Document:

Unassociated Document

    AMENDMENT
      NO. 1

    TO

    SENIOR
      SECURED CONVERTIBLE PROMISSORY NOTES

     

    THIS
      AMENDMENT NO. 1 TO SENIOR SECURED CONVERTIBLE PROMISSORY NOTES (this
“Amendment”), dated as of September 21, 2007, is made by and among Glowpoint,
      Inc., a Delaware corporation (the “Maker”) and ___________________ (the
“Holder”).

     

    Preliminary
      Statement

     

    WHEREAS,
      the Maker is the issuer and the Holder is the holder of each of the senior
      secured convertible promissory notes set forth on Exhibit
      A
      hereof
      (each, a “Note”, and collectively, the “Notes”); and

     

    WHEREAS,
      in consideration for the issuance of warrants (the “Amendment Warrants”) to
      acquire a number of shares of Common Stock equal to the product of (i) the
      Conversion Rate (as defined in the Notes) for the outstanding principal balance
      plus any accrued but unpaid interest under the Notes, times (ii) 0.33,
      substantially in the form of the warrants issued in connection with the 2007
      Purchase Agreement (as defined herein), to the Holder, the Maker and the Holder
      desire to amend certain provisions of each of the Notes as described
      herein.

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, the parties, intending to be legally bound, hereby
      agree as follows:

     

    1. Capitalized
      Terms.
      Capitalized terms used, but not defined, herein, shall have the meanings
      ascribed to such terms in the Notes. 

     

    2. Amendments
      to Notes.

     

    (a) Maturity
      Date.
      The
      Maturity Date of each of the Notes is hereby extended from September 30, 2007
      to
      March 31, 2009. All references to “Maturity Date” in each of the Notes shall be
      the Maturity Date as amended by this Amendment.

     

    (b) Security
      Agreement.
      Section
      1.3 of each Note is hereby amended by adding the clause “, as amended,”
immediately after the words “Security Agreement dated as of March 31,
      2006”.

     

    (c) Remedies
      Upon an Event of Default.
      Subclause (ii) of the proviso contained in Section 2.2 is hereby deleted and
      the
      following new subclause (ii) of such proviso shall be substituted in lieu
      thereof:

     

    “(ii)
      Sections 2.1(a)-(g) and (j)-(l), the Holder may demand the prepayment of this
      Note pursuant to Section 3.7 hereof,”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) Conversion.

     

    (i) Section
      3.1 of each Note is hereby deleted in its entirety and the following Section
      3.1
      shall be substituted in lieu thereof:

     

    “Section
      3.1 Conversion.

     

    (a) Optional
      Conversion.
      At any
      time on or after the Issuance Date , this Note shall be convertible (in whole
      or
      in part), at the option of the Holder (the "Conversion
      Option"),
      into
      such number of fully paid and non-assessable shares of Common Stock (the
      "Conversion
      Rate")
      as is
      determined by dividing (x) that portion of the outstanding principal balance
      plus any accrued but unpaid interest under this Note as of such date that the
      Holder elects to convert by (y) the Conversion Price (as defined in Section
      3.2(a) hereof) then in effect on the date on which the Holder faxes a notice
      of
      conversion (the "Conversion
      Notice"),
      duly
      executed, to the Maker (facsimile number (973) 860-0754, Attn.: Chief Executive
      Officer, with a copy to facsimile number 973-556-1272, Attn.: General Counsel)
      (the “Conversion
      Date”),
      provided, however, that the Conversion Price shall be subject to adjustment
      as
      described in Section 3.6 below. The Holder shall deliver this Note to the Maker
      at the address designated in the Purchase Agreement at such time that this
      Note
      is fully converted. With respect to partial conversions of this Note, the Maker
      shall keep written records of the amount of this Note converted as of each
      Conversion Date.

