediately
preceding the Closing Date equals 19.999% of the Common Stock outstanding on such date (the “Issuable Maximum”), unless the Company obtains shareholder approval in accordance with the rules and regulations of such Trading Market.
If, at the time any Purchaser requests an exercise or conversion of any Securities, the Actual Minimum (excluding any shares issued or issuable at an effective purchase price in excess of the Closing Price on the Trading Day immediately preceding
the Closing Date) exceeds the Issuable Maximum (and if the Company has not previously obtained the required shareholder approval), then the Company shall issue to the Purchaser requesting such exercise or conversion a number of Underlying Shares of
Common Stock not exceeding such Purchaser’s pro-rata portion of the Issuable Maximum (based on such Purchaser’s share of the aggregate purchase price paid hereunder and provided that the number of Underlying Shares issued to such Purchaser
shall not exceed the difference between (x) such Purchaser’s pro rata portion (vis-à-vis other Purchasers) of the Issuable Maximum and (y) the total number of 

  

 21 

 
Underlying Shares issued to such Purchaser as of the date of such exercise or conversion), and the remainder of the Underlying Shares issuable in connection
with such exercise or conversion (if any) shall constitute “Excess Shares” issuable only in accordance with the procedures described in Section 4.5(g) below. 
  
 (g) Any Purchaser whose receipt of Excess Shares upon exercise or conversion of Securities is restricted
based on the number of Remaining Authorized Shares or the Issuable Maximum shall have the option, by notice to the Company, to require the Company to use its best efforts to obtain the required shareholder approval necessary to permit the issuance
of such Excess Shares as soon as is possible, but in any event not later than the 60th day after such notice. No shares of Common Stock that were issued pursuant to the Transaction Documents may be entitled to vote to approve the issuance of such
Excess Shares. 
  
 4.6 Conversion and Exercise Procedures.
The form of Election to Purchase included in the Warrants and the form of Conversion Notice included in the Certificate of Designations set forth the totality of the procedures required in order to exercise the Warrants or convert the Shares under
the Transaction Documents. Subject to, and in reliance upon, the satisfaction by Purchasers of all obligations under the Transaction Documents, including but not limited the obligations described in Section 3.2 of this Agreement and
Section 6 of the Registration Rights Agreement, no additional legal opinion or other information or instructions shall be necessary to enable the Purchasers to exercise their Warrants or convert their Shares. The Company shall honor exercises
of the Warrants and conversions of the Shares and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents. 
  
 4.7 Intentionally Omitted. 
  

4.8 Securities Laws Disclosure; Publicity. The Company shall no later than 8:30 a.m., New York City time on June 3, 2005, issue a press
release acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby (the “Press Release”). On the Closing Date or the first Business Day thereafter, the Company shall file a Current Report on
Form 8-K with the Commission (the “8-K Filing”) describing the terms of the transactions contemplated by the Transaction Documents and including as exhibits to such Current Report on Form 8-K this Agreement and the form of Warrants,
in the form required by the Exchange Act. Thereafter, the Company shall timely file any filings and notices required by the Commission or applicable law with respect to the transactions contemplated hereby and, if any disclosure therein differs
materially from that which is contained in the 8-K Filing, provide copies thereof to the Purchasers promptly after filing. The Company and the Purchasers shall consult with each other in issuing any press releases or otherwise making public
statements or filings and other communications with the Commission or any regulatory agency or Trading Market with respect to the transactions contemplated hereby, and neither party shall issue any such press release or otherwise make any such
public statement, filing or other communication without the prior consent of the other, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public 

  

 22 

 
statement, filing or other communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the
name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to the extent such disclosure (but not any disclosure as to the controlling Persons
thereof) is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure. 
  
 4.9 Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and not for the
satisfaction of any portion of the Company’s debt (other than payment of trade payables and accrued expenses in the ordinary course of the Company’s business and prior practices), to redeem any Company equity or equity-equivalent
securities or to settle any outstanding litigation. 
  
 4.10
Reimbursement. If any Purchaser or any of its Affiliates or any officer, director, partner, controlling person, employee or agent of a Purchaser or any of its Affiliates (a “Related Person”) becomes involved in any capacity
in any Proceeding brought by or against any Person in connection with or as a result of the transactions contemplated by the Transaction Documents, the Company will indemnify and hold harmless such Purchaser or Related Person for its reasonable
legal and other expenses (including the costs of any investigation, preparation and travel) and for any Losses incurred in connection therewith, as such expenses or Losses are incurred, excluding only Losses that result directly from such
Purchaser’s or Related Person’s gross negligence or willful misconduct. In addition, the Company shall indemnify and hold harmless each Purchaser and Related Person from and against any and all Losses, as incurred, arising out of or
relating to any breach by the Company of any of the representations, warranties or covenants made by the Company in this Agreement or any other Transaction Document, or any allegation by a third party that, if true, would constitute such a breach.
The conduct of any Proceedings for which indemnification is available under this paragraph shall be governed by Section 5(c) of the Registration Rights Agreements. The indemnification obligations of the Company under this paragraph shall be in
addition to any liability that the Company may otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Purchasers and any such Related Persons. The Company also agrees
that neither the Purchasers nor any Related Persons shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company in connection with or as a result of the transactions contemplated by the Transaction
Documents, except to the extent that any Losses incurred by the Company result from such Purchaser’s violation of law, material breach of this Agreement or the gross negligence or willful misconduct of the applicable Purchaser or Related Person
in connection with such transactions. If the Company breaches its obligations under any Transaction Document, then, in addition to any other liabilities the Company may have under any Transaction Document or applicable law, the Company shall pay or
reimburse the Purchasers on demand for all costs of collection and enforcement (including reasonable attorneys fees and expenses). Without limiting the generality of the foregoing, the Company specifically agrees to reimburse the Purchasers on
demand for all costs of enforcing the indemnification obligations in this paragraph. 
  
 4.11 Default Interest. If the Company fails to make any cash payment required by any Transaction Document in full when due, then the Company shall pay interest 

  

 23 

 
thereon at a rate of 12% per annum (or such lesser maximum rate that is permitted to be paid under applicable law) from the date such payment was due
until such amount, plus all such interest thereon, is paid in full. 
  
 4.12 Rights of Shareholders. Each time the Company delivers a notice or other communication to holders of the Common Stock it will contemporaneously deliver a copy of such notice or communication to the Purchasers. 
  
 4.13 MFN Provision. If any time prior to the date on which the Company
has consummated one or more equity financings with gross proceeds to the Company of more than $24,000,000 following the Closing Date, the Company or any Subsidiary of the Company offers to issue or issues to any Person any security of the Company or
any Subsidiary of the Company, then the Company shall offer to each Purchaser the right to exchange all or a portion of the Series C Preferred Stock then held by such Purchaser valued at the then Stated Value (as defined in the Certificate of
Designations), plus accumulated and unpaid dividends, of such Series C Preferred Stock for such security. Such offer shall made at the same time and in the same manner as if such offer is being made to any other potential purchaser of such security.
Each Purchaser shall have 20 Trading Days to review the offer and determine whether it wants to exchange all or any portion of the Series C Preferred Stock. 
  
 4.14 Series B Preferred Stock. The Company hereby represents and warrants that the issuance of the Series B Preferred Stock pursuant to the
Securities Purchase Agreement dated May 20, 2005 between the Company and the purchasers therein has closed and the Company agrees that it shall not increase the authorized number of shares of Series B Preferred Stock or issue greater than
15,000 shares of Series B Preferred Stock, without the prior written consent of the holders of a majority of the Series B Preferred Stock. 
  
 4.15 Shareholders Rights Plan. In the event that a shareholders rights plan is adopted by the Company, no claim will be made or enforced by the
Company or any other Person that any Purchaser is an “Acquiring Person” under any such plan or in any way could be deemed to trigger the provisions of such plan by virtue of receiving Securities under the Transaction Documents. 

 
 ARTICLE V 
 CONDITIONS 
  
 5.1 Conditions Precedent to the Obligations of the Purchasers. The obligation of each Purchaser to acquire Securities at the Closing is subject to the satisfaction or waiver by such Purchaser, at or before the Closing, of each of the
following conditions: 
  
 (a) Representations
and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of the Closing as though made on and as of such date; 
  

 24 

 (b) Performance. The Company and each other Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing; 
  
 (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 that prohibits the consummation of any of the transactions contemplated by the
Transaction Documents; 
  
 (d) No Suspensions
of Trading in Common Stock; Listing. Trading in the Common Stock shall not have been suspended by the Commission or any Trading Market (except for any suspensions of trading of not more than one Trading Day solely to permit dissemination of
material information regarding the Company) at any time since the date of execution of this Agreement, and the Common Stock shall have been at all times since the date hereof listed for trading on an Eligible Market; 
  
 (e) Adverse Changes. Since the date of execution of
this Agreement, no event or series of events shall have occurred that reasonably could be expected to have or result in a Material Adverse Effect. 
  
 5.2 Conditions Precedent to the Obligations of the Company. The obligation of the Company to sell Securities at the Closing is subject to the
satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions: 
  
 (a) Representations and Warranties. The representations and warranties of the Purchasers contained herein shall be true and correct
in all material respects as of the date when made and as of the Closing Date as though made on and as of such date; 
  
 (b) Performance. The Purchasers shall have performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Purchasers at or prior to the Closing; and 
  

(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 that prohibits the consummation of any of the transactions contemplated by the Transaction Documents. 
  
 ARTICLE VI 
 MISCELLANEOUS 
  
 6.1 Termination. This Agreement may be terminated by the Company or any Purchaser, by written notice to the other parties, if the Closing has not been consummated by the 

  

 25 

 
third trading day following the date of this Agreement; provided that no such termination will affect the right of any party to sue for any breach by the
other party (or parties). 
  
 6.2 Fees and Expenses. At the
Closing, the Company shall pay to Iroquois Capital, L.P., an aggregate of $25,000 for their legal fees and expenses incurred in connection with the preparation and negotiation of the Transaction Documents, of which amount $10,000 has been previously
paid by the Company. In lieu of the foregoing payments, the Iroquois Capital, L.P. may retain the amount of such payments instead of delivering such amounts to the Company at the Closing. Except as expressly set forth in the Transaction Documents to
the contrary, each party shall pay the fees and expenses of its advisers, 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. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the issuance of any Securities. 
  

6.3 Entire Agreement. The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or
after the Closing, and without further consideration, the Company will execute and deliver to the Purchasers such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the
Transaction Documents. 
  
 6.4 Notices. Any and all notices
or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses for such notices and communications are those set forth on the signature pages hereof, or such other address as may be
designated in writing hereafter, in the same manner, by such Person. 
  
 6.5 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and the holders of at least 50.1% of the outstanding Shares or, in
the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver 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 subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. 
  

 26 

 6.6 Construction. The headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will
be applied against any party. 
  
 6.7 Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of the Purchasers. Any Purchaser may assign its rights under this Agreement and the Registration Rights Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such assignee agrees in writing to be bound by
the provisions of those Agreements. 
  
 6.8 No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that each
Related Person is an intended third party beneficiary of Section 4.10 and may enforce the provisions of such Section directly against the Company. 
  

6.9 Governing Law; Venue; Waiver Of Jury Trail. THE CORPORATE LAWS OF THE STATE OF NEVADA SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS
OF THE COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING
A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) 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 CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 
  

 27 

 6.10 Survival. The representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery, conversion and/or exercise of the Securities, as applicable. 
  
 6.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

  
 6.12 Severability. If any provision of this Agreement
is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
  
 6.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 
  
 6.14 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. 
  
 6.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in
the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. 
  
 6.16 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any
Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be 

  

 28 

 
fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  
 6.17 Usury. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly
agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and,
without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents
exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof,
the new maximum contract rate of interest allowed by law will be the Maximum Rate of interest applicable to the Transaction Documents from the effective date forward, unless such application is precluded by applicable law. If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any
such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election. 
  
 6.18 Independent Nature of Purchasers’ Obligations and Rights as Among the Purchasers. The obligations of each Purchaser under any Transaction
Document 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 any Transaction Document. 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 the Subsidiary 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 other Purchaser (or any other Person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein or in any Transaction
Document, and no action taken by any Purchaser pursuant 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 Document. The Company hereby confirms that it understands and agrees that the Purchasers are not acting as a “group” as
that term is used in Section 13(d) of the Exchange Act. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no other Purchaser will be acting as
agent of such Purchaser in connection with monitoring its investment hereunder. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the
other Transaction Documents, and it shall not 

  

 29 

 
be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser represents that it has been
represented by its own separate legal counsel in its review and negotiations of this Agreement and the Transaction Documents and each party represents and confirms that Proskauer Rose LLP represents only Iroquois Capital LP in connection with this
Agreement and the other Transaction Documents. 
  
 6.19
Adjustments in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in Common Shares (or other securities or rights convertible into, or entitling the holder thereof to receive directly or
indirectly Common Shares), combination or other similar recapitalization or event occurring after the date hereof, each reference in any Transaction Document to a number of shares or a price per share shall be amended to appropriately account for
such event. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 SIGNATURE PAGES FOLLOW] 
  

 30 

 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated above. 
  

			
	GLOBAL EPOINT, INC.
		
	 By:   
	 	/s/    TORESA LOU        
	 Name:
	 	Toresa Lou
	 Title:
	 	CEO

  

			
	 Address for Notice:

	
	 [__________________________________________]

	 [__________________________________________]

	 Facsimile No.: [_______________]

	 Telephone No.: [_______________]

	 Attn: [    ]

	
	 With a copy to:

	 [                    ]

	 [                    ]

	 Facsimile No.: [        ]

	 Telephone No.: [        ]

	 Attn: [        ].

  
 [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGE FOR PURCHASERS FOLLOWS] 
  

 31 

			
	 [Name of Purchaser]

	 Nite Capital LP

		
	By:	 	/S/    KEITH A.
GOODMAN        
	 Name:
	 	Keith A. Goodman
	 Title:
	 	Manager of the General Partner

  

	
	 Address for Notice:
  
 100 East Cook Ave Ste 201
 Libertyville, IL 60048

	[    ]
	Facsimile No.: 847-968-2648
	Telephone No.: 847-968-2655
	Attn: Keith Goodman

  

 32 

			
	Omicron Master Trust
		
	By:	 	/S/    BRUCE
BERNSTEIN        
	 Name:
	 	Bruce Bernstein
	 Title:
	 	Managing Partner

  

	
	 Address for Notice:

	 650 5th Ave, 24th Fl
 New York, NY 10019
 Facsimile No.: 212 258-2315
 Telephone No.: 212 258-2302
 Attn: Brian Daly

	
	With a copy to:
	
	 Proskauer Rose LLP
 1585 Broadway
 New York, New York 10036-8299
 Facsimile No.: (212) 969-2900

Telephone No.: (212) 969-3000
 Attn: Adam J. Kansler,
Esq.

