8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 8-K

———————

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) March 16, 2009

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Glowpoint, Inc.

 (Exact name of registrant as specified in its Charter)

———————

Delaware	0-25940	77-0312442
(State or other jurisdiction	(Commission	(I.R.S Employer
of incorporation)	File Number)	Identification No.)

225 Long Avenue Hillside, NJ, 07205

(Address of principal executive offices, Zip Code)

Registrant's telephone number, including area code   (312) 235-3888

Not Applicable

(Former name or former address, if changed since last report)

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On March 16, 2009, Glowpoint, Inc. (“Glowpoint” or the “Company”) entered into a series of transactions that resulted in the Company raising additional working capital, exchanging or repaying all of its outstanding senior secured convertible promissory notes, and exchanging all of its Series A Convertible Preferred Stock for a newly-created Series A-1 Convertible Preferred Stock.  As a result of these transactions, the Company is debt-free (other than normal course trade payables and existing capital lease obligations) and has a single class of preferred stock outstanding.

Pursuant to a Series A-1 Convertible Preferred Stock Purchase Agreement, dated March 16, 2009 (the “Purchase Agreement”), the Company received approximately $1.8 million of gross proceeds on March 18, 2009 in an initial closing (the “Initial Closing”) of a private placement of approximately 450 shares of its newly-created Series A-1 Convertible Preferred Stock (“Series A-1 Preferred Stock”) and issued Series A-3 Warrants, dated March 18, 2009, having an exercise price of $0.40 per share (the “Series A-3 Warrants”) to acquire an aggregate of approximately 2,250,000 shares of common stock. Pursuant to the Purchase Agreement, the Company may sell additional shares of Series A-1 Preferred Stock and Series A-3 Warrants in one or more subsequent closings that may occur during the 90-day period following the Initial Closing, up to a maximum offering amount of $5 million. There can be no assurance, however , that the Company will raise any additional funds following the Initial Closing. The disclosures contained in this Current Report on Form 8-K do not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company described herein.

Each share of Series A-1 Preferred Stock has a stated value of $7,500 per share (the “Stated Value”), a liquidation preference equal to the Stated Value, and is convertible at the holder’s election into common stock at a conversion price per share of $0.75.  Therefore, each share of Series A-1 Preferred Stock is convertible into 10,000 shares of common stock. The Series A-1 Preferred Stock is senior to all other classes of equity, has weighted average anti-dilution protection and, after the first anniversary of the Issuance Date (the “Dividend Grace Period”), is entitled to dividends at a rate of 5% per annum, payable quarterly, based on the Stated Value.  After the Dividend Grace Period, all dividends shall be payable (i) if on or before September 30, 2010, at the Company’s option in cash or through the issuance of a number of additional shares of Series A-1 Preferred Stock with an aggregate liquidation preference equal to the dividend amount payable on the applicable dividend payment date and (ii) if after September 30, 2010, at the option of the holder in cash or through the issuance of a number of additional shares of Series A-1 Preferred Stock with an aggregate liquidation preference equal to the dividend amount payable on the applicable dividend payment date.  The “Issuance Date” is defined as the original issuance date of the Series A-1 Preferred Stock, except for shares of Series A-1 Preferred Stock issued upon the exchange of Series A Preferred Stock pursuant to the Series A Preferred Consent and Exchange Agreement (discussed below), in which case the “Issuance Date” is the date of issuance of the Series A Convertible Preferred Stock (i.e., either November 25, 2008 or December 31, 2008). Except for when dividends are payable, the Series A-1 Preferred Stock is the same as the Series A Convertible Preferred Stock created in November 2008.

The Series A-3 Warrants are exercisable for a period of five years and have weighted average anti-dilution protection. We are also obligated to file a registration statement to register for resale the shares of common stock issuable upon exercise of the Series A-3 Warrants by the date that is 90 days following the date the Company receives the written request for registration from the holders of 2/3 of the shares of common stock underlying the Series A-3 Warrants, all in accordance with the terms of a Registration Rights Agreement dated November 25, 2008, as amended by Amendment No. 1 dated February 19, 2009.  

The foregoing description of the private placement of the Series A-1 Preferred Stock and Series A-3 Warrants and the specific terms of the Series A-1 Preferred Stock, the Series A-3 Warrants and the registration rights is qualified in its entirety by reference to the provisions of the form of Purchase Agreement, the form of Certificate of Designations, Preferences and Rights of Series A-1 Preferred Stock, the form of amended Series A-3 Warrant, the Registration Rights Agreement, and the Amendment No. 1 to Registration Rights Agreement attached to this report as Exhibits 10.1, 4.1, 4.2, 10.2, and 10.3, respectively.

Pursuant to that certain Note Exchange Agreement, dated March 16, 2009, approximately 268.907 shares of Series A-1 Preferred Stock and Series A-3 Warrants to acquire approximately 594,536 shares of common stock were issued on March 18, 2009 in exchange for approximately $1.1 million of the Company’s senior secured convertible promissory notes (“Notes”), which represents all but approximately $0.72 million of the Company’s outstanding Notes (the “Remaining Notes”).  The Remaining Notes were purchased and retired by the Company pursuant to that certain Securities Purchase Agreement, dated March 16, 2009, which prepayment closed on March 18, 2009 and was funded from the sale of securities pursuant to the Purchase Agreement. As a result, there are no Notes outstanding. The foregoing description of the issuance of the Series A-1 shares in exchange for the Notes and repayment of the Remaining Notes is qu alified in its entirety by reference to the provisions of the form of Note Exchange Agreement and Securities Purchase Agreement attached to this report as Exhibits 10.4 and 10.5.

Pursuant to that certain Series A Preferred Consent and Exchange Agreement, dated March 16, 2009, the holders of the Company’s Series A Convertible Preferred Stock (i) consented to the creation of the Series A-1 Preferred Stock and (ii) were issued an aggregate of approximately 3,789.782 shares of Series A-1 Preferred Stock in exchange for an aggregate of

approximately 3,789.782 shares of the Company’s Series A Convertible Preferred Stock on March 18, 2009. The foregoing description of the exchange of the Series A Preferred Stock is qualified in its entirety by reference to the provisions of the form of Series A Preferred Consent and Exchange Agreement attached to this report as Exhibit 10.6.

Burnham Hill Partners LLC (“BHP”) acted as placement agent and financial advisor and was paid a fee of $126,000 at the closing, which equaled seven (7%) percent of the gross proceeds received by the Company in the closing. Glowpoint also issued advisory warrants to BHP and/or its designees and assignees to purchase 500,000 shares of common stock at an exercise price of $0.40 per share. The advisory warrants are substantially similar to the form of amended Series A-3 Warrant attached hereto as Exhibit 4.2. Glowpoint also paid an additional $75,000 to BHP in connection with fees earned in an earlier transaction that were deferred until this closing.

A copy of the press release announcing the foregoing transactions is attached to this Form 8-K as Exhibit 99.1.

ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.

The information disclosed in Item 1.01 of this Form 8-K is incorporated into this Item 3.02.  The issuances were made in a private placement in reliance upon exemptions from registration pursuant to Sections 3(a)(9) and 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder.  Each investor is an accredited investor as defined in Rule 501 of Regulation D.

ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

On March 19, 2009, Glowpoint announced the voluntarily resignation of Michael Brandofino as Glowpoint’s Chief Executive Officer and a member of the Board of Directors.  Joseph Laezza and David W. Robinson were appointed Co-Chief Executive Officers. Mr. Laezza, 38, has been Glowpoint’s Chief Operating Officer since April 2006 and President since June 2008 and previously served as Glowpoint’s Vice President of Operations since March 2004. Mr. Robinson, 40, has been Glowpoint’s Executive Vice President, General Counsel and Corporate Secretary since May 2006 and Executive Vice President, Business Development since June 2008.  Prior to joining Glowpoint, Mr. Robinson served as Vice President and General Counsel of Con Edison Communications from August 2001.

Also on March 19, 2009, Glowpoint announced the resignations of Richard Reiss, a director of Glowpoint since inception, and Aziz Ahmad, a director of Glowpoint since 2006, from Glowpoint’s board of directors (the “Board”) and all committees.  Messrs. Laezza and Robinson were elected to fill the vacancies on the Board created by such resignations.  Mr. Reiss served on no Board committees.  Mr. Ahmad was an alternate member of the audit, compensation and nominating committees.  There was no disagreement between the Company and the resigning directors.  Their letters of resignation are attached hereto as Exhibits 17.1 and 17.2.  In connection with their resignations, the Company amended the option agreements of the resigning Board members to extend the exercisability of their options to 180 days following their resignation (from 90 days) and amended their restricted stock award agreements, if any, to accelerate the vesting of restricted stock awards by one year.

Pursuant to the Purchase Agreement, the Company also agreed to take all steps necessary or advisable to eliminate the classification of its Board of Directors at the Company’s next annual meeting of shareholders (the “Annual Meeting”).  In order to comply with this provision, it is expected that all directors will submit their resignations and some of them may not stand for re-election.  For those that do not stand for re-election, they will receive substantially the same option agreement amendment and restricted stock award amendment as described herein. The Board of Directors also agreed in the Purchase Agreement to amend and restate its director compensation policy at the Annual Meeting to provide, “Directors who are not our executive officers or employees receive an annual cash fee of $20,000, payable in equal quarterly installments on the first business day following the end of the calendar quarter, and an a nnual grant of 25,000 restricted shares of our common stock, which shall be made at the annual meeting of our stockholders and shall vest at the next annual meeting of our stockholders. The chairperson of our board of directors, if any, and the chairperson of our audit committee will each receive an additional cash payment of $5,000 per year, payable in equal quarterly installments.”

On March 12, 2009, the Company amended the employment agreements of Messrs. Brandofino and Robinson.  Mr. Brandofino’s employment agreement was amended to revise the covenant not to compete during the year following his resignation.  The employment agreement of Mr. Robinson was amended to extend its term until January 31, 2011, so as to be co-terminus with the employment agreement of Mr. Laezza and Edwin F. Heinen, the Company’s Chief Financial Officer.  The employment agreements of Messrs. Brandofino, Laezza, Heinen and Robinson were also amended as of January 1, 2009 to make changes in connection with revisions to Internal Revenue Code Section 409A.  This brief description of the employment agreement amendments of Messrs. Brandofino, Laezza, Heinen and Robinson are qualified in their entirety by reference to the provisions of the agreements attached to this report as Exhibit 10.7, 10.8, 10.9 and 10.10, resp ectively.

There is no family relationship between Messrs. Laezza, Robinson and any director or officer of the Company.  As disclosed in the Form 8-K filed by the Company on September 24, 2007 and subsequent filings, as required, Messrs. Laezza and Robinson, together with other Company executive officers and directors, invested in the Company’s Senior Secured Convertible Note financing on September 21, 2007.

A copy of the press release announcing the foregoing matters is attached to this Form 8-K as Exhibit 99.1.

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

(a)

Financial Statements of Businesses Acquired. Not Applicable.

(b)

Pro Forma Financial Information. Not Applicable.

(c)

Shell Company Transactions.  Not Applicable

(d)

Exhibits

Exhibit No.	Description
4.1	Certificate of Designations, Preferences and Rights of Series A-1 Preferred Stock of Glowpoint.
4.2	Form of amended Series A-3 Warrant dated March 18, 2009.
10.1	Form of Series A-1 Convertible Stock Purchase Agreement, dated as of March 16, 2009, between Glowpoint and the purchasers set forth therein.
10.2	Form of Registration Rights Agreement, dated as of November 25, 2008, between Glowpoint and the purchasers set forth therein, filed as an exhibit to Registrant’s Current Report on Form 8-K, dated November 26, 2008, and incorporated herein by reference.
10.3	Amendment No. 1 to Registration Rights Agreement, dated February 19, 2009.
10.4	Form of Note Exchange Agreement, dated March 16, 2009, between Glowpoint and the holders set forth therein.
10.5	Form of Securities Purchase Agreement, dated March 16, 2009, between Glowpoint and the holder set forth therein.
10.6	Form of Series A Preferred Consent and Exchange Agreement, dated March 16, 2009, between Glowpoint and the holders set forth therein.
10.7	Employment Agreement Amendment between the Company and Michael Brandofino, dated March 12, 2009.
10.8	Employment Agreement Amendment between the Company and Joseph Laezza dated March 12, 2009.
10.9	Employment Agreement Amendment between the Company and Edwin F. Heinen dated March 12, 2009.
10.10	Employment Agreement Amendment between the Company and David W. Robinson dated March 12, 2009.
17.1	Letter of Resignation from Richard Reiss, dated March 18, 2009.
17.2	Letter of Resignation from Aziz Ahmad, dated March 18, 2009.
99.1	Text of press release dated March 19, 2009.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GLOWPOINT, INC.
Dated:  March 19, 2009
	/s/ EDWIN F. HEINEN
	Edwin F. Heinen
	Chief Financial Officer

EX-4.1

Exhibit 4.1

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES A-1 CONVERTIBLE PREFERRED STOCK
OF
GLOWPOINT, INC.

The undersigned, the President of Glowpoint, Inc., a Delaware corporation (the "Company"), in accordance with the provisions of the Delaware General Corporation Law, does hereby certify that, pursuant to the authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation of the Company, the following resolution creating a series of Series A-1 Convertible Preferred Stock, was duly adopted on March 12, 2009.

RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Company by provisions of the Amended and Restated Certificate of Incorporation of the Company (the "Certificate of Incorporation"), there hereby is created out of the shares of Preferred Stock, par value $0.0001 per share, of the Company authorized in Article IV of the Certificate of Incorporation (the "Preferred Stock"), a series of Preferred Stock of the Company, to be named "Series A-1 Convertible Preferred Stock,” consisting of Seven Thousand Five Hundred (7,500) shares, which series shall have the following designations, powers, preferences and relative and other special rights and the following qualifications, limitations and restrictions:

1.

Designation and Rank. The designation of such series of the Preferred Stock shall be the Series A-1 Convertible Preferred Stock, par value $0.0001 per share (the "Series A-1 Preferred Stock"). The maximum number of shares of Series A-1 Preferred Stock shall be Seven Thousand Five Hundred (7,500) shares. The Series A-1 Preferred Stock shall rank senior to the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock “), Series C Convertible Preferred Stock, par value $0.0001 per share (the "Series C Preferred Stock"), the Series D Convertible Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”) and the common stock, par value $0.0001 per share (the "Common Stock"), and to all other classes and series of equity securities of the Company which by their terms rank junior to the Seri es A-1 Preferred Stock ("Junior Stock"). Subject to Section 3(a), the Series A-1 Preferred Stock shall be subordinate to and rank junior to all indebtedness of the Company now or hereafter outstanding.  The date of original issuance of the Series A-1 Preferred Stock is referred to herein as the “Issuance Date”.  Notwithstanding the foregoing, the “Issuance Date” of shares of Series A-1 Preferred Stock issued upon the exchange of Series A Preferred Stock shall be the date of issuance of the Series A Preferred Stock.

2.

Dividends.  

(a)

Payment of Dividends.  The holders of record of shares of Series A-1 Preferred Stock shall be entitled to receive, out of any assets at the time legally available therefor, cumulative dividends at the rate of five (5%) percent of the stated Liquidation Preference Amount (as defined in Section 4 hereof) per share per annum commencing on the first anniversary of the Issuance Date (the "Dividend Payment"), payable quarterly.  All dividends payable on or before September 30, 2010 shall be payable at the Company’s option in cash or

through the issuance of a number of additional shares of Series A-1 Preferred Stock with an aggregate Liquidation Preference Amount equal to the dividend amount payable on the applicable Dividend Payment Date.  After September 30, 2010, all dividends shall be payable, at the option of the holder in cash or through the issuance of a number of additional shares of Series A-1 Preferred Stock with an aggregate Liquidation Preference Amount equal to the dividend amount payable on the applicable Dividend Payment Date.  In the event of a Voluntary Conversion (as defined in Section 5(a) hereof) pursuant to Section 5(a), all accrued but unpaid dividends on the Series A-1 Preferred Stock being converted shall be payable in cash within five (5) business days of such Voluntary Conversion Date (as defined in Section 5(b)(i) hereof).  Dividends on the Series A-1 Preferred Stock are prior and in preference to any decl aration or payment of any distribution (as defined below) on any outstanding shares of Junior Stock. Such dividends shall accrue on each share of Series A-1 Preferred Stock from day to day whether or not earned or declared so that if such dividends with respect to any previous dividend period at the rate provided for herein have not been paid on, or declared and set apart for, all shares of Series A-1 Preferred Stock at the time outstanding, the deficiency shall be fully paid on, or declared and set apart for, such shares on a pro rata basis with all other equity securities of the Company ranking on a parity with the Series A-1 Preferred Stock as to the payment of dividends before any distribution shall be paid on, or declared and set apart for Junior Stock.

(b)

So long as any shares of Series A-1 Preferred Stock are outstanding, the Company shall not declare, pay or set apart for payment any dividend or make any distribution on any Junior Stock (other than dividends or distributions payable in additional shares of Junior Stock), unless at the time of such dividend or distribution the Company shall have paid all accrued and unpaid dividends on the outstanding shares of Series A-1 Preferred Stock.

(c)

In the event of a dissolution, liquidation or winding up of the Company pursuant to Section 4, all accrued and unpaid dividends on the Series A-1 Preferred Stock shall be payable on the day immediately preceding the date of payment of the preferential amount to the holders of Series A-1 Preferred Stock.  In the event of (i) a mandatory redemption pursuant to Section 9 or (ii) a redemption upon the occurrence of a Change of Control (as defined in Section 8(b)), all accrued and unpaid dividends on the Series A-1 Preferred Stock shall be payable on the day immediately preceding the date of such redemption.  

(d)

For purposes hereof, unless the context otherwise requires, “distribution” shall mean the transfer of cash or property without consideration, whether by way of dividend or otherwise, payable other than in shares of Common Stock or other equity securities of the Company, or the purchase or redemption of shares of the Company (other than redemptions set forth in Section 8 below or repurchases of Common Stock held by employees or consultants of the Company upon termination of their employment or services pursuant to agreements providing for such repurchase or upon the cashless exercise of options held by employees or consultants) for cash or property.

3.

Voting Rights.

(a)

Class Voting Rights. So long as shares of the Series A-1 Preferred Stock remain outstanding, the Company shall not, without the affirmative vote or consent of the holders of at least two-thirds (2/3rds) of the shares of the Series A-1 Preferred Stock outstanding

2

at the time, given in person or by proxy, either in writing or at a meeting, in which the holders of the Series A-1 Preferred Stock vote separately as a class, (i) authorize, create, issue or increase the authorized or issued amount of any class of debt or equity securities, ranking pari passu or senior to the Series A-1 Preferred Stock, with respect to the distribution of assets on liquidation, dissolution or winding up; (ii) amend, alter or repeal the provisions of the Series A-1 Preferred Stock, whether by merger, consolidation or otherwise, so as to adversely affect any right, preference, privilege or voting power of the Series A-1 Preferred Stock; provided, however, that any creation and issuance of another series of Junior Stock shall not be deemed to adversely affect such rights, preferences, privileges or voting powers; (iii) repurchase, redeem or pay dividends on, shares of Common Stock or any other shares of the Company's Junior Stock (other than (1) in connection with any employee stock option plan or employee stock purchase plan which is approved by the Board of Directors and is existing as of the date hereof, (2) de minimus repurchases from employees of the Company, and (3) any contractual redemption obligations existing as of the date hereof as disclosed in the Company’s public filings with the Securities and Exchange Commission); (iv) amend the Certificate of Incorporation or By-Laws of the Company so as to affect materially and adversely any right, preference, privilege or voting power of the Series A-1 Preferred Stock; provided, however, that any creation and issuance of another series of Junior Stock shall not be deemed to adversely affect such rights, preferences, privileges or voting powers; (v) effect any distribution with respect to Junior Stock other than as permitted hereby; (vi) subject to the Company’s fiduciary duties under Delaware law, take any action to liquidate, dissolve or wind up the affairs of the Company; or (vii) incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money.  Notwithstanding the foregoing to the contrary, the Company may (i) issue the Notes and the Warrants (each as defined in Section 5(e)(x) below); (ii) obtain and utilize a credit facility any banking institution on terms that are no less favorable to the Company than the terms of the credit facility it had with JPMorgan Chase Bank; and (iii) obtain and utilize any line of credit, factoring arrangement or other similar financing arrangement in connection with servicing the Company’s receivables in an amount up to $1,000,000.

(b)

General Voting Rights.

(i)

Each holder of Series A-1 Preferred Stock shall be entitled to vote on all matters, together with the holders of Common Stock, on an as converted basis up to 9.99% of (A) the Common Stock issuable upon conversion of the Series A-1 Preferred Stock held by such holder, plus (B) all other shares of Common Stock beneficially owned by the holder at such time; provided, however, that upon a holder of Series A-1 Preferred Stock providing the Company with sixty-one (61) days notice (pursuant to Section 5(i) hereof) (a "Waiver Notice") that such holder would like to waive Section 3(b)(i) of this Certificate of Designations with regard to any or all shares of Common Stock issuable upon conversion of Series A-1 Preferred Stock, this Section 3(b)(i) shall be of no force or effect with regard to those shares of Series A-1 Preferred Stock referenced in the Waiver Notice provided.

(ii)

Except (A) with respect to transactions upon which the Series A-1 Preferred Stock shall be entitled to vote separately as a class pursuant to Section 3(a) above, (B) with respect to the general voting rights granted pursuant to Section 3(b)(i) above and Section 10

3

below and (C) as otherwise required by Delaware law, the Series A-1 Preferred Stock shall have no voting rights.  

(iii)

The Common Stock into which the Series A-1 Preferred Stock is convertible shall, upon issuance, have all of the same voting rights as other issued and outstanding Common Stock of the Company, and none of the rights of the Preferred Stock.

4.

Liquidation, Dissolution; Winding-Up.