     

    (b) Mandatory
      Conversion.
      On the
      Mandatory Conversion Date (as defined below), this Note shall automatically
      and
      without any action on the part of the Holder, convert into such number of fully
      paid and non-assessable shares of Common Stock as is determined by dividing
      (x)
      that portion of the outstanding principal balance plus any accrued but unpaid
      interest under this Note as of the Mandatory Conversion Date by (y) the
      Conversion Price then in effect on the Mandatory Conversion Date, provided,
      however, that the Conversion Price shall be subject to adjustment as described
      in Section 3.6 below. As used herein, "Mandatory Conversion Date" shall be
      the
      first date that the Closing Bid Price (as defined below) of the Common Stock
      exceeds $1.25 (as adjusted for stock splits, stock dividends, combinations
      and
      similar transactions) for twenty (20) consecutive trading days. The Mandatory
      Conversion Date and the Voluntary Conversion Date collectively are referred
      to
      in this Note as the "Conversion Date". Notwithstanding the foregoing to the
      contrary, the Note shall automatically convert pursuant to this Section 3.1(b)
      only if (1) the Registration Statement is effective and has been effective,
      without lapse or suspension of any kind, for such twenty (20) consecutive
      trading day period, (2) trading in the Common Stock shall not have been
      suspended by the Securities and Exchange Commission or the OTC Bulletin Board
      (or other exchange or market on which the Common Stock is trading), and (3)
      the
      Maker is in material compliance with the terms and conditions of this Note
      and
      the other Transaction Documents. The term "Closing Bid Price" shall mean, on
      any
      particular date (i) the last closing bid price per share of the Common Stock
      on
      such date on the OTC Bulletin Board or another registered national stock
      exchange on which the Common Stock is then listed, or if there is no such price
      on such date, then the last closing bid price on such exchange or quotation
      system on the date nearest preceding such date.”

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (ii) Section
      3.4(a) of each Note is hereby amended by adding the following after the last
      sentence thereof:

     

    “In
      the
      event the Holder is unable to fully convert this Note in connection with either
      a mandatory conversion pursuant to Section 3.1(b) hereof, or a conversion
      election following the delivery of a Maker's Prepayment Notice pursuant to
      Section 3.7(k) hereof due to the restrictions set forth in this Section 3.4(a),
      such holder may elect to receive Series D Convertible Preferred Stock of the
      Company in lieu of shares of Common Stock convertible into the number of shares
      of Common Stock that would have been delivered to such holder but for the
      limitations set forth in this Section 3.4(a). The foregoing sentence shall
      not
      preclude the Holder from waiving at any time its rights to limit its ownership
      to (i) 4.9% of all of the Common Stock issued and outstanding at such time
      in
      accordance with this Section 3.4(a) or (ii) 9.9% of all of the Common Stock
      issued and outstanding at such time in accordance with Section 3.4(b)
      hereof.”

     

    (e) Anti-Dilution
      Exemptions.
      Section
      3.6(c) of each Note is hereby deleted in its entirety and the following new
      Section 3.6(c) shall be substituted in lieu thereof:

     