  

 33 

			
	 [Name of Purchaser]
  
 Iroquois Master Fund Ltd.

		
	By:	 	/S/    JOSHUA
SILVERMAN        
	 Name:
	 	Joshua Silverman
	 Title:
	 	Authorized Signatory

  

	
	 Address for Notice:

	
	 [    ]
 Facsimile No.:
 Telephone No.:
 Attn:

	
	With a copy to:
	
	 Proskauer Rose LLP
 1585 Broadway
 New York, New York 10036-8299
 Facsimile No.: (212) 969-2900
 Telephone No.: (212) 969-3000
 Attn: Adam J. Kansler, Esq.

  

 34 

			
	 [Name of Purchaser]
 The Tail Wind Fund, Ltd.

	 By:
	 	Tail Wind Advisory & Management Ltd., as investment manager
		
	By:	 	/S/    DAVID
CROOK        
	 Name:
	 	David Crook
	 Title:
	 	CEO

  

	
	 Address for Notice:

	
	 [    ]
 Facsimile No.:
 Telephone No.:
 Attn:

	
	With a copy to:

  

 35 

			
	DKR SOUNDSHORE OASIS HOLDING FUND LTD.
		
	 By:
	 	/s/    BRAD CASWELL        
	 Name:
	 	Brad Caswell
	 Title:
	 	Director
	
	Address for Notice:
	
	 c/o DKR Capital Partners L.P.
 1281 East Main
Street
 Stamford, CT 06902
 Tel: 203-324-8378
 Fax: 203-674-4737
 Attn: Rajni Narasi

	
	Registered Address:
	
	 18 Church Street
 Skandia House
 Hamilton HM11
 Bermuda

  

 36 

			
	[Name of Purchaser]
	Cranshire Capital, L.P.
		
	 By:
	 	/s/    MITCHELL P. KOPIN        
	 Name:
	 	Mitchell P. Kopin
	 Title:
	 	President - Downsview Capital, Inc., The G. P.
	
	Address for Notice:
	
	 666 Dundee Rd, Suite 1901
 North Brook, IL
60062
 [    ]
 Facsimile No.:
847-562-9031
 Telephone No.: 847-562-9030
 Attn: Mitchell
Kopin

  

 37 

			
	SMITHFIELD FIDUCIARY LLC
		
	 By:
	 	/s/    ADAM J. CHILL        
	 Name:
	 	Adam J. Chill
	 Title:
	 	Authorized Signatory
	
	Address for Notice:
	
	 c/o Highbridge Capital Management, LLC
 9
West 57th Street, 27th Floor
 New York, New York 10019
 Facsimile No.: (212) 751-0755
 Telephone No.: (212) 287-4720
 Attn: Ari J. Storch / Adam J. Chill

  

 38 

			
	[Name of Purchaser]
	RHP Master Fund, Ltd.
	By: Rock Hill Investment Management, L.P.
	By: RHP General Partner, LLC
		
	 	 	/s/    WAYNE BLOCH        
	 By:
	 	Wayne Bloch
	 Its:
	 	Managing Partner
		
	 By:
	 	 
	 Name: 
	 	 
	 Title:
	 	 
	
	Address for Notice:
	
	 [    ]
 Facsimile No.:
610-949-9600
 Telephone No.: 610-949-9700
 Attn: Keith
Marlowe

  

 39 

			
	 [Name of Purchaser]
 Enable Growth Partners
LP
 $300,000.00

		
	 By:
	 	/s/    BRENDAN
O’NEIL        
	 Name:
	 	Brendan O’Neil
	 Title:
	 	Principal
	
	Address for Notice:
	
	 One Ferry Building, Suite 255
 San Francisco,
CA 94111
  
 Facsimile No.: 415-677-1580
 Telephone No.: 415-677-1578
 Attn: Brendan O’Neil

  

 40 

			
	 [Name of Purchaser]
 Enable Opportunity
Partners LP
 $50,000.00

		
	 By:
	 	/s/    BRENDAN
O’NEIL        
	 Name:
	 	Brendan O’Neil
	 Title:
	 	Principal
	
	Address for Notice:
	
	 One Ferry Building, Suite 255
 San Francisco,
CA 94111
  
 Facsimile No.: 415-677-1580
 Telephone No.: 415-677-1578
 Attn: Brendan O’Neil

  

 41 

 Schedule A 
  
 PURCHASERS 
  

									
	 PURCHASERS

	  	SHARES

	  	WARRANT
SHARES

	  	PURCHASE
PRICE

	  	ADDITIONAL
SHARES

	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 
	 TOTAL
	  	 	  	 	  	 	  	 

 Schedule 3.1(a) 
  
 Subsidiaries 
  
 Global Telephony, Inc., a Nevada corporation 
  
 Global Airworks, Inc., a California corporation 
  
 McDigit, Inc., a California corporation 

 Schedule 3.1(e) 
  
 Issuance of Securities 
  
 The Company has granted to Iroquois Capital LP, Cranshire Capital, L.P, Omicron Master Trust, DKR Soundshore Oasis Holding Fund Ltd., Bluegrass Growth Fund LP and
Bluegrass Growth Fund, Ltd. limited rights of first refusal to purchase the securities of the Company pursuant to Section 4.5(b) of the Securities Purchase Agreement dated December 19, 2004 between the Company and the aforementioned
parties. 

 Schedule 3.1(f) 
  
 Company Capitalization 
  

	1.	The Company has authorized 50,000,000 shares of Common Stock, $.03 par value, of which 12,465,885 shares issued and outstanding. 

  

	2.	The Company has authorized 2,000,000 shares of undesignated Preferred Stock, of which (a) 55,000 shares have been designated and issued as Series A Convertible Preferred Stock
of which 21,000 shares are outstanding; and (b) 55,000 shares have been designated as Series B Convertible Preferred Stock, of which 15,000 shares have been issued and are outstanding. 

  

	3.	The Company has outstanding options to purchase an aggregate of 4,275,100 shares of Common Stock. 

  

	4.	The Company has outstanding warrants to purchase an aggregate of 989,041 shares of Common Stock, excluding warrants to purchase shares of Common Stock to be issued to the Purchasers
and warrants to purchase shares of Common Stock to be issued to H.C. Wainwright & Co., Inc. in connection with the closing. 

  

	5.	The Company has outstanding additional investment rights to purchase an aggregate of 400,000 shares of Common Stock. 

  

	6.	In April and June of 2004, the Company borrowed funds from Prophecy Technologies, LLC, d/b/a the Maxus Group, to fund the purchase price in connection with the acquisition of
certain assets from Insolvency Services Group, Inc. Of this indebtedness, $2,405,241.86 is convertible into shares of the Company’s Common Stock at a conversion price calculated in the same manner as the conversion price calculated for the
Series A Convertible Preferred Stock. In addition, the Company will issue to Prophecy Technologies, LLC a warrant to purchase a number of shares of Common Stock equal to 330,000 shares issuable upon conversion of the aforementioned indebtedness.

  

	7.	In June 2004, we borrowed $1,000,000 from John Pan, our Chairman, Chief Financial Officer and President. Interest accrues on the unpaid principal balance of this loan at a rate
equal to the prime rate at Bank of the West, plus 0.25%. We are required to accrue interest payments each month until the principal balance is paid in full, which must occur no later than December 15, 2005. 

 Schedule 3.1(f) (cont.) 
  
 Beneficial Ownership in Excess of 5% of Outstanding Common Stock 
  

										
	 Name of Beneficial Owner

	  	Shares
Owned as
of 5/20/05

	  	Shares
Acquirable

	  	Total

	  	%

	 
	 MAG Capital, LLC- note 1
	  	958,359	  	1,833,571	  	2,791,930	  	19.5	%
	 T. Lou
	  	46,334	  	1,721,096	  	1,767,430	  	12.5	%
	 J. Pan
	  	5,383,472	  	500,000	  	5,883,472	  	45.4	%
	 Frederick Sandvick
	  	 	  	870,000	  	870,000	  	6.5	%
	 	  	
	  	
	  	
	  	 	 
	 	  	6,388,165	  	4,924,667	  	11,312,832	  	 	 
					
	 Total Shares Outstanding as of 5/27/04:
	  	 	  	 	  	12,465,885	  	 	 

  

			
	 note 1-
	 	Represents share acquired and acquirable by MAG Capital, LLC and three equity funds that are managed by MAG Capital, LLC.

 Schedule 3.1(h) 
  
 Material Changes 
  
 On March 9, 2005, the Company’s wholly-owned subsidiary, Best Logic, LLC, entered into a loan agreement with Far East National Bank pursuant to which the bank
has agreed to loan Best Logic up to $1,000,000. Pursuant to a promissory note, dated March 9, 2005, executed in connection with the loan agreement, interest on the outstanding principal balance of the loan will accrue at a variable rate equal
to the lender’s prime rate plus 1%. The initial interest rate is 6.5% per annum, subject to change each time the lender’s prime rate changes. Interest is payable monthly with all outstanding principal and accrued and unpaid interest
due and payable in full on March 15, 2006. As of May 2005, a total of $700,000 has been advanced to Best Logic pursuant to the loan agreement. 

 Schedule 3.1(l) 
  
 Certain Fees 
  
 The Company is obligated to pay H.C. Wainwright & Co., Inc. a fee of (i) cash in the amount of five percent (5%) of the purchase price paid by the
Purchasers for their purchase of Series C Preferred Stock and (ii) warrants to purchase five percent of the common shares underlying the Series C Preferred Stock purchased by Purchasers. 

 Schedule 3.1(o) 
  
 Registration Rights 
  
 As of this date, the Company has not filed, nor is it required to file, the registration statement contemplated by the Registration Rights Agreement dated May 20,
2005 between the Company and the purchasers of the Series B Convertible Preferred Stock. 

 Schedule 3.1(bb) 
  
 The Company has entered into of a Letter of Intent dated May 27, 2005 with Astrophysics, Inc., a copy of which has been provided to the
Purchasers, pursuant to which the Company proposes to: (i) acquire Astrophysics in consideration of the Company’s issuance of a control block of its common stock; (ii) cause the resignation of its current directors at the close of the
Astrophysics acquisition in favor of a slate of directors appointed by Astrophysics; and (iii) and in connection with the Astrophysics acquisition, raise up to $30 million of additional capital through the sale of its equity securities.
Pursuant to the Letter of Intent, the Company has agreed to pay Astrophysics a non-refundable deposit of $500,000, loan Astrophysics $500,000 and loan Astrophysics an additional $5 million. 

 EXHIBIT A 
  
 CERTIFICATE OF DESIGNATIONS 

							
	[GRAPHIC APPEARS HERE]	  	 DEAN HELLER
 Secretary of
State
 204 North Carson Street, Suite 1
 Carson
City, Nevada 89701-4299
 (775) 884 6705
 Website:
secretaryofstate.biz
	  	  
 Entity #
 C2721 – 1990
 Document Number:
 20050220519 – 46
  
 Date Filed:

	 	  	 Certificate of Designation
 (PURSUANT TO NRS 78.1955)
	  	 	  	 6/8/2005 3:37:47 PM
 In the office of
  
 /s/    DEAN
HELLER        

 Dean
Heller
 Secretary of State

		
	Important: Read Attached Instructions before completing form.	  	ABOVE SPACE IS FOR OFFICE USE ONLY

  
 Certificate of
Designation 
 For Nevada Profit Corporations 
 (Pursuant to NRS 78.1955) 
  

	1.	Name of corporation: 

  
 Global ePoint, Inc. 
  

	2.	By resolution of the board of directors pursuant to a provision in the articles of incorporation, this certificate establishes the following regarding the voting powers,
designations, preferences, limitations, restrictions and relative rights of the following class or series of stock: 

  
 SERIES C CONVERTIBLE PREFERRED STOCK - One Million Two Hundred Fifty Thousand Ten (1,250,010) Shares: 
  
 RESOLVED, that a series of Preferred Stock in the
Corporation, having the rights, preferences, privileges and restrictions, and the number of shares constituting such series and designation of such series, set forth below be, and it hereby is, authorized by the Board of Directors of the Corporation
pursuant to authority given by the Corporation’s Certificate of Incorporation. 
  
 NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines the Determinations of the number of shares
constituting, and the rights, preferences, privileges and restrictions relating to a new series of Preferred Stock as follows: 
  
 1. Designation, Amount and Par Value. The series of preferred stock shall be designated as the Corporation’s Series C Convertible
Preferred Stock (the “Series C Preferred Stock”), and the number of shares so designated shall be 1,250,010.* 
  

	*	CONTINUED ON THE ATTACHED 

  

			
	 3.      Effective date of filing (optional):
	  	 
	 	  	(must not be later than 90 days after the certificate is filed)

  

			
	 
		
	 4.      Officer Signature:
	 	/S/    JOHN
PAN        
	 	 	John Pan, President

  
 Filing Fee: $175.00 

 
 IMPORTANT: Failure to include any of the above information
and submit the proper fees may cause this filing to be rejected. 
  
 SUBMIT IN DUPLICATE 
  

			
	 This form must be accompanied by appropriate fees. See attached fee schedule.
	  	 

 Execution Version 
  
 CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF 
 SERIES C CONVERTIBLE PREFERRED STOCK 
 OF 
 GLOBAL EPOINT, INC. 
 a Nevada
corporation 
  

  
 The undersigned, John Pan certifies that: 
  
 1. He is the duly acting President and Secretary of Global ePoint, Inc., a corporation organized and existing under the Corporation Code of the State of
Nevada (the “Corporation”). 
  
 2.
Pursuant to authority conferred upon the Board of Directors by the Amended and Restated Articles of Incorporation of the Corporation, as amended, and pursuant to the provisions of Section 78.1955 of the General Corporation Law of Nevada, said
Board of Directors, has previously designated the Corporation’s Series A Convertible Preferred Stock (“Series A Preferred Stock”). 
  

3. Pursuant to authority conferred upon the Board of Directors by the Amended and Restated Articles of Incorporation of the Corporation, as amended,
and pursuant to the provisions of Section 78.1955 of the General Corporation Law of Nevada, said Board of Directors, has previously designated the Corporation’s Series B Convertible Preferred Stock (“Series B Preferred
Stock”). 
  