(a)

In the event of the liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of shares of the Series A-1 Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Company available for distribution to its stockholders, an amount equal to $7,500 per share (the "Liquidation Preference Amount") plus all accrued and unpaid dividends before any payment shall be made or any assets distributed to the holders of the Common Stock or any other Junior Stock. If the assets of the Company are not sufficient to pay in full the Liquidation Preference Amount payable to the holders of outstanding shares of the Series A-1 Preferred Stock and any series of preferred stock or any other class of stock on a parity, as to rights on liquidation, dissolution or winding up, with the Series A-1 Preferred Stock, then all of said assets will be distributed among the holders of the Series A-1 Preferred Stock and the other classes of stock on a parity with the Series A-1 Preferred Stock, if any, ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. The liquidation payment with respect to each outstanding fractional share of Series A-1 Preferred Stock shall be equal to a ratably proportionate amount of the liquidation payment with respect to each outstanding share of Series A-1 Preferred Stock. All payments for which this Section 4(a) provides shall be in cash, property (valued at its fair market value as determined reasonably and in good faith by the Board of Directors of the Company) or a combination thereof; provided, however, that no cash shall be paid to holders of Junior Stock unless each holder of the outstanding shares of Series A-1 Preferred Stock has been paid in cash the full Liquidation Preference Amount to which such holder is entitled as provided herein . After payment of the full Liquidation Preference Amount to which each holder is entitled, such holders of shares of Series A-1 Preferred Stock will not be entitled to any further participation as such in any distribution of the assets of the Company.

(b)

A consolidation or merger of the Company with or into any other corporation or corporations, or a sale of all or substantially all of the assets of the Company, or the effectuation by the Company of a transaction or series of related transactions in which more than 50% of the voting shares of the Company is disposed of or conveyed, shall, at the election of the holder of the Series A-1 Preferred Stock in writing within ten (10) days following the Company’s notice to such holder, be deemed to be a liquidation, dissolution, or winding up within the meaning of this Section 4. In the event of the merger or consolidation of the Company with or into another corporation, subject to Section 5(e)(v), and in the event the holder of the Series A-1 Preferred Stock does not elect to deem such transaction a liquidation event pursuant to this Section 4(b), the Series A-1 Preferred Stock shall maintain its relative powers , designations and preferences provided for herein and no merger shall result inconsistent therewith.

4

(c)

Written notice of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, stating a payment date and the place where the distributable amounts shall be payable, shall, to the extent possible, be given by mail, postage prepaid, no less than twenty (20) days prior to the payment date stated therein, to the holders of record of the Series A-1 Preferred Stock at their respective addresses as the same shall appear on the books of the Company.

5.

Conversion. The holder of Series A-1 Preferred Stock shall have the following conversion rights (the "Conversion Rights"):

(a)

Right to Convert. At any time on or after the Issuance Date, the holder of any shares of Series A-1 Preferred Stock may, at such holder's option, subject to the limitations set forth in Section 7 herein, elect to convert (a "Voluntary Conversion") all or any portion of the shares of Series A-1 Preferred Stock held by such person into a number of fully paid and nonassessable shares of Common Stock equal to the quotient of (i) the Liquidation Preference Amount of the shares of Series A-1 Preferred Stock being converted divided by (ii) the Conversion Price (as defined in Section 5(d) below) then in effect as of the date of the delivery by such holder of its notice of election to convert. In the event of a notice of redemption of any shares of Series A-1 Preferred Stock pursuant to Section 8 hereof, the Conversion Rights of the shares designated for redemption shall terminate at the close of busine ss on the last full day preceding the date fixed for redemption, unless the redemption price is not paid on such redemption date, in which case the Conversion Rights for such shares shall continue until such price is paid in full. In the event of a liquidation, dissolution or winding up of the Company, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Series A-1 Preferred Stock. In the event of such a redemption or liquidation, dissolution or winding up, the Company shall provide to each holder of shares of Series A-1 Preferred Stock notice of such redemption or liquidation, dissolution or winding up, which notice shall (i) be sent at least fifteen (15) days prior to the termination of the Conversion Rights and (ii) state the amount per share of Series A-1 Preferred Stock that will be paid or distributed on such redemption or liquidation, dissolution or winding up, as t he case may be.

(b)

Mechanics of Voluntary Conversion. The Voluntary Conversion of Series A-1 Preferred Stock shall be conducted in the following manner:

(i)

Holder's Delivery Requirements. To convert Series A-1 Preferred Stock into full shares of Common Stock on any date (the "Voluntary Conversion Date"), the holder thereof shall transmit by facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m., New York time on such date, a copy of a fully executed notice of conversion in the form attached hereto as Exhibit I (the "Conversion Notice"), to the Company.  As soon as practicable following such Voluntary Conversion Date, surrender to a common carrier for delivery to the Company the original certificates representing the shares of Series A-1 Preferred Stock being converted (or an indemnification undertaking with respect to such shares in the case of their loss, theft or destruction) (the "Preferred Stock Certificates") and the originally executed Conversion Notice.

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(ii)

Company's Response. Upon receipt by the Company of a copy of the fully executed Conversion Notice, the Company or its designated transfer agent (the "Transfer Agent"), as applicable, shall within three (3) business days following the date of receipt by the Company of a copy of the fully executed Conversion Notice, issue and deliver to the Depository Trust Company ("DTC") account on the holder's behalf via the Deposit Withdrawal Agent Commission System ("DWAC") as specified in the Conversion Notice, registered in the name of the holder or its designee, for the number of shares of Common Stock to which the holder shall be entitled. Notwithstanding the foregoing to the contrary, the Company or its Transfer Agent shall only be required to issue and deliver the shares to the DTC on a holder's behalf via DWAC if (i) such conversion is in connection with a sale, (ii) the shares of Common Stock may be issued without restrictive legends and (iii) the Company and the Transfer Agent are participating in DTC through the DWAC system.  If all of the conditions set forth in clauses (i), (ii) and (iii) above are not satisfied, the Company shall deliver physical certificates to the holder or its designee. If the number of shares of Preferred Stock represented by the Preferred Stock Certificate(s) submitted for conversion is greater than the number of shares of Series A-1 Preferred Stock being converted, then the Company shall, as soon as practicable and in no event later than three (3) business days after receipt of the Preferred Stock Certificate(s) and at the Company's expense, issue and deliver to the holder a new Preferred Stock Certificate representing the number of shares of Series A-1 Preferred Stock not converted.

(iii)

Dispute Resolution. In the case of a dispute as to the arithmetic calculation of the number of shares of Common Stock to be issued upon conversion, the Company shall cause its Transfer Agent to promptly issue to the holder the number of shares of Common Stock that is not disputed and shall submit the arithmetic calculations to the holder via facsimile as soon as possible, but in no event later than two (2) business days after receipt of such holder's Conversion Notice. If such holder and the Company are unable to agree upon the arithmetic calculation of the number of shares of Common Stock to be issued upon such conversion within two (2) business days of such disputed arithmetic calculation being submitted to the holder, then the Company shall within two (2) business days submit via facsimile the disputed arithmetic calculation of the number of shares of Common Stock to be issued upon such conversion to the Company's independent, outside accountant (the "Accountant"). The Company shall cause the Accountant to perform the calculations and notify the Company and the holder of the results no later than five (5) business days from the time it receives the disputed calculations. The Accountant's calculation shall be binding upon all parties absent manifest error. The reasonable expenses of such Accountant in making such determination shall be paid by the Company, in the event the holder's calculation was correct, or by the holder, in the event the Company's calculation was correct, or equally by the Company and the holder in the event that neither the Company's or the holder's calculation was correct. The period of time in which the Company is required to effect conversions or redemptions under this Certificate of Designations shall be tolled with respect to the subject conversion or redemption pending resolution of any dispute by the Company made in good faith and in accordance with this Section 5(b)( iii).

(iv)

Record Holder. The person or persons entitled to receive the shares of Common Stock issuable upon a conversion of the Series A-1 Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

6

(v)

Company's Failure to Timely Convert.  If within five (5) business days of the Company's receipt of an executed copy of the Conversion Notice (so long as the applicable Preferred Stock Certificates and original Conversion Notice are received by the Company on or before such third business day), the Transfer Agent shall fail to issue and deliver to a holder the number of shares of Common Stock to which such holder is entitled upon such holder's conversion of the Series A-1 Preferred Stock or to issue a new Preferred Stock Certificate representing the number of shares of Series A-1 Preferred Stock to which such holder is entitled pursuant to Section 5(b)(ii) (a "Conversion Failure"), in addition to all other available remedies which such holder may pursue hereunder and under the Series A-1 Convertible Preferred Stock Purchase Agreement (the "Series A-1 Purchase Agreement") among the Company and the initial holders of the Series A-1 Preferred Stock (including indemnification pursuant to Section 6 thereof), the Company shall pay additional damages to such holder on each business week after such fifth (5th) business day that such conversion is not timely effected (so long as the applicable Preferred Stock Certificates and original Conversion Notice are received by the Company on or before such fifth business day) in an amount equal 0.5% of the product of (A) the sum of the number of shares of Common Stock not issued to the holder on a timely basis pursuant to Section 5(b)(ii) and to which such holder is entitled and, in the event the Company has failed to deliver a Preferred Stock Certificate to the holder on a timely basis pursuant to Section 5(b)(ii), the number of shares of Common Stock issuable upon conversion of the shares of Series A-1 Preferred Stock represented by such Preferred Stock Certificate, as of the last possible date which the Company could have issued such Preferred Stoc k Certificate to such holder without violating Section 5(b)(ii) and (B) the Closing Bid and Ask Price (as defined below) of the Common Stock on the last possible date which the Company could have issued such Common Stock and such Preferred Stock Certificate, as the case may be, to such holder without violating Section 5(b)(ii).  If the Company fails to pay the additional damages set forth in this Section 5(b)(v) within seven (7) business days of the date incurred, then such payment shall bear interest at the rate of 1.0% per month (pro rated for partial months) until such payments are made.

(vi)

Buy-In Rights.  In addition to any other rights available to the holders of Series A-1 Preferred Stock, if within three (3) business days of the Company's receipt of an executed copy of the Conversion Notice (so long as the applicable Preferred Stock Certificates and original Conversion Notice are received by the Company on or before such third business day), the Transfer Agent shall fail to issue and deliver to a holder the number of shares of Common Stock to which such holder is entitled upon such holder's conversion of the Series A-1 Preferred Stock (a "Conversion Failure"), 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 shares of Common Stock issuable upon conversion of Series A-1 Preferred Stock which the holder anticipated receiving up on such conversion (a “Buy-In”), then the Company 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 Common Stock issuable upon conversion of Series A-1 Preferred Stock that the Company was required to deliver to the holder in connection with the conversion at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) deliver to the holder the number of shares of Common Stock that would have been issued had the Company timely complied with its conversion and delivery obligations hereunder.  For

7

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 conversion 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 Company shall be required to pay to the holder $1,000. The holder shall provide the Company 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 Company. Nothing herein shall limit a holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conv ersion of the Series A-1 Preferred Stock as required pursuant to the terms hereof.

(c)

Mandatory Conversion.

(i)

Each share of Series A-1 Preferred Stock outstanding on the Mandatory Conversion Date (as defined below) shall, automatically and without any action on the part of the holder thereof, convert into a number of fully paid and nonassessable shares of Common Stock equal to the quotient of (i) the Liquidation Preference Amount of the shares of Series A-1 Preferred Stock outstanding on the Mandatory Conversion Date divided by (ii) the Conversion Price in effect on the Mandatory Conversion Date.

(ii)

As used herein, "Mandatory Conversion Date" shall be the first date that the Closing Bid and Ask Price (as defined below) of the Common Stock exceeds (A) $1.50 (as adjusted for stock splits, stock dividends, combinations and similar transactions) and (B) the value of the average daily trading volume for a period of ten (10) consecutive trading days equals or exceeds $1 million; provided that a registration statement covering the resale of the shares of Common Stock issuable upon conversion of the Series A-1 Preferred Stock is effective on the Mandatory Conversion Date and on each trading day of such ten (10) trading day period or the shares of Common Stock into which the Series A-1 Preferred Stock can be converted may be offered for sale to the public without any volume limitation pursuant to Rule 144 under the Securities Act of 1933, as amended. If on the Mandatory Conversion Date, a holder is prohib ited from converting all of its shares of Series A-1 Preferred Stock as a result of the restrictions contained in Section 7 of this Certificate of Designations, such shares of Series A-1 Preferred Stock shall be exchanged for shares of a new series of preferred stock with preferences, rights and limitations substantially similar to those of the Series A-1 Preferred Stock. The Mandatory Conversion Date and the Voluntary Conversion Date collectively are referred to in this Certificate of Designations as the "Conversion Date."  Notwithstanding the foregoing to the contrary, the Company may effect a mandatory conversion pursuant to this Section 5(c) only if (A) a registration statement providing for the resale of the shares of Common Stock issuable upon conversion of the Series A-1 Preferred Stock is then in effect or such shares are freely tradeable without any volume limitation pursuant to Rule 144, (B) trading in the Common Stock shall not have been suspended by the Securities and Exchange Comm ission or the OTC Bulletin Board (or other exchange or market on which the Common Stock is trading), and (C) the Company is in material compliance with the terms and conditions of this Certificate of Designations, that certain Registration Rights Agreement, dated as of November 25, 2008, between the Company and the purchasers set forth therein, as amended, and that certain Note

8

Exchange Agreement, dated as of March 16, 2009, by and between the Company and the purchasers set forth therein (collectively, the Transaction Documents”).

(iii)

The term "Closing Bid and Ask Price" shall mean, for any security as of any date, the last average of the closing bid and ask price of such security on the OTC Bulletin Board or other principal exchange on which such security is traded as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid and ask prices of any market makers for such security as reported in the "pink sheets" by the National Quotation Bureau, Inc. If the Closing Bid and Ask Price cannot be calculated for such security on such date on any of the foregoing bases, the Closing Bid and Ask Price of such security on such date shall be the fair market value as determined in good faith by the Board of Directors of the Co mpany.

(iv)

On the Mandatory Conversion Date, the outstanding shares of Series A-1 Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its Transfer Agent; provided, however, that the Company shall not be obligated to issue the shares of Common Stock issuable upon conversion of any shares of Series A-1 Preferred Stock unless certificates evidencing such shares of Series A-1 Preferred Stock are either delivered to the Company or the holder notifies the Company that such certificates have been lost, stolen, or destroyed, and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection therewith. Upon the occurrence of the automatic conversion of the Series A-1 Preferred Stock pursuant to this Section 5, the holders of the S eries A-1 Preferred Stock shall surrender the certificates representing the Series A-1 Preferred Stock for which the Mandatory Conversion Date has occurred to the Company and the Company shall cause its Transfer Agent to deliver the shares of Common Stock issuable upon such conversion (in the same manner set forth in Section 5(b)(ii)) to the holder promptly following the holder's delivery of the applicable Preferred Stock Certificates.

(d)

Conversion Price.

(i)

The term "Conversion Price" shall mean $0.75 per share, subject to adjustment under Section 5(e) hereof.

(ii)

Notwithstanding the foregoing to the contrary, if during any period (a "Black-out Period"), a holder of Series A-1 Preferred Stock is unable to trade any Common Stock issued or issuable upon conversion of the Series A-1 Preferred Stock immediately because the Company has informed such holder of Series A-1 Preferred Stock that an existing prospectus cannot be used at that time in the sale or transfer of such Common Stock (provided that such postponement, delay, suspension or fact that the prospectus cannot be used is not due to factors solely within the control of the holder of Series A-1 Preferred Stock or due to the Company exercising its rights under Section 3(n) of (A) the Registration Rights Agreement, dated as of March 31, 2006, between the Company and the purchasers set forth therein, (B) the Registration Rights Agreement, dated as of February 17, 2004, between the Company and the purchasers set forth therein, (C) the Registration Rights Agreement, dated as of December 17, 2002, between

9

the Company and the purchasers set forth therein, or (D) the Registration Rights Agreement, dated as of November 25, 2008, as amended, between the Company and the purchasers set forth therein (each of the foregoing as may be amended from time to time, a "Registration Rights Agreement"), such holder of Series A-1 Preferred Stock shall have the option but not the obligation on any Conversion Date within ten (10) trading days following the expiration of the Black-out Period of using the Conversion Price applicable on such Conversion Date or any Conversion Price selected by such holder of Series A-1 Preferred Stock that would have been applicable had such Conversion Date been at any earlier time during the Black-out Period.

(e)

Adjustments of Conversion Price.

(i)

Adjustments for Stock Splits and Combinations. If the Company shall at any time or from time to time after the Issuance Date, effect a stock split of the outstanding Common Stock, the Conversion Price shall be proportionately decreased. If the Company shall at any time or from time to time after the Issuance Date, combine the outstanding shares of Common Stock, the Conversion Price shall be proportionately increased. Any adjustments under this Section 5(e)(i) shall be effective at the close of business on the date the stock split or combination becomes effective.

(ii)

Adjustments for Certain Dividends and Distributions. If the Company shall at any time or from time to time after the Issuance Date, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in shares of Common Stock, then, and in each event, the Conversion Price shall be decreased as of the time of such issuance or, in the event such record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction:

(1)

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

(2)

the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution;

provided, however, that no such adjustment shall be made if the holders of Series A-1 Preferred Stock simultaneously receive (i) a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A-1 Preferred Stock had been converted into Common Stock on the date of such event or (ii) a dividend or other distribution of shares of Series A-1 Preferred Stock which are convertible, as of the date of such event, into such number of shares of Common Stock as is equal to the number of additional shares of Common Stock being issued with respect to each share of Common Stock in such dividend or distribution.

(iii)

Adjustment for Other Dividends and Distributions. If the Company shall at any time or from time to time after the Issuance Date, make or issue or set a record date

10

for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in securities of the Company other than shares of Common Stock, then, and in each event, an appropriate revision to the applicable Conversion Price shall be made and provision shall be made (by adjustments of the Conversion Price or otherwise) so that the holders of Series A-1 Preferred Stock shall receive upon conversions thereof, in addition to the number of shares of Common Stock receivable thereon, the number of securities of the Company which they would have received had their Series A-1 Preferred Stock been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the Conversion Date, retained such securities (together with any distributions payable thereon during such period), giving application to all adjustmen ts called for during such period under this Section 5(e)(iii) with respect to the rights of the holders of the Series A-1 Preferred Stock; provided, however, that if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be adjusted pursuant to this paragraph as of the time of actual payment of such dividends or distributions.

(iv)

Adjustments for Reclassification, Exchange or Substitution. If the Common Stock issuable upon conversion of the Series A-1 Preferred Stock at any time or from time to time after the Issuance Date shall be changed to the same or different number of shares of any class or classes of stock, whether by reclassification, exchange, substitution or otherwise (other than by way of a stock split or combination of shares or stock dividends provided for in Sections 5(e)(i), (ii) and (iii), or a reorganization, merger, consolidation, or sale of assets provided for in Section 5(e)(v)), then, and in each event, an appropriate revision to the Conversion Price shall be made and provisions shall be made (by adjustments of the Conversion Price or otherwise) so that the holder of each share of Series A-1 Preferred Stock shall have the right thereafter to convert such share of Series A-1 Preferred Stock into the kind and am ount of shares of stock and other securities receivable upon reclassification, exchange, substitution or other change, by holders of the number of shares of Common Stock into which such share of Series A-1 Preferred Stock might have been converted immediately prior to such reclassification, exchange, substitution or other change, all subject to further adjustment as provided herein.

(v)

Adjustments for Reorganization, Merger, Consolidation or Sales of Assets. If at any time or from time to time after the Issuance Date there shall be a capital reorganization of the Company (other than by way of a stock split or combination of shares or stock dividends or distributions provided for in Section 5(e)(i), (ii) and (iii), or a reclassification, exchange or substitution of shares provided for in Section 5(e)(iv)), or a merger or consolidation of the Company with or into another corporation where the holders of outstanding voting securities prior to such merger or consolidation do not own over 50% of the outstanding voting securities of the merged or consolidated entity, immediately after such merger or consolidation, or the sale of all or substantially all of the Company's properties or assets to any other person (an "Organic Change") and the holder of the Series A-1 Preferred Stock d oes not elect to treat such event as a liquidation event pursuant to Section 4(b), then as a part of such Organic Change an appropriate revision to the Conversion Price shall be made if necessary and provision shall be made if necessary (by adjustments of the Conversion Price or otherwise) so that the holder of each share of Series A-1 Preferred Stock shall have the right thereafter to convert such share of Series A-1 Preferred Stock into the kind and amount of shares of stock and other securities or property which such holder would have had the right to receive had such holder converted its

11

shares of Series A-1 Preferred Stock immediately prior to the consummation of such Organic Change. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 5(e)(v) with respect to the rights of the holders of the Series A-1 Preferred Stock after the Organic Change to the end that the provisions of this Section 5(e)(v) (including any adjustment in the Conversion Price then in effect and the number of shares of stock or other securities deliverable upon conversion of the Series A-1 Preferred Stock) shall be applied after that event in as nearly an equivalent manner as may be practicable.

(vi)

Adjustments for Issuance of Additional Shares of Common Stock.

(A)

In the event the Company, shall, at any time or from time to time, issue or sell any additional shares of Common Stock (otherwise than as provided in the foregoing subsections (i) through (v) of this Section 5(e) or pursuant to Common Stock Equivalents (hereafter defined) granted or issued prior to the Issuance Date) (the "Additional Shares of Common Stock"), at a price per share less than the Conversion Price, or without consideration, the Conversion Price then in effect upon each such issuance shall be adjusted to that price  (rounded to the nearest cent) determined by multiplying the Conversion Price by a fraction:

(1)

the numerator of which shall be equal to the sum of (A) the number of shares of Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common Stock plus (B) 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 then Conversion Price, and

(2)

the denominator of which shall be equal to the number of shares of Common Stock outstanding immediately after the issuance of such Additional Shares of Common Stock.

(B)

No adjustment of the number of shares of Common Stock shall be made under paragraph (A) of this Section 5(e)(vi) upon the issuance of any Additional Shares of Common Stock which are issued pursuant to the exercise of any warrants or other subscription or purchase rights or pursuant to the exercise of any conversion or exchange rights in any Common Stock Equivalents (as defined below), if any such adjustment shall previously have been made upon the issuance of such warrants or other rights or upon the issuance of such Common Stock Equivalents (or upon the issuance of any warrant or other rights therefore) pursuant to Section 5(e)(vii).