    “(c) Certain
      Issues Excepted.
      Anything herein to the contrary notwithstanding, the Maker shall not be required
      to make any adjustment to the Conversion Price in connection with (i) securities
      issued (other than for cash) in connection with a merger, acquisition, or
      consolidation, (ii) securities issued pursuant to the conversion or exercise
      of
      convertible or exercisable securities issued or outstanding on or prior to
      the
      date hereof (so long as the conversion or exercise price in such securities
      are
      not amended to lower such price and/or adversely affect the Holders) or
      issued
      pursuant to the Purchase Agreement, (iii) securities issued pursuant to the
      terms of that certain Exchange Agreement, dated as of September 21, 2007, by
      and
      among the Maker and the holders signatory thereto, (iv) the issuance of the
      Promissory Notes and the Warrants (each as defined below), (v) the shares of
      Common Stock issuable upon the conversion of the Promissory Notes or the
      exercise of the Warrants, (vi) securities issued in connection with bona fide
      strategic license agreements or other partnering arrangements so long as such
      issuances are not for the purpose of raising capital, (vii) Common Stock issued
      or the issuance or grants of options to purchase Common Stock pursuant to the
      Maker’s stock option plans and employee stock purchase plans approved by the
      Makers board of directors, so long as such issuances in the aggregate do not
      exceed the number of shares of Common Stock (or options to purchase such number
      of shares of Common Stock) issuable pursuant to such plans as they exist as
      of
      September 21, 2007, (viii) any warrants issued to the placement agent and its
      designees for the transactions contemplated by the Purchase Agreement, (ix)
      the
      payment of any dividends on the Maker’s Series B convertible preferred stock,
      (x) securities issued pursuant to a bona fide firm underwritten public offering
      of the Maker’s securities, (xi) the payment of liquidated damages pursuant to
      the Registration Rights Agreement dated February 17, 2004 between the Maker
      and
      the parties listed therein and (xii) the issuance of Common Stock upon the
      exercise or conversion of any securities described in clauses (i) through (xi)
      above. For purposes of this Note, (A) “Promissory
      Notes”
shall
      mean collectively, each of the following, as the same may be amended from time
      to time: (1) the senior secured convertible promissory notes issued pursuant
      to
      the Purchase Agreement, or that certain Note and Warrant Purchase Agreement,
      dated as of April 12, 2006, by and among the Maker and the purchasers listed
      therein (collectively with the Purchase Agreement, the “2006
      Purchase Agreements”),
      (2)
      the additional senior secured convertible promissory notes in the aggregate
      principal amount of up to $3,600,000 issued pursuant to that certain Note and
      Warrant Purchase Agreement, dated as of September 21, 2007, by and among the
      Maker and the purchasers listed therein (collectively with the 2006 Purchase
      Agreements, the “Purchase
      Agreements”),
      and
      (3) any additional senior secured convertible promissory notes issued from
      time
      to time as interest on the outstanding principal balance of the foregoing
      promissory notes; and (B) “Warrants”
shall
      mean, collectively, each of the following, as the same may be amended from
      time
      to time: (A) the warrants to purchase shares of Common Stock issued pursuant
      to
      the Purchase Agreements; and (B) the warrants to purchase shares of Common
      Stock
      issued in connection with the amendment of the senior secured convertible
      promissory notes issued pursuant to the 2006 Purchase Agreements.”

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (f) Maker
      Prepayment Option.
      The
      following Section 3.7(k) shall be added to each Note:

     

    “(k) Maker
      Prepayment Option.

     