 4. Pursuant to authority conferred upon
the Board of Directors by the Amended and Restated Articles of Incorporation of the Corporation, as amended, and pursuant to the provisions of Section 78.1955 of the General Corporation Law of Nevada, said Board of Directors, pursuant to a
unanimous written consent effective as of May 31, 2005, adopted a resolution establishing the rights, preferences, privileges and restrictions of, and the number of shares comprising, the Corporation’s Series C Convertible Preferred Stock,
which resolution is as follows: 
  
 RESOLVED, that a series of
Preferred Stock in the Corporation, having the rights, preferences, privileges and restrictions, and the number of shares constituting such series and the designation of such series, set forth below be, and it hereby is, authorized by the Board of
Directors of the Corporation pursuant to authority given by the Corporation’s Certificate of Incorporation. 
  
 NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines the Determinations of, the number of shares constituting, and the
rights, preferences, privileges and restrictions relating to, a new series of Preferred Stock as follows: 

 SERIES C CONVERTIBLE PREFERRED STOCK 
  
 1. Designation, Amount and Par Value. The series of preferred stock shall be designated as the Corporation’s
Series C Convertible Preferred Stock (the “Series C Preferred Stock”), and the number of shares so designated shall be 1,250,010. Each share of Series C Preferred Stock shall have no par value and a stated value equal to $2.80 (the
“Stated Value”). 
  
 2. Definitions. In
addition to the terms defined elsewhere in this Certificate of Designations, (a) the terms set forth in Exhibit A hereto have the meanings indicated therein, and (b) the following terms have the meanings indicated: 
  
 “Conversion Price” means the Fixed
Conversion Price, as adjusted pursuant to this Certificate of Designations. 
  
 “Equity Conditions” means, with respect to a specified issuance of Common Stock, that each of the following conditions is satisfied: (i) the number of authorized but unissued and otherwise
unreserved shares of Common Stock is sufficient for such issuance; (ii) such shares of Common Stock are registered for resale by the Holders and may be sold by the Holders pursuant to an effective Underlying Shares Registration Statement or all
such shares may be sold without volume restrictions pursuant to Rule 144(k) under the Securities Act; (iii) the Common Stock is listed or quoted (and is not suspended from trading) on an Eligible Market and such shares of Common Stock are
approved for listing upon issuance; (iv) such issuance would be permitted in full without violating Section 17 hereof or the rules or regulations of any Trading Market; (v) no Bankruptcy Event has occurred; (vi) the Company has
not failed for any reason to deliver a certificate evidencing any Securities to a Purchaser as required pursuant to any Transaction Document within five Trading Days after delivery of notice of failure to deliver by Purchaser and none of the
exercise or conversion rights of the Holders pursuant to the Transaction Documents are suspended for any reason other than a breach of the Transaction Documents by the Purchasers; (vii) the Company has not failed to make any cash payment
required under the Transaction Documents or if the Company has failed in making any payment under the Transaction Documents, such failure has been or will be cured within five Trading Days after notice of such default was first given to the Company
by a Purchaser; or (viii) the Company has not issued any equity securities of the Company (other than any such securities issued in connection with the acquisition of Astrophysics, Inc. as described in the Letter of Intent or the financing
described therein) which are senior to the Series C Preferred Stock in right of payment, or with respect to dividends, liquidation or dissolution; and (ix) the Closing Price of the Common Stock is equal to or greater than $0.57. 
  
 “Fixed Conversion Price” means $2.80.

  
 “Holder” means any holder of
Series C Preferred Stock. 
  
 “Junior
Securities” means the (i) Common Stock and all other equity or equity equivalent securities of the Corporation, including, without limitation, the Corporation’s Series B Convertible Preferred Stock, no par value, outstanding as of
the date hereof 

  

 2 

 
other than the Corporation’s Series A Convertible Preferred Stock, no par value and (ii) all equity or equity equivalent securities issued by the
Corporation after the Closing Date, other than preferred stock issued by the Corporation contemporaneously, and in connection, with the Corporation’s acquisition of Astrophysics, Inc. described in the Letter of Intent. 
  
 “Original Issue Date” means the date of the
first issuance of any shares of the Series C Preferred Stock regardless of the number of transfers of any particular shares of Series C Preferred Stock and regardless of the number of certificates that may be issued to evidence such Series C
Preferred Stock. 
  
 “Purchase
Agreement” means the Securities Purchase Agreement, dated as of June 2, 2005, among the Corporation and the original purchasers of the Series C Preferred Stock. 
  
 3. Dividends. 
  
 (a) Holders shall be entitled to receive, out of funds legally available therefor, and the Corporation shall pay, cumulative dividends on
the Series C Preferred Stock at the rate per share (as a percentage of the Stated Value per share) of 6% per annum, payable semiannually in arrears commencing on December 31, 2005 and thereafter on each June 30 and December 31,
except if such date is not a Trading Day, in which case such dividend shall be payable on the next succeeding Trading Day (each, a “Dividend Payment Date”). Dividends on the Series C Preferred Stock shall be calculated on the basis
of a 360-day year, shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue from such date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally
available for the payment of dividends. 
  
 (b)
Subject to the conditions and limitations set forth below, the Corporation may pay required dividends (i) in cash or (ii) in Common Stock. The Corporation must deliver written notice (the “Dividend Notice”) to the Holders
indicating the manner in which it intends to pay dividends at least fifteen (15) Trading Days prior to each Dividend Payment Date, but the Corporation may indicate in any such notice that the election contained therein shall continue for subsequent
Dividend Payment Dates until revised. Failure to timely provide such written notice shall be deemed an election by the Corporation to pay the dividend in cash. All dividends payable in respect of the Series C Preferred Stock on any Dividend Payment
Date must be paid in the same manner. 
  
 (c)
Notwithstanding the foregoing, the Corporation may not pay dividends by issuing Common Stock unless, at such time, the Equity Conditions are satisfied (or waived in writing by the applicable Holder) with respect to such Common Stock dividend shares
and all of the Underlying Shares then issuable upon conversion in full of all the outstanding Series C Preferred Stock. 
  
 (d) So long as any Series C Preferred Stock is outstanding, (i) neither the Corporation nor any Subsidiary shall, directly or
indirectly, redeem, purchase or otherwise acquire any Junior Securities or set aside any monies for such a redemption, purchase or other 

  

 3 

 
acquisition, and (ii) the Corporation shall not pay or declare any dividend or make any distribution on any Junior Securities, except pro rata stock
dividends on the Common Stock payable in additional shares of Common Stock and dividends due and paid in the ordinary course on preferred stock of the Corporation, in each case only at such times as the Corporation is in compliance with its payment
and other obligations hereunder. 
  
 (e) In the
event that the Corporation elects to pay dividends in shares of Common Stock, the number of shares of Common Stock to be issued to each Holder as such dividend shall be (i) determined by dividing the total dividend then payable to such Holder
by the Dividend Conversion Price (as defined below) as of the applicable Dividend Payment Date, and rounding up to the nearest whole share, and (ii) paid to such Holder in accordance with Section 3(f) below. The term “Dividend
Conversion Price” shall mean 92.5% of the arithmetic average of the Volume Weighted Average Prices of Common Stock for the twenty (20) consecutive Trading Days immediately prior to the applicable Dividend Payment Date (not including
such date), as appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such five Trading Day period. 
  

(f) In the event that any dividends are paid in Common Stock the Corporation shall, on or before the fifth (5th) Trading Day
following the applicable Dividend Payment Date, (i) issue and deliver to such Holder a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled, or
(ii) subject to the request of the Holder and provided that (a) a registration statement covering the resale of the shares of Common Stock to which the holder shall be entitled is effective under the Securities Act and (b) the Holder
has complied with the provisions of Section 6 of the Registration Rights Agreement, credit the number of shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with The
Depository Trust Corporation (“DTC”) through its Deposit Withdrawal Agent Commission System. 
  
 4. Registration of Series C Preferred Stock. The Corporation shall register shares of the Series C Preferred Stock, upon records to be maintained
by the Corporation for that purpose (the “Series C Preferred Stock Register”), in the name of the record Holders thereof from time to time. The Corporation may deem and treat the registered Holder of shares of Series C Preferred
Stock as the absolute owner thereof for the purpose of any conversion hereof or any distribution to such Holder, and for all other purposes, absent actual notice to the contrary. 
  
 5. Registration of Transfers. The Corporation shall register the transfer of any shares of Series C Preferred Stock
in the Series C Preferred Stock Register, upon surrender of certificates evidencing such Shares to the Corporation at its address specified herein. Upon any such registration or transfer, a new certificate evidencing the shares of Series C Preferred
Stock so transferred shall be issued to the transferee and a new certificate evidencing the remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder. 
  
 6. Liquidation. 
  
 (a) In the event of any liquidation, dissolution or winding
up of the Corporation, either voluntary or involuntary (a “Liquidation Event”), the Holders of Series C Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of 

  

 4 

 
the assets or surplus funds of the Corporation to the holders of Junior Securities by reason of their ownership thereof, an amount per share in cash equal to
the Stated Value for each share of Series C Preferred Stock then held by them (as adjusted for any stock split, stock dividend, stock combination or other similar transactions with respect to the Series C Preferred Stock), plus all accrued but
unpaid dividends on such Series C Preferred Stock as of the date of such event (the “Series C Stock Liquidation Preference”). If, upon the occurrence of a Liquidation Event, the assets and funds thus distributed among the holders of
the Series C Preferred Stock shall be insufficient to permit the payment to such Holders of the full Series C Stock Liquidation Preference, then the entire assets and funds of the Corporation legally available for distribution shall be distributed
ratably among the Holders of the Series C Preferred Stock in proportion to the aggregate Series C Stock Liquidation Preference that would otherwise be payable to each of such Holders. Such payment shall constitute payment in full to the holders of
the Series C Stock upon the Liquidation Event. After such payment shall have been made in full, or funds necessary for such payment shall have been set aside by the Corporation in trust for the account of the holders of Series C Stock, so as to be
available for such payment, such holders of Series C Stock shall be entitled to no further participation in the distribution of the assets of the Corporation. The purchase or redemption by the Corporation of stock of any class, in any manner
permitted by law, shall not, for the purposes of this Certificate of Designations, be deemed to be a Liquidation Event. Neither the consolidation or merger of the Corporation with or into any other Person, nor the sale or transfer by the Corporation
of less than substantially all of its assets shall, for the purposes of this Certificate of Designations, be deemed to be a Liquidation Event. 
  
 (b) In the event of a Liquidation Event, following completion of the distributions required by the first sentence of paragraph (a) of
this Section 6, if assets or surplus funds remain in the Corporation, the holders of the Junior Securities shall share in all remaining assets of the Corporation, in accordance with the General Corporation Law of Nevada and the Restated
Articles of Incorporation of the Corporation. 
  
 (c) The Corporation shall provide written notice of any Liquidation Event to each record Holder not less than 30 days prior to the payment date or effective date thereof, provided that such information shall be made known to the public
prior to or in conjunction with such notice being provided to the Holders. 
  
 7. Conversion. 
  
 (a) Conversion at Option of Holder. At the option of any Holder, any Series C Preferred Stock held by such Holder may be converted into Common Stock based on the Conversion Price then in effect for such Series C Preferred Stock. A
Holder may convert Series C Preferred Stock into Common Stock pursuant to this paragraph at any time and from time to time after the Original Issue Date, by delivering to the Corporation a Conversion Notice, in the form attached hereto,
appropriately completed and duly signed, and the date any such Conversion Notice is delivered to the Corporation (as determined in accordance with the notice provisions hereof) is a “Conversion Date.” 
  
 (b) Conversion at Option of Corporation. If, at any
time after the Effective Date, the average arithmetic Closing Price for fifteen (15) consecutive Trading Days exceeds 

  

 5 

 
$3.75 (as adjusted for any stock dividend, stock split, stock combination or other similar transaction after the Original Issue Date) (the “Threshold
Price”), the Corporation may require the Holders to convert all or any part of the shares of Series C Preferred Stock into Common Stock based on the Conversion Price. The Corporation may require a conversion pursuant to this paragraph by
delivering irrevocable written notice of such election to the Holders, and the tenth (10th) Trading Day after the date any such notice is delivered to the Holders (as determined in accordance with the notice provisions hereof) will be the
“Conversion Date” for such required conversion. Notwithstanding the foregoing, the Corporation may not require any conversion under this paragraph (and any notice thereof will be void), unless (A) from the period commencing on
the Corporation’s delivery of the irrevocable written notice through the Conversion Date, the Equity Conditions are satisfied (or waived in writing by the applicable Holder) on each Trading Day with respect to all of the Underlying Shares then
issuable upon conversion in full of all outstanding Series C Preferred Stock. 
  
 8. Mechanics of Conversion. 
  
 (a) The number of Underlying Shares issuable upon any conversion of a share of Series C Preferred Stock hereunder shall equal (i) the Stated Value of such share of Series C Preferred Stock to be converted,
divided by the Conversion Price on the Conversion Date, plus (ii) the amount of any accrued but unpaid dividends on such share of Series C Preferred Stock through the Conversion Date, divided by the Conversion Price on the Conversion Date.

  
 (b) Upon conversion of any share of Series C
Preferred Stock, and provided that the Holder has complied with the provisions of Section 6 of the Registration Rights Agreement, the Corporation shall promptly (but in no event later than three Trading Days after the Conversion Date) issue or
cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate a certificate for the Underlying Shares issuable upon such conversion, free of restrictive legends unless a
registration statement covering the resale of the Underlying Shares and naming the Holder as a selling stockholder thereunder is not then effective and such Underlying Shares are not then freely transferable without volume restrictions pursuant to
Rule 144 under the Securities Act. The Holder, or any Person so designated by the Holder to receive Underlying Shares, shall be deemed to have become holder of record of such Underlying Shares as of the Conversion Date. The Corporation shall, upon
request of the Holder, use its best efforts to deliver Underlying Shares hereunder electronically through the DTC or another established clearing corporation performing similar functions, and shall issue such Underlying Shares in the same manner as
dividend payment shares are issued pursuant to Section 3(i) above. 
  
 (c) A Holder shall not be required to deliver the original certificate(s) evidencing the Series C Preferred Stock being converted in order to effect a conversion of such Series C Preferred Stock. Execution and
delivery of the Conversion Notice shall have the same effect as cancellation of the original certificate(s) and issuance of a new certificate evidencing the remaining shares of Series C Preferred Stock. Upon surrender of a certificate following one
or more partial conversions, the Corporation shall promptly deliver to the Holder a new certificate representing the remaining shares of Series C Preferred Stock. 
  