(vii)

Issuance of Common Stock Equivalents. If the Company, at any time after the Issuance Date, shall issue any securities convertible into or exchangeable for, directly or indirectly, Common Stock ("Convertible Securities"), other than the Series A-1 Preferred Stock, or any rights or warrants or options to purchase any such Common Stock or Convertible Securities, shall be issued or sold (collectively, the "Common Stock Equivalents") and the aggregate of the price per share for which Additional Shares of Common Stock may be issuable thereafter pursuant to such Common Stock Equivalent, plus the consideration received by the Company for issuance of such Common Stock Equivalent divided by the number of

12

shares of Common Stock issuable pursuant to such Common Stock Equivalent (the "Aggregate Per Common Share Price") shall be less than the Conversion Price, 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 or adjusted shall make the Aggregate Per Common Share Price be less than Conversion Price in effect at the time of such amendment or adjustment, then the Conversion Price then in effect shall be adjusted pursuant to Section 5(e)(vi)(A) above assuming that all Additional Shares of Common Stock have been issued pursuant to the Convertible Securities or Common Stock Equivalents for a purchase price equal to the Aggregate Per Common Share Price. No adjustment of the Conversion Price shall be made under this subsection (vii) upon the issuance of a ny Convertible Security which is issued pursuant to the exercise of any warrants or other subscription or purchase rights therefore, if any adjustment shall previously have been made to the exercise price of such warrants then in effect upon the issuance of such warrants or other rights pursuant to this subsection (vii). No adjustment shall be made to the Conversion Price upon the issuance of Common Stock pursuant to the exercise, conversion or exchange of any Convertible Security or Common Stock Equivalent where an adjustment to the Conversion Price was made as a result of the issuance or purchase of any Convertible Security or Common Stock Equivalent.

(viii)

Consideration for Stock. In case any shares of Common Stock or Convertible Securities other than the Series A-1 Preferred Stock, or any rights or warrants or options to purchase any such Common Stock or Convertible Securities, shall be issued or sold:

(1)

in connection with any merger or consolidation in which the Company is the surviving corporation (other than any consolidation or merger in which the previously outstanding shares of Common Stock of the Company 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 Directors of the Company, of such portion of the assets and business of the nonsurviving corporation as such Board may determine to be attributable to such shares of Common Stock, Convertible Securities, rights or warrants or options, as the case may be; or

(2)

in the event of any consolidation or merger of the Company in which the Company is not the surviving corporation or in which the previously outstanding shares of Common Stock of the Company 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 Company for stock or other securities of any corporation, the Company 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. If any such calculation results in adjustment of the applicable Conversion Price, or the number of sha res of Common Stock issuable upon conversion of the Series A-1 Preferred Stock, the determination of the applicable Conversion Price or the number of shares of Common Stock issuable upon conversion of the Series A-1 Preferred Stock immediately prior to such merger, consolidation or sale, shall be made after giving effect to such adjustment of the number of shares of Common Stock issuable upon conversion of the Series A-1 Preferred Stock. In the

13

event any consideration received by the Company 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 of Directors of the Company. In the event Common Stock is issued with other shares or securities or other assets of the Company for consideration which covers both, the consideration computed as provided in this Section 5(e)(viii) shall be allocated among such securities and assets as determined in good faith by the Board of Directors of the Company.

(ix)

Record Date. In case the Company shall take record of the holders of its Common Stock or any other Preferred Stock for the purpose of entitling them to subscribe for or purchase Common Stock or Convertible Securities, then the date of the issue or sale of the shares of Common Stock shall be deemed to be such record date.

(x)

Certain Issues Excepted. Anything herein to the contrary notwithstanding, the Company shall not be required to make any adjustment to the Conversion Price upon (i) the Company's issuance of any Additional Shares of Common Stock and warrants therefore in connection with a merger and/or acquisition, consolidation, sale or disposition of all or substantially all of the Company's assets; provided that the Conversion Price shall be adjusted in accordance with Section 5(e)(v), (ii) the Company's issuance of Additional Shares of Common Stock or warrants therefore in connection with strategic agreements (e.g., any issuances of securities to consultants or public relations consultants to the Company so long as such issuances do not in the aggregate exceed ten percent (10%) of the Company's issued and outstanding shares of Common Stock as of the Issuance Date) so long as such issuances are not for the purpose of r aising capital, (iii) Common Stock or grants of options to purchase Common Stock pursuant to any stock option plans and employee stock purchase plans approved by the Company’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 date hereof, (iv) any issuances of securities of Common Stock pursuant to Company 401(k) matches, (v) 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), (vi) the issuance of the Notes and the Warrants (as defined below), (vii) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (viii) the payment of liquidated dama ges pursuant to a Registration Rights Agreement, and (ix) the issuance of common stock upon the exercise or conversion of any securities described in clauses (i) through (viii) above.  For purposes of this Certificate of Designations, (A) “Notes” shall mean collectively, each of the following, as the same may be amended from time to time: (1) the outstanding senior secured convertible promissory notes issued pursuant to those certain Note and Warrant Purchase Agreements dated as of March 31, 2006, April 12, 2006 and September 21, 2007 (collectively, the "Purchase Agreements”), by and among the Company and the purchasers listed therein, 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; and (B) “Warrants” shall mean, collectively, each of the following, as the same may be amended from time to time: (1) the Company’s Series A warrants to purchase s hares of Common Stock; (2) the Company’s Series A-2 warrants to purchase shares of Common Stock; (3) the Company’s Series A-3 warrants to

14

purchase shares of Common Stock; and (4) the Company’s financial advisory warrants to purchase shares of Common Stock.

(f)

No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith, assist in the carrying out of all the provisions of this Section 5 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series A-1 Preferred Stock against impairment.  In the event a holder shall elect to convert any shares of Series A-1 Preferred Stock as provided herein, the Company cannot refuse conversion (subject to the limitations set forth in Section 7 herein) based on any claim that such holder or any one associated or affiliated with such hold er has been engaged in any violation of law, unless (i) an order from the Securities and Exchange Commission prohibiting such conversion or (ii) an injunction from a court, on notice, restraining and/or adjoining conversion of all or of said shares of Series A-1 Preferred Stock shall have been issued and the Company posts a surety bond for the benefit of such holder in an amount equal to 100% of the Liquidation Preference Amount of the Series A-1 Preferred Stock such holder has elected to convert, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such holder in the event it obtains judgment.  If the Company is the prevailing party in any legal action or other legal proceeding relating to the Conversion Rights of the holders of the Series A-1 Preferred Stock, then the Company shall be entitled to recover from the holders of Series A-1 Preferred Stock reasonable attorneys’ fees, costs and disbursements (in add ition to any other relief to which the Company may be entitled).

(g)

Certificates as to Adjustments. Upon occurrence of each adjustment or readjustment of the Conversion Price or number of shares of Common Stock issuable upon conversion of the Series A-1 Preferred Stock pursuant to this Section 5, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of such Series A-1 Preferred Stock a certificate setting forth such adjustment and readjustment, showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon written request of the holder of such affected Series A-1 Preferred Stock, at any time, furnish or cause to be furnished to such holder a like certificate setting forth such adjustments and readjustments, the Conversion Price in effect at the time, and the number of shares of Common Stock and the amount, if any, of other securities or pro perty which at the time would be received upon the conversion of a share of such Series A-1 Preferred Stock. Notwithstanding the foregoing, the Company shall not be obligated to deliver a certificate unless such certificate would reflect an increase or decrease of at least one percent of such adjusted amount.

(h)

Issue Taxes. The Company shall pay any and all issue and other taxes, excluding federal, state or local income taxes, that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of shares of Series A-1 Preferred Stock pursuant thereto; provided, however, that the Company shall not be obligated to pay any transfer taxes resulting from any transfer requested by any holder in connection with any such conversion.

15

(i)

Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile or three (3) business days following being mailed by certified or registered mail, postage prepaid, return-receipt requested, addressed to the holder of record at its address appearing on the books of the Company. The Company will give written notice to each holder of Series A-1 Preferred Stock at least twenty (20) days prior to the date on which the Company closes its books or takes a record (I) with respect to any dividend or distribution upon the Common Stock, (II) with respect to any pro rata subscription offer to holders of Common Stock or (III) for determining rights to vote with respect to any Organic Change, dissolution, liquidation or winding-up and in no event shall such notice be provided to such holder prior to such information being made known to the p ublic. The Company will also give written notice to each holder of Series A-1 Preferred Stock at least twenty (20) days prior to the date on which any Organic Change, dissolution, liquidation or winding-up will take place and in no event shall such notice be provided to such holder prior to such information being made known to the public.

(j)

Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A-1 Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall pay cash equal to the product of such fraction multiplied by the average of the Closing Bid and Ask Prices of the Common Stock for the five (5) consecutive trading immediately preceding the Voluntary Conversion Date.

(k)

Reservation of Common Stock. The Company shall, so long as any shares of Series A-1 Preferred Stock are outstanding, reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Series A-1 Preferred Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of all of the Series A-1 Preferred Stock then outstanding; provided that the number of shares of Common Stock so reserved shall at no time be less than 100% of the number of shares of Common Stock for which the shares of Series A-1 Preferred Stock are at any time convertible. The initial number of shares of Common Stock reserved for conversions of the Series A-1 Preferred Stock and each increase in the number of shares so reserved shall be allocated pro rata among the holders of the Series A-1 Preferred Stock based on the number of shares of Series A-1 Preferred Stock held by each holder of record at the time of issuance of the Series A-1 Preferred Stock or increase in the number of reserved shares, as the case may be. In the event a holder shall sell or otherwise transfer any of such holder's shares of Series A-1 Preferred Stock, each transferee shall be allocated a pro rata portion of the number of reserved shares of Common Stock reserved for such transferor. Any shares of Common Stock reserved and which remain allocated to any person or entity which does not hold any shares of Series A-1 Preferred Stock shall be allocated to the remaining holders of Series A-1 Preferred Stock, pro rata based on the number of shares of Series A-1 Preferred Stock then held by such holder.

(l)

Retirement of Series A-1 Preferred Stock. Conversion of Series A-1 Preferred Stock shall be deemed to have been effected on the applicable Conversion Date. Upon conversion of only a portion of the number of shares of Series A-1 Preferred Stock represented by a certificate surrendered for conversion, the Company shall issue and deliver to such holder at the expense of the Company, a new certificate covering the number of shares of Series A-1

16

Preferred Stock representing the unconverted portion of the certificate so surrendered as required by Section 5(b)(ii).

(m)

Regulatory Compliance. If any shares of Common Stock to be reserved for the purpose of conversion of Series A-1 Preferred Stock require registration or listing with or approval of any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise before such shares may be validly issued or delivered upon conversion, the Company shall, at its sole cost and expense, in good faith and as expeditiously as possible, endeavor to secure such registration, listing or approval, as the case may be.

6.

No Preemptive Rights. Except as provided in Section 5 hereof, no holder of the Series A-1 Preferred Stock shall be entitled to rights to subscribe for, purchase or receive any part of any new or additional shares of any class, whether now or hereinafter authorized, or of bonds or debentures, or other evidences of indebtedness convertible into or exchangeable for shares of any class, but all such new or additional shares of any class, or any bond, debentures or other evidences of indebtedness convertible into or exchangeable for shares, may be issued and disposed of by the Board of Directors on such terms and for such consideration (to the extent permitted by law), and to such person or persons as the Board of Directors in their absolute discretion may deem advisable.

7.

Conversion Restriction.  Notwithstanding anything to the contrary set forth in Section 5 of this Certificate of Designations, at no time, other than in a bona fide Change of Control (as defined below) transaction, may a holder of shares of Series A-1 Preferred Stock convert shares of the Series A-1 Preferred Stock if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of Common Stock owned by such holder and its affiliates at such time, the number of shares of Common Stock which would result in such holder and its affiliates beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess of 9.99% of all of the Common Stock outstanding at such time; provided, however, that upon a holder of Series A-1 Preferred Stock prov iding the Company with sixty-one (61) days notice (pursuant to Section 5(i) hereof)(a "Waiver Notice") that such holder would like to waive Section 7 of this Certificate of Designations with regard to any or all shares of Common Stock issuable upon conversion of Series A-1 Preferred Stock, this Section 7 shall be of no force or effect with regard to those shares of Series A-1 Preferred Stock referenced in the Waiver Notice provided.  In the event a holder is unable to fully convert its shares of Series A-1 Preferred Stock in connection with a conversion election following the delivery of a Company's Redemption Notice pursuant to Section 8(d) hereof due to the restrictions set forth in this Section 7, 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 7.  The foregoing sentence shall not preclude a holder from waiving at any time its rights to limit its ownership to 9.99% of all of the Common Stock issued and outstanding at such time in accordance with this Section 7.

8.

Redemption.

17

(a)

Redemption Option Upon Change of Control. In addition to any other rights of the Company or the holders of Series A-1 Preferred Stock contained herein, simultaneous with the occurrence of a Change of Control (as defined below), the Company, at its option, shall have the right to redeem all or a portion of the outstanding Series A-1 Preferred Stock in cash at a price per share of Series A-1 Preferred Stock equal to 100% of the Liquidation Preference Amount plus all accrued and unpaid dividends (the "Change of Control Redemption Price").  Notwithstanding the foregoing to the contrary, the Company may effect a redemption pursuant to this Section 8(a) only if the Company is in material compliance with the terms and conditions of this Certificate of Designations, the Series A-1 Purchase Agreement and the other Transaction Documents (as defined in the Series A-1 Purchase Agreement).

(b)

"Change of Control".  A "Change of Control" shall be deemed to have occurred at such time as a third party not affiliated with the Company or any holders of the Series A-1 Preferred Stock shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than 50% of the outstanding voting securities of the Company.

(c)

Mechanics of Redemption at Option of Company Upon Change of Control. At any time within ten (10) days prior to a Change of Control transaction, the Company may redeem, effective immediately prior to the consummation of such Change of Control, all of the holder's Series A-1 Preferred Stock then outstanding by delivering written notice thereof via facsimile and overnight courier ("Notice of Redemption at Option of Company Upon Change of Control") to each holder of Series A-1 Preferred Stock, which Notice of Redemption at Option of Company Upon Change of Control shall indicate (i) the number of shares of Series A-1 Preferred Stock that the Company is electing to redeem and (ii) the Change of Control Redemption Price, as calculated pursuant to Section 8(a) above.  The Change of Control Redemption Price shall be paid in cash in accordance with Section 8(a) of this Certificate of Designations. O n or prior to the Change of Control, the holders of Series A-1 Preferred Stock shall surrender to the Company the certificate or certificates representing such shares, in the manner and at the place designated in the Notice of Redemption at Option of Company Upon Change of Control.  The Company shall deliver the Change of Control Redemption Price immediately prior to or simultaneously with the consummation of the Change of Control; provided that a holder's Preferred Stock Certificates shall have been so delivered to the Company (or an indemnification undertaking with respect to such Preferred Stock Certificates in the event of their loss, theft or destruction).  From and after the Change of Control transaction, unless there shall have been a default in payment of the Change of Control Redemption Price, all rights of the holders of Series A-1 Preferred Stock as a holder of such Series A-1 Preferred Stock (except the right to receive the Change of Control Redemption Price without interest upon surren der of their certificate or certificates) shall cease with respect to any redeemed shares of Series A-1 Preferred Stock, and such shares shall not thereafter be transferred on the books of the Company or be deemed to be outstanding for any purpose whatsoever.  Notwithstanding the foregoing to the contrary, nothing contained herein shall limit a holder’s ability to convert its shares of Series A-1 Preferred Stock following the receipt of the Notice of Redemption at Option of Company Upon Change of Control and prior to the consummation of the Change of Control transaction.

(d)

Company's Redemption Option.  The Company may redeem all or a portion of the Series A-1 Preferred Stock outstanding upon five (5) business days prior written

18

notice (the "Company's Redemption Notice") in cash at a price per share of Series A-1 Preferred Stock equal to 110% of the Liquidation Preference Amount plus all accrued and unpaid dividends  (the “Company’s Redemption Price”); provided, that if a holder has delivered a Conversion Notice to the Company for all or a portion of the shares of Series A-1 Preferred Stock, such shares of Series A-1 Preferred Stock designated to be redeemed may be converted by such holder. If a holder delivers a Conversion Notice but is prohibited from converting all of its shares of Series A-1 Preferred Stock as a result of the restrictions contained in Section 7 of this Certificate of Designations, such shares of Series A-1 Preferred Stock shall be exchanged for shares of a new series of preferred stock with preferences, rights and limitations substantially similar to those of the Series A-1 Pref erred Stock. The Company's Redemption Notice shall state the date of redemption which date shall be five (5) business days after the Company has delivered the Company's Redemption Notice (the "Company's Redemption Date"), the Company's Redemption Price and the number of shares to be redeemed by the Company. The Company shall deliver the Company's Redemption Price to the holder(s) within five (5) business days after the Company has delivered the Company's Redemption Notice, provided, that if the holder(s) delivers a Conversion Notice before the Company's Redemption Date, then the portion of the Company's Redemption Price which would be paid to redeem the shares of Series A-1 Preferred Stock covered by such Conversion Notice shall be returned to the Company upon delivery of the Common Stock issuable in connection with such Conversion Notice to the holder(s). On the Redemption Date, the Company shall pay the Company's Redemption Price, subject to any adjustment pursuant to the immediately preceding se ntence, to the holder(s) on a pro rata basis, provided, however, that upon receipt by the Company of the Preferred Stock Certificates to be redeemed pursuant to this Section 8(d), the Company shall, on the next business day following the date of receipt by the Company of such Preferred Stock Certificates, pay the Company's Redemption Price, subject to any adjustment pursuant to the immediately preceding sentence, to the holder(s) on a pro rata basis.  Notwithstanding the foregoing to the contrary, the Company may effect a redemption pursuant to this Section 8(d) only if (A) a registration statement providing for the resale of the shares of Common Stock issuable upon conversion of the Series A-1 Preferred Stock is then in effect or such shares can be resold pursuant to Rule 144 under the Securities Act of 1933, as amended, without any volume limitations, (B) 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), (C) the Company is in material compliance with the terms and conditions of this Certificate of Designations, the Series A-1 Purchase Agreement and the other Transaction Documents (as defined in the Series A-1 Purchase Agreement), and (D) the Company is not in possession of any material non-public information.  Nothing contained herein shall limit a holder’s ability to convert its shares of Series A-1 Preferred Stock following the receipt of the Company’s Redemption Notice and prior to the Company's Redemption Date.

9.

Inability to Fully Convert.

(a)

Holder's Option if Company Cannot Fully Convert. If, upon the Company's receipt of a Conversion Notice, the Company cannot issue shares of Common Stock registered for resale under a registration statement for any reason (unless such registration statement is not then required to be effective pursuant to the Registration Rights Agreement), including, without limitation, because the Company (x) does not have a sufficient number of shares of Common Stock authorized and available or (y) is otherwise prohibited by applicable

19

law or by the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Company or its securities from issuing all of the Common Stock which is to be issued to a holder of Series A-1 Preferred Stock pursuant to a Conversion Notice, then the Company shall issue as many shares of Common Stock as it is able to issue in accordance with such holder's Conversion Notice and pursuant to Section 5(b)(ii) above and, with respect to the unconverted Series A-1 Preferred Stock (other than unconverted Series A-1 Preferred Stock as a result of the restrictions contained in Sections 7 hereof), the holder, solely at such holder's option, can elect, within five (5) business days after receipt of notice from the Company thereof to:

(i)

require the Company to redeem from such holder those shares of Series A-1 Preferred Stock for which the Company is unable to issue Common Stock in accordance with such holder's Conversion Notice ("Mandatory Redemption") at a price per share equal to the Change of Control Redemption Price as of such Conversion Date (the "Mandatory Redemption Price"); provided that the Company shall have the sole option to pay the Mandatory Redemption Price in cash or shares of Common Stock.  The number of shares of Common Stock to be issued as the Mandatory Redemption Price shall be determined by dividing (i) the total amount of the Mandatory Redemption Price by (ii) the average Closing Bid and Ask Price of the Common Stock for the five (5) trading days immediately preceding the date such Mandatory Redemption Price is due;

(ii)

if the Company's inability to fully convert Series A-1 Preferred Stock is pursuant to Section 9(a)(y) above, require the Company to issue restricted shares of Common Stock in accordance with such holder's Conversion Notice and pursuant to Section 5(b)(ii) above;

(iii)

void its Conversion Notice and retain or have returned, as the case may be, the shares of Series A-1 Preferred Stock that were to be converted pursuant to such holder's Conversion Notice (provided that a holder's voiding its Conversion Notice shall not effect the Company's obligations to make any payments which have accrued prior to the date of such notice); or

(iv)

exercise its Buy-In rights pursuant to and in accordance with the terms and provisions of Section 5(b)(vi) hereof.

(b)

Mechanics of Fulfilling Holder's Election. The Company shall promptly send via facsimile to a holder of Series A-1 Preferred Stock, upon receipt of a facsimile copy of a Conversion Notice from such holder which cannot be fully satisfied as described in Section 9(a) above, a notice of the Company's inability to fully satisfy such holder's Conversion Notice (the "Inability to Fully Convert Notice"). Such Inability to Fully Convert Notice shall indicate (i) the reason why the Company is unable to fully satisfy such holder's Conversion Notice, (ii) the number of Series A-1 Preferred Stock which cannot be converted and (iii) the applicable Mandatory Redemption Price. Such holder shall notify the Company of its election pursuant to Section 9(a) above by delivering written notice via facsimile to the Company ("Notice in Response to Inability to Convert").

20

(c)

Pro-rata Conversion and Redemption. In the event the Company receives a Conversion Notice from more than one holder of Series A-1 Preferred Stock on the same day and the Company can convert and redeem some, but not all, of the Series A-1 Preferred Stock pursuant to this Section 9, the Company shall convert and redeem from each holder of Series A-1 Preferred Stock electing to have Series A-1 Preferred Stock converted and redeemed at such time an amount equal to such holder's pro-rata amount (based on the number shares of Series A-1 Preferred Stock held by such holder relative to the number shares of Series A-1 Preferred Stock outstanding) of all shares of Series A-1 Preferred Stock being converted and redeemed at such time.

(d)

Payment of Redemption Price. If such holder shall elect to have its shares redeemed pursuant to Section 9(a)(i) above, the Company shall pay the Mandatory Redemption Price to such holder within thirty (30) days of the Company's receipt of the holder's Notice in Response to Inability to Convert, provided that prior to the Company's receipt of the holder's Notice in Response to Inability to Convert the Company has not delivered a notice to such holder stating, to the satisfaction of the holder, that the event or condition resulting in the Mandatory Redemption has been cured and all Common Stock issuable to such holder in accordance with such holder's Conversion Notice can and will be delivered to the holder.  If the Company shall fail to pay the applicable Mandatory Redemption Price to such holder on a timely basis as described in this Section 9(d) (other than pursuant to a good faith dispute of the a rithmetic calculation of the Mandatory Redemption Price), in addition to any remedy such holder of Series A-1 Preferred Stock may have under this Certificate of Designation, such unpaid amount shall bear interest at the rate of 1.0% per month (prorated for partial months) until paid in full.  Until the full Mandatory Redemption Price is paid in full to such holder, such holder may (i) void the Mandatory Redemption with respect to those shares of Series A-1 Preferred Stock for which the full Mandatory Redemption Price has not been paid, (ii) receive back such shares of Series A-1 Preferred Stock, and (iii) require that the Conversion Price of such returned shares of Series A-1 Preferred Stock be adjusted to the lesser of (A) the Conversion Price and (B) the average Closing Bid and Ask Price during the five day period ending on the date the holder voided the Mandatory Redemption.