    (i) At
      any
      time following March 19, 2008, the Maker may prepay in cash all or any portion
      of the outstanding principal amount of this Note together with all accrued
      and
      unpaid interest thereon upon ten (10) Trading Days prior written notice to
      the
      Holder (the “Maker's
      Prepayment Notice”)
      at a
      price (the “Maker's
      Prepayment Price”)
      equal
      to (A) one hundred ten percent (110%)
      of the
      aggregate principal amount of this Note; plus (B) any accrued but unpaid
      interest outstanding at such time; (C) plus an amount equal to interest at
      the
interest
      rate as determined in accordance with Section 1.2 hereof on
      the
      principal amount of this Note being prepaid for a period that commences on
      the
      date of such prepayment and that terminates on the Maturity Date;
      provided,
      however,
      that if
      the Holder has delivered a Conversion Notice to the Maker or delivers a
      Conversion Notice within such ten (10) Trading Day period following delivery
      of
      the Maker’s Prepayment Notice, the principal amount of this Note designated to
      be converted may not be prepaid by the Maker and shall be converted in
      accordance with Section 3.3 hereof; provided further
      that if
      during the period between delivery of the Maker's Prepayment Notice and the
      Maker's Prepayment Date (as defined below), the Holder shall become entitled
      to
      deliver a Notice of Prepayment at Option of Holder Upon Major Transaction or
      Notice of Prepayment at Option of Holder upon Triggering Event, then such rights
      of the Holder, at its option, shall take precedence over the previously
      delivered Maker Prepayment Notice. The Maker's Prepayment Notice shall state
      the
      date of prepayment which date shall be the eleventh (11th)
      Trading
      Day after the Maker has delivered the Maker's Prepayment Notice (the
“Maker's
      Prepayment Date”),
      the
      Maker’s Prepayment Price and the principal amount of this Note to be prepaid by
      the Maker. The Maker shall deliver the Maker's Prepayment Price on the Maker’s
      Prepayment Date, provided,
      that if
      the Holder delivers a Conversion Notice before the Maker's Prepayment Date,
      then
      the portion of the Maker's Prepayment Price which would be paid to prepay this
      Note covered by such Conversion Notice shall be returned to the Maker upon
      delivery of the Common Stock issuable in connection with such Conversion Notice
      to the Holder. On the Maker's Prepayment Date, the Maker shall pay the Maker's
      Prepayment Price, subject to any adjustment pursuant to the immediately
      preceding sentence, to the Holder. If the Maker fails to pay the Maker's
      Prepayment Price by the eleventh (11th)
      Trading
      Day after the Maker has delivered the Maker's Prepayment Notice, the Maker’s
      Prepayment Notice will be declared null and void ab
      initio
      and the
      Maker shall lose its right to prepay this Note pursuant to this Section 3.7(k).
      Notwithstanding the foregoing to the contrary, the Maker may effect a prepayment
      pursuant to this Section 3.7(k) only if (1) the Registration Statement is
      effective and has been effective, without lapse or suspension of any kind,
      for a
      period thirty (30) consecutive calendar days immediately preceding the Maker’s
      Prepayment Notice through the Maker’s Prepayment Date, (2) trading
      in the Common Stock shall not have been suspended by the Securities and Exchange
      Commission or the OTC Bulletin Board (or other exchange or market on which
      the
      Common Stock is trading), (3) the Maker is in material compliance with the
      terms
      and conditions of this Note and the other Transaction Documents, and (4) the
      Maker is not in possession of any material non-public information.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (ii) In
      the
      event that this Note is prepaid in accordance with this Section 3.7(k), then
      on
      the Maker’s Prepayment Date, the Maker shall issue to the Holder warrants (the
“Prepayment
      Warrants”)
      substantially in the form of the Warrants issued to the Holder pursuant to
      the
      Purchase Agreement to purchase up to such number of fully paid and
      non-assessable shares of Common Stock as is determined by multiplying (A) the
      quotient of (1) that portion of the principal
      amount of this Note being prepaid plus
      any
      accrued but unpaid interest on such principal amount as of the Maker’s
      Prepayment Date, divided by (2) the Conversion Price then in effect on the
      Maker’s Prepayment Date, by (B) twenty-five percent (25%). The Prepayment
      Warrants will have an exercise price equal to 110% of the Closing Sale Price
      of
      the Common Stock on the Maker’s Prepayment Date, and shall expire on the five
      (5) year anniversary of the Maker’s Prepayment Date.”

    

    (g) EBITDA.
      The
      following new Section 1.7 is hereby added to each of the Notes:

     

    “Section
      1.7. EBITDA.
      The
      Maker shall maintain the following minimum Adjusted EBITDA (as defined below)
      determined as of the following dates:

     

    
      	
              Determination
                Date

            	
              Adjusted
                EBITDA

            
	 	 
	
              As
                of March 31, 2008

            	
              $0
                for the quarter ending March 31, 2008

            
	 	 
	
              As
                of June 30, 2008

            	
              $1,000,000
                for the period commencing on January 1, 2008 and ending on June 30,
                2008.

            
	 	 
	
              As
                of September 30, 2008

            	
              $1,500,000
                for the quarter ending September 30, 2008, or $2,500,000 for the
                period
                commencing on January 1, 2008 and ending on September 30,
                2008.

            
	 	 