 6 

 (d) The Corporation’s obligations to issue and deliver Underlying Shares upon
conversion of Series C Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by any Holder to enforce the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by any Holder or any other Person of any obligation to the Corporation
or any violation or alleged violation of law by any Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to any Holder in connection with the issuance of such
Underlying Shares. 
  
 9. Redemption Rights. 
  
 (a) Optional Redemption Right. 
  
 (i) The Corporation shall have the right at any time to
repurchase (a “Optional Redemption”) all of the then outstanding Series C Preferred Stock at a price equal to 105% of the Stated Value of such shares of Series C Preferred Stock (the “Optional Redemption Price”),
plus all accrued but unpaid dividends thereon to the date of payment, in cash. The Corporation must deliver a notice of the Optional Redemption to the Holders at least twenty (20) Trading Days prior the date of the Optional Redemption (the
“Optional Redemption Date”), which notice shall state the date of the Optional Redemption Date and the Optional Redemption Price. 
  
 (ii) Upon receipt of payment of the Optional Redemption Price by the Holders of Series C Preferred Stock, each Holder will deliver the
certificate(s) evidencing the Series C Preferred Stock redeemed by the Corporation, unless such Holder is awaiting receipt of a new certificate evidencing such shares from the Corporation pursuant to another provision hereof. At any time on or prior
to the Optional Redemption Date, the Holders may convert any or all of the shares of Series C Preferred Stock, and the Corporation shall honor any such conversions in accordance with the terms hereof. 
  
 (b) Mandatory Redemption. 
  
 (i) Beginning on the nine month anniversary of the Original
Issue Date of the Series C Preferred Stock and on the first business day of each month thereafter (each a “Mandatory Redemption Date”), the Corporation shall redeem 1/30th of the original principal amount of the Series C Preferred Stock at a price equal to 100% of the Stated Value of such shares of Series C Preferred Stock, plus
all accrued but unpaid dividends thereon to the date of payment (for each redemption on a Mandatory Redemption Date, the “Mandatory Redemption Price”). 
  
 (ii) Subject to the conditions and limitations set forth below, the Corporation may pay the Mandatory
Redemption Price (i) in cash or (ii) in 

  

 7 

 
Common Stock. The Corporation must deliver written notice (the “Mandatory Redemption Notice”) to the Holders indicating the manner in which
it intends to pay the Mandatory Redemption Price at least seven (7) Trading Days prior to the Mandatory Redemption Date. Failure to timely provide such written notice shall be deemed an election by the Corporation to pay the Mandatory
Redemption Price in cash, unless payment of the Mandatory Redemption Price is not permitted on the Mandatory Redemption Date, in which case the Mandatory Redemption Price shall be payable in cash. 
  
 (iii) Notwithstanding the foregoing, the Corporation may not
pay the Mandatory Redemption Price by issuing Common Stock unless, at such time, the Equity Conditions are satisfied (or waived in writing by the applicable Holder) with respect to such Common Stock shares and all of the Underlying Shares then
issuable upon conversion in full of all the outstanding Series C Preferred Stock. 
  
 (iv) In the event that the Corporation elects to pay the Mandatory Redemption Price in shares of Common Stock, the number of shares of
Common Stock to be issued to each Holder on the Mandatory Redemption Date shall be (i) determined by dividing the total Mandatory Redemption Price then payable to such Holder by the Redemption Market Price (as defined below) as of the Mandatory
Redemption Date, and rounding up to the nearest whole share, and (ii) paid to such Holder in accordance with Section 9(c)(v) below. The term “Redemption Market Price” shall mean 92.5% of the average of the Volume Weighted
Average Prices of Common Stock for the twenty (20) consecutive Trading Days immediately prior to the Mandatory Redemption Date (not including such date). Notwithstanding any other provision of this Certificate of Designation, the Corporation
shall not be entitled to pay the Mandatory Redemption Price in shares of Common Stock unless the Company has obtained shareholder approval, if required, for the issuance in accordance with the applicable rules and regulations of the Eligible Market.

  
 (v) In the event that the Mandatory
Redemption Price is paid in Common Stock the Corporation shall, on the Mandatory Redemption Date, (i) issue and deliver to such Holder a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock
to which the Holder shall be entitled, or (ii) if the Holder has notified the Corporation that this clause (ii) shall apply, provided that the Holder has complied with the provisions of Section 6 of the Registration Rights Agreement,
credit the number of shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission System. 
  
 10. Triggering Events. 
  
 (a) During the first fifteen (15) Trading Days
following the occurrence of a Triggering Event, each Holder shall have the option to elect, by notice to the Corporation (an 

  

 8 

 
“Event Notice”), to require the Corporation to repurchase all or any portion of the Series C Preferred Stock then held by such Holder, at a
price per share equal to the Stated Value plus all accrued but unpaid dividends thereon through the date of payment. The aggregate amount payable pursuant to the preceding sentence is referred to as the “Event Price.” The
Corporation shall pay the aggregate Event Price to each Holder no later than the sixtieth day following the date of delivery of the Event Notice, and upon receipt thereof such Holder shall deliver original certificates evidencing the shares of
Series C Preferred Stock and Underlying Shares so repurchased to the Corporation (to the extent such certificates have been delivered to the Holder). 
  
 (b) Upon the occurrence of any Bankruptcy Event, the Corporation shall immediately be obligated, without any further action by any Holder,
to repurchase all outstanding shares of Series C Preferred Stock and all such Underlying Shares at the Event Price pursuant to the preceding paragraph as if each Holder had delivered an Event Notice immediately prior to the occurrence of such
Bankruptcy Event. 
  
 11. Voting Rights. Except as
otherwise provided herein or as required by applicable law, the Holders of the Series C Preferred Stock shall not be entitled to vote on matters on which holders of Common Stock are entitled to vote. So long as any shares of Series C Preferred Stock
are outstanding, except as otherwise provided herein, the Corporation shall not, without the affirmative vote of the Holders of a majority of the shares of Series C Preferred Stock then outstanding, (a) alter or change adversely the powers,
preferences or rights given to the Series C Preferred Stock or alter or amend this Certificate of Designation (whether by merger, reorganization, consolidation or otherwise), (b) authorize or create any class of stock ranking as to dividends,
redemption or distribution of assets upon a Liquidation Event or Change of Control senior to or otherwise pari passu with the Series C Preferred Stock; provided, however, that the Corporation shall be permitted to issue without the consent of
the Holders of the Series C Preferred Stock any class of preferred stock ranking pari passu with the Series C Preferred Stock if the conversion price of such class of preferred stock, directly or indirectly to Common Stock, is greater than the
Conversion Price for the Series C Preferred Stock, (c) amend its certificate or articles of incorporation or other charter documents so as to affect adversely any rights of the Holders (whether by merger, reorganization, consolidation or
otherwise), (d) increase the authorized number of shares of Series C Preferred Stock, (e) redeem, repurchase or otherwise acquire any share of Junior Securities, (f) increase the authorized number of shares of Series B Preferred
Stock, (g) issue greater wan 15,000 shares of Series B Preferred Stock or (h) enter into any agreement with respect to the foregoing. 
  
 12. Charges, Taxes and Expenses. Issuance of certificates for shares of Series C Preferred Stock and for Underlying Shares issued on conversion of
(or otherwise in respect of) the Series C Preferred Stock shall be made without charge to the Holders for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Corporation; provided, however, that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of
any certificates for Common Stock or Series C Preferred Stock in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring the 

  

 9 

 
Series C Preferred Stock or receiving Underlying Shares in respect of the Series C Preferred Stock. 
  
 13. Replacement Certificates. If any certificate evidencing Series C
Preferred Stock or Underlying Shares is mutilated, lost, stolen or destroyed, the Corporation shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for such certificate, a new
certificate, but only upon receipt of evidence reasonably satisfactory to the Corporation of such loss, theft or destruction and customary and reasonable indemnity, if requested. Applicants for a new certificate under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as die Corporation may prescribe. 
  
 14. Reservation of Underlying Shares. The Corporation covenants that it shall at all times reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Underlying Shares as required hereunder, the number of Underlying Shares which are then issuable and deliverable upon the conversion of
(and otherwise in respect of) all outstanding Series C Preferred Stock (taking into account the adjustments of Section 15), free from preemptive rights or any other contingent purchase rights of persons other than the Holder. The Corporation
covenants that all Underlying Shares so issuable and deliverable shall, upon issuance in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Corporation covenants that it shall use its best
efforts to satisfy each of the Equity Conditions. 
  
 15.
Certain Adjustments. The Conversion Price is subject to adjustment from time to time as set forth in this Section 15. 
  
 (a) Stock Dividends and Splits. If the Corporation, at any time while Series C Preferred Stock is outstanding, (i) pays a
stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock (other than regular dividends on the Series C Preferred Stock), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Conversion Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or combination. 
  
 (b) Pro Rata Distributions. If the Corporation, at any time while Series C Preferred Stock is outstanding, distributes to all
holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or purchase any security, or
(iv) any other asset (in each case, “Distributed Property”), then in each such case upon any conversion of Series C Preferred Stock that occurs after such record date, such Holder shall be 

  

 10 

 
entitled to receive, in addition to the Underlying Shares otherwise issuable upon such conversion, the Distributed Property that such Holder would have been
entitled to receive in respect of such number of Underlying Shares had the Holder been the record holder of such Underlying Shares immediately prior to such record date. 
  
 (c) Fundamental Transactions. If, at any time while Series C Preferred Stock is outstanding,
(i) the Corporation effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation effects any sale of all or substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or
(iv) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result
of a subdivision or combination of shares of Common Stock covered by Section 15(a) above) (in any such case, a “Fundamental Transaction”), then upon any subsequent conversion of Series C Preferred Stock, each Holder shall have
the right to receive, for each Underlying Share that would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the
Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction, then each Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of Series C Preferred Stock following such Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall issue to the Holder a new series of preferred stock consistent with the foregoing
provisions and evidencing die Holders’ right to convert such preferred stock into Alternate Consideration, The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph (c) and insuring that the Series C Preferred Stock (or any such replacement security) wilt be similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. 
  
 (d) Calculations. All
calculations under this Section 15 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Corporation, and the disposition of any such shares shall be considered an issue or sale of Common Stock. 
  
 (e) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 15, the Corporation at its
expense will promptly compute such adjustment in 

  

 11 

 
accordance with the terms hereof and prepare a certificate describing in reasonable detail such adjustment and the transactions giving rise thereto,
including all facts upon which such adjustment is based. Upon written request, the Corporation will promptly deliver a copy of each such certificate to each Holder and to the Corporation’s Transfer Agent 
  
 (f) Notice of Corporate Events. If the Corporation
(i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the
Corporation or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up
of the affairs of the Corporation, then the Corporation shall deliver to each Holder a notice describing the material terms and conditions of such transaction, at least 20 calendar days prior to the applicable record or effective date on which a
Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Corporation will take all steps reasonably necessary in order to insure that each Holder is given the practical opportunity to
convert its Series C Preferred Stock prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate
action required to be described in such notice. 
  
 16. Change
of Control. 
  
 (a) Reorganization,
Reclassification, Consolidation, Merger or Sale. Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Corporation’s assets to another Person or other transaction which is
effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as “Organic
Change.” As long as any share of Series C Preferred Stock is outstanding, prior to the consummation of any (i) sale of all or substantially all of the Corporation’s assets to an acquiring Person or (ii) other Organic Change
following which the Corporation is not a surviving entity, the Corporation will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the “Acquiring Entity”) a written
agreement (in form and substance reasonably satisfactory to the Holders of at least a majority of the Series C Preferred Stock then outstanding) to deliver to each Holder of Series C Preferred Stock in exchange for such shares, a security of the
Acquiring Entity evidenced by a written instrument substantially similar in form and substance to the Series C , Preferred Stock (including, without limitation, having a stated value and liquidation preference equal to the Stated Value and the
Series C Stock Liquidation Preference held by such Holder) and reasonably satisfactory to the Holders of at least a majority of the Series C Preferred Stock then outstanding. Prior to the consummation of any other Organic Change, the Corporation
shall make appropriate provision (in form and substance reasonably satisfactory to the Holders of at least a majority of the Series C Preferred Stock then outstanding) to insure that each of the Holders of die Series C Preferred Stock will
thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of such Holder’s Series C Preferred Stock such
shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares of Common Stock 

  

 12 

 
which would have been acquirable and receivable upon the conversion of such Holder’s Series C Preferred Stock as of the date of such Organic Change
(without taking into account any limitations or restrictions on the convertibility of the Series C Preferred Stock). 
  
 (b) Optional Redemption Upon Change of Control. In addition to the rights of the Holders of Series C Preferred Stock under
Section 16(a), upon a Change of Control of the Corporation each Holder of Series C Preferred Stock shall have the right, at such Holder’s option, to require the Corporation to redeem all or a portion of such Holder’s Series C
Preferred Stock at a price per Series C Preferred Stock equal to the Stated Value plus all accrued but unpaid dividends thereon through the date of payment (the “Change of Control Redemption Price”). No sooner than 60 days nor later
than ten (10) days prior to the consummation of a Change of Control, but not prior to the public announcement of such Change of Control, the Corporation shall deliver written notice thereof via facsimile and overnight courier (a “Notice
of Change of Control”) to each Holder of Series C Preferred Stock. At any time during the period beginning after receipt of a Notice of Change of Control (or, in the event a Notice of Change of Control is not delivered at least ten
(10) days prior to a Change of Control, at any time on or after the date which is ten (10) days prior to a Change of Control) and ending on the twentieth day following Holder’s receipt of a Notice of Change of Control, any Holder of
the Series C Preferred Stock then outstanding may require the Corporation to redeem all or a portion of the Holder’s Series C Preferred Stock then outstanding by delivering written notice thereof via facsimile and overnight courier (a
“Notice of Redemption Upon Change of Control”) to the Corporation, which Notice of Redemption Upon Change of Control shall indicate (i) the number of Series C Preferred Stock that such Holder is submitting for redemption, and
(ii) the applicable Change of Control Redemption Price, as calculated pursuant to this Section 16(b). Upon the Corporation’s receipt of a Notice(s) of Redemption Upon Change of Control from any Holder of Series C Preferred Stock, the
Corporation shall promptly, but in no event later than two (2) Trading Days following such receipt, notify each Holder of Series C Preferred Stock by facsimile of the Corporation’s receipt of such Notice(s) of Redemption Upon Change of
Control. The Corporation shall deliver the applicable Change of Control Redemption Price within sixty (60) days of the consummation of the Change of Control. Payments provided for in this Section 16(b) shall have priority to payments to
other stockholders in connection with a Change of Control. 
  