10.

Vote to Change the Terms of or Issue Preferred Stock. The affirmative vote at a meeting duly called for such purpose, or the written consent without a meeting, of the holders of not less than two-thirds (2/3rds) of the then outstanding shares of Series A-1 Preferred Stock, shall be required (a) for any change to this Certificate of Designations or the Company's Certificate of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series A-1 Preferred Stock or (b) for the issuance of additional shares of Series A-1 Preferred Stock.

11.

Lost or Stolen Certificates. Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Preferred Stock Certificates representing the shares of Series A-1 Preferred Stock, and, in the case of loss, theft or destruction, of an indemnification undertaking by the holder to the Company (in form and substance satisfactory to the Company) and, in the case of mutilation, upon surrender and cancellation of the Preferred Stock Certificate(s), the Company shall execute and deliver new Preferred Stock Certificate(s) of like tenor and date; provided, however, the Company shall not be obligated to

21

re-issue Preferred Stock Certificates if the holder contemporaneously requests the Company to convert such shares of Series A-1 Preferred Stock into Common Stock.

12.

Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designations shall be cumulative and in addition to all other remedies available under this Certificate of Designations, at law or in equity (including a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a holder's right to pursue actual damages for any failure by the Company to comply with the terms of this Certificate of Designations. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the perform ance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holders of the Series A-1 Preferred Stock and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach, the holders of the Series A-1 Preferred Stock shall be entitled, in addition to all other available remedies, to an injunction restraining any breach or the Series A-1 Preferred Stockholders' reasonable perception of a threatened breach by the Company of the provisions of this Certificate of Designations, without the necessity of showing economic loss and without any bond or other security being required.

13.

Specific Shall Not Limit General; Construction. No specific provision contained in this Certificate of Designations shall limit or modify any more general provision contained herein.   This Certificate of Designation shall be deemed to be jointly drafted by the Company and all initial purchasers of the Series A-1 Preferred Stock and shall not be construed against any person as the drafter hereof.

14.

Failure or Indulgence Not Waiver. No failure or delay on the part of a holder of Series A-1 Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

22

IN WITNESS WHEREOF, the undersigned has executed and subscribed this Certificate and does affirm the foregoing as true this 16th day of March, 2009.

GLOWPOINT, INC.
By:	/s/ MICHAEL BRANDOFINO
	Michael Brandofino Chief Executive Officer

EXHIBIT I

GLOWPOINT, INC.
CONVERSION NOTICE

Reference is made to the Certificate of Designations, Preferences and Rights of the Series A-1 Preferred Stock of Glowpoint, Inc. (the "Certificate of Designations"). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series A-1 Preferred Stock, par value $.0001 per share (the "Preferred Shares"), of Glowpoint, Inc., a Delaware corporation (the "Company"), indicated below into shares of Common Stock, par value $.0001 per share (the "Common Stock"), of the Company, by tendering the stock certificate(s) representing the share(s) of Preferred Shares specified below as of the date specified below.

Date of Conversion:

Number of Preferred Shares to be converted:

Stock certificate no(s). of Preferred Shares to be converted:

Please confirm the following information:

Conversion Price:

Number of shares of Common Stock to be issued:

Number of shares of Common Stock beneficially owned or deemed

beneficially owned by the Holder on the Date of Conversion:

Please issue the Common Stock into which the Preferred Shares are being converted and, if applicable, any check drawn on an account of the Company in the following name and to the following address:

Issue to:

Facsimile Number:

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):

Authorization:
	By:
	Title:

Dated:

EX-4.2

Exhibit 4.2

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-3 WARRANT TO PURCHASE

SHARES OF COMMON STOCK

OF

GLOWPOINT, INC.

Expires March 18, 2014

No.: W-A-08- __	Number of Shares:
Date of Issuance: March 18, 2009

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 March 18, 2009 and shall expire at 5:00 p.m., Eastern Time, on March 18, 2014 (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.

-1-

(b)

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

(c)

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

X = Y - (A)(Y)

      B

Where

X =

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

Y =

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

A =

the Warrant Price.

B =

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

(d)

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

-2-

(e)

Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.  In addition to any other rights available to the Holder, if the Issuer fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Stock pursuant to an exercise on or before the Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Stock which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Issuer shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of shares of Warrant Stock th at 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.

(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.

-3-

(i)

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

(ii)

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

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

(iii)

The Issuer agrees to reissue this Warrant or certificates representing any of the Warrant Stock, without the legend set forth above if at such time, prior to making any transfer of any such securities, the Holder shall give written notice to the Issuer describing the manner and terms of such transfer.  Such proposed transfer will not be effected until: (a) either (i) the Issuer has received an opinion of counsel reasonably satisfactory to the Issuer, to the effect that the registration of such securities under the Securities Act is not required in connection with such proposed transfer, (ii) a registration statement under the Securities Act covering such proposed disposition has been filed by the Issuer with the Securities and Exchange Commission and has become effective under the Securities Act, (iii) the Issuer has received other evidence reasonably satisfactory to the Issuer that such re gistration 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

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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 D TC 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 percent (100%) of the aggregate number of shares of Common Stock to provide for the exercise of this Warrant.

(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 applic able 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.

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(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.

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)  “Triggering Event” means the Issuer doing any of the following after the Original Issue Date: (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.   

A.

The Issuer shall not enter into or be a party to a Triggering Event unless (i) the Successor Entity assumes in writing all of the obligations of the Issuer under this Warrant pursuant to a written agreement in form and substance approved, in writing, by the Holder prior to such Triggering Event and (ii) the Successor Entity is a company

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that has a class of equity securities registered pursuant to the Securities Exchange Act of 1934, as amended, and such security is listed or quoted on a national securities exchange, national automated quotation system or the OTC Bulletin Board. Upon the occurrence of any Triggering Event, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Triggering Event, the provisions of this Warrant referring to the “Issuer” shall refer instead to the Successor Entity), and may exercise every right and power of the Issuer and shall assume all of the obligations of the Issuer under this Warrant with the same effect as if such Successor Entity had been named as the Issuer herein. Upon consummation of the Triggering Event, the Successor Enti ty shall deliver to the Holder written confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the Triggering Event, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of this Warrant prior to such Triggering Event, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Triggering Event had this Warrant been exercised immediately prior to such Triggering Event, as adjusted in accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Triggering Event pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock, the Issuer shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the Triggering Event but prior to the expiration of the Term, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of this Warrant prior to such Triggering Event, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Triggering Event had this Warrant been exercised immediately prior to such Triggering Event, as adjusted in accordance with the provisions of this Warrant. Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section shall apply similarly and equally to successive Triggeri ng Events and shall be applied without regard to any limitations on the exercise of this Warrant.

B.

Notwithstanding the provisions of Section 4(a)(i)(A), the Issuer shall have the right to require that the Holder waive the requirements of Section 4(a)(i)(A) (the “Waiver”) in exchange for a payment of cash in an amount equal to the Black-Scholes Value of the remaining unexercised portion of this Warrant on the date of such Triggering Event, with the Waiver becoming effective, and this Warrant cancelled, concurrently with such payment of such cash amount (the “Triggering Event Amount”) to the Holder upon closing the Triggering Event. Notwithstanding anything to the contrary in this Section 4(a)(i)(B), in no event may the Issuer effect a Triggering Event with a non-publicly traded Successor Entity when the consideration paid upon closing the Triggering Event is anything other than c ash.  Notwithstanding anything further to the contrary in this Section 4(a)(i)(B), but subject to the ownership limitation set forth in Section 7, until such time that the Holder receives the Triggering Event Amount (at which point this Warrant shall be cancelled), this Warrant may be exercised,

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in whole or in part, by the Holder prior to closing the Triggering Event, into Common Stock pursuant to Section 2.

(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.

(c)

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

(i)

cash,

(ii)

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

(iii)

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

then (1) the number of shares of Common Stock for which this Warrant is exercisable shall be adjusted to equal the product of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such adjustment multiplied by a fraction (A) the numerator of which shall be the Per Share Market Value of Common Stock at the date of taking such record and (B) the denominator of which shall be such Per Share Market Value minus the amount allocable to one share of Common Stock of any such cash so distributable and of the fair value (as determined in good faith by the Board of Directors of the Issuer) of any and all such evidences of indebtedness, shares of stock, other securities or property or warrants or other

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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 re classification, 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:

(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

-9-

issuable thereafter is amended or adjusted, and such price as so amended shall make the Aggregate Per Common Share Price be less than the Warrant Price in effect at the time of such amendment or adjustment, then the Warrant Price upon each such issuance or amendment shall be adjusted as provided in Section 4(d).  No further adjustment of the Warrant Price then in effect shall be made under this Section 4(e) upon the issuance of any Common Stock Equivalents which are issued pursuant to the exercise of any warrants or other subscription or purchase rights therefor, if any such adjustment shall previously have been made upon the issuance of such warrants or other rights pursuant to this Section 4(e).  No further adjustments of the Warrant Price then in effect shall be made upon the actual issue of such Common Stock upon conversion or exchange of such Common Stock Equivalents.

(f)

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

(g)

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

(i)

Computation of Consideration.  To the extent that any Additional Shares of Common Stock or any Common Stock Equivalents (or any warrants or other rights therefor) shall be issued for cash consideration, the consideration received by the Issuer therefor shall be the amount of the cash received by the Issuer therefor, or, if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the initial public offering price (in any such case subtracting any amounts paid or receivable for accrued interest

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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 issuabl e pursuant to any warrants or other rights to subscribe for or purchase the same shall be the consideration received by the Issuer for issuing such warrants or other rights plus the additional con­sideration payable to the Issuer upon exercise of such warrants or other rights.  The consideration for any Additional Shares of Common Stock issuable pursuant to the terms of any Common Stock Equivalents shall be the consideration received by the Issuer for issuing war­rants or other rights to subscribe for or purchase such Common Stock Equivalents, plus the consideration paid or payable to the Issuer in respect of the subscription for or purchase of such Common Stock Equivalents, plus the additional consideration, if any, payable to the Issuer upon the exercise of the right of conversion or exchange in such Common Stock Equivalents.  In the event of any consolidation or merger of the Issuer in which the Issuer is not the surviving corporation or in which the previously outstanding shares of Comm on 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(g)(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.

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(iii)

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

(h)

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.

(i)

Escrow of Warrant Stock.  If after any property becomes distributable pursuant to this Section 4 by reason of the taking of any record of the holders of Common Stock, but prior to the occurrence of the event for which such record is taken, and the Holder exer­cises this Warrant, any shares of Common Stock issuable upon exercise by reason of such adjustment shall be deemed the last shares of Common Stock for which this Warrant is exercised (notwithstanding any other provision to the contrary herein) and such shares or other property shall be held in escrow for the Holder by the Issuer to be issued to the Holder upon and to the extent that the event actually takes place, upon payment of the current Warrant Price.  Notwithstanding any other provision to the contrary herein, if the event for which such record was taken fails to occur or is rescinded, then such escrowed shares shall be cancelled by the Iss uer 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. The Holder may not exercise the Warrant hereunder to the extent such exercise would result in the Holder and its affiliates beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and

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the rules thereunder) in excess of 9.99% 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 sixty-one (61) days notice (pursuant to Section 12 hereof) (the "Waiver Notice") that such holder would like to waive this Section 7 with regard to any or all shares of Common Stock issuable upon exercise of this Warrant, this Section 7 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.  In the event the Holder is unable to fully exercise this Warrant, in whole or in part, due to the restrictions set forth in this Section 7, such Holder may elect to receive Series D Convertible Preferred Stock of the Issuer 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 7.  The foregoing sentence shall not preclude the Holder from waiving at any time its rights to limit its ownership to 9.99% of all of the Common Stock issued and outstanding at such time in accordance with this Section 7.

8.

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

"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 Issuer and the holders signatory thereto, (iv) the issuance of the Notes and the Warrants, (v) t he 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) securities issued pursuant to a bona fide firm underwritten public offering of the Issuer’s securities, (xi) securities issued pursuant to the terms of those c ertain Note Exchange Agreements dated as of November 25, 2008, December 31, 2008 and March 16, 2009, by and among the Issuer and the holders signatory thereto (the “Note Exchange Agreements”), (xii) securities issued pursuant to the terms of that certain Series C Consent and Exchange Agreement, dated as of November 25, 2008, and that certain Series A Consent and Exchange Agreement, dated March 16, 2009, by and among the Issuer and the holders signatory thereto (collectively, the “Consent and Exchange

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Agreements”), (xiii) securities issued pursuant to the terms of the Purchase Agreement, (xiv) securities issued pursuant to the terms of those certain Amendments No. 2 to Senior Secured Notes by and among the Issuer and the holders named therein, dated as of November 25, 2008, (xv) the payment of any dividends on the Series A-1 Shares, (xvi) any warrants issued to the financial advisor and/or its designees for the transactions contemplated by the Note Exchange Agreements, the Consent and Exchange Agreements, or the Purchase Agreement, and (xvii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (xvi) above.

“Black-Scholes Value” means the value of this Warrant obtained from the "OV" function on the Bloomberg Financial Markets (“Bloomberg”) using (i) a price per share of Common Stock equal to the greater of (A) the arithmetic average of the weighted average price of the Common Stock for the five Trading Days immediately preceding the date of consummation of the applicable Triggering Event and (B) the weighted average price of the Common Stock for the Trading Day immediately preceding the date of consummation of the applicable Triggering Event, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of consummation of the Triggering Event, and (iii) an expected volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg determined as of the Trading Day immedia tely following the public announcement of the applicable Triggering Event.

“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.

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"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.

"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) any senior secured convertible promissory notes issued pursuant to the Prior 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 March 18, 2009.

"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

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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 no t 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.

"Prior 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 thereto, (ii) that certain Note and Warrant Purchase Agreement dated as of April 12, 2006 by and among the Issuer and the purchasers thereto, (iii) that certain Note and Warrant Purchase Agreement dated as of September 21, 2007 among the Issuer and the purchasers thereto, and (iv) that certain Series A Convertible Preferred Stock Purchase Agreement, dated as of November 25, 2008, among the Issuer and the purchasers thereto.

“Purchase Agreement” means that certain Series A-1 Convertible Preferred Stock Purchase Agreement, dated as of March 16, 2009, among the Issuer and the purchasers thereto, as the same may be amended from time to time.

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

"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.

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“Series A-1 Shares” means shares of the Issuer’s Series A-1 Convertible Preferred Stock, par value $0.0001 per share and stated value of $7,500 per share, convertible into shares of Common Stock, issued pursuant to the Purchase Agreement or the Series A Consent and Exchange Agreement.  

"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.

“Successor Entity” means the Person, which may be the Issuer, formed by, resulting from or surviving any Triggering Event or the Person with which such Triggering Event shall have been made; provided, however, that if such Person is not a company that has a class of equity securities registered pursuant to the Securities Exchange Act of 1934, as amended, and listed or quoted on a national securities exchange, national automated quotation system or the OTC Bulletin Board, Successor Entity shall mean the entity that, directly or indirectly, controls such Person and whose common shares or equivalent equity security are listed or quoted on a national securities exchange, national automated quotation system or the OTC Bulletin Board

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

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

"Triggering Event" has the meaning specified in Section 4(a)(i) hereof.

"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 (which may include, without limitation, this Warrant); (B) the warrants to purchase shares of Common Stock issued in connection with amending the Notes (which may include, without limitation, this Warrant); 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 $0.40, 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.

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"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 or dividends (including cash dividends) 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

(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 dat e 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

-18-

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.

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 t o 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

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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:

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, Esq.

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.

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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.

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.

-21-

IN WITNESS WHEREOF, the Issuer has executed this Series A-3 Warrant as of the day and year first above written.

GLOWPOINT, INC.
By:
	Joseph Laezza, President

-22-

EXERCISE FORM

SERIES A-3 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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EX-10.1

Exhibit 10.1

SERIES A-1 CONVERTIBLE PREFERRED

STOCK PURCHASE AGREEMENT

Dated as of March 16, 2009

by and among

GLOWPOINT, INC.

and

THE PURCHASERS LISTED ON EXHIBIT A

Page

ARTICLE I  Purchase and Sale of Series A-1 Preferred Stock

1

Section 1.1

Purchase and Sale of Series A-1 Preferred Stock.

1

Section 1.2

Purchase Price and Closing

1

Section 1.3

Conversion Shares/Warrant Shares

2

Section 1.4

Exchange of Notes

19

ARTICLE II  Representations and Warranties

2

Section 2.1

Representations and Warranties of the Company

2

Section 2.2

Representations and Warranties of the Purchasers

13

ARTICLE III  Covenants

15

Section 3.1

Securities Compliance

15

Section 3.2

Registration and Listing

15

Section 3.3

Inspection Rights

16

Section 3.4

Compliance with Laws

16

Section 3.5

Keeping of Records and Books of Account

16

Section 3.6

Reporting Requirements

16

Section 3.7

Other Agreements

17

Section 3.8

Use of Proceeds

16

Section 3.9

Reporting Status

16

Section 3.10

Disclosure of Transaction

17

Section 3.11

Disclosure of Material Information

17

Section 3.12

Pledge of Securities

17

Section 3.13

Amendments

17

Section 3.14

Distributions

17

Section 3.15

Reservation of Shares

18

Section 3.16

Transfer Agent Instructions

18

Section 3.17

Disposition of Assets

18

Section 3.18

Restrictions on Certain Issuances of Securities

19

Section 3.19

Status of Dividends

19

Section 3.20

Subsequent Financings

19

Section 3.20

Bona Fide Sale

20

ARTICLE IV  Conditions

21

Section 4.1

Conditions Precedent to the Obligation of the Company to Close
and to Sell the Securities

21

Section 4.2

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

22

ARTICLE V  Certificate Legend

25

Section 5.1

Legend

24

ARTICLE VI  Indemnification

26

Section 6.1

General Indemnity.

26

Section 6.2

Indemnification Procedure

26

ARTICLE VII  Miscellaneous

27

Section 7.1

Fees and Expenses

27

Section 7.2

Specific Performance; Consent to Jurisdiction; Venue.

28

Section 7.3

Entire Agreement; Amendment

28

Section 7.4

Notices

29

Section 7.5

Waivers

30

Section 7.6

Headings

30

Section 7.7

Successors and Assigns

30

Section 7.8

No Third Party Beneficiaries

30

Section 7.9

Governing Law

30

Section 7.10

Survival

30

Section 7.11

Counterparts

31

Section 7.12

Publicity

31

Section 7.13

Severability

31

Section 7.14

Further Assurances

31

SERIES A-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

This SERIES A-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT dated as of March 16, 2009 (this “Agreement”) by and among Glowpoint, Inc., a Delaware corporation (the "Company"), and each of the purchasers of the Company’s Series A-1 Convertible Preferred Stock whose names are set forth on Exhibit A attached hereto (each a "Purchaser" and collectively, the "Purchasers").  

The parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE OF SERIES A-1 PREFERRED STOCK

Section 1.1

Purchase and Sale of Series A-1 Preferred Stock.  

(a)

Upon the following terms and conditions, the Company shall issue and sell to the Purchasers, and the Purchasers shall purchase from the Company, up to one thousand two hundred fifty (1,250) shares of the Company’s Series A-1 Convertible Preferred Stock (the “Series A-1 Shares”), par value $0.0001 per share and stated value of $7,500 per share, convertible into shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), in the amounts set forth opposite such Purchaser’s name on Exhibit A hereto.  The designation, rights, preferences and other terms and provisions of the Series A-1 Convertible Preferred Stock are set forth in the Certificate of Designation of the Relative Rights and Preferences of the Series A-1 Convertible Preferred Stock attached hereto as Exhibit B (the “Certificate of Designat ion”).  The Company and the Purchasers are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities registration afforded by Section 4(2) of the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the "Securities Act"), including Regulation D ("Regulation D"), and/or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the investments to be made hereunder.

(b)

Upon the following terms and conditions, each Purchaser shall be issued Series A-3 Warrants, in substantially the form attached hereto as Exhibit C (the "Warrants"), to purchase a number of shares of Common Stock equal to fifty percent (50%) of the number of Conversion Shares (as defined below) issuable upon conversion of such Purchaser’s Series A-1 Shares at an exercise price per share equal to $0.40 and a term of five (5) years following issuance.  The number of shares of Common Stock issuable upon exercise of the Warrants issuable to each Purchaser is set forth opposite such Purchaser’s name on Exhibit A attached hereto.

Section 1.2

Purchase Price and Closing.  Subject to the terms and conditions hereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Purchasers, severally but not jointly, agree to purchase up to one thousand

1

(1,000) Series A-1 Shares at a purchase price of Four Thousand Hundred ($4,000) Dollars per share, for an aggregate purchase price of up to Five Million Dollars ($5,000,000) (the “Purchase Price”).  The initial closing of the purchase and sale of the Series A-1 Shares to be acquired by the Purchasers from the Company under this Agreement shall take place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, New York 10036 (the “First Closing”) at 10:00 a.m., New York time on March 16, 2009, or such other date as the Purchasers and the Company may agree upon, and such additional closings (together with the First Closing, each, a “Closing”) that may occur from time to time, at the discretion of the Company, during the 90 days following the First Closing (each, a "Closing Date") ; provided, that all of the conditions set forth in Article IV hereof and applicable to a Closing shall have been fulfilled or waived in accordance herewith.  Subject to the terms and conditions of this Agreement, at a Closing the Company shall deliver or cause to be delivered to each Purchaser (i) that number of (x) Series A-1 Shares and (y) a Warrant to purchase such number of shares of Common Stock set forth opposite the name of such Purchaser on Exhibit A hereto, and (ii) any other documents required to be delivered pursuant to Article IV hereof.  At a Closing, each Purchaser shall deliver its Purchase Price by wire transfer to an escrow account designated by the escrow agent.    

Section 1.3

Conversion Shares; Warrant Shares.  The Company has authorized and has reserved and covenants to continue to reserve, free of preemptive rights and other similar contractual rights of stockholders, a number of its authorized but unissued shares of Common Stock equal to one hundred percent (100%) of the aggregate number of shares of Common Stock to effect the conversion of the Series A-1 Shares and exercise of the Warrants as of a Closing Date.  Any shares of Common Stock issuable upon conversion of the Series A-1 Shares are herein referred to as the “Conversion Shares”.  Any shares of Common Stock issuable upon exercise of the Warrants (and such shares when issued) are herein referred to as the “Warrant Shares”.  The Series A-1 Shares, the Warrants, the Conversion Shares and the Warrant Shares are sometimes collectively referred to herei n as the "Securities".    