	
              As
                of December 31, 2008

            	
              $2,000,000
                for the quarter ending December 31, 2008, or $4,500,000 for the year
                ended
                December 31, 2008.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    In
      the
      event Maker fails to maintain the foregoing minimum Adjusted EBITDA, then the
      per annum interest rate on the unpaid principal balance of this Note then in
      effect shall increase by 200 basis points, and such increase will be cumulative
      for each subsequent breach; provided, however, that the per annum interest
      rate
      shall revert to the interest rate as determined in accordance with Section
      1.2
      hereof in the event the Maker achieves or exceeds the cumulative minimum
      Adjusted EBITDA for the period commencing on January 1, 2008 through any
      subsequent determination date. Failure to maintain the foregoing minimum
      Adjusted EBITDA shall not constitute an Event of Default (as defined in Section
      2.1 hereof). For purposes of this Note, “Adjusted
      EBITDA”
shall
      mean, for any period, the sum of the amounts (as determined in accordance with
      generally accepted accounting principals, consistently applied) for such period
      of (i) net income or loss before dividends, plus (ii) charges for foreign,
      federal, state and local taxes as computed on the Maker’s income tax returns,
      plus (iii) interest expense, plus (iv) depreciation, plus (v) amortization
      expense, including, without limitation, amortization of goodwill and other
      intangible assets and amortization of stock based compensation expense, plus
      (vi) extraordinary losses, plus (vii) charges related to any financing
      consummated on or prior to the Issuance Date, plus (viii) the cost of any
      beneficial conversion feature of any outstanding security of the Maker, plus
      (ix) the cost of any accretion of discounts minus (x) interest income, minus
      (xi) extraordinary gains, and (xii) such other adjustments to eliminate the
      impact of any derivative financial instruments (e.g., add back increases in
      fair
      value of derivative financial instruments and subtract decreases in fair value
      of derivative financial instruments).”

     

    (h) Trigger
      Events.
      Section
      3.7(f)(vi) of each Note is hereby deleted in its entirety.

     

    (i) Conversion
      Notice.
      The
      Form of Notice of Conversion attached to each Note is hereby deleted in its
      entirety, and the Form of Notice of Conversion attached hereto as Exhibit
      B
      shall be
      substituted in lieu thereof.

     

    3. Effective
      Time.
      This
      Amendment shall be effective contemporaneously with the issuance by the Maker
      of
      the Amendment Warrants to the Holder.

     

    4. Ratification.
      Except
      as expressly amended hereby, all of the terms, provisions and conditions of
      each
      Note are hereby ratified and confirmed in all respects by each party hereto
      and,
      except as expressly amended hereby, are, and hereafter shall continue, in full
      force and effect.

     

    5. Entire
      Agreement.
      This
      Amendment and each Note, as amended, constitute the entire agreement of the
      parties with respect to the subject matter hereof and supersede all prior and
      contemporaneous agreements and understandings, both written and oral, between
      the parties with respect thereto.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    6. Amendments.
      No
      amendment, supplement, modification or waiver of this Amendment shall be binding
      unless executed in writing by all parties hereto.

     

    7. Counterparts.
      This
      Amendment may be executed in two or more counterparts, each of which shall
      constitute an original but all of which when taken together shall constitute
      but
      one contract. Each party shall be entitled to rely on a facsimile signature
      of
      any other party hereunder as if it were an original.

     

    8. Governing
      Law.
      This
      Amendment shall be governed by and construed in accordance with the internal
      laws of the State of New York, without giving effect to any of the conflicts
      of
      law principles which would result in the application of the substantive law
      of
      another jurisdiction. 

     

    9. Successors
      and Assigns.
      This
      Amendment shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	 	 
	 	GLOWPOINT,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title:

    

    
      	 	 	 
	 	 	 
	 	 	 
	 	[Holder]
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	
              Title:

            

    

    
       

      Signature
        Page to Amendment No. 1 to Senior Secured Convertible Promissory
        Notes

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    Schedule
      of Notes

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    FORM
      OF

     

    NOTICE
      OF
      CONVERSION

     

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

     

    The
      undersigned hereby irrevocably elects to convert $ ________________ of the
      principal amount of the above Note No. CN-06-____ into shares of Common Stock
      of
      Glowpoint, Inc. (the “Maker”) according to the conditions hereof, as of the date
      written below.

     

    Date
      of
      Conversion
      _________________________________________________________

     

    Applicable
      Conversion Price __________________________________________________

     

    Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by the
      

    Holder
      on
      the Date of Conversion: _________________________

     

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

     

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

    (obtained
      from the receiving
      bank/broker):____________________________________________

     

    Signature___________________________________________________________________

     

    [Name]

     

    Address:__________________________________________________________________

     

    _______________________________________________________________________Unassociated Document

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

    

    SERIES
      A-2 WARRANT TO PURCHASE

    

    SHARES
      OF
      COMMON STOCK

    

    OF

    

    GLOWPOINT,
      INC.

    

    

    Expires
      September 20, 2012

     

    
      	No.: W-A-07- __	
              Number
                of Shares: ___________

            
	Date of Issuance: September 21,
              2007	
            

    

     

    

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

    

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

            

    

    

    
      	 	
              2.