 17.
Limitation on Conversion. 
  
 (a)
Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be acquired by any Holder upon any conversion of Series C Preferred Stock (or otherwise in respect of the Series C Preferred Stock) shall be
limited to the extent necessary to insure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of
Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% (the “Maximum Percentage”) of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. Each delivery of a Conversion Notice by a Holder will constitute a representation by such Holder that it has evaluated the limitation set forth in this paragraph and determined that issuance of the full 

  

 13 

 
number of Underlying Shares requested in such Conversion Notice is permitted under this paragraph. By written notice to the Corporation, any Holder may waive
the provisions of this Section or increase or decrease the Maximum Percentage to any other percentage specified in such notice, but (i) any such waiver or increase will not be effective until the 61st day after such notice is delivered to the
Corporation, and (ii) any such waiver or increase or decrease will apply only to such Holder and not to any other Holder. 
  
 (b) Notwithstanding anything to the contrary contained herein, the maximum number of shares of Common Stock that the Company may issue
pursuant to the Transaction Documents at an effective purchase price less than the Closing Price on the Trading Day immediately preceding the Closing Date equals 19.99% of the outstanding shares of Common Stock immediately preceding the Closing Date
(the “Issuable Maximum”), unless the Company obtains shareholder approval in accordance with the rules and regulations of such Trading Market. If, at the time any Holder requests an conversion of any of the Series C Preferred Stock,
the Actual Minimum (excluding any shares issued or issuable at an effective purchase price in excess of the Closing Price on the Trading Day immediately preceding the Closing Date) exceeds the Issuable Maximum (and if the Company has not previously
obtained the required shareholder approval), then the Company shall issue to the Holder requesting such exercise a number of shares of Common Stock not exceeding such Holder’s pro-rata portion of the Issuable Maximum (based on such
Holder’s share (vis-à-vis other Holders) of the aggregate purchase price paid under the Purchase Agreement and taking into account any Series C Preferred Stock previously issued to such Holder). For the purposes hereof, “Actual
Minimum” shall mean, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise
and/or conversion in full of all Warrants and Shares, without giving effect to any limits on the number of shares of Common Stock that may be owned by a Holder at any one time. 
  
 18. Fractional Shares. The Corporation shall not be required to issue or cause to be issued fractional Underlying
Shares on conversion of Series C Preferred Stock. If any fraction of an Underlying Share would, except for the provisions of this Section, be issuable upon conversion of Series C Preferred Stock, the number of Underlying Shares to be issued will be
rounded up to the nearest whole share. 
  
 19. Notices. Any
and all notices or other communications or deliveries hereunder (including without limitation any Conversion Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Corporation, to 339 S. Cheryl Lane, City of Industry,
California 91789, facsimile: 909-598-8838, attention Chief Financial Officer, or (ii) if to a Holder, to the address or facsimile number 

  

 14 

 
appearing on the Corporation’s stockholder records or such other address or facsimile number as such Holder may provide to the Corporation in accordance
with this Section. 
  
 20. Miscellaneous. 
  
 (a) The headings herein are for convenience only, do not
constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof. 
  
 (b) No provision of this Certificate of Designations may be amended, except in a written instrument signed by the Company and Holders of
at least 60% of the shares of Series C Preferred Stock then outstanding. 
  
 (c) Any of the rights of the Holders of Series C Preferred Stock set forth herein, including any Equity Conditions, Triggering Events or any other similar conditions for the Holders’ benefit, may be waived by the
affirmative vote of Holders of at least 60% of the shares of Series C Preferred Stock then outstanding. No waiver of any default with respect to any provision, condition or requirement of this Certificate of Designation shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the
exercise of any such right. 
  

 15 

 IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be duly executed as of
this 2nd day of June 2005. 
  

			
	GLOBAL EPOINT, INC.
		
	By:	 	/s/    JOHN PAN        
	Name:	 	 
	Title:	 	 

  

 16 

 EXHIBIT A 
  

ADDITIONAL DEFINITIONS 
  
 “Actual Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant
to the Transaction Documents, including any Underlying Shares issuable upon exercise or conversion in full of all Warrants and Shares, ignoring any limits on the number of shares of Common Stock that may be owned by a Purchaser at any one time and
(i) assuming that (a) any previously unconverted Shares are held until the third anniversary of the Closing Date and all dividends thereon are paid in shares of Common Stock, and (b) the Closing Price at all times on and after the
date of determination equals 100% of the actual Closing Price on the Trading Day immediately prior to the date of determination, and (ii) giving effect to the Conversion Price (as defined in the Certificate of Designations) as in effect on such
date, without regard to potential changes in the Closing Price that may occur thereafter. 
  
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and
construed under Rule 144 under the Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of
such Purchaser. 
  
 “Bankruptcy Event” means any of the following
events: (a) the Corporation or any Subsidiary commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction relating to the Corporation or any Subsidiary thereof; (b) there is commenced against the Corporation or any Subsidiary any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Corporation
or any Subsidiary is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Corporation or any Subsidiary suffers any appointment of any custodian or the like for it or
any substantial part of its property that is not discharged or stayed within 60 days; (e) the Corporation or any Subsidiary makes a general assignment for the benefit of creditors; (f) the Corporation or any Subsidiary fails to pay, or
states that it is unable to pay or is unable to pay, its debts generally as they become due; (g) the Corporation or any Subsidiary calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its
debts; or (h) the Corporation or any Subsidiary, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of
the foregoing. 
  
 “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
  
 “Change of Control” means the occurrence of any of the following in one or a series of related transactions other than a transaction or transactions
contemplated by the Letter of Intent: (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 

  

 17 

 
13d-5(b)(1) under the Exchange Act) of more than one-half of the voting rights or equity interests in the Corporation;; (iii) a merger or consolidation
of the Corporation or any significant Subsidiary or a sale of more than one-half of the assets of the Corporation (other than non-homeland security assets) in one or a series of related transactions, unless following such transaction or series of
transactions, the holders of the Corporation’s securities prior to the first such transaction continue to hold at least two-thirds of the voting rights and equity interests in the surviving entity or acquirer of such assets; (iv) a
recapitalization, reorganization or other transaction involving the Corporation or any significant Subsidiary that constitutes or results in a transfer of more than one-half of the voting rights or equity interests in the Corporation;
(v) consummation of a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act with respect to the Corporation, or (vi) the execution by the Corporation or its controlling shareholders of an agreement providing
for or reasonably likely to result in any of the foregoing events. 
  
 “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.2 of the Purchase Agreement upon the satisfaction of each of the conditions set forth in Sections 5.1 and 5.2
of the Purchase Agreement. 
  
 “Closing Date” means the date of
the Closing. 
  
 “Closing Price” means, for any date, the price
determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on an Eligible Market or any other national securities exchange, the closing bid price per share of the Common Stock for such date
(or the nearest preceding date) on the primary Eligible Market or exchange on which the Common Stock is then listed or quoted; (b) if prices for the Common Stock are then quoted on the OTC Bulletin Board, the closing bid price per share of the
Common Stock for such date (or the nearest preceding date) so quoted; (c) if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink Sheets LLC (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent closing bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by Purchasers holding a majority of the Securities, the cost of which shall be paid by the Corporation. 
  
 “Commission” means the Securities and Exchange Commission. 
  
 “Common Stock” means the common stock of the Corporation, par value $0.03 per share. 
  
 “Convertible Securities” shall mean any evidence of indebtedness, shares, options, warrants or other securities directly or indirectly convertible into
or exercisable or exchangeable for shares of Common Stock. 
  
 “Effective
Date” means the date that an Underlying Shares Registration Statement is declared effective by the Commission. 
  
 “Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market or the
OTC Bulletin Board. 
  
 “Exchange Act” means the Securities
Exchange Act of 1934, as amended. 
  

 18 

 “GAAP” means United States generally accepted accounting principles, as recognized by the American
Institute of Certified Public Accountants or the Financial Accounting Standards Board, consistently applied and maintained on a consistent basis for the Corporation and its Subsidiaries throughout the period indicated and consistent with the prior
financial practice of the Corporation; provided, however, that any accounting principle or practice required to be changed by the American Institute of Certified Public Accountants or the Financial Accounting Standards Board (or other
appropriate board or committee of either) in order to continue as a generally accepted accounting principle or practice may be so changed. 
  
 “Letter of Intent” means that certain letter dated May 27, 2005 between the Corporation and Astrophysics, Inc. regarding the proposed acquisition of
Astrophysics, Inc. by the Corporation and the related financing (the “Financing”) described therein. 
  
 “Lien” means any lien, charge, claim, security interest, encumbrance, right of first refusal or other restriction. 
  
 “Losses” means any and all losses, claims, damages, liabilities, settlement
costs and expenses, including without limitation costs of preparation of legal action and reasonable attorneys’ fees. 
  
 “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities. 
  
 “Person” means any individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or any court or other federal, state, local or other governmental authority or other entity
of any kind. 
  
 “Proceeding” means an action, claim, suit,
investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Registration Rights Agreement” means the Registration Rights Agreement, dated on or around the Closing Date, among the Corporation and the Purchasers,
in the form of Exhibit B to the Purchase Agreement. 
  
 “Required
Effectiveness Date” means the date on which an Underlying Shares Registration Statement is required to become effective pursuant to the Registration Rights Agreement. 
  
 “Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise or conversion in full of all Warrants and Convertible Securities, ignoring any limits on the number of shares of Common Stock that
may be owned by a Purchaser at any one time and (i) assuming that (a) any previously unconverted Shares are held until the third anniversary of the Closing Date or, if earlier, until maturity, and all dividends thereon are paid in shares
of Common Stock, and (b) the Closing Price at all times on and after the date of determination equals 50% of the actual Closing Price on the Trading Day immediately prior to the date of determination, and (ii) giving effect to the 

  

 19 

 
Conversion Price (as defined in the Certificate of Designations) as in effect on such date, without regard to potential changes in the Closing Price that may
occur thereafter. 
  
 “Rule 144,” “Rule 415,” and
“Rule 424” means Rule 144, Rule 415 and Rule 424, respectively, promulgated by the Commission pursuant to the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule. 
  
 “Securities” means the Shares, the Warrants and the Underlying Shares. 
  
 “Senior Debt” means any indebtedness of the Corporation from the date hereof that is senior to any indebtedness set forth on Schedule 3.1(bb) of the Purchase Agreement in right of payment,
whether with respect to interest or upon liquidation or dissolution, or otherwise. 
  
 “Series C Preferred Stock” means the Series C Convertible Preferred Stock, no par value, of the Corporation, which is convertible into shares of Common Stock. 
  
 “Shares” means an aggregate of 1,250,007 shares of Series C Preferred Stock, which are being purchased by the Purchasers
pursuant to the Purchase Agreement. 
  
 “Subsidiary” means any
subsidiary of the Corporation that is required to be listed in Schedule 3.1(a) of the Purchase Agreement. 
  
 “Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on an Eligible Market or (b) if trading ceases to
occur on an Eligible Market, any Business Day. 
  
 “Trading Market”
means the Nasdaq SmallCap Market or any other national securities exchange, market or trading or quotation facility on which the Common Stock is then listed or quoted. 
  
 “Transaction Documents” means the Purchase Agreement, the Securities, the Registration Rights Agreement, the Certificate of
Designations, and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
  
 “Triggering Event” means any of the following events: (a) immediately prior to any Bankruptcy Event; (b) the Common Stock is not listed or
quoted, or is suspended from trading, on an Eligible Market for a period of seven consecutive Trading Days or for a period of twenty Trading Days (which need not be consecutive Trading Days) in any 12 month period; (c) the Corporation fails for
any reason to deliver a certificate evidencing any Securities to a Purchaser as required pursuant to any Transaction Document within five Trading Days after delivery of notice of failure to deliver by Purchaser or the exercise or conversion rights
of the Holders pursuant to the Transaction Documents are otherwise suspended for any reason other than a breach of the Transaction Documents by the Purchasers; (d) the Corporation fails to have available a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock available to issue Underlying Shares upon any exercise of the Warrants or any conversion of convertible Securities; (e) any other Event (as defined in the Registration Rights Agreement)
occurs and remains uncured for 90 days; (f) the Corporation fails to make any cash payment required under the Transaction Documents and such failure is not cured within ten Trading Days after notice of 

  

 20 

 
such default is first given to the Corporation by a Purchaser; or (i) the Corporation shall issue equity securities of the Corporation (other than any
such securities issued in connection with the acquisition of Astrophysics, Inc as described in the Letter of Intent or the financing described therein) which shall be senior to the Series C Preferred Stock in right of payment, or with respect to
dividends, liquidation, or dissolution. 
  
 “Underlying Shares”
means the shares of Common Stock issuable upon conversion of the Shares and upon exercise of the Warrants and in satisfaction of any other obligation of the Corporation to issue shares of Common Stock pursuant to the Transaction Documents.

  
 “Underlying Shares Registration Statement” means a
registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale of the Securities by the Purchasers. 
  
 “Volume Weighted Average Price” means, with respect to any particular Trading Day or for any particular period, the volume weighted average trading price
per share of Common Stock on such date or for such period on an Eligible Market as reported by Bloomberg, L.P., or any successor performing similar functions. 
  

 21 

 EXHIBIT B 
  

FORM OF CONVERSION NOTICE 
  
 (To be executed by the registered Holder 
 in order to convert shares of
Series C Preferred Stock) 
  
 The undersigned hereby elects to convert the number
of shares of Series C Convertible Preferred Stock indicated below into shares of common stock, $0.03 par value (the “Common Stock”), of Global ePoint, Inc., a Nevada corporation (the “Corporation”), according to the
conditions hereof, as of the date written below. 
  