Section 1.4

Exchange of Senior Secured Convertible Promissory Notes.  The parties hereto acknowledge and agree that, at the First Closing, the holders of certain Senior Secured Convertible Promissory Notes, as set forth on Exhibit A hereto, having an aggregate principal amount of approximately $1,100,000, will exchange such Senior Secured Convertible Promissory Notes for shares of the Company’s Series A-1 Convertible Preferred Stock and Series A-3 Warrants.  

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Section 2.1

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

2

(a)

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

(b)

Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and perform this Agreement, the Warrants, the Certificate of Designation, the Escrow Agreement by and among the Company, the Purchasers and the escrow agent, dated as of the date hereof, substantially in the form of Exhibit D attached hereto (the “Escrow Agreement”), the Joinder to Registration Rights Agreement by and among the Company and the purchasers named therein, dated the date hereof, substantially in the form of Exhibit E attached hereto (the “Joinder to Registration Rights Agreement”), the Series A Preferred Consent & Exchange Agreement by and among the Company and the holders of the Company’s Series A convertible preferred stock, dated as of the date hereof, substantially in the form of Exhibit F attached hereto (the & #147;Series A Preferred Consent & Exchange Agreement”), and that certain Note Exchange Agreement dated on or about the date hereof among the Company and the holder(s) named therein (the “Note Exchange Agreement”)(collectively, the "Transaction Documents"), and to issue and sell the Securities in accordance with the terms hereof.  The execution, delivery and performance of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, its Board of Directors or stockholders is required.  When executed and delivered by the Company, each of the Transaction Documents shall constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, morator ium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor's rights and remedies or by other equitable principles of general application.

(c)

Capitalization.  The authorized capital stock and the issued and outstanding shares of capital stock of the Company as of the date hereof is set forth on Schedule 2.1(c) hereto.  All of the outstanding shares of the Common Stock and any other outstanding security of the Company have been duly and validly authorized.  The Series A Convertible Preferred Stock is the only Preferred Stock currently issued and outstanding, which shares shall be exchanged into Series A-1 Shares at Closing.  Except as set forth in this Agreement or as set

3

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

(d)

Issuance of Securities.  The Series A-1 Shares and Warrants to be issued at a Closing will have been duly authorized by all necessary corporate action and the Series A-1 Shares, when paid for or issued in accordance with the terms hereof, shall be validly issued and outstanding, fully paid and non-assessable and entitled to the rights and preferences set forth in the Certificate of Designation.  When the Conversion Shares and Warrant Shares are issued in accordance with the terms of the Certificate of Designation and the Warrants, respectively, such shares will be duly authorized by all necessary corporate action and validly issued and outstanding, fully paid and non-assessable, and the holders shall be entitled to all rights accorded to a holder of Common Stock.

(e)

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

4

(other than any filings, consents and approvals which may be required to be made by the Company under applicable state and federal securities laws, rules or regulations and the Certificate of Designation or any registration provisions provided in the Joinder to Registration Rights Agreement).

(f)

Commission Documents, Financial Statements.  The Common Stock of the Company is registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and except as set forth on Schedule 2.1(f) hereto, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act (all of the foregoing including filings incorporated by reference therein being referred to herein as the "Commission Documents").  Except as set forth on Schedule 2.1(f) hereto, at the times of their respective filings, the Form 10-K for the fiscal year ended December 31, 2007 (the “Form 10-K”) and each subsequently filed Form 10-Q (collectively, the "Form 10-Q" ;) complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such documents, and the Form 10-Q and Form 10-K did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Except as set forth on Schedule 2.1(f) hereto, as of their respective dates, the financial statements of the Company included in the Commission Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto.  Such financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the financial position of the Company and its Subsidiaries as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

(g)

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

5

rights, warrants or options of the type described in the preceding sentence.  Neither the Company nor any Subsidiary is party to, nor has any knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of any Subsidiary.

(h)

No Material Adverse Change.  Except as set forth in the Commission Documents or on Schedule 2.1(h) hereto, since December 31, 2007, the Company has not experienced or suffered any Material Adverse Effect.

(i)

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

(j)

No Undisclosed Events or Circumstances.  Since December 31, 2007, no event or circumstance has occurred or exists with respect to the Company or its Subsidiaries or their respective businesses, properties, prospects, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.

(k)

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

(l)

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

(m)

Actions Pending.  There is no action, suit, claim, investigation, arbitration, alternate dispute resolution proceeding or other proceeding pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary which questions the validity of this Agreement or any of the other Transaction Documents or any of the transactions contemplated hereby or thereby or any action taken or to be taken pursuant hereto or thereto.  There is no action, suit, claim, investigation, arbitration, alternate dispute resolution proceeding or other proceeding pending or, to the knowledge of the Company, threatened against or involving the

6

Company, any Subsidiary or any of their respective properties or assets, which individually or in the aggregate, would reasonably be expected, if adversely determined, to have a Material Adverse Effect.  There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any Subsidiary or any officers or directors of the Company or Subsidiary in their capacities as such, which individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(n)

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

(o)

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

(p)

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

(q)

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

(r)

Operation of Business.  The Company and each of the Subsidiaries owns or possesses the rights to all patents, trademarks, domain names (whether or not registered) and

7

any patentable improvements or copyrightable derivative works thereof, websites and intellectual property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations which are necessary for the conduct of its business as now conducted without any conflict with the rights of others.

(s)

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

(t)

Books and Records; Internal Accounting Controls.  The records and documents of the Company and its Subsidiaries accurately reflect in all material respects the information relating to the business of the Company and the Subsidiaries, the location and collection of their assets, and the nature of all transactions giving rise to the obligations or accounts receivable of the Company or any Subsidiary.  Except as set forth in the Commission Documents, the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company's management, to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to m aintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate actions are taken with respect to any differences.

8

(u)

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

(v)

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

(w)

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

(x)

Governmental Approvals.  Except for the filing of any notice prior or subsequent to a Closing Date that may be required under applicable state and/or Federal securities laws (which if required, shall be filed on a timely basis), including the filing of a Form D, the filing of a registration statement pursuant to the Joinder to Registration Rights Agreement, the filing of a Form 8-K, and the filing of the Certificate of Designation with the Secretary of State for the State of Delaware, no authorization, consent, approval, license, exemption of, filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, is or will be necessary for, or in connection with, the execution or delivery of the Securities, or for the performance by the Company of its obligations under the Transaction Documents.

9

(y)

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

(z)

Absence of Certain Developments.  Except as set forth in the Commission Documents or on Schedule 2.1(z) hereto, since December 31, 2007, neither the Company nor any Subsidiary has:

(i)

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

(ii)

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

(iii)

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

(iv)

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

(v)

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

(vi)

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

10

(vii)

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

(viii)

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

(ix)

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

(x)

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

(xi)

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

(xii)

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

(xiii)

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

(xiv)

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

(aa)

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

(bb)

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

11

or by any trade or business, whether or not incorporated, which, together with the Company or any Subsidiary, is under common control, as described in Section 414(b) or (c) of the Code.

(cc)

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

(dd)

No Integrated Offering.  Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offering of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act which would prevent the Company from selling the Securities pursuant to Regulation D and Rule 506 thereof under the Securities Act, or any applicable exchange-related stockholder approval provisions, nor will the Company or any of its affiliates or subsidiaries take any action or steps that would cause the offering of the Securities to be integrated with other offerings.  The Company does not have any registration statement pending before the Commission or currently under th e Commission’s review and, except as set forth on Schedule 2.1(dd), since September 1, 2008, the Company has not offered or sold any of its equity securities or debt securities convertible into shares of Common Stock.

(ee)

Sarbanes-Oxley Act

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

(ff)

Dilutive Effect.  The Company understands and acknowledges that its obligation to issue Conversion Shares upon conversion of the Series A-1 Shares in accordance with this Agreement and the Certificate of Designation and its obligations to issue the Warrant

12

Shares upon the exercise of the Warrants in accordance with this Agreement and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interest of other stockholders of the Company.

(gg)

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

Section 2.2

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

(a)

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

(b)

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

(c)

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

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(d)

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

(e)

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

(f)

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

(g)

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

(h)

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

14

the Exchange Act and such Purchaser is not a broker-dealer.  Each Purchaser acknowledges that an investment in the Securities is speculative and involves a high degree of risk.  

(i)

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

(j)

No Shorting.  No Purchaser has engaged in any Short Sales (as defined in Regulation SHO) of any securities of the Company or instructed any third parties to engage in any Short Sales of securities of the Company on its behalf prior to the applicable Closing Date.  Each Purchaser covenants and agrees that it will not be in a net short position (to be determined on a fully diluted, as converted basis and without regard to any ownership blocker provisions contained in the Certificate of Designation or other Transaction Documents) with respect to the shares of Common Stock issued or issuable to it.

(k)

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

ARTICLE III

COVENANTS

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

Section 3.1

Securities Compliance.  The Company shall notify the Commission in accordance with its rules and regulations, of the transactions contemplated by any of the Transaction Documents, including filing a Form 8-K disclosing the transaction and filing a Form D with respect to the Securities as required under Regulation D, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to the Purchasers or subsequent holders.

Section 3.2

Registration and Listing.  The Company shall cause its Common Stock to continue to be registered under Sections 12(b) or 12(g) of the Exchange Act, to comply

15

in all respects with its reporting and filing obligations under the Exchange Act, and to not take any action or file any document (whether or not permitted by the Securities Act or the rules promulgated thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act or Securities Act, except as permitted herein.  The Company will take all action necessary to continue the listing or trading of its Common Stock on the OTC Bulletin Board or other exchange or market on which the Common Stock is trading.  Subject to the terms of the Transaction Documents, the Company further covenants that it will take such further action as the Purchasers may reasonably request, all to the extent required from time to time to enable the Purchasers to sell the Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act.  Upon the request of the Purchasers, the Company shall deliver to the Purchasers a written certification of a duly authorized officer as to whether it has complied with such requirements.

Section 3.3

Inspection Rights.  Provided same would not be in violation of Regulation FD, the Company shall permit, during normal business hours and upon reasonable request and reasonable notice, each Purchaser or any employees, agents or representatives thereof, so long as such Purchaser shall be obligated hereunder to purchase the Series A-1 Shares or shall beneficially own any Conversion Shares or Warrant Shares, for purposes reasonably related to such Purchaser's interests as a stockholder, to examine the publicly available, non-confidential records and books of account of, and visit and inspect the properties, assets, operations and business of the Company and any Subsidiary, and to discuss the publicly available, non-confidential affairs, finances and accounts of the Company and any Subsidiary with any of its officers, consultants, directors, and key employees.

Section 3.4

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

Section 3.5

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

Section 3.6

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

(a)

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

16

(b)

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

(c)

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

Section 3.7

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

Section 3.8

Use of Proceeds.  The net proceeds from the sale of the Securities hereunder shall be used by the Company for working capital and general corporate purposes and not to redeem any Common Stock or securities convertible, exercisable or exchangeable into Common Stock, to repay any indebtedness for borrowed money, to consummate any mergers, acquisitions or similar transactions with third parties, or to settle any outstanding litigation.  Notwithstanding the foregoing, the Company will use net proceeds at the First Closing to redeem outstanding Senior Secured Convertible Promissory Notes held by Smithfield Fiduciary, if any, prior to maturity.

Section 3.9

Certain Board Matters.

(a)

The Company shall reduce the size of its Board of Directors and take all steps necessary or advisable to eliminate the classification of its Board of Directors at the Company’s next annual meeting of shareholders (the “Annual Meeting”), which is expected to occur in May or June 2009.

(b)

No later than the Annual Meeting, the Board of Directors shall amend and restate its director compensation policy to provide, “Directors who are not our executive officers or employees receive an annual cash fee of $20,000, payable in equal quarterly installments on the first business day following the end of the calendar quarter, and an annual grant of 25,000 restricted shares of our common stock, which shall be made at the annual meeting of our stockholders and shall vest at the next annual meeting of our stockholders. The chairperson of our board of directors, if any, and the chairperson of our audit committee will each receive an additional cash payment of $5,000 per year, payable in equal quarterly installments.”

(c)

So long as a Purchaser owns at least 50% of the outstanding Series A-1 Shares, the Nominating Committee of the Board will consider one nominee to serve as a director of the Company proposed by such Purchaser; provided such nomination complies with the procedures set forth in the Certificate, Bylaws and the Company's Charter of the Nominating Committee; provided, further, that such nominee qualifies as independent and a financial expert in accordance with the rules of the SEC and the NYSE Alternext.

Section 3.10

Reporting Status.  So long as a Purchaser beneficially owns any of the Securities, the Company shall timely file all reports required to be filed with the Commission

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pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination.  

Section 3.11

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

Section 3.12

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

Section 3.13

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

Section 3.14

Amendments.  The Company shall not amend or waive any provision of the Certificate or Bylaws of the Company in any way that would adversely affect the liquidation preferences, dividends rights, conversion rights, voting rights or redemption rights of the Series A-1 Shares.

Section 3.15

Distributions.  So long as Series A-1 Shares or Warrants remain outstanding, the Company agrees that it shall not (i) declare or pay any dividends or make any

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distributions to any holder(s) of Common Stock or (ii) purchase or otherwise acquire for value, directly or indirectly, any Common Stock or other equity security of the Company.

Section 3.16

Reservation of Shares.  So long as any of the Series A-1 Shares or Warrants remain outstanding, the Company shall take all action necessary to at all times have authorized and reserved for the purpose of issuance, one hundred percent (100%) of the aggregate number of shares of Common Stock needed to provide for the issuance of the Conversion Shares and the Warrant Shares.

Section 3.17

Transfer Agent Instructions.  The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, to issue certificates, registered in the name of each Purchaser or its respective nominee(s), for the Conversion Shares and the Warrant Shares in such amounts as specified from time to time by each Purchaser to the Company upon conversion of the Series A-1 Shares or exercise of the Warrants in the form of Exhibit G attached hereto (the “Irrevocable Transfer Agent Instructions”).  Prior to registration of the Conversion Shares and Warrant Shares under the Securities Act, all such certificates shall bear the restrictive legend specified in Section 5.1 of this Agreement.  The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 3.17 will be given by the C ompany to its transfer agent and that the Conversion Shares and the Warrant Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Joinder to Registration Rights Agreement.  If a Purchaser provides the Company with an opinion of counsel, in a generally acceptable form, to the effect that a public sale, assignment or transfer of the Conversion Shares or the Warrant Shares may be made without registration under the Securities Act or the Purchaser provides the Company with reasonable assurances that the Conversion Shares or the Warrant Shares can be sold pursuant to Rule 144 without any restriction as to the number of securities acquired as of a particular date that can then be immediately sold, the Company shall permit the transfer, and, in the case of the Conversion Shares and the Warrant Shares, promptly instruct its transfer agent to issue one or more certificates in such name and in such d enominations as specified by such Purchaser and without any restrictive legend.  The Company acknowledges that a breach by it of its obligations under this Section 3.17 may cause irreparable harm to the Purchasers by vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 3.17 will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 3.17, that the Purchasers shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

Section 3.18

Disposition of Assets.  So long as the Series A-1 Shares remain outstanding, neither the Company nor any Subsidiary shall sell, transfer or otherwise dispose of any of its properties, assets and rights including, without limitation, its software and intellectual property, to any person except for sales of obsolete assets and sales to customers in the ordinary course of business or with the prior written consent of the holders of at least two-thirds (2/3rds) of the Series A-1 Shares then outstanding.

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Section 3.19

Restrictions on Certain Issuances of Securities.  Except for (i) purchase money security interests on equipment purchased or leased by the Company and (ii) any liens on up to $1 million of the Company’s receivables in connection with any line of credit, factoring arrangement or other similar financing arrangement in connection with servicing the Company’s receivables, the Company shall not issue any securities that rank pari passu or senior to the Series A-1 Shares without the prior written consent of at least two-thirds (2/3rds) of the Series A-1 Shares outstanding at such time.

Section 3.20

Status of Dividends.  The Company covenants and agrees that (i) in no Federal income tax return or claim for refund of Federal income tax or other submission to the Internal Revenue Service (the “Service”) will the Company treat the Series A-1 Shares other than as equity capital or the dividends paid thereon other than as dividends paid on equity capital unless required to do so under the Code, applicable regulations or published rulings or announcements, and no deduction with respect to (a) the Series A-1 Shares or (b) any distribution with respect to the Series A-1 Shares shall operate to jeopardize the availability to Purchasers of the dividends received deduction provided by Section 243(a)(1) of the Code or any successor provision, (ii) in no report to shareholders or to any governmental body having jurisdiction over the Company or otherwise will it treat the Series A-1 Shares other than as equity capital or the dividends paid thereon other than as dividends paid on equity capital unless required to do so by a governmental body having jurisdiction over the accounts of the Company or by a change in generally accepted accounting principles required as a result of action by an authoritative accounting standards setting body, and (iii) it will take no action which would result in the dividends paid by the Company on the Series A-1 Shares out of the Company’s current or accumulated earnings and profits being ineligible for the dividends received deduction provided by Section 243(a)(1) of the Code.  The preceding sentence shall not be deemed to prevent the Company from designating the Preferred Stock as “Convertible Preferred Stock” in its annual and quarterly financial statements in accordance with its prior practice concerning other series of preferred stock of the Company.  In the event that the Purchasers have reasonable cause to believe that dividends paid by the Comp any on the Series A-1 Shares out of the Company’s current or accumulated earnings and profits will not be treated as eligible for the dividends received deduction provided by Section 243(a)(1) of the Code, or any successor provision, the Company will, at the reasonable request of the Purchasers of 51% of the outstanding Series A-1 Shares, join with the Purchasers in the submission to the Service of a request for a ruling that dividends paid on the Shares will be so eligible for Federal income tax purposes, at the Purchasers’ expense.  In addition, the Company will reasonably cooperate with the Purchasers (at Purchasers’ expense) in any litigation, appeal or other proceeding challenging or contesting any ruling, technical advice, finding or determination that earnings and profits are not eligible for the dividends received deduction provided by Section 243(a)(1) of the Code, or any successor provision to the extent that the position to be taken in any such litiga tion, appeal, or other proceeding is not contrary to any provision of the Code, applicable regulations or published rulings or announcements.  Notwithstanding the foregoing, nothing herein contained shall be deemed to preclude the Company from claiming a deduction with respect to such dividends if (i) the Code shall hereafter be amended, or final Treasury regulations thereunder are issued or modified, to provide that dividends on the Series A-1 Shares or Conversion Shares should not be treated as dividends for Federal income tax purposes or that a deduction with respect to all or a portion of the dividends on the Shares is allowable for Federal income tax purposes, or (ii) in the absence of such an amendment, issuance or modification and after a submission of a request for

20

ruling or technical advice, the Service shall issue a published ruling or advise that dividends on the Shares should not be treated as dividends for Federal income tax purposes.  If the Service specifically determines that the Series A-1 Shares or the Conversion Shares constitute debt, the Company may file protective claims for refund.

Section 3.21

Subsequent Financings.  

(a)

So long as any of the Series A-1 Shares remain outstanding, if, at any time after a Closing Date, the Company enters into any sale, exchange (or other type of distribution to) with any third party of Common Stock or any debt or equity securities convertible, exercisable or exchangeable into Common Stock (a “Subsequent Financing”) on terms more favorable than the terms governing the Series A-1 Shares, then the Purchasers in their sole discretion may exchange the Series A-1 Shares, valued at their Liquidation Preference Amount (as defined in the Certificate of Designation), together with accrued but unpaid dividends (which dividend payments shall be payable, at the sole option of the Purchasers, in cash or in the form of the new securities to be issued in the Subsequent Financing), for the securities issued or to be issued in the Subsequent Financing.  The Company covenants and agrees to promptly noti fy in writing the Purchasers of the terms and conditions of any such proposed Subsequent Financing.

(b)

For purposes of this Agreement, a Permitted Financing (as defined hereinafter) shall not be considered a Subsequent Financing.  A "Permitted Financing" shall mean (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 a Closing Date (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Purchasers) or issued pursuant to this Agreement or the Note Exchange Agreement, (iii) 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, (iv) Common Stock issued or the issuance or grants of options to purchase Common Stock pu rsuant to Company’s stock option plans and employee stock purchase plans approved by the Company’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 existed on September 21, 2007, (v) any warrants issued to the financial advisor and/or their designees for the transactions contemplated by this Agreement and the Note Exchange Agreement, (vi) securities issued pursuant to a bona fide firm underwritten public offering of the Company’s securities, (vii) the payment of liquidated damages pursuant to the Registration Rights Agreement dated February 17, 2004 between the Company and the parties listed therein, and (viii) the issuance of Common Stock upon the exercise or conversion of any securities described in clauses (i) through (vii) above.

ARTICLE IV

CONDITIONS

Section 4.1

Conditions Precedent to the Obligation of the Company to Close and to Sell the Securities.  The obligation hereunder of the Company to close and issue and sell the Securities to the Purchasers at a Closing is subject to the satisfaction or waiver, at or before

21

such Closing of the conditions set forth below.  These conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion.

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

Series A Consent & Exchange Agreement. At or prior to the First Closing, the transactions contemplated by the Series A Consent & Exchange Agreement shall have been consummated.

(g)

Note Exchange Agreement.  At or prior to the First Closing, the transactions contemplated by the Note Exchange Agreement shall have been consummated.

Section 4.2

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

(a)

Accuracy of the Company's Representations and Warranties.  Each of the representations and warranties of the Company in this Agreement and the other Transaction Documents shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the applicable Closing Date as though

22

made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of such date.

(b)

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

(c)

No Suspension, Etc.  Trading in the Company’s Common Stock shall not have been suspended by the Commission or the OTC Bulletin Board (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to or with the applicable Closing), and, at any time prior to the applicable Closing Date, trading in securities generally as reported by Bloomberg Financial Markets (“Bloomberg”) shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by Bloomberg, or on the New York Stock Exchange, nor shall a banking moratorium have been declared either by the United States or New York State authorities, nor shall there have occurred any material adverse change in any financial market which, in each case, in the judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Series A-1 Shares.

(d)

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

(e)

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

(f)

Certificate of Designation of Rights and Preferences.  Prior to the First Closing, the Certificate of Designation in the form of Exhibit B attached hereto shall have been filed with the Secretary of State of Delaware.