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

            

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

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

    

    X
      = Y -
(A)(Y)

          
      B

    

    
      	
              Where

            	
              X
                =

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

            

    

    

    
      	 	
              Y
                =

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

            

    

    

    
      	 	
              A
                =

            	
              the
                Warrant Price. 

            

    

    

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

            

    

    

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

     

    
      
        
        

      

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

     

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

     

    
      
        
        

      

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

    

    (h) Compliance
      with Securities Laws.

    

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

    

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

    

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

     

    
      
        
        

      

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

    

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

    

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

    

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

     

    
      
        
        

      

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

    

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

    

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

     

    
      
        
        

      

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

    

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

     

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

     

    
      
        
        

      

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

    

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

    

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

    

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

    

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

    

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

     

    
      
        
        

      

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

    

    (i) cash,

    

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

    

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

    

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

    

    (d) Issuance
      of Additional Shares of Common Stock.
      

    

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

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

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

    

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

    

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

     

    
      
        
        

      

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

     

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

     

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

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

    

    "Original
      Issue Date"
      means
      September 21, 2007.

    

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

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

    

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

    

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

    

    9. Other
      Notices.
      In case
      at any time:

    

    
      	 	
              (A)

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

            

    

    

    
      	 	
              (B)

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

            

    

    

    
      	 	
              (C)

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

            

    

    

    
      	 	
              (D)

            	
              there
                shall be any capital reorganization by the Issuer;
                or

            

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (E)

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

            

    

    

    
      	 	
              (F)

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

            

    

    

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

    

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

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

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

    

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

     

    If
      to the
      Issuer:          Glowpoint,
      Inc.

    225
      Long
      Avenue 

    Hillside,
      New Jersey 07205

    Attention:
      Chief Executive Officer 

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

    Fax
      No.:
      (973) 391-1904

    and

    General
      Counsel

    Glowpoint,
      Inc.

    225
      Long
      Avenue 

    Hillside,
      New Jersey 07205

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

    Fax
      No.:
      (973) 556-1272

    

    with
      copies (which copies 

    shall
      not
      constitute notice 

    to
      the
      Issuer) to:   

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    Gibbons
      P.C.

    One
      Gateway Center

    Newark,
      New Jersey 07102

    Attn:
      Frank Cannone, Esq.

    Tel.
      No.:
      (973) 596-4500

    Fax
      No.:
      (973) 596-0545

    

    If
      to any
      Holder:                 
      At
      the
      address of such Holder set forth on Exhibit
      A
      to this
      Agreement, with copies to

                         
 Holder’s
      counsel as set forth on Exhibit
      A
      or as
      specified in writing by such Holder with 

                          
copies
      to:

    

    with
      copies (which copies 

    shall
      not
      constitute notice) 

    to:                          
      Kramer
      Levin Naftalis & Frankel LLP

    1177
      Avenue of the Americas

    New
      York,
      New York 10036

    Attention:
      Christopher S. Auguste

    Tel.
      No.:
      (212) 715-9100

    Fax
      No.:
      (212) 715-8000

    

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

     

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    
 

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

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Issuer has executed this Series A-2 Warrant as of the
      day
      and year first above written.

    

    
      	 	 	 
	 	GLOWPOINT,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	Title:

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    EXERCISE
      FORM

    SERIES
      A-2 WARRANT

    

    GLOWPOINT,
      INC.

    

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

     

    
      	Dated: _________________	Signature 	___________________________
	
            	Address	
              _____________________

            
	
            	
            	
              _____________________

            

    

     

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

    

    ASSIGNMENT

    

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

     

    
       

      
        	Dated: _________________	Signature 	___________________________
	
              	Address	
                _____________________

              
	
              	
              	
                _____________________

              

      

      
         

      

    

    PARTIAL
      ASSIGNMENT

    

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

     

    
      
        	Dated: _________________	Signature 	___________________________
	
              	Address	
                _____________________

              
	
              	
              	
                _____________________

              

      

       

    

    

    FOR
      USE
      BY THE ISSUER ONLY:

    

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

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