	
	 
	Date to Effect Conversion
	
	 
	Number of shares of Series C Preferred Stock owned prior to Conversion
	
	 
	Number of shares of Series C Preferred Stock to be Converted
	
	 
	Stated Value of shares of Series C Preferred Stock to be Converted (including ____________ of dividends added under Section 3(c) of the Certificate of Designations and _____________
added under Section 2(d) of the Registration Rights Agreement)
	
	 
	Number of shares of Common Stock to be Issued
	
	 
	Applicable Conversion Price
	
	 
	 Number of shares of Series C Preferred Stock subsequent to Conversion

			
	
	 
	Name of Holder
		
	 By:
	 	 
	 Name: 
	 	 
	 Title: 
	 	 

  

 22 

 EXHIBIT B 
  
 REGISTRATION RIGHTS AGREEMENT 

 EXECUTION VERSION 
  
 REGISTRATION RIGHTS AGREEMENT 
  

This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 2, 2005, among Global ePoint, Inc., a
Nevada corporation (the “Company”), and the investors signatory hereto (each such investor is a “Purchaser” and all such investors are, collectively, the “Purchasers”). 
  
 WHEREAS, the parties have agreed to enter into this Agreement in connection
with, and as a condition to the Closing under, the Securities Purchase Agreement, dated as of the date hereof, among the Company and the Purchasers (the “Purchase Agreement”); 
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows: 
  
 1. Definitions. In addition to the terms defined elsewhere in this Agreement, (a) capitalized terms that are not
otherwise defined herein have the meanings given to such terms in the Purchase Agreement, and (b) the following terms have the meanings indicated: 
  
 “Filing Date” means, with respect to the initial Registration Statement required to be filed pursuant to
Section 2, July 1, 2005, and, with respect to any additional Registration Statements that may be required pursuant to Section 3(c), the 30th day following the date on which the Company first knows, or reasonably should
have known, that such additional Registration Statement is required under such Section. 
  
 “Holder” means any holder, from time to time, of Registrable Securities. 
  
 “Prospectus” means the prospectus included
in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means any Common Stock (including Underlying Shares) issued or issuable pursuant to the
Transaction Documents, together with any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing. 
  
 “Registration Statement” means the initial
registration statement required to be filed hereunder and any additional registration statements contemplated by Section 3(c), 

 
including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. 
  
 “Required Effectiveness Date” means, with respect to the initial Registration Statement required to be filed hereunder,
August 31, 2005, and, with respect to any additional Registration Statements that may be required pursuant to Section 3(c), the 60th day following the date on which the Company first knows, or reasonably should have known, that such
additional Registration Statement is required under such Section. 
  
 “Rule 415,” “Rule 424” and “Rule 461” means Rule 415, Rule 424 and Rule 461, respectively, promulgated by the Commission pursuant to the Securities Act, as such Rules may be
amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Special Counsel” means one special counsel to the Holders. Unless the Holders notify the Company otherwise, the Special
Counsel will be the Purchaser Counsel identified in the Purchase Agreement. 
  
 2. Shelf Registration 
  
 (a) As promptly as possible, and in any event on or prior to each Filing Date, the Company shall prepare and file with the Commission a “Shelf Registration Statement covering the resale of all Registrable Securities for an offering to
be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be
on another appropriate form in accordance herewith as the Holders may consent) and shall contain (except if otherwise directed by the Holders) the “Plan of Distribution” attached hereto as Annex A. The Company shall use its best
efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the Required Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until the earlier of (i) the fifth anniversary of the Effective Date; (ii) as to any Holder of Registrable Securities, the date that the Holder receives an opinion of
counsel to the Company that all of the Registrable Securities held by the Holder may be freely traded without registration under the Securities Act in reliance on Rule 144 promulgated under the Securities Act, or (iii) when all Registrable
Securities covered by such Registration Statement have been sold (the “Effectiveness Period”). The Company shall notify each Holder in writing promptly (and in any event within one business day) after receiving notification from the
Commission that a Registration Statement has been declared effective. 
  
 (b) The initial Registration Statement to be filed hereunder shall cover the sale by the Holders of at least the Required Minimum number of shares of Common Stock. 
  
 (c) If: (i) any Registration Statement is not filed on or prior to the Filing Date, or (ii) the-Company fails to
file with the Commission a request for acceleration in accordance with 

  

 2 

 
Rule 461 promulgated under the Securities Act, within five Trading Days after the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that a Registration Statement will not be “reviewed,” or will not be subject to further review, or (iii) the Company is able yet fails to respond to any comments made by the Commission (A) within 10
Trading Days after the receipt of such comments on the initial Registration Statement or (B) within 20 Trading Days after the receipt of such comments on any additional Registration Statement, or (iv) a Registration Statement filed
hereunder is not declared effective by the Commission by the Required Effectiveness Date, or (v) the Common Stock is not listed or quoted, or is suspended from trading on an Eligible Market for a period of a period of seven consecutive Trading
Days or for a period of twenty Trading Days (which need not be consecutive Trading Days) in any 12 month period (any such failure or breach being referred to as an “Event,” and for purposes of clause (i) or (iv) the date on which
such Event occurs, or for purposes of clause (ii) or (v) the date on which such applicable Trading Day period is exceeded, or for purposes of clause (iii) the date which such ten Trading Day-period is exceeded, being referred to as
“Event Date”), then: (x) on each such Event Date the Company shall pay to each Purchaser an amount in cash, as partial liquidated damages and not as a penalty, equal to 1% of the aggregate purchase price paid by such Purchaser
pursuant to the Purchase Agreement; and (y) on each monthly anniversary of each such Event Date thereof (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each
Purchaser an amount in cash, as partial liquidated damages and not as a penalty, equal to 1% of the aggregate purchase price paid by such Purchaser pursuant to the Purchase Agreement, or a proportional amount in the event of periods of less than one
month. Such payments shall be in partial compensation to the Purchasers and shall not constitute the Purchaser’s exclusive remedy for such events. If the Company fails to pay any liquidated damages pursuant to this Section in full within seven
days after the date payable, the Company will pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Purchaser, accruing daily from the date such liquidated damages
are due until such amounts, plus all such interest thereon, are paid in full. 
  
 (d) The Company shall not, prior to the Effective Date of the Registration Statement, prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities. 
  
 3.
Registration Procedures. In connection with the Company’s registration obligations hereunder, the Company shall: 
  
 (a) Not less than three Trading Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, the
Company shall furnish to any counsel designated by any Purchaser (each, a “Purchaser Counsel”, and Iroquois Capital LP has initially designated Proskauer Rose LLP, “LP Counsel”) copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of each Purchaser and Purchaser Counsel. The Company shall not file a Registration Statement or any such Prospectus
or any amendments or supplements thereto to which Purchasers holding a majority of the Registrable Securities shall reasonably object in their good faith. 
  

 3 

 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to
each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file
with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible, and in any event within ten days, to any comments received from the Commission with respect to the Registration
Statement or any amendment thereto; and (iv) comply in all material respects, to the extent applicable to the Company, with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Purchasers thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented.

  
 (c) Notify Purchaser Counsel as promptly as reasonably
possible, and (if requested by any such Person) confirm such notice in writing no later than one Trading Day thereafter, of any of the following events: (i) the Commission notifies the Company whether there will be a “review” of any
Registration Statement; (ii) the Commission comments in writing on any Registration Statement; (iii) any Registration Statement or any post-effective amendment is declared effective; (iv) the Commission or any other Federal or state
governmental authority requests any amendment or supplement to any Registration Statement or Prospectus or requests additional information related thereto; (v) the Commission issues any stop order suspending the effectiveness of any
Registration Statement or initiates any Proceedings for that purpose; (vi) the Company receives notice of any suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or the
initiation or threat of any Proceeding for such purpose; or (vii) an event has occurred which requires a post-effective amendment to the Registration Statement or a supplement to the prospectus included therein. 
  
 (d) Use its best efforts to avoid the issuance of or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of any Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as
soon as possible. 
  
 (e) Promptly deliver to Purchaser Counsel,
without charge, an electronic copy of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Purchasers in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. 
  
 (f) Promptly deliver to each Purchaser and Purchaser Counsel, without charge,
as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by 

  

 4 

 
each of the selling Purchasers in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto. 
  
 (g) (i) In the time and manner
required by each Trading Market, prepare and file with such Trading Market an additional shares listing application covering all of the Registrable Securities; (ii) take all steps necessary to cause such Registrable Securities to be approved
for listing on each Trading Market as soon as possible thereafter; (iii) provide to the Purchasers evidence of such listing; and (iv) maintain the listing of such Registrable Securities on each such Trading Market or another Eligible
Market. 
  
 (h) Prior to any public offering of Registrable
Securities, use its best efforts to register or qualify or cooperate with the selling Purchasers and each applicable Purchaser Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of
such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Purchaser reasonably requests in writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement. 
  
 (i) Subject to Purchasers compliance with Section 6 hereof, cooperate
with the Purchasers to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted
by this Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Purchasers may request. 
  
 (j) Upon the occurrence of any event described in Section 3(c)(vii), as promptly as reasonably possible, prepare a
supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file such supplement,
amendment or any other document as may be required. 
  
 (k) If
Holders of a majority of the Registrable Securities being offered pursuant to a Registration Statement select underwriters for the offering, the Company shall enter into and perform its obligations under an underwriting agreement, in usual and
customary form, including, without limitation, by providing customary legal opinions, comfort letters and indemnification and contribution obligations. 
  
 (l) Comply with all applicable rules and regulations of the Commission. 
  
 4. Registration Expenses. The Company shall pay all fees and expenses incident to the performance of or compliance
with this Agreement by the Company, including without limitation (a) all registration and filing fees and expenses, including without limitation those related to filings with the Commission, any Trading Market and in connection with applicable
state securities or Blue Sky laws, (b) printing expenses (including without limitation expenses of printing certificates for Registrable Securities and of printing prospectuses requested by the 

  

 5 

 
Purchasers), (c) messenger, telephone and delivery expenses, (d) fees and disbursements of counsel for the Company, (e) fees and expenses of
all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, and (f) all listing fees to be paid by the Company to the Trading Market. 
  
 5. Indemnification 
  
 (a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Purchaser, the officers, directors, partners, members, agents, investment advisors and employees of each of them, each Person who controls any such Purchaser (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against
any and all Losses, as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or
in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (i) such untrue statements, alleged untrue statements, omissions or alleged omissions are based
solely upon information regarding such Purchaser furnished in writing to the Company by such Purchaser or its counsel or other Person acting on behalf of such Purchaser expressly for use therein, or to the extent that such information relates to
such Purchaser or such Purchaser’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Purchaser or its counsel or other Person acting on behalf of such Purchaser expressly for
use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3(c)(v)-(vii), the use by such
Purchaser of an outdated or defective Prospectus after the Company has notified such Purchaser in writing that the Prospectus is outdated or defective and prior to the receipt by such Purchaser of the Advice contemplated in Section 6. The
Company shall notify the Purchasers promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. 
  
 (b) Indemnification by Purchasers. Each Purchaser shall, severally and
not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses arising solely out of any untrue statement of a material fact contained in the Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statement or omission is contained in any information so
furnished in writing by such Purchaser to the Company 

  

 6 

 
specifically for inclusion in such Registration Statement or such Prospectus or to the extent that (i) such untrue statements or omissions are based
solely upon information regarding such Purchaser furnished in writing to the Company by such Purchaser expressly for use therein, or to the extent that such information relates to such Purchaser or such Purchaser’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing by such Purchaser or its counsel or other person acting on behalf of such Purchaser expressly for use in the Registration Statement, such Prospectus or such
form of Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3(c)(v)-(vii), the use by such Purchaser of an outdated or defective Prospectus after the
Company has notified such Purchaser in writing that the Prospectus is outdated or defective and prior to the receipt by such Purchaser of the Advice contemplated in Section 6. In no event shall the liability of any selling Purchaser
hereunder be greater in amount than the dollar amount of the net proceeds received by such Purchaser upon the sale of the Registrable Securities giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in
writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. 
  
 An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless (i) a conflict of interest exists between the
Indemnified Party and the Indemnifying Party or (ii) such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  

 7 

 All reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such
fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or (b) is unavailable to an Indemnified Party (by
reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault
of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

  
 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Purchaser shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Purchaser from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 
  
 The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 
  
 6. Dispositions. Each Purchaser agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the
Registration Statement. Each Purchaser further agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 3(c)(v), (vi) or (vii), such Purchaser will discontinue
disposition of such 

  

 8 

 
Registrable Securities under the Registration Statement until such Purchaser’s receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by Section 3(j), or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of
any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

  
 7. Miscellaneous 
  
 (a) Remedies. In the event of a breach by the Company or by a Holder
of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of at least two-thirds of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence. 
  
 (c) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement,
enter into any agreement with respect to its securities that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as and to the extent specified in the
applicable schedule to the Purchase Agreement, neither the Company nor any Subsidiary has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in
full. 
  
 (d) No Piggyback on Registrations. Except as and
to the extent specified in Schedule 3.1(w) to the Purchase Agreement, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement
other than the Registrable Securities, and the Company shall not after the date hereof enter into any agreement providing any such right to any of its security holders. 
  

 9 

 (e) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. 
  
 (f) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable
in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing,
the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered. 
  
 (g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Agreement on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) and earlier than 11:59 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt
by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth in the Purchase Agreement. 
  
 (h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign its rights and obligations hereunder in the manner and to
the extent permitted under the Purchase Agreement; provided that such transferee agrees in writing to be bound by the provisions of this Agreement. 
  
 (i) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 
  
 (j) GOVERNING LAW; VENUE; WAIVER OF JURY
TRAIL. THE CORPORATE LAWS OF THE STATE OF NEVADA SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND

  

 10 

 
INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED
HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) 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 CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 
  
 (k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law. 
  
 (l)
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 
  

 11 

 (m) Headings. The headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. 
  
 [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES TO FOLLOW] 
  

 12 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	GLOBAL EPOINT, INC.
		
	By:	 	 
	Name: 	 	 
	Title:	 	 

  
 [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES OF PURCHASERS TO FOLLOW] 
  

 13 

			
	 [PURCHASER]

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

	
	 Address for Notice:

	
	 [                                      
      ]

	 [                                      
      ]

	 [                                      
      ]

	 Telephone No.:

	 Facsimile No.:

	 Attn:

	
	 With copies to:

	
	 Proskauer Rose LLP
 1585 Broadway
 New York, New York 10036-8299
 Facsimile No.: (212) 969-2900
 Telephone No.: (212) 969-3000
 Attn: Adam J. Kansler, Esq.

  

 14 

			
	[Purchaser]
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

	
	 Address for Notice:

	
	 Facsimile No.:

	 Attn:

  

 15 

 Annex A 
  
 Plan of Distribution 
  
 The selling stockholders may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling shares: 
  

	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

  

	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	 	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	 	privately negotiated transactions; 

  

	 	•	 	short sales; 

  

	 	•	 	broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	 	a combination of any such methods of sale; and 

  

	 	•	 	any other method permitted pursuant to applicable law. 