(g)

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

(h)

Series A-1 Share Certificates and Warrants.  At or prior to the applicable Closing, the Company shall have delivered to the Purchasers certificates representing the Series A-1 Shares being acquired by the Purchasers at such Closing (in such denominations as each

23

Purchaser may request) and the Warrants (in such denominations as each Purchaser may request).

(i)

Resolutions.  The Board of Directors of the Company shall have adopted resolutions consistent with Section 2.1(b) hereof in a form reasonably acceptable to the Purchasers (the "Resolutions").

(j)

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

(k)

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

(l)

Joinder to Registration Rights Agreement.  As of the First Closing Date, the Company shall have executed and delivered the Joinder to Registration Rights Agreement to each Purchaser.

(m)

Material Adverse Effect.  No Material Adverse Effect shall have occurred at or before the subject Closing Date.

(n)

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

(o)

No Indebtedness.  As of the First Closing, the Company shall not have any outstanding indebtedness for borrowed money other than existing capital lease obligations and trade payables entered into in the ordinary course of business and consistent with past practice.

(p)

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

(q)

Note Exchange Agreement.  At or prior to the First Closing, the transactions contemplated by the Note Exchange Agreement shall have been consummated.

(r)

Series A Consent & Exchange Agreement. At or prior to the First Closing, the transactions contemplated by the Series A Consent & Exchange Agreement shall have been consummated.  

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ARTICLE V

CERTIFICATE LEGEND

Section 5.1

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

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

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

25

of this Agreement.  Whenever a certificate representing the Conversion Shares or the Warrant Shares is required to be issued to a Purchaser without a legend, in lieu of delivering physical certificates representing the Conversion Shares or the Warrant Shares, provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer program, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Conversion Shares or the Warrant Shares to a Purchaser by crediting the account of such Purchaser's Prime Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system (to the extent not inconsistent with any provisions of this Agreement).

ARTICLE VI

INDEMNIFICATION

Section 6.1

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

Section 6.2

Indemnification Procedure.  Any party entitled to indemnification under this Article VI (an "indemnified party") will give written notice to the indemnifying party of any matter giving rise to a claim for indemnification; provided, that the failure of any party entitled to indemnification hereunder to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Article VI except to the extent that the indemnifying party is actually prejudiced by such failure to give notice.  In case any such action, proceeding or claim is brought against an indemnified party in respect of which indemnification is sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the reasonable judgment of the indemnifying party a conflict of interest between it and the indemnified party exists with respect to such action, proceeding or claim (in which case the indemnifying party shall be responsible for the reasonable fees and expenses of one separate counsel for the indemnified parties), to assume the defense thereof with counsel reasonably satisfactory to the indemnified party.  In the event that the indemnifying party advises an indemnified party that it will not contest such a claim for indemnification hereunder, or fails, within thirty (30) days of receipt of any indemnification notice to notify, in writing, such person of its election to defend, settle or compromise, at its sole cost and expense, any action, proceeding or claim (or discontinues its defense at any time after it commences such defense),

26

then the indemnified party may, at its option, defend, settle or otherwise compromise or pay such action or claim.  In any event, unless and until the indemnifying party elects in writing to assume and does so assume the defense of any such claim, proceeding or action, the indemnified party's costs and expenses arising out of the defense, settlement or compromise of any such action, claim or proceeding shall be losses subject to indemnification hereunder.  The indemnified party shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the indemnified party which relates to such action or claim.  The indemnifying party shall keep the indemnified party fully apprised at all times as to the status of the d efense or any settlement negotiations with respect thereto.  If the indemnifying party elects to defend any such action or claim, then the indemnified party shall be entitled to participate in such defense with counsel of its choice at its sole cost and expense.  The indemnifying party shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent.  Notwithstanding anything in this Article VI to the contrary, the indemnifying party shall not, without the indemnified party's prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes any future obligation on the indemnified party or which does not include, as an unconditional term thereof, the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such claim.  The indemnification obligations to defend the indemnified party required by this Article VI shall be made by pe riodic payments of the amount thereof during the course of investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred, so long as the indemnified party shall refund such moneys if it is ultimately determined by a court of competent jurisdiction that such party was not entitled to indemnification.  The indemnity agreements contained herein shall be in addition to (a) any cause of action or similar rights of the indemnified party against the indemnifying party or others, and (b) any liabilities the indemnifying party may be subject to pursuant to the law.  No indemnifying party will be liable to the indemnified party under this Agreement to the extent, but only to the extent that a loss, claim, damage or liability is attributable to the indemnified party’s breach of any of the representations, warranties or covenants made by such party in this Agreement or in the other Transaction Documents.

ARTICLE VII

MISCELLANEOUS

Section 7.1

Fees and Expenses.  Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement; provided, however, that the Company shall pay all actual and reasonable attorneys' fees and expenses (including disbursements and out-of-pocket expenses) incurred by the Purchasers in connection with (i) the preparation, negotiation, execution and delivery of the Transaction Documents and the transactions contemplated thereunder, including disbursements and out-of-pocket expenses and (ii) any amendments, modifications or waivers of this Agreement or any of the other Transaction Documents.  In addition, the Company shall pay all reasonable fees and expenses incurred by the Purchasers in connection wit h the enforcement of

27

this Agreement or any of the other Transaction Documents, including, without limitation, all reasonable attorneys' fees and expenses.    

Section 7.2

Specific Performance; Consent to Jurisdiction; Venue.

(a)

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

(b)

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

Section 7.3

Entire Agreement; Amendment.  This Agreement and the Transaction Documents contain the entire understanding and agreement of the parties with respect to the matters covered hereby and, except as specifically set forth herein or in the Transaction Documents, neither the Company nor any of the Purchasers makes any representations, warranty, covenant or undertaking with respect to such matters and they supersede all prior understandings and agreements with respect to said subject matter, all of which are merged herein.  No provision of this Agreement may be waived or amended other than by a written instrument signed by the Company and the holders of at least a majority of the Series A-1 Shares then outstanding.  No such amendment shall be effective to the extent that it applies to less than all of the holders of the Series A-1 Shares then outstanding.  No consideration shal l be offered or paid to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents or holders of Series A-1 Shares, as the case may be.

Section 7.4

Notices.  Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business

28

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 Company:

Glowpoint, Inc.

225 Long Avenue

Hillside, New Jersey 07205

Attention: Chief Executive Officer

Tel. No.: (312) 235-3888

Fax No.:  (973) 391-1901

with copies (which copies

shall not constitute notice

to the Company) to:

General Counsel

Glowpoint, Inc.

Hillside, New Jersey 07205

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

Fax No.:  (973) 565-1272

and

Gibbons P.C.

One Gateway Center

Newark, New Jersey 07102

Attn: Frank Cannone, Esq.

Tel. No.: (973) 596-4500

Fax No.:  (973) 596-0545

If to any Purchaser:

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

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attention: Christopher S. Auguste, Esq.

Tel. No.: (212) 715-9100

Fax No.: (212) 715-8000

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

Section 7.5

Waivers.  No waiver by either party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the

29

exercise of any such right accruing to it thereafter.  No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents.  This provision constitutes a separate right granted to each Purchaser by the Company and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

Section 7.6

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

Section 7.7

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

Section 7.8

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

Section 7.9

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

Section 7.10

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

Section 7.11

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

Section 7.12

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

30

Section 7.13

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

Section 7.14

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

31

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

GLOWPOINT, INC.
By:
	Name:
	Title:
PURCHASER:
	Name:
	Title:

EXHIBIT A

LIST OF PURCHASERS

Names and Addresses Investment Amount and Number of Series A-1 Shares and Warrants Purchased

i

EX-10.3

Exhibit 10.3

AMENDMENT NO. 1
TO
REGISTRATION RIGHTS AGREEMENT

THIS AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT (this “Amendment”), dated February 19, 2009, is made by and among Glowpoint, Inc., a Delaware corporation (the “Company”) and the investors signatory hereto (the “Investors”).

Preliminary Statement

WHEREAS, the parties hereto are parties to that certain Registration Rights Agreement, dated as of November 25, 2008 (the “Registration Rights Agreement”);

WHEREAS, the Company and the Investors desire to amend certain provisions of the Registration Rights Agreement as described herein;

WHEREAS, Section 7(f) of the Registration Rights Agreement provides that the Registration Rights Agreement may be amended on behalf of all parties thereto by the Company and the Holders of two-thirds (2/3) of the Registrable Securities outstanding; and

WHEREAS, the Investors are the Holders of at least two-thirds (2/3) of the Registrable Securities outstanding.

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 Registration Rights Agreement.

2.

Amendments to Registration Rights Agreement.

(a)

Filing Date.  The definition of “Filing Date” in Section 1 of the Registration Rights Agreement is hereby deleted in its entirety and the following new definition shall be substituted in lieu thereof:

“

"Filing Date" means, subject to Section 2(b) hereof, a date within ninety (90) days following the Company’s receipt of a request for registration from Holders of at least two-thirds (2/3) of the Registrable Securities outstanding; provided that, if the Filing Date falls on a Saturday, Sunday or any other day which shall be a legal holiday or a day on which the Commission is authorized or required by law or other government actions to close, the Filing Date shall be the following Business Day.”

3.

Ratification.  Except as expressly amended hereby, all of the terms, provisions and conditions of the Registration Rights Agreement 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.

4.

Entire Agreement.  This Amendment and the Registration Rights Agreement, 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.

5.

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

6.

Counterparts.  This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same instrument.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

7.

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.  

8.

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

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

GLOWPOINT, INC.

By:

Name:

Title:

INVESTOR:

By:

Name:

Title:

EX-10.4

Exhibit 10.4

NOTE EXCHANGE AGREEMENT

THIS NOTE EXCHANGE AGREEMENT (this “Agreement”), dated as of March 16, 2009, by and among Glowpoint, Inc., a Delaware corporation (the “Company”), and the holder of the Company’s Senior Secured Convertible Promissory Notes whose signature appears on the signature page attached hereto (the “Holder”).

Preliminary Statement

WHEREAS, the Holder currently holds Senior Secured Convertible Promissory Notes (the “Notes”) issued by the Company with an aggregate principal value of approximately $1.1 million, which are convertible into shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), at a conversion price of $0.50 per share;

WHEREAS, in consideration for the issuance of warrants to acquire a number of shares of Common Stock equal to the product of (i) the result of (x) 1.875 times the outstanding principal balance under $1.042 million of the Notes divided by (y) 0.75, times (ii) 0.2, substantially in the form of the Series A-3 warrants issued in connection with the Series A-1 Convertible Preferred Stock Purchase Agreement, dated November 25, 2008 (the “Series A-1 Stock Purchase Agreement”); and

WHEREAS, in consideration for the additional issuance of warrants (together with the warrants issued pursuant to the immediately preceding recital, the “Amendment Warrants”) to acquire a number of shares of Common Stock equal to the product of (i) the result of (x) 1.875 times the remaining outstanding principal balance (i.e., approximately $27,302 of principal) under the Notes divided by (y) 0.75, times (ii) 0.5, substantially in the form of the Series A-3 warrants issued in connection with the Series A-1 Stock Purchase Agreement;

WHEREAS, subject to the terms and conditions set forth herein, the Company and the Holder desire to cancel and retire the Notes and forfeit any and all rights thereunder in exchange for shares of newly-created Series A-1 Convertible Preferred Stock, par value $0.0001 per share, stated value $7,500 per share (the “Series A-1 Preferred Stock”).  The Series A-1 Preferred Stock and the shares of Common Stock issuable upon conversion of the Series A-1 Preferred Stock are sometimes collectively referred to herein as the “Securities”.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby agreed and acknowledged, the parties hereby agree as follows:

1.

Securities Exchange.

(a)

Upon the following terms and subject to the conditions contained herein, the Holder agrees to deliver to the Company the Notes in exchange for the Series A-1 Preferred Stock.  In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the delivered Notes shall be exchanged into that number of validly issued, fully paid and non-assessable shares of Series A-1 Preferred Stock as is determined by dividing (x) the principal amount of such Notes together with all accrued and unpaid interest through and including the Closing Date (as defined below) by (y) $4,000.

(b)

The closing under this Agreement (the “Closing”) shall take place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY 10036 upon the satisfaction of each of the conditions set forth in Sections 4 and 5 hereof (the “Closing Date”).

(c)

At the Closing, the Holder shall deliver to the Company for cancellation the Notes, or an indemnification undertaking with respect to such Notes in the event of the loss, theft or destruction of such Notes.  At the Closing, the Company shall issue to the Holder the Series A-1 Preferred Stock, each in the amounts set forth on Exhibit A attached hereto.  

2.

Representations, Warranties and Covenants of the Holder.  The Holder hereby makes the following representations and warranties to the Company, and covenants for the benefit of the Company:

(a)

The Holder is duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization.  

(b)

This Agreement has been duly authorized, validly executed and delivered by the Holder and is a valid and binding agreement and obligation of Holder enforceable against it in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and Holder has full power and authority to execute and deliver the Agreement and the other agreements and documents contemplated hereby and to perform its obligations hereunder and thereunder.

(c)

Holder understands that the Securities are being offered and sold to it in reliance on specific provisions of Federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of Holder set forth herein for purposes of qualifying for exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”) and applicable state securities laws.

(d)

The execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions contemplated hereby do not and will not (i) violate any provision of the Holder’s charter or organizational documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease

agreement, instrument or obligation to which the Holder is a party or by which the Holder’s respective properties or assets are bound, or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Holder or by which any property or asset of the Holder are bound or affected, except, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, materially and adversely affect the Holder’s ability to perform its obligations under this Agreement.

(e)

Holder is an “accredited investor” as defined under Rule 501 of Regulation D promulgated under the Securities Act.

(f)

Holder is and will be acquiring the Securities for Holder’s own account, for investment purposes, and not with a view to any resale or distribution in whole or in part, in violation of the Securities Act or any applicable securities laws; provided, however, that by making the representations herein, Holder does not agree to hold the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with Federal and state securities laws applicable to such disposition.

(g)

The offer and sale of the Securities is intended to be exempt from registration under the Securities Act, by virtue of Section 3(a)(9) and/or 4(2) thereof.  Holder understands that the Securities purchased hereunder are “restricted securities,” as that term is defined in the Securities Act and the rules thereunder, have not been registered under the Securities Act, and that none of the Securities can be sold or transferred unless they are first registered under the Securities Act and such state and other securities laws as may be applicable or the Company receives an opinion of counsel reasonably acceptable to the Company that an exemption from registration under the Securities Act is available (and then the Securities may be sold or transferred only in compliance with such exemption and all applicable state and other securities laws).

(h)

Holder has not employed any broker or finder or incurred any liability for any brokerage or investment banking fees, commissions, finders’ structuring fees, financial advisory fees or other similar fees in connection with any of the transactions contemplated by this Agreement.

(i)

Holder acknowledges that the Securities were not offered to Holder by means of any form of general or public solicitation or general advertising, or publicly disseminated advertisements or sales literature, including (i) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media, or broadcast over television or radio, or (ii) any seminar or meeting to which Holder was invited by any of the foregoing means of communications.  Holder, in making the decision to purchase the Securities, has relied upon independent investigation made by it and the representations, warranties and agreements set forth in this Agreement and the other transaction documents and has not relied on any information or representations made by third parties.

(j)

Holder owns and holds, beneficially and of record, the entire right, title, and interest in and to the Notes (including, without limitation, accrued and unpaid interest

thereon) set forth opposite Holder’s name on Exhibit A, free and clear of all rights and Encumbrances (as defined below).   Holder has full power and authority to transfer and dispose of the Notes (including, without limitation, accrued and unpaid interest thereon) set forth opposite Holder’s name on Exhibit A, free and clear of any right or Encumbrance other than restrictions under the Securities Act and applicable state securities laws.  Other than the transactions contemplated by this Agreement, there is no outstanding vote, plan, pending proposal, or other right of any person to acquire all or any of the Notes set forth opposite Holder’s name on Exhibit A.  “Encumbrances” shall mean any security or other property interest or right, claim, lien, pledge, option, charge, security interest, contingent or conditional sale, or other title claim or retention agre ement, interest or other right or claim of third parties, whether perfected or not perfected, voluntarily incurred or arising by operation of law, and including any agreement (other than this Agreement) to grant or submit to any of the foregoing in the future.

(k)

Independent Investment.  Except as may be disclosed in any filings by a Holder with the Securities and Exchange Commission, Holder has not agreed to act with any other holder of any Company securities for the purpose of acquiring, holding, voting or disposing of the Securities purchased hereunder for purposes of Section 13(d) under the Securities and Exchange Act of 1934, as amended, and each Holder is acting independently with respect to its investment in the Securities.  The decision of each Holder to purchase Securities pursuant to this Agreement has been made by such Holder independently of any other Holder and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or of its subsidiaries which may have been made or given by any other Holder or by any agent or employee of any other Holder, and no Holder or any of its agents or employees shall have any liability to any Holder (or any other person) relating to or arising from any such information, materials, statements or opinions.

3.

Representations, Warranties and Covenants of the Company.  The Company represents and warrants to Holder, and covenants for the benefit of Holder, as follows:

(a)

The Company has been duly incorporated and is validly existing and in good standing under the laws of the state of Delaware, with full corporate power and authority to own, lease and operate its properties and to conduct its business as currently conducted, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure to register or qualify would not have a Material Adverse Effect.  For purposes of this Agreement, “Material Adverse Effect” shall mean any material adverse effect on the business, operations, properties, prospects, or financial condition of the Company and its subsidiaries and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to perform any of its obligations under this Agreement in any material respect.

(b)

The Securities have been duly authorized by all necessary corporate action and, when paid for or issued in accordance with the terms hereof, the Securities shall be validly issued and outstanding, fully paid and nonassessable, free and clear of all liens, encumbrances and rights of refusal of any kind.

(c)

This Agreement has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding agreement and obligation of the Company enforceable against the Company in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and the Company has full power and authority to execute and deliver the Agreement and the other agreements and documents contemplated hereby and to perform its obligations hereunder and thereunder.

(d)

The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement by the Company, will not (i) conflict with or result in a breach of or a default under any of the terms or provisions of, (A) the Company’s certificate of incorporation or by-laws, or (B) of any material provision of any indenture, mortgage, deed of trust or other material agreement or instrument to which the Company is a party or by which it or any of its material properties or assets is bound, (ii) result in a violation of any provision of any law, statute, rule, regulation, or any existing applicable decree, judgment or order by any court, federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over the Company, or any of its material properties or assets or (iii) result in the creation or imposition of any material lien, charge or encumbran ce upon any material property or assets of the Company or any of its subsidiaries pursuant to the terms of any agreement or instrument to which any of them is a party or by which any of them may be bound or to which any of their property or any of them is subject except in the case of clauses (i)(B), (ii) (except with respect to federal and state securities laws) or (iii) for any such conflicts, breaches, or defaults or any liens, charges, or encumbrances which would not have a Material Adverse Effect.

(e)

The delivery and issuance of the Securities in accordance with the terms of and in reliance on the accuracy of Holder’s representations and warranties set forth in this Agreement will be exempt from the registration requirements of the Securities Act.

(f)

Except for the filing of the Certificate of Designations, Preferences and Rights of Series A-1 Preferred Stock (the “Certificate of Designation”), no consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement or the offer, sale or issuance of the Securities or the consummation of any other transaction contemplated by this Agreement.

(g)

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

(h)

Except for amounts paid or payable to Burnham Hill Partners, the Company represents that it has not paid, and shall not pay, any commissions or other remuneration, directly or indirectly, to Holder or to any third party for the solicitation of the exchange of the Notes pursuant to this Agreement.

(i)

The Company covenants and agrees that promptly following the Closing Date, all Notes that are exchanged for Series A-1 Preferred Stock pursuant to the terms set forth herein will be cancelled and retired by the Company.

(j)

There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company which questions the validity of this Agreement or the transactions contemplated hereby or any action taken or to be taken pursuant thereto.  There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened, against or involving the Company or any subsidiary, or any of their respective properties or assets which, if adversely determined, is reasonably likely to result in a Material Adverse Effect.

(k)

The authorized capital stock of the Company and the shares thereof issued and outstanding as of February 28, 2009 are set forth on Schedule 3(k) attached hereto.  All of the outstanding shares of the Company’s Common Stock and any other outstanding security of the Company have been duly and validly authorized, and are fully paid and non-assessable.  The Series C Convertible Preferred Stock is the only Preferred Stock currently issued and outstanding.  Except as set forth in this Agreement or on Schedule 3(k) attached hereto, as of the Closing Date, no shares of Common Stock are entitled to preemptive rights and there are no registration rights or outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company.  The Company is not a party to, and its executive officers have no knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of the Company.  The Company has furnished or made available to the Holder true and correct copies of the Company’s certificate of incorporation as in effect on the date hereof, and the Company’s bylaws as in effect on the date hereof.

(l)

Prior to registration of the shares of Common Stock underlying the Series A-1 Preferred Stock under the Securities Act, all such certificates shall bear the restrictive legend specified in Section 6 of this Agreement.  Subject to any applicable state and federal securities laws, the Company warrants that the Securities shall be freely transferable on the books and records of the Company as and to the extent provided in this Agreement.  If Holder provides the Company with an opinion of counsel, in form, substance and scope reasonably acceptable to the Company, to the effect that a public sale, assignment or transfer of the Securities may be made without registration under the Securities Act or the Holder provides the Company with reasonable assurances that the Securities can be sold pursuant to Rule 144 without any restriction as to the number of securities acquired as of a particular date that can the n be immediately sold, the Company shall permit the transfer and promptly instruct its transfer agent to issue one or more certificates in such name and in such denominations as specified by the Holder and without any restrictive legend.  The Company acknowledges that a breach by it of its obligations under this Section 3(l) will cause irreparable harm to the Holder by vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Company acknowledges that the remedy

at law for a breach of its obligations under this Section 3(l) will be inadequate and agrees, in the event of a breach or the Holder’s reasonable perception of a threatened breach by the Company of the provisions of this Section 3(l), that the Holder shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

4.

Conditions Precedent to the Obligation of the Company to Issue the Series A-1 Preferred Stock.  The obligation hereunder of the Company to issue and deliver the Series A-1 Preferred Stock to Holder is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below.  These conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion.

(a)

Holder shall have executed and delivered this Agreement.

(b)

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

(c)

Each of the representations and warranties of Holder in this Agreement shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of such date.

(d)

The transactions contemplated by the Series A-1 Stock Purchase Agreement shall have been consummated.

(e)

The transactions contemplated by the Series A Consent and Exchange Agreement shall have been consummated.

5.