  
 The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. 
  
 The selling stockholders may also engage in short sales against the box, puts
and calls and other transactions in our securities or derivatives of our securities and may sell or deliver shares in connection with these trades. 
  
 Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved. Any profits on the resale of shares of common stock by a broker-dealer acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by a selling stockholder. The selling stockholders may agree to indemnify any 

 
agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on that person under the Securities
Act. 
  
 The selling stockholders may from time to time pledge or
grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to
time under this prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus. 
  
 The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus and
may sell the shares of common stock from time to time under this prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. 
  
 The selling stockholders and any broker-dealers or agents that are involved in selling the shares of common stock may be deemed to be
“underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them
may be deemed to be underwriting commissions or discounts under the Securities Act. 
  
 We are required to pay all fees and expenses incident to the registration of the shares of common stock, including the fees and disbursements of counsel to the selling stockholders. We have agreed to indemnify the
selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. 
  
 The selling stockholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by any selling stockholder. If we are notified by any selling
stockholder that any material arrangement has been entered into with a broker-dealer for the sale of shares of common stock, if required, we will file a supplement to this prospectus. If the selling stockholders use this prospectus for any sale of
the shares of common stock, they will be subject to the prospectus delivery requirements of the Securities Act. 
  
 The anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may apply to sales of our common stock and activities of the selling
stockholders. 

 EXHIBIT C 
  
 FORM OF WARRANT 

 NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE
STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES, SUBJECT TO THE TERMS OF THIS
LEGEND AND THE SECURITIES ACT. 
  
 GLOBAL ePOINT, INC.

  
 WARRANT 
  

			
	Warrant No. [  ]	 	Dated: June     , 2005

  
 Global ePoint, Inc., a
Nevada corporation (the “Company”), hereby certifies that, for value received, [Name of Holder] or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of
[            ]1 shares of common stock, $0.03 par value
per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to $3.50 per share (as adjusted from time to
time as provided in Section 9, the “Exercise Price”), at any time and from time to time from and after the date hereof and through and including the third anniversary of the date of issuance hereof (the
“Expiration Date”), and subject to the following terms and conditions. This Warrant (this “Warrant”) is one of a series of similar warrants issued pursuant to that certain Securities Purchase Agreement, dated as of the
date hereof, by and among the Company and the Purchasers identified therein (the “Purchase Agreement”). All such warrants are referred to herein, collectively, as the “Warrants.” 
  
 1. Definitions. In addition to the terms defined elsewhere in this
Warrant, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase Agreement. 
  
 2. Registration of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder 

	1	Equal to 50% (aggregate) warrant coverage on the Underlying Shares under the Series C Preferred Stock of the Holder. 

 of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary. 
  
 3. Registration of Transfers. Subject to the Holder’s appropriate compliance with the Section 5 of the Securities Act, which shall be evidenced by such documents and representations as the Company may reasonably request,
the Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein.
Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance
by such transferee of all of the rights and obligations of a holder of a Warrant. 
  
 4. Exercise and Duration of Warrants. 
  
 (a) This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the date hereof to and including the Expiration Date. At 6:30 P.M., New York City time on the Expiration
Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value; provided that, if the average of the Closing Prices for the five Trading Days immediately prior to (but not including) the Expiration Date
exceeds the Exercise Price on the Expiration Date, then this Warrant shall be deemed to have been exercised in full (to the extent not previously exercised) on a “cashless exercise” basis at 6:30 P.M. New York City time on the Expiration
Date if a “cashless exercise” may occur at such time pursuant to Section 10 below. 
  
 (b) A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto (the
“Exercise Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless
exercise” if so indicated in the Exercise Notice and if a “cashless exercise” may occur at such time pursuant to this Section 10 below), and the date such items are delivered to the Company (as determined in accordance with the
notice provisions hereof) is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as
cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares. 
  
 5. Delivery of Warrant Shares. 
  
 (a) Upon exercise of this Warrant, the Company shall promptly (but in no event later than three Trading Days after the Exercise Date)
issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise. Subject to and in reliance upon
compliance of Purchasers with Section 6 of the Registration Rights 

  

 2 

 
Agreement, the Company shall cause the certificate for the Warrant Shares to be issued free of restrictive legends unless a registration statement covering
the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective and the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144 under the Securities Act. The
Holder, or any Person so designated by the Holder to receive Warrant Shares, shall be deemed to have become holder of record of such Warrant Shares as of the Exercise Date. The Company shall, upon request of the Holder, use its best efforts to
deliver Warrant Shares hereunder electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions. 
  
 (b) This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number
of Warrant Shares. Upon surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

  
 (c) In addition to any other rights available
to a Holder, if the Company fails to deliver to the Holder a certificate representing Warrant Shares by the fifth Trading Day after exercise of this Warrant in full compliance with Section 4(b), and if after such fifth Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving from the Company (a “Buy-In”), then the
Company shall, within three Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to the Holder a certificate or certificates representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) the Closing Price on the date of the event giving rise to the Company’s obligation to deliver such certificate. 
  
 (d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. 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 Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof. 
  
 6. Charges, Taxes
and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any 
  

 3 

 
issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants
in a name other than that of the Holder or an Affiliate thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

  
 7. Replacement of Warrant. If this Warrant is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable bond or indemnity, if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations
and procedures and pay such other reasonable third-party costs as the Company may prescribe. 
  
 8. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for
the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may be necessary to assure that such shares of Common
Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed. 
  
 9. Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9. 
  
 (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on
its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding
shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of
which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or
combination. 
  

 4 

 (b) Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or
purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then in each such case the Holder shall, upon exercise of this Warrant, be entitled to receive such Distributed Property as the Holder would
have received had the Holder exercised the Warrant prior to the record date for the distribution of the Distributed Property. 
  
 (c) Fundamental Transactions. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or
consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer by the Company is
completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 9(a) above) (in any such
case, a “Fundamental Transaction”), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon
the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate
Consideration”). The aggregate Exercise Price for this Warrant will not be affected by any such Fundamental Transaction, but the Company shall apportion such aggregate Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. In the event of a Fundamental Transaction, the Company or the successor or purchasing Person, as the case
may be, shall execute with the Holder a written agreement providing that: 
  
 (x) this Warrant shall thereafter entitle the Holder to purchase the Alternate Consideration in accordance with this section 9(c), 
  
 (y) in the case of any such successor or purchasing Person, upon such consolidation, merger, statutory
exchange, combination, sale or conveyance such successor or purchasing Person shall be jointly and severally liable with the Company for the performance of all of the Company’s obligations under this Warrant and the Purchase Agreement, and

  
 (z) if registration or qualification is
required under the Exchange Act or applicable state law for the public resale by the Holder of shares of stock and other securities so issuable upon exercise of this Warrant, such registration or qualification 

  

 5 

 
shall be completed prior to such reclassification, change, consolidation, merger, statutory exchange, combination or sale. 
  
 If, in the case of any Fundamental Transaction, the Alternate Consideration
includes shares of stock, other securities, other property or assets of a Person other than the Company or any such successor or purchasing Person, as the case may be, in such Fundamental Transaction, then such written agreement shall also be
executed by such other Person and shall contain such additional provisions to protect the interests of the Holder as the Board of Directors of the Company shall reasonably consider necessary by reason of the foregoing. At the Holder’s request,
any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the
aggregate Exercise Price upon exercise thereof. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph
(c) and insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. If any Fundamental Transaction constitutes or results in a Change of
Control, then at the request of the Holder delivered before the 90th day after such Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase the Warrant from the Holder for a purchase price, payable in cash
within five Trading Days after such request (or, if later, on the effective date of the Fundamental Transaction), equal to the Black-Scholes value of the remaining unexercised portion of this Warrant on the date of such request. 
  
 (d) Number of Warrant Shares. Simultaneously with any
adjustments to the Exercise Price pursuant to paragraphs (a) or (b) of this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment. 
  
 (e) Calculations. All calculations under this
Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company,
and the disposition of any such shares shall be considered an issue or sale of Common Stock. 
  
 (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its
expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or
other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly
deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent. 
  
 (g) Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including 

  

 6 

 
without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes
or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall
deliver to the Holder a notice describing the material terms and conditions of such transaction, at least 20 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in
or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with
respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. 
  
 10. Payment of Exercise Price. The Holder shall pay the Exercise Price
in immediately available funds; provided, however, in the event that a Registration Statement covering the resale of the Warrant Shares is not then effective and the prospectus made part thereof is current, then the Holder, for so long as the
Warrant Shares are not eligible for resale pursuant to Registration Statement, may satisfy its obligation to pay the Exercise Price through a “cashless exercise,” in which event the Company shall issue to the Holder the number of Warrant
Shares determined as follows: 
  

			
	 	  	X = Y [(A-B)/A]
		
	where:	  	X = the number of Warrant Shares to be issued to the Holder.
		
	 	  	Y = the number of Warrant Shares with respect to which this Warrant is being exercised.
		
	 	  	A = the average of the Closing Prices for the five Trading Days immediately prior to (but not including) the Exercise Date.
		
	 	  	B = the Exercise Price.

  
 For
purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for
the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Purchase Agreement. 
  
 11. Limitation on Exercise. (a) Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be
acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.99% (the
“Maximum Percentage”) of the 

  

 7 

 
total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined by Holder for purposes of this Section 11 in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated the limitation set forth in this paragraph and determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is permitted under this
paragraph. By written notice to the Company, the Holder may waive the provisions of this Section or increase or decrease the Maximum Percentage to any other percentage specified in such notice, but (i) any such waiver or increase will not be
effective until the 61st day after such notice is delivered to the Company, and (ii) any such waiver or increase or decrease will apply only to the Holder and not to any other holder of Warrants. Holder’s determination of beneficial
ownership in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder shall not be binding upon the Company. 
  

(b) Notwithstanding anything to the contrary contained herein, the maximum number of shares of Common Stock that the Company may issue
pursuant to the Transaction Documents at an effective purchase price less than the Closing Price on the Trading Day immediately preceding the Closing Date equals 19.99% of the outstanding shares of Common Stock immediately preceding the Closing Date
(the “Issuable Maximum”), unless the Company obtains shareholder approval, if required, in accordance with the rules and regulations of such Trading Market. If, at the time any Holder requests an exercise of any of the Warrants, the
Actual Minimum (excluding any shares issued or issuable at an effective purchase price in excess of the Closing Price on the Trading Day immediately preceding the Closing Date) exceeds the Issuable Maximum (and if the Company has not previously
obtained the required shareholder approval), then the Company shall issue to the Holder requesting such exercise a number of shares of Common Stock not exceeding such Holder’s pro-rata portion of the Issuable Maximum (based on such
Holder’s share (vis-à-vis other Holders) of the aggregate purchase price paid under the Purchase Agreement and taking into account any Warrant Shares previously issued to such Holder). For the purposes hereof, “Actual
Minimum” shall mean, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise
and/or conversion in full of all Warrants and Shares, without giving effect to any limits on the number of shares of Common Stock that may be owned by a Holder at any one time. 
  
 12. Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on
the exercise of this Warrant. If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant, the number of Warrant Shares to be issued will be rounded up to the nearest whole share.

  
 13. Notices. Any and all notices or other
communications or deliveries hereunder (including without limitation any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified in this 

  

 8 

 
Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices or communications shall be as set forth in the Purchase
Agreement. 
  
 14. Warrant Agent. The Company shall serve
as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last
address as shown on the Warrant Register. 
  
 15.
Miscellaneous. 
  
 (a) Subject to the
restrictions on transfer set forth on the first page hereof, this Warrant may be assigned by the Holder, subject to the transferee’s agreement to be bound by the obligations of the Holder hereunder. This Warrant may not be assigned by the
Company except to a successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this
Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and
their successors and assigns. 
  
 (b) The Company
will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary 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 action as may be necessary or appropriate in order to protect the rights of the Holder against
impairment. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor on such exercise, (ii) will take all such action as may be reasonably
necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant, and (iii) will not close its shareholder books or records in any manner which
interferes with the timely exercise of this Warrant. 
  
 (c) GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN 

  

 9 

 
CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT
OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A
COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH
EVIDENCE OF DELIVERY) 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
CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY
WAIVES ALL RIGHTS TO A TRIAL BY JURY. 
  

(d) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect
any of the provisions hereof. 
  
 (e) In case any
one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the
parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, 
 SIGNATURE PAGE FOLLOWS] 
  

 10 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as
of the date first indicated above. 
  

			
	GLOBAL ePOINT, INC.
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 11 

 FORM OF EXERCISE NOTICE 
  
 (To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant) 
  
 To: Global ePoint, Inc. 
  
 The undersigned is the Holder of Warrant No.
                     (the “Warrant”) issued by Global ePoint, Inc., a Nevada corporation (the “Company”).
Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant. 
  

	1.	The Warrant is currently exercisable to purchase a total of
                     Warrant Shares. 

  

	2.	The undersigned Holder hereby exercises its right to purchase
                     Warrant Shares pursuant to the Warrant. 

  

	3.	The Holder intends that payment of the Exercise Price shall be made as (check one): 

  
  ̈
“Cash Exercise” under Section 10 
  
  ̈ “Cashless Exercise” under Section 10 (if permitted) 
  

	4.	If the holder has elected a Cash Exercise, the holder shall pay the sum of $
                     to the Company in accordance with the terms of the Warrant. 

  

	5.	Pursuant to this exercise, the Company shall deliver to the holder
                     Warrant Shares in accordance with the terms of the Warrant. 

  

	6.	Following this exercise, the Warrant shall be exercisable to purchase a total of
                     Warrant Shares. 

  

									
	Dated:                     ,
            	 	 	 	 Name of Holder:

					
	 	 	 	 	 	 	(Print)	 	 
					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Title:
	 	 
	 	 	 	 	 	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

 FORM OF ASSIGNMENT 
  
 [To be completed and signed only upon transfer of Warrant] 
  
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                        
the right represented by the within Warrant to purchase                      shares of Common Stock of Global ePoint, Inc. to which the within
Warrant relates and appoints                      attorney to transfer said right on the books of Global ePoint, Inc. with full power of
substitution in the premises. 
  