Conditions Precedent to the Obligation of the Holder to Accept the Series A-1 Preferred Stock. The obligation hereunder of Holder to accept the Series A-1 Preferred Stock is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below.  These conditions are for Holder’s sole benefit and may be waived by Holder at any time in its sole discretion.

(a)

The Company shall have executed and delivered this Agreement.

(b)

The Company shall have filed the Certificate of Designation with the Delaware Secretary of State, in substantially the form attached hereto as Exhibit B.

(c)

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

(d)

Each of the representations and warranties of the Company shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of such date.

(e)

No statute, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement at or prior to the Closing Date.

(f)

As of the Closing Date, no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, shall be pending against or affecting the Company, or any of its properties, which questions the validity of the Agreement or the transactions contemplated thereby or any action taken or to be taken pursuant thereto.  As of the Closing Date, no action, suit, claim or proceeding before or by any court or governmental agency or body, domestic or foreign, shall be pending against or affecting the Company, or any of its properties, which, if adversely determined, is reasonably likely to result in a Material Adverse Effect.

(g)

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

(h)

The Company shall have delivered on the Closing Date to the Holder a secretary’s certificate, dated as of the Closing Date, as to (i) the resolutions of the board of directors of the Company authorizing the transactions contemplated by this Agreement, (ii) the Company’s certificate of incorporation, (iii) the Company’s bylaws, each as in effect at the Closing, and (iv) the authority and incumbency of the officers of the Company executing this Agreement.

(i)

The certificates representing the shares of Series A-1 Preferred Stock shall have been duly executed and delivered to the Holder.

(j)

At the Closing, the Holders shall have received an opinion of counsel to the Company, dated the Closing Date, in the form of Exhibit C hereto.

(k)

The Initial Closing, as defined in the Series A-1 Stock Purchase Agreement, shall have been consummated.

6.

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

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE

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

The Company agrees to reissue certificates representing any of the Securities, without the legend set forth above if at such time, prior to making any transfer of any such Securities, such holder thereof shall give written notice to the Company describing the manner and terms of such transfer and removal as the Company may reasonably request, and provided the conditions set forth in this paragraph shall have been met.  Such proposed transfer will not be effected until: (a) the Company has either (i) received an opinion of counsel that the registration of the Securities is not required in connection with such proposed transfer; or (ii) filed a registration statement under the Securities Act covering such proposed disposition has been filed by the Company with the Securities and Exchange Commission, which registration statement has become effective under the Securities Act; and (b) the Company has received an opinion of counsel that either: (i) the 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.  The Company will use reasonable efforts to respond to any such notice from Holder within five (5) business days.  In the case of any proposed transfer under this Section 6, the Company will use reasonable efforts to comply with any such applicable state securities or “blue sky” laws, but shall in no event be required, in connection therewith, to qualify to do business in any state where it is not then qualified or 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.  The restrictions on transfer contained in this Section 6 shall be in addition to, and not by way of limitation of, any other restrictions on transfer cont ained in any other section of this Agreement.

7.

Fees and Expenses.  Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement, provided, however, that the Company shall pay reasonable attorneys’ fees and expenses (exclusive of disbursements and out-of-pocket expenses) incurred by the Holder in connection with the preparation, negotiation, execution and delivery of this Agreement and the other transaction documents.

8.

Indemnification.

(a)

The Company hereby agrees to indemnify and hold harmless Holder and its officers, directors, shareholders, members, managers, employees, agents and attorneys against any and all losses, claims, damages, liabilities and reasonable expenses (collectively “Claims”) incurred by each such person in connection with defending or investigating any such Claims, whether or not resulting in any liability to such person, to which any such indemnified party may become subject, insofar as such Claims arise out of or are based upon any breach of any representation, warranty, covenant or agreement made by the Company in this Agreement.

(b)

Holder hereby agrees to indemnify and hold harmless the Company and its officers, directors, shareholders, members, managers, employees, agents and attorneys against any and all Claims incurred by each such person in connection with defending or investigating any such Claims, whether or not resulting in any liability to such person, to which any such indemnified party may become subject, insofar as such Claims arise out of or are based upon any breach of any representation, warranty, covenant or agreement made by Holder in this Agreement.

9.

Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without giving effect conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  Each of the parties consents to the exclusive jurisdiction of the Federal courts whose districts encompass any part of the County of New York located in the City of New York in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions.  Each party waives its right to a trial by jury.  Each party to this Agreement irrevocably consents to the service of process in any such proceeding by the mailing of copies thereof by regis tered or certified mail, postage prepaid, to such party at its address set forth herein.  Nothing herein shall affect the right of any party to serve process in any other manner permitted by law.

10.

Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, express overnight courier, registered first class mail, or telecopier (provided that any notice sent by telecopier shall be confirmed by other means pursuant to this Section 10), initially to the address set forth below, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section.

(a)

if to the Company:

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 a copy to:

Gibbons P.C.
One Gateway Center
Newark, New Jersey 07102
Attn: Frank Cannone, Esq.
Tel. No.: (973) 596-4500
Fax No.:  (973) 596-0545

(b)

if to the Holder:

At the address of Holder set forth on Exhibit A to this Agreement;

with a copy to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attention: Christopher S. Auguste, Esq.

Tel. No.: (212) 715-9100

Fax No.: (212) 715-8000

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when receipt is acknowledged, if telecopied; or when actually received or refused if sent by other means.

11.

Confidentiality. Holder acknowledges and agrees that the existence of this Agreement and the information contained herein and in the Exhibits hereto (collectively, “Confidential Information”) is of a confidential nature and shall not, without the prior written consent of the Company, be disclosed by Holder to any person or entity, other than Holder’s personal financial and legal advisors for the sole purpose of evaluating an investment in the Company, and that it shall not, without the prior written consent of the Company, directly or indirectly, make any statements, public announcements or release to trade publications or the press with respect to the subject matter of this Agreement.  Notwithstanding the foregoing, Holder may use or disclose Confidential to the extent Holder is legally compelled to disclose such Confidential Information, provided, however, that prior to any such comp elled disclosure, Holder shall give the Company reasonable advance notice of any such disclosure and shall cooperate with the Company in protecting against any such disclosure and/or obtaining a protective order narrowing the scope of such disclosure and/or use of the Confidential Information.  Holder further acknowledges and agrees that the information contained herein and

in the other documents relating to this transaction may be regarded as material non-public information under United States federal securities laws, and that United States federal securities laws prohibit any person who has received material non-public information relating to the Company from purchasing or selling securities of the Company, or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell securities of the Company.  Accordingly, until such time as any such non-public information has been adequately disseminated to the public, Holder shall not purchase or sell any securities of the Company, or communicate such information to any other person.  The Company shall also file with the Securities and Exchange Commission a Current Report on Form 8-K (the “Form 8-K”) describing th e material terms of the transactions contemplated hereby as soon as practicable following the Closing Date, but in no event more than two (2) Trading Days following the Closing Date, which Form 8-K shall be subject to prior review and comment by the Holder.  "Trading Day" means any day during which The New York Stock Exchange shall be open for business.

12.

Entire Agreement.  This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior and/or contemporaneous oral or written proposals or agreements relating thereto all of which are merged herein.  This Agreement may not be amended or any provision hereof waived in whole or in part, except by a written amendment signed by all of the parties hereto.

13.

Counterparts.  This Agreement may be executed by facsimile signature and in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, this Agreement was duly executed on the date first written above.

GLOWPOINT, INC.
By:
	Name:
	Title:
HOLDER:
By:
	Name:
	Title:

EX-10.5

Exhibit 10.5

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of March 16, 2009 is by and between ___________ (the "Seller") and Glowpoint, Inc., (the "Purchaser"), with an address of 225 Long Avenue, Hillside, NJ 07016.

RECITALS

1.

The Seller is the beneficial and record owner of the securities listed on Exhibit A attached hereto (the “Securities”) of Glowpoint, Inc., a Delaware corporation (the “Issuer”).

2.

The Purchaser desires to purchase from the Seller, and the Seller desires to sell, transfer and assign to the Purchaser, the Seller's entire right, title and interest in and to the Securities, in accordance with the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the representations, warranties and agreements contained herein and for other good and valuable consideration, the receipt and legal adequacy of which is hereby acknowledged, the parties agree:

1.

Agreement to Purchase Securities.  The Purchaser hereby agrees to purchase, and the Seller hereby agrees to sell, the Securities pursuant to the terms and conditions set forth herein.  The aggregate purchase price of the Securities being sold to the Purchaser hereunder is Seven Hundred Fifty Thousand Dollars ($750,000) (the “Purchase Price”).  The Purchaser shall deliver to the Seller the Purchase Price via wire transfer in immediately available funds according to written instructions attached hereto as Exhibit B.  The closing under this Agreement shall take place simultaneously with the execution and delivery of this Agreement at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY 10036 (the "Closing"), at such time and place or on such date as the Purchaser and the Seller may agree up on.  Each party shall deliver all documents, instruments and writings required to be delivered by such party pursuant to this Agreement at or prior to the Closing.

2.

Delivery of Securities to the Purchaser; Assignment.  On or prior to the Closing, all documents representing the Securities shall be delivered to the Purchaser. Concurrently with the delivery to the Purchaser of all documents representing the Securities, the Seller in respect of such document shall deliver an assignment agreement, if required, covering such document.  At or promptly following the Closing, the Issuer shall issue replacement securities to the Purchaser.

3.

Representations, Warranties and Covenants of Purchaser.  The Purchaser hereby represents and warrants to the Seller, and covenants for the benefit of the Seller, as of the date hereof, as follows:

(a)

He is an "accredited investor" as defined under Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act");

(b)

He is acquiring the Securities for his own account and not with a view to any distribution of the Securities in violation of the Securities Act;

(c)

He acknowledges that he has significant prior investment experience, including investment in non-listed and non-registered securities, and that he recognizes the highly speculative nature of this investment.  He represents that he has been furnished with all documents and other information regarding the Issuer that he had requested or desired to know and all other documents which could be reasonably provided have been made available for his inspection and review;

(d)

He acknowledges that the Securities have not been passed upon or reviewed by the Securities and Exchange Commission.  He agrees that he will not sell, transfer or otherwise dispose of any of the Securities unless they are registered under the Securities Act, or unless an exemption from such registration is available.  He understands that the Securities have not been registered under the Securities Act or any state law by reason of a claimed exemption under the provisions of the Securities Act or any state law;

(e)

This Agreement constitutes a valid and binding agreement and obligation of the Purchaser enforceable against the Purchaser in accordance with its terms, subject to limitations on enforcement by general principles of equity and bankruptcy or other laws affecting the enforcement of creditors' rights generally; and

(f)

This Agreement has been duly authorized, validly executed and delivered on behalf of the Purchaser, and the Purchaser has full power and authority to execute and deliver this Agreement and the other agreements and documents contemplated hereby and to perform his obligations hereunder and thereunder.

4.

Representations, Warranties and Covenants of the Seller.  The Seller represents and warrants to the Purchaser, and covenants for the benefit of the Purchaser, as of the date hereof, as follows:

(a)

Based upon the Purchaser’s representations and warranties being true and accurate, the offer and sale of the Securities hereunder is exempt from registration under the Securities Act pursuant to an exemption thereunder;

(b)

The Securities are "restricted securities" as defined under Rule 144 promulgated under the Securities Act, as amended.  The Seller (i) was an accredited investor on the acquisition date of the Securities and (ii) acquired the Securities for its own account for investment only and with no intention of or arrangement for distributing any of such Securities;

(c)

This Agreement has been duly authorized, validly executed and delivered on behalf of the Seller and is a valid and binding agreement and obligation of the Seller enforceable against the Seller in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors' rights generally, and the Seller has full power and authority to execute and deliver this Agreement and the other agreements and documents contemplated hereby and to perform its obligations hereunder and thereunder;

(d)

The Seller is the legal, beneficial and registered owner of the Securities, free and clear of any liens, charges or encumbrances.  Upon payment of the Purchase Price, the

Purchaser will acquire all right, title and interest in the Securities, free and clear of all liens, charges or encumbrances;

(e)

In connection with the offer and sale of the Securities, neither the Seller nor any affiliate of the Seller or any person acting on the Seller’s or the Seller’s affiliates’ behalf has engaged in any form of “general solicitation” or “general advertising” as those terms are used in Rule 502(c) under the Securities Act; and

(f)

The Seller has reviewed all restrictions upon and conditions to the transfer of the Securities.  There are no such restrictions and conditions in order to consummate the sale of the Securities to Purchaser as contemplated by this Agreement, and such Securities are not as of the date of this Agreement, subject to any restriction on transfer, except for restrictions under the Securities Act, and are free from all taxes, liens, claims and encumbrances.

5.

Binding Effect; Assignment.  This Agreement is not assignable by the Seller or the Purchaser without the prior written consent of the other party.  This Agreement and the provisions hereof shall be binding and shall inure to the benefit of the Seller and its successors and permitted assigns with respect to the obligations of the Purchaser under this Agreement, and to the benefit of the Purchaser and its successors and permitted assigns, with respect to the obligations of the Seller under this Agreement.

6.

Expenses.  Each of the parties agrees to pay its own expenses incident to this Agreement and the performance of its obligations hereunder.

7.

Governing Law; Jurisdiction.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  Each of the Seller and the Purchaser (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in New York County for the purposes of any suit, action or proceeding arising out of or relating to this Agreement and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or procee ding is improper.  Each of the Seller and the Purchaser consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in Section 8 hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing in this Section 7 shall affect or limit any right to serve process in any other manner permitted by law.

8.

Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, express overnight courier, registered first class mail, overnight courier, or telecopier, initially to the address set forth below, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section.

If to the Seller:

___________________________

___________________________

___________________________

If to Purchaser:

At the address of the Purchaser first written above, with copies to:

General Counsel

Glowpoint, Inc.

Hillside, New Jersey 07205

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

Fax No.:  (973) 565-1272

and

Gibbons P.C.

One Gateway Center

Newark, New Jersey 07102

Attn: Frank Cannone, Esq.

Tel. No.: (973) 596-4500

Fax No.:  (973) 596-0545

or to any other address specified by any party by notice given as aforesaid.

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; three (3) Business Days after being deposited in the mail, postage prepaid, if mailed; the next Business Day after being deposited with an overnight courier, if deposited with a nationally recognized, overnight courier service; when receipt is acknowledged, if telecopied.

9.

Entire Agreement.  This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior and/or contemporaneous oral or written proposals or agreements relating thereto all of which are merged herein.  This Agreement may not be amended or any provision hereof waived in whole or in part, except by a written amendment signed by both of the parties.

10.

Counterparts.  This Agreement may be executed by facsimile signature and in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  

11.

Transfer Taxes.  The Purchaser shall pay any transfer taxes or other fees that may be payable upon transfer of the Securities.  

12.

Survival.  The representations and warranties of the Seller and the Purchaser shall survive the Closing hereunder.

IN WITNESS WHEREOF, this Agreement was duly executed on the date first written above.

SELLER: __________________
By:
	Name:
	Title:
PURCHASER: Glowpoint, Inc.
	Name:
	Title:

[Signature Page to Securities Purchase Agreement]

EXHIBIT A

LIST OF SECURITIES

EX-10.6

Exhibit 10.6

SERIES A PREFERRED CONSENT AND EXCHANGE AGREEMENT

THIS SERIES A PREFERRED CONSENT AND EXCHANGE AGREEMENT (this “Agreement”) is dated as of March 16, 2009, by and among Glowpoint, Inc., a Delaware corporation (the “Company”), and the holders of the Company’s Series A Convertible Preferred Stock (each a “Holder” and collectively the “Holders”).

Preliminary Statement

WHEREAS, Section 3(a) of the Company’s Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Series A Certificate of Designation”) requires the affirmative vote or consent of the holders of at least two-third (2/3rds) of the outstanding shares of Series A convertible preferred stock, par value $0.0001 (“Series A Preferred Stock”), in order to, among other things, (i) authorize, create, issue or increase the authorized or issued amount of any class of debt or equity securities, ranking pari passu or senior to the Series A Preferred Stock, with respect to the distribution of assets on liquidation, dissolution or winding up; or (ii) repurchase, redeem or pay dividends on, shares of common stock or any other shares of the Company's stock;

WHEREAS, the Company and the Holders desire to create a new Series A-1 convertible preferred stock, par value $0.0001 per share, stated value $7,500 per share (“Series A-1 Preferred Stock”), that (i) will rank senior to the Series A Preferred Stock with respect to the distribution of assets on liquidation, dissolution or winding up and (ii) will be entitled to the payment of cash dividends; and

WHEREAS, after the creation of the Series A-1 Preferred Stock and subject to the terms and conditions set forth herein, the Company and the Holders desire to cancel and retire the Series A Preferred Stock and forfeit any and all rights thereunder in exchange for shares of the Series A-1 Preferred Stock.  The Series A-1 Preferred Stock and the shares of Common Stock issuable upon conversion of the Series A-1 Preferred Stock are sometimes collectively referred to herein as the “Securities”.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby agreed and acknowledged, the parties hereby agree as follows:

1.

Creation of Series A-1 Preferred Stock.  The Holders, representing more than two-third (2/3rds) of the outstanding shares of Series A Preferred Stock, hereby consent to the creation of the Series A-1 Preferred Stock with the rights and preferences set forth in the Certificate of Designation of the Relative Rights and Preferences of the Series A-1 Convertible Preferred Stock (the “Certificate of Designation”).  The Holders approve the terms of the Certificate of Designation in all respects and direct the Company to file it with the Delaware Secretary of State.

2.

Securities Exchange.

(a)

Upon the following terms and subject to the conditions contained herein, the Holders agree to deliver to the Company the Series A Preferred Stock in exchange for the Series A-1 Preferred Stock.  In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the delivered shares of Series A Preferred Stock shall be exchanged on a one-for-one basis into validly issued, fully paid and non-assessable shares of Series A-1 Preferred Stock.

(b)

Concurrently with the consummation of the transactions contemplated by this Agreement, the Company is selling additional shares of its Series A-1 Preferred Stock pursuant to that certain Series A-1 Convertible Preferred Stock Purchase Agreement dated on or about the date hereof (the “Series A-1 Stock Purchase Agreement”).

(c)

The closing under this Agreement (the “Closing”) shall take place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY 10036 upon the satisfaction of each of the conditions set forth in Sections 5 and 6 hereof (the “Closing Date”).

(d)

At the Closing, the Holders shall deliver to the Company for cancellation the shares of Series A Preferred Stock, or an indemnification undertaking with respect to such shares of Series A Preferred Stock in the event of the loss, theft or destruction of such shares of Series A Preferred Stock.  At the Closing, the Company shall issue to the Holders the Series A-1 Preferred Stock, each in the amounts set forth on Exhibit A attached hereto.  

3.

Representations, Warranties and Covenants of the Holders.  Each of the Holders hereby makes the following representations and warranties to the Company, and covenants for the benefit of the Company, with respect solely to itself and not with respect to any other Holder:

(a)

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

(b)

This Agreement has been duly authorized, validly executed and delivered by each Holder and is a valid and binding agreement and obligation of each Holder enforceable against such Holder in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and each Holder has full power and authority to execute and deliver the Agreement and the other agreements and documents contemplated hereby and to perform its obligations hereunder and thereunder.

(c)

Each Holder understands that the Securities are being offered and sold to it in reliance on specific provisions of Federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of each Holder set forth herein for purposes of qualifying for exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”) and applicable state securities laws.

(d)

The execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions contemplated hereby do not and will not

2

(i) violate any provision of the Holder’s charter or organizational documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Holder is a party or by which the Holder’s respective properties or assets are bound, or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Holder or by which any property or asset of the Holder are bound or affected, except, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually o r in the aggregate, materially and adversely affect the Holder’s ability to perform its obligations under this Agreement.

(e)

Each Holder is an “accredited investor” as defined under Rule 501 of Regulation D promulgated under the Securities Act.

(f)

Each Holder is and will be acquiring the Securities for such Holder’s own account, for investment purposes, and not with a view to any resale or distribution in whole or in part, in violation of the Securities Act or any applicable securities laws; provided, however, that by making the representations herein, such Holder does not agree to hold the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with Federal and state securities laws applicable to such disposition.

(g)

The offer and sale of the Securities is intended to be exempt from registration under the Securities Act, by virtue of Section 3(a)(9) and/or 4(2) thereof.  Each Holder understands that the Securities purchased hereunder are “restricted securities,” as that term is defined in the Securities Act and the rules thereunder, have not been registered under the Securities Act, and that none of the Securities can be sold or transferred unless they are first registered under the Securities Act and such state and other securities laws as may be applicable or the Company receives an opinion of counsel reasonably acceptable to the Company that an exemption from registration under the Securities Act is available (and then the Securities may be sold or transferred only in compliance with such exemption and all applicable state and other securities laws).

(h)

Each Holder has not employed any broker or finder or incurred any liability for any brokerage or investment banking fees, commissions, finders’ structuring fees, financial advisory fees or other similar fees in connection with any of the transactions contemplated by this Agreement.

(i)

Each Holder acknowledges that the Securities were not offered to such Holder by means of any form of general or public solicitation or general advertising, or publicly disseminated advertisements or sales literature, including (i) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media, or broadcast over television or radio, or (ii) any seminar or meeting to which such Holder was invited by any of the foregoing means of communications.  Each Holder, in making the decision to purchase the Securities, has relied upon independent investigation made by it and the representations, warranties and agreements set forth in this Agreement and the other transaction documents and has not relied on any information or representations made by third parties.

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(j)

Each Holder owns and holds, beneficially and of record, the entire right, title, and interest in and to the shares of Series A Preferred Stock set forth opposite such Holder’s name on Exhibit A, free and clear of all rights and Encumbrances (as defined below).   Each Holder has full power and authority to transfer and dispose of the shares of Series A Preferred Stock set forth opposite such Holder’s name on Exhibit A, free and clear of any right or Encumbrance other than restrictions under the Securities Act and applicable state securities laws.  Other than the transactions contemplated by this Agreement, there is no outstanding vote, plan, pending proposal, or other right of any person to acquire all or any of the shares of Series A Preferred Stock set forth opposite such Holder’s name on Exhibit A.  “Encumbrances” shall mean any security or other property interest or right, claim, lien, pledge, option, charge, security interest, contingent or conditional sale, or other title claim or retention agreement, interest or other right or claim of third parties, whether perfected or not perfected, voluntarily incurred or arising by operation of law, and including any agreement (other than this Agreement) to grant or submit to any of the foregoing in the future.

(j)

Independent Investment.  Except as may be disclosed in any filings by a Holder with the Securities and Exchange Commission, Holder has not agreed to act with any other holder of any Company securities for the purpose of acquiring, holding, voting or disposing of the Securities purchased hereunder for purposes of Section 13(d) under the Securities and Exchange Act of 1934, as amended, and each Holder is acting independently with respect to its investment in the Securities.  The decision of each Holder to purchase Securities pursuant to this Agreement has been made by such Holder independently of any other Holder and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or of its subsidiaries which may have been made or given by any other Holder or by any agent or employee of any other Holder, and no Holder or any of its agents or employees shall have any liability to any Holder (or any other person) relating to or arising from any such information, materials, statements or opinions.

4.

Representations, Warranties and Covenants of the Company.  The Company represents and warrants to each Holder, and covenants for the benefit of each Holder, as follows:

(a)

The Company has been duly incorporated and is validly existing and in good standing under the laws of the state of Delaware, with full corporate power and authority to own, lease and operate its properties and to conduct its business as currently conducted, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure to register or qualify would not have a Material Adverse Effect.  For purposes of this Agreement, “Material Adverse Effect” shall mean any material adverse effect on the business, operations, properties, prospects, or financial condition of the Company and its subsidiaries and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to perform any of its obligations under this Agreement in any material respect.

(b)

The Securities have been duly authorized by all necessary corporate action and, when paid for or issued in accordance with the terms hereof, the Securities shall be validly

4

issued and outstanding, fully paid and nonassessable, free and clear of all liens, encumbrances and rights of refusal of any kind.

(c)

This Agreement has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding agreement and obligation of the Company enforceable against the Company in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and the Company has full power and authority to execute and deliver the Agreement and the other agreements and documents contemplated hereby and to perform its obligations hereunder and thereunder.

(d)

The execution and delivery of the Agreement and the consummation of the transactions contemplated by this Agreement by the Company, will not (i) conflict with or result in a breach of or a default under any of the terms or provisions of, (A) the Company’s certificate of incorporation or by-laws, or (B) of any material provision of any indenture, mortgage, deed of trust or other material agreement or instrument to which the Company is a party or by which it or any of its material properties or assets is bound, (ii) result in a violation of any provision of any law, statute, rule, regulation, or any existing applicable decree, judgment or order by any court, federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over the Company, or any of its material properties or assets or (iii) result in the creation or imposition of any material lien, charge or encumbranc e upon any material property or assets of the Company or any of its subsidiaries pursuant to the terms of any agreement or instrument to which any of them is a party or by which any of them may be bound or to which any of their property or any of them is subject except in the case of clauses (i)(B), (ii) or (iii) for any such conflicts, breaches, or defaults or any liens, charges, or encumbrances which would not have a Material Adverse Effect.

(e)

The delivery and issuance of the Securities in accordance with the terms of and in reliance on the accuracy of each Holder’s representations and warranties set forth in this Agreement will be exempt from the registration requirements of the Securities Act.

(f)

Except for the filing of the Certificate of Designation, no consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement or the offer, sale or issuance of the Securities or the consummation of any other transaction contemplated by this Agreement.

(g)

The Company has complied and will comply with all applicable federal and state securities laws in connection with the offer, issuance and delivery of the Securities hereunder.  Neither the Company nor anyone acting on its behalf, directly or indirectly, has or will sell, offer to sell or solicit offers to buy any of the Securities, or similar securities to, or solicit offers with respect thereto from, or enter into any preliminary conversations or negotiations relating thereto with, any person, or has taken or will take any action so as to bring the issuance and sale of any of the Securities under the registration provisions of the Securities Act and applicable state securities laws.  Neither the Company nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general

5

advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of any of the Securities.

(h)

Except for amounts paid or payable to Burnham Hill Partners, if any, the Company represents that it has not paid, and shall not pay, any commissions or other remuneration, directly or indirectly, to any Holder or to any third party for the solicitation of the exchange of the Series A Preferred Stock pursuant to this Agreement.

(i)

The Company covenants and agrees that promptly following the Closing Date, all shares of Series A Preferred Stock that are exchanged for Series A-1 Preferred Stock pursuant to the terms set forth herein will be cancelled and retired by the Company.

(j)

There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company which questions the validity of this Agreement or the transactions contemplated hereby or any action taken or to be taken pursuant thereto.  There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened, against or involving the Company or any subsidiary, or any of their respective properties or assets which, if adversely determined, is reasonably likely to result in a Material Adverse Effect.

(k)

The authorized capital stock of the Company and the shares thereof issued and outstanding as of February 28, 2009 are set forth on Schedule 4(k) attached hereto.  All of the outstanding shares of the Company’s Common Stock and any other outstanding security of the Company have been duly and validly authorized, and are fully paid and non-assessable.  The Series A Preferred Stock is the only Preferred Stock currently issued and outstanding.  Except as set forth in this Agreement or on Schedule 4(k) attached hereto, as of the Closing Date, no shares of Common Stock are entitled to preemptive rights and there are no registration rights or outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company.  The Company is not a party to, a nd its executive officers have no knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of the Company.  The Company has furnished or made available to the Holders true and correct copies of the Company’s certificate of incorporation as in effect on the date hereof, and the Company’s bylaws as in effect on the date hereof.

(l)

Prior to registration of the shares of Common Stock underlying the Series A-1 Preferred Stock under the Securities Act, all such certificates shall bear the restrictive legend specified in Section 7 of this Agreement.  Subject to any applicable state and federal securities laws, the Company warrants that the Securities shall be freely transferable on the books and records of the Company as and to the extent provided in this Agreement.  If a Holder provides the Company with an opinion of counsel, in form, substance and scope reasonably acceptable to the Company, to the effect that a public sale, assignment or transfer of the Securities may be made without registration under the Securities Act or the Holders provide the Company with reasonable assurances that the Securities can be sold pursuant to Rule 144 without any restriction as to the number of securities acquired as of a particular date that can t hen be immediately sold, the Company shall permit the transfer and promptly instruct its transfer agent to issue one or more certificates in such name and in such denominations as specified by the Holders and

6

without any restrictive legend.  The Company acknowledges that a breach by it of its obligations under this Section 4(l) will cause irreparable harm to the Holders by vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 4(l) will be inadequate and agrees, in the event of a breach or the Holders’ reasonable perception of a threatened breach by the Company of the provisions of this Section 4(l), that the Holders shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

5.

Conditions Precedent to the Obligation of the Company to Issue the Series A-1 Preferred Stock.  The obligation hereunder of the Company to issue and deliver the Series A-1 Preferred Stock to each Holder is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below.  These conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion.

(a)

Each Holder shall have executed and delivered this Agreement.

(b)

The Company shall have filed the Certificate of Designation with the Delaware Secretary of State, in substantially the form attached hereto as Exhibit B.

(c)

Each Holder shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Holder at or prior to the Closing Date.

(d)

Each of the representations and warranties of each Holder in this Agreement shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of such date.

(e)

The transactions contemplated by the Series A-1 Stock Purchase Agreement and that certain Note Exchange Agreement, dated on or about the date hereof, shall have been consummated.

6.

Conditions Precedent to the Obligation of the Holders to Accept the Series A-1 Preferred Stock. The obligation hereunder of each Holder to accept the Series A-1 Preferred Stock is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below.  These conditions are for each Holder’s sole benefit and may be waived by each Holder at any time in its sole discretion.

(a)

The Company shall have executed and delivered this Agreement.

(b)

The Company shall have filed the Certificate of Designation with the Delaware Secretary of State, in substantially the form attached hereto as Exhibit B.

7

(c)

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

(d)

Each of the representations and warranties of the Company shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of such date.

(e)

No statute, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement at or prior to the Closing Date.

(f)

As of the Closing Date, no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, shall be pending against or affecting the Company, or any of its properties, which questions the validity of the Agreement or the transactions contemplated thereby or any action taken or to be taken pursuant thereto.  As of the Closing Date, no action, suit, claim or proceeding before or by any court or governmental agency or body, domestic or foreign, shall be pending against or affecting the Company, or any of its properties, which, if adversely determined, is reasonably likely to result in a Material Adverse Effect.

(g)

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

(h)

The Company shall have delivered on the Closing Date to the Holders a secretary’s certificate, dated as of the Closing Date, as to (i) the resolutions of the board of directors of the Company authorizing the transactions contemplated by this Agreement, (ii) the Company’s certificate of incorporation, (iii) the Company’s bylaws, each as in effect at the Closing, and (iv) the authority and incumbency of the officers of the Company executing this Agreement.

(i)

The certificates representing the shares of Series A-1 Preferred Stock shall have been duly executed and delivered to the Holders.

(j)

At the Closing, the Holders shall have received an opinion of counsel to the Company, dated the Closing Date, in the form of Exhibit E hereto.

(k)

The First Closing, as defined in the Series A-1 Stock Purchase Agreement, shall have been consummated.

8

7.

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

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

The Company agrees to reissue certificates representing any of the Securities, without the legend set forth above if at such time, prior to making any transfer of any such Securities, such holder thereof shall give written notice to the Company describing the manner and terms of such transfer and removal as the Company may reasonably request, and provided the conditions set forth in this paragraph shall have been met.  Such proposed transfer will not be effected until: (a) the Company has either (i) received an opinion of counsel that the registration of the Securities is not required in connection with such proposed transfer; or (ii) filed a registration statement under the Securities Act covering such proposed disposition has been filed by the Company with the Securities and Exchange Commission, which registration statement has become effective under the Securities Act; and (b) the Company has received an opinion of counsel that either: (i) the 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.  The Company will use reasonable efforts to respond to any such notice from a Holder within five (5) business days.  In the case of any proposed transfer under this Section 7, the Company will use reasonable efforts to comply with any such applicable state securities or “blue sky” laws, but shall in no event be required, in connection therewith, to qualify to do business in any state where it is not then qualified or 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.  The restrictions on transfer contained in this Section 7 shall be in addition to, and not by way of limitation of, any other restrictions on transfer co ntained in any other section of this Agreement.

8.

Fees and Expenses.  Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement, provided, however, that the Company shall pay reasonable attorneys’ fees and expenses (exclusive of disbursements and out-of-pocket expenses) incurred by the Holders in connection with the preparation, negotiation, execution and delivery of this Agreement and the other transaction documents.

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9.

Indemnification.

(a)

The Company hereby agrees to indemnify and hold harmless each Holder and its officers, directors, shareholders, members, managers, employees, agents and attorneys against any and all losses, claims, damages, liabilities and reasonable expenses (collectively “Claims”) incurred by each such person in connection with defending or investigating any such Claims, whether or not resulting in any liability to such person, to which any such indemnified party may become subject, insofar as such Claims arise out of or are based upon any breach of any representation, warranty, covenant or agreement made by the Company in this Agreement.

(b)

Each Holder hereby agrees to indemnify and hold harmless the Company and its officers, directors, shareholders, members, managers, employees, agents and attorneys against any and all Claims incurred by each such person in connection with defending or investigating any such Claims, whether or not resulting in any liability to such person, to which any such indemnified party may become subject, insofar as such Claims arise out of or are based upon any breach of any representation, warranty, covenant or agreement made by such Holder in this Agreement.

10.

Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without giving effect conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  Each of the parties consents to the exclusive jurisdiction of the Federal courts whose districts encompass any part of the County of New York located in the City of New York in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions.  Each party waives its right to a trial by jury.  Each party to this Agreement irrevocably consents to the service of process in any such proceeding by the mailing of copies thereof by regis tered or certified mail, postage prepaid, to such party at its address set forth herein.  Nothing herein shall affect the right of any party to serve process in any other manner permitted by law.

11.

Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, express overnight courier, registered first class mail, or telecopier (provided that any notice sent by telecopier shall be confirmed by other means pursuant to this Section 11), initially to the address set forth below, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section.

(a)

if to the Company:

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

10

General Counsel
Glowpoint, Inc.
225 Long Avenue
Hillside, New Jersey 07205
Tel. No.: (312) 235-3888 x 2087
Fax No.: (973) 556-1272

with a copy to:

Gibbons P.C.
One Gateway Center
Newark, New Jersey 07102
Attn: Frank Cannone, Esq.
Tel. No.: (973) 596-4500
Fax No.:  (973) 596-0545

(b)

if to the Holders:

At the address of such Holder set forth on Exhibit A to this Agreement;

with a copy to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attention: Christopher S. Auguste, Esq.

Tel. No.: (212) 715-9100

Fax No.: (212) 715-8000

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when receipt is acknowledged, if telecopied; or when actually received or refused if sent by other means.

12.

Confidentiality. Each Holder acknowledges and agrees that the existence of this Agreement and the information contained herein and in the Exhibits hereto (collectively, “Confidential Information”) is of a confidential nature and shall not, without the prior written consent of the Company, be disclosed by such Holder to any person or entity, other than such Holder’s personal financial and legal advisors for the sole purpose of evaluating an investment in the Company, and that it shall not, without the prior written consent of the Company, directly or indirectly, make any statements, public announcements or release to trade publications or the press with respect to the subject matter of this Agreement.  Notwithstanding the foregoing, a Holder may use or disclose Confidential to the extent Holder is legally compelled to disclose such Confidential Information, provided, however, that prior to any such compelled disclosure, Holder shall give the Company reasonable advance notice of any such disclosure and shall cooperate with the Company in protecting against any such disclosure and/or obtaining a protective order narrowing the scope of such disclosure and/or use of the Confidential Information.  Each Holder further acknowledges and agrees that the information contained

11

herein and in the other documents relating to this transaction may be regarded as material non-public information under United States federal securities laws, and that United States federal securities laws prohibit any person who has received material non-public information relating to the Company from purchasing or selling securities of the Company, or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell securities of the Company.  Accordingly, until such time as any such non-public information has been adequately disseminated to the public, each Holder shall not purchase or sell any securities of the Company, or communicate such information to any other person.  The Company shall also file with the Securities and Exchange Commission a Current Report on Form 8-K (the “Form 8-K”) describing the material terms of the transactions contemplated hereby as soon as practicable following the Closing Date, but in no event more than two (2) Trading Days following the Closing Date, which Form 8-K shall be subject to prior review and comment by the Holders.  "Trading Day" means any day during which The New York Stock Exchange shall be open for business.

13.

Entire Agreement.  This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior and/or contemporaneous oral or written proposals or agreements relating thereto all of which are merged herein.  This Agreement may not be amended or any provision hereof waived in whole or in part, except by a written amendment signed by all of the parties hereto.

14.

Counterparts.  This Agreement may be executed by facsimile signature and in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

12

IN WITNESS WHEREOF, this Agreement was duly executed on the date first written above.

GLOWPOINT, INC.
By:
	Name:
	Title:
Holder:
By:
	Name:
	Title:

EX-10.7

Exhibit 10.7

AMENDMENT TO AMENDED EMPLOYMENT AGREEMENT

This Amendment to Amended Employment Agreement (as defined below) (the “Amendment”), dated March 12, 2009, is by and between Glowpoint, Inc., a Delaware corporation (“Glowpoint”), and Michael Brandofino (the “Employee”).  Capitalized terms used but not otherwise defined in this Amendment will have the meanings set forth in the Amended Employment Agreement.

WHEREAS, Employee and Glowpoint entered into an Amended and Restated Employment Agreement as of July 1, 2004, as amended May 15, 2007 and June 26, 2007 (collectively, the “Amended Employment Agreement”);

WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) requires employment agreement provisions that are nonqualified plans of deferred compensation under Code Section 409A to satisfy certain provisions of Code Section 409A and the regulations thereunder (the “Section 409A Provisions”);

WHEREAS, Glowpoint and the Employee wish to satisfy the Section 409A Provisions prior to a vesting event and avoid the tax consequences of a failure to satisfy the Section 409A Provisions upon or after a vesting event; and

WHEREAS, the Employee wishes to revise the terms of his covenant not to compete, and Glowpoint is willing to make these revisions.

NOW, THEREFORE, in consideration of the mutual covenants set forth in the Amended Employment Agreement and this Amendment, the parties further amend the Amended Employment Agreement as follows:

1.

Section 2.2(a) of Amended Employment Agreement.  The following sentence is added to the end of Section 2.2(a) of the Amended Employment Agreement effective as of January 1, 2009: “The Company shall pay the incentive compensation no later than March 15 of the calendar year following the calendar year for which the Employee earned the incentive compensation.”

2.

Section 2.2(b) of Amended Employment Agreement.  The following sentence is added to Section 2.2(b) of the Amended Employment Agreement effective as of January 1, 2009:  “The Company shall pay the bonus to the Employee within thirty days after consummation of the Sale.”

3.

Section 3.3 of Amended Employment Agreement.  The second and third sentences of Section 3.3 of the Amended Employment Agreement are deleted, and replaced with the following sentences effective as of January 1, 2009:  “Such severance shall be paid as salary continuation in accordance with the Company’s regular payroll practices commencing with the payroll period ending immediately after the thirtieth day after the date of the Employee’s

separation from service as defined under the Section 409A Provisions (the “Separation From Service”).  The Company shall pay the severance only if the Employee also incurs a Separation From Service.  If the Employee is terminated without Cause, or Resigns for Good Reason, or dies, and also incurs a Separation From Service, Employee will also be entitled to one year of accelerated vesting on the Options to be granted pursuant to this Agreement.”

4.

Section 6.1 of Amended Employment Agreement.  Section 6.1 of the Amended Employment Agreement, Non-Competition, is hereby deleted in its entirety and replaced with the following: “During the term of this Agreement, and for 12 months after the termination of Employee's employment with the Company for any reason, unless mutually agreed otherwise by the Employee and the Company, Employee shall not, directly or indirectly, work as an employee, consultant, agent, principal, partner, manager, officer, or director for the following entities: Iformata Communications, BT Conferencing/Wireone, Nortel Telepresence, Cisco CROS or York Telecom.”  

5.

Entire Agreement.  This Amendment is the final, complete, and exclusive Amendment between the parties relating to the subject matter hereof, and supersedes all prior or contemporaneous proposals, understandings, representations, warranties, promises, and other communications, whether oral or written, relating to such subject matter.  Unless specifically amended by this Amendment, all the provisions of the Amended Employment Agreement remain unchanged and continue in full force and effect.  If any provision of the Amended Employment Agreement, as further amended by this Amendment, is held by a court of competent jurisdiction to be unenforceable, the remaining provisions will be unaffected and remain in effect.

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

Glowpoint, Inc.
By:  /s/ Joseph Laezza	/s/ Michael Brandofino
Name: Joseph Laezza Title: President	Michael Brandofino

EX-10.8

Exhibit 10.8

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement (as defined below) (the “Amendment”), dated as of March 12, 2009, is by and between Glowpoint, Inc., a Delaware corporation (“Glowpoint”), and Joseph Laezza (the “Employee”).  Capitalized terms used but not otherwise defined in this Amendment will have the meanings set forth in the Employment Agreement.

WHEREAS, Employee and Glowpoint entered into an Employment Agreement on March 11, 2004, as amended May 15, 2007 and November 24, 2008 (as amended, the “Employment Agreement”)

WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) requires employment agreement provisions that are nonqualified plans of deferred compensation under Code Section 409A to satisfy certain provisions of Code Section 409A and the regulations thereunder (the “Section 409A Provisions”);

WHEREAS, Glowpoint and the Employee wish to satisfy the Section 409A Provisions prior to a vesting event and avoid the tax consequences of a failure to satisfy the Section 409A Provisions upon or after a vesting event; and

NOW, THEREFORE, in consideration of the mutual covenants set forth in the Employment Agreement and this Amendment, the parties further amend the Employment Agreement as follows:

1.

Section 2.3 of Employment Agreement.  The following sentence is added to the end of Section 2.3 of the Employment Agreement effective as of January 1, 2009: “The Company shall pay the incentive compensation no later than March 15 of the calendar year following the calendar year for which the Employee earned the incentive compensation.”

2.

Section 3.3 of Employment Agreement.  The second and third sentences of Section 3.3 of the Employment Agreement are deleted, and replaced with the following sentences effective as of January 1, 2009:  “Such severance shall be paid as salary continuation in accordance with the Company’s regular payroll practices commencing with the payroll period ending immediately after the thirtieth day after the date of the Employee’s separation from service as defined under the Section 409A Provisions (the “Separation From Service”).  The Company shall pay the severance only if the Employee also incurs a Separation From Service.  If the Employee is terminated without Cause, or Resigns for Good Reason, or dies, and also incurs a Separation From Service, Employee will also be entitled to one year of accelerated vesting on the Options to be granted pursuant to this Agreement.”

3.

Entire Agreement.  This Amendment is the final, complete, and exclusive Amendment between the parties relating to the subject matter hereof, and supersedes all prior or contemporaneous proposals, understandings, representations, warranties, promises, and other communications, whether oral or written, relating to such subject matter.  Unless specifically

amended by this Amendment, all the provisions of the Employment Agreement remain unchanged and continue in full force and effect.  If any provision of the Employment Agreement, as further amended by this Amendment, is held by a court of competent jurisdiction to be unenforceable, the remaining provisions will be unaffected and remain in effect.

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

Glowpoint, Inc.
By:  /s/ Edwin F. Heinen	/s/ Joseph Laezza
Name: Edwin F. Heinen Title: Chief Financial Officer	Joseph Laezza

EX-10.9

Exhibit 10.9

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement (as defined below) (the “Amendment”), dated as of March 12, 2009, is by and between Glowpoint, Inc., a Delaware corporation (“Glowpoint”), and Edwin F. Heinen (the “Employee”).  Capitalized terms used but not otherwise defined in this Amendment will have the meanings set forth in the Employment Agreement.

WHEREAS, Employee and Glowpoint entered into an Employment Agreement on January 30, 2007, as amended April 24, 2007 and November 24, 2008 (as amended, the “Employment Agreement”);

WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) requires employment agreement provisions that are nonqualified plans of deferred compensation under Code Section 409A to satisfy certain provisions of Code Section 409A and the regulations thereunder (the “Section 409A Provisions”);

WHEREAS, Glowpoint and the Employee wish to satisfy the Section 409A Provisions prior to a vesting event and avoid the tax consequences of a failure to satisfy the Section 409A Provisions upon or after a vesting event; and

NOW, THEREFORE, in consideration of the mutual covenants set forth in the Employment Agreement and this Amendment, the parties further amend the Employment Agreement as follows:

1.

Section 2.3 of Employment Agreement.  The following sentence is added to the end of Section 2.3 of the Employment Agreement effective as of January 1, 2009: “The Company shall pay the incentive compensation no later than March 15 of the calendar year following the calendar year for which the Employee earned the incentive compensation.”

2.

Section 3.3 of Employment Agreement.  The second and third sentences of Section 3.3 of the Employment Agreement are deleted, and replaced