					
	Dated:                    ,
            	 	 	 	 
			
	  	 	 	 	  
	 	 	 	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
			
	  	 	 	 	  
	 	 	 	 	Address of Transferee
			
	 	 	 	 	 
			
	 	 	 	 	 
	 In the presence of:
	 	 	 	 
			
	  	 	 	 	  

 EXHIBIT D 
  
 TRANSFER AGENT INSTRUCTIONS 

 GLOBAL EPOINT, INC. 
 339 S. Cheryl Lane 
 City of Industry, CA 91789 
  
 June 2, 2005 
  
 IRREVOCABLE TRANSFER AGENT INSTRUCTIONS 
  
 American Stock Transfer & Trust Company 
 40 Wall St. 
 New York, NY 10005- 
  
 Ladies and Gentlemen: 
  
 Reference is made to the Securities Purchase Agreement (the “Purchase
Agreement”), dated as of June 2, 2005, among Global ePoint, Inc., a Nevada corporation (the “Company”), and the purchasers named therein (the “Holders”) pursuant to which the Company is issuing the Company’s common
stock, par value $0.03 per share (the “Common Stock”). 
  
 The Company has agreed with the Holders that it will instruct you to: (A) issue the Common Stock free of all restrictive and other legends if, at the time of such issue, (i) a registration statement covering the resale of such
Common Stock has been declared and is effective by the Commission under the Securities Act, (ii) such Common Stock is eligible for sale under Rule 144(k) or (iii) such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the Staff of the Commission); or (B) reissue the Common Stock (if such shares were originally issued with a restrictive legend) free of all restrictive and other legends
(i) upon the effectiveness of a registration statement covering the resale of the Common Stock or (ii) following any sale of such Common Stock pursuant to Rule 144 or (iii) such Common Stock are eligible for sale under Rule 144(k) or
(iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the Commission). 
  
 In furtherance of this instruction, upon the effectiveness of the Registration Statement (as defined in the Purchase
Agreement) we have instructed our counsel to deliver to you their opinion letter in the form attached hereto as Exhibit I to the effect that the Registration Statement has been declared effective by the Commission and that Common Stock are
freely transferable by the Holders and accordingly may be issued (or reissued, as applicable) and delivered to the Holders free of all restrictive and other legends. 

 You need not require further letters from us or our counsel to effect any future issuance or reissuance
of shares of Common Stock to the Holders as contemplated by the Purchase Agreement and this letter. This letter shall serve as our standing irrevocable instructions with regard to this matter 
  

			
	 Very truly yours,

	
	 GLOBAL EPOINT, INC.

		
	By:	 	 
	 	 	Toresa Lou, Chief Executive Officer

  

 2 

 Exhibit I 
  
 [Counsel’s Letterhead] 
  
 [Transfer Agent] 
  

	 	Re:	[                ] 

  
 To Whom It May Concern: 
  
 We are writing on behalf of our client, Global ePoint, Inc., a Nevada corporation (the “Company”), in connection with the Company’s recent
filing of a Registration Statement on Form S-3 (File No.            ) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”)
relating to              shares of the Company’s common stock of the Company, par value $0.03 per share (the “Registrable Securities”), issued or to be issued to the
selling stockholders (the “Selling Stockholders”) listed in the selling stockholders table at pages      of the final prospectus, a copy of which is attached hereto as Exhibit A. 
  
 In connection with the foregoing, we advise you that the SEC has entered an
order declaring the Registration Statement effective under the Securities Act of 1933, as amended (the “1933 Act”), on                   , 2005.
We have no knowledge 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. 
  
 If you have any questions relating to the foregoing, please feel free to call me at
                            . 
  
 Very truly yours, 
  

 3 

 EXHIBIT E 
  
 OPINION OF COMPANY COUNSEL 

 June 3, 2005 
  
 To the Purchasers 
 Listed on Schedule
“A” 
  
 Ladies and Gentlemen: 
  
 We have acted as counsel to Global ePoint, Inc., a Nevada corporation (the
“Company”‘) in connection with the sale by the Company to you (collectively, the “Purchasers”) of an aggregate of 1,250,004 shares (the “Shares”) of the Company’s Series C Preferred Stock,
no par value, convertible into 1,250,004 shares of the Company’s Common Stock, $.03 par value (“Common Stock”), and the issuance by the Company to you of warrants (the “Warrants”) to purchase up to 625,004
shares of the Company’s Common Stock; all pursuant to that certain Securities Purchase Agreement dated as of June 2, 2005 by and among the Company and the Purchasers (the “Purchase Agreement”). This opinion letter is being
furnished to you pursuant to Section 2.3(a)(iv) of the Purchase Agreement. For purposes of this opinion letter, the term “Transaction Documents” shall mean and include, and shall only mean and include, the Purchase Agreement,
the Certificate of Designations in the form attached to the Purchase Agreement as Exhibit A, the Registration Rights Agreement in the form attached to the Purchase Agreement as Exhibit B, and the form of Warrant attached to the Purchase Agreement as
Exhibit C. Except as provided in the foregoing sentence, all terms used herein have the meanings set forth in the Purchase Agreement unless otherwise defined herein. 
  
 In acting as counsel for the Company and arriving at the opinions expressed below, we have examined and relied upon
originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company, agreements and other instruments, certificates of officers and representatives of the Company, certificates of public officials, public
filings and other documents we have deemed necessary or appropriate as a basis for the opinions expressed herein. As to various questions of fact relating to such opinions, we have relied solely upon the representations of the Company and the
Purchasers contained in the Purchase Agreement or made to us in certificates of officers of the Company delivered at closing. In such examination we have assumed the genuineness of all signatures on original documents, the authenticity and
completeness of all documents submitted to us as originals, the conformity to original documents of all copies submitted to us as copies thereof, the legal capacity of natural persons, and the due execution and delivery of all documents (except as
to due execution and delivery by the Company) where due execution and delivery are a prerequisite to the effectiveness thereof. 
  
 Based upon and subject to the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that: 
  
 1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the state of Nevada and has all requisite corporate power and authority to own and operate its properties and assets and to carry on its business as now 

 June 3, 2005 
 Page 2 
  

 
conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to qualify could have a
Material Adverse Effect. 
  
 2. The Company has
all requisite corporate power and authority to execute, deliver and perform the Transaction Documents, to issue, sell and deliver the Securities pursuant to the Transaction Documents, and to carry out and perform its obligations under, and to
consummate the transactions contemplated by, the Transaction Documents. 
  
 3. The authorization, execution and delivery by the Company of the Transaction Documents, the authorization, issuance, sale and delivery of the Securities pursuant to the Purchase Agreement, the issuance and delivery
of the Underlying Shares upon conversion or exercise of the Warrants, and the consummation by the Company of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate action. The Transaction
Documents delivered at Closing have been duly and validly executed and delivered by the Company and constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with their terms. 
  
 4. The authorized capital stock of the Company consists of
2,000,000 shares of Preferred Stock, and 50,000,000 shares of Common Stock. 
  
 5. The Shares have been duly authorized and, upon issuance, delivery, and payment therefor in accordance with the Purchase Agreement, will be validly issued, fully paid and non-assessable and, to our knowledge, are
free of preemptive rights. 
  
 6. The shares of
Common Stock issuable to the Purchasers upon conversion of the Shares have been duly authorized and reserved for issuance and, upon issuance and delivery upon conversion of the Shares in accordance with their terms, will be validly issued, fully
paid and non-assessable. The shares of Common Stock issuable to the Purchasers upon exercise of the Warrants have been duly authorized and reserved for issuance, and upon issuance, delivery, and payment therefor in accordance with the Warrants, will
be validly issued, fully paid and non-assessable. 
  
 7. To our knowledge, except for the Securities issued or to be issued to the Purchasers under the Purchase Agreement and the securities described in either Schedule 3.1(f) of the Purchase Agreement or the SEC Reports, there are no options,
warrants, conversion privileges or other rights presently outstanding to purchase or otherwise acquire from the Company any capital stock or other securities of the Company, or any other agreements on the part of the Company to issue any such
securities or rights. 
  
 8. The Shares and
Warrants delivered at the Closing may be issued to the Purchasers without registration under the Securities Act. 

 June 3, 2005 
 Page 3 
  

 9. The execution, delivery and performance by the Company of, and the compliance by
the Company with the terms of, the Transaction Documents and the issuance, sale and delivery of the Shares and Warrants delivered at the Closing pursuant to the Purchase Agreement do not (a) conflict with or result in a violation of any
provision of law, rule or regulation having applicability to the Company or of the certificate of incorporation or by-laws or other similar organizational documents of the Company; (b) conflict with, result in a breach of or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or result in or permit the termination or modification of, any agreement, instrument, order, writ, judgment or decree known to us to which the Company is
a party or is subject; or (c) to our knowledge, result in the creation or imposition of any lien, claim or encumbrance on any of the Company’s assets or properties. 
  
 10. To our knowledge, there is no claim, action, suit, proceeding, arbitration, investigation or inquiry,
pending or threatened, before any court or governmental or administrative body or agency, or any private arbitration tribunal, against the Company or affecting any of its properties or assets that could result in a Material Adverse Effect.

  
 11. No consent, license, permit, waiver,
approval or authorization of, or designation, declaration, registration or filing with, any court, governmental or regulatory authority, or self-regulatory organization applicable to the Company, is required in connection with the valid execution,
delivery and performance by the Company of the Transaction Documents, or the offer, sale, issuance or delivery of the Shares and Warrants delivered at the Closing pursuant to the Purchase Agreement or the consummation of the transactions
contemplated thereby, except as may be required under any state securities laws. 
  
 12. The Company is not an Investment Company within the meaning of the Investment Company Act of 1940, as amended. 
  
 13. To our knowledge, the conditions for use of Form S-3 set
forth in General Instruction I.A. of Form S-3 promulgated under the Securities Act have been satisfied for the registration of the resale of the Shares and Underlying Shares pursuant to the Registration Statement. 
  
 In addition to the qualifications and limitations set forth above, the
opinions expressed herein are subject to the following qualifications and limitations: 
  
 (a) We express no opinion with respect to laws other than those of the State of California, the State of Nevada and the federal securities laws of the United States of America, and we assume no responsibility as to
the applicability thereto, or the effect thereon, of the laws of any other jurisdiction. 

 June 3, 2005 
 Page 4 
  

  
 (b) To the extent that
any of the opinions expressed in this letter relates to the enforceability of the Transaction Documents, the opinion is subject to the effect of applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting the rights of
creditors generally or the availability or specific performance, injunctive relief and other equitable remedies, and to general principles of equity, whether in a proceeding in equity or at law. 
  
 (c) We express no opinion as to the validity or enforceability of
indemnification or contribution provisions of the Transaction Documents. 
  
 (d) We express no opinion as to the validity or enforceability of Section 17(a) of the Certificate of Designations attached to the Purchase Agreement as Exhibit A or Section 11 of the Warrant attached to the
Purchase Agreement as Exhibit B relating the beneficial ownership provisions of Section 13(d) of the Exchange Act and rules and regulations thereunder. 
  
 (e) In giving the opinions expressed in paragraph nos. 8, 9, 10 and 11 above, we have assumed that (i) neither the Company nor any person acting on
its behalf offered or sold the Shares and Warrants by any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Act; (ii) each person or entity that purchased securities of the Company
between February 1, 2004 and the date hereof was, as of the date of such purchase, an accredited investor, as defined in Rule 501 of Regulation D; (iii) the representations and warranties of the Purchasers in the Purchase Agreement and all
Exhibits thereto executed by the Purchasers are, and continue to be, true and accurate in all respects and the Purchasers will perform, satisfy and comply with all covenants made by them in the Purchase Agreement. 
  
 (f) In giving the opinions expressed in paragraph nos. 8, 9, 10, and 11
above, we express no opinion as to the validity or legality of, or any adverse consequence resulting from, either (i) the Company’s issuance of the Shares or Underlying Shares without the restrictive legend (“Legend”) set
forth in Section 4.1(b) of the Purchase Agreement, or (ii) the Company’s removal of the Legend from the Shares or the Underlying Shares prior to such time as the Shares or the Underlying Shares are resold by the holders thereof in
accordance with Section 5 of the Act. 
  
 (g) Where we render
an opinion based upon factual matters “to our knowledge” or that “we know of” or similar expressions, it is based upon the actual knowledge of this firm’s attorneys who have devoted substantive legal attention as counsel to
the Company solely in connection with the Purchase Agreement and the transactions contemplated thereby, and without any independent investigation of any underlying facts or situations. 
  
 This letter constitutes our opinions only and shall not be deemed a guarantee of the matters set forth herein. We are
furnishing this letter to you solely for your benefit in connection 

 June 3, 2005 
 Page 5 
  

 with the above-described transaction. It is not to be used, circulated, quoted or otherwise referred to for any other
purpose, and no one other than you is entitled to rely on this opinion. This letter speaks only as of the date above written, and we hereby expressly disclaim any duty to update any of the statements made herein. 
  
 Very truly yours, 

 June 3, 2005 
 Page 6 
  

 SCHEDULE “A” 
 LIST OF PURCHASERS 
  
 RHP Master Fund, Ltd.

 c/o Rock Hill Investment Management, L.P. 
 3 Bala Plaza East
Suite 585 
 Bala Cynwyd, PA 19004 
  
 The Tail Wind Fund, Ltd. 
 Bank of Nova Scotia Trust Company (Bahamas) Ltd.

 Attn: Ngaire Strachan 
 P.O. Box N-3106 
 Scotiabank Building 
 Rawson Square, Nassau, Bahamas 
  
 Cranshire Capital, L.P. 
 666 Dundee Rd., Suite 1901 
 Northbrook, IL 60062 
  
 DKR Soundshore Oasis Holding Fund Ltd. 
 c/o DKR
Capital Partners L.P. 
 1281 East Main Street 
 Stamford, CT
06902 
  
 Enable Growth Partners LP 
 One Ferry Building, Suite 255 
 San Francisco, CA 94111 
  
 Enable Opportunity Partners LP 
 One Ferry Building, Suite 255 
 San Francisco, CA 94111 
  
 Omicron Master Trust 
 650 5th Ave., 24th Floor 
 New York, NY 10019 
  
 Nite Capital LP 
 100 East Cook Ave., Suite 201 
 Libertyville, IL 60048 

 June 3, 2005 
 Page 7 
  

 Smithfield Fiduciary LLC 
 c/o Highbridge Capital Management, LLC 
 9 West 57th Street, 27th Floor 
 New York, NY 10019 
  
 Iroquois Capital LP 
 641 Lexington Ave, 26th Floor 
 New York, NY 10022

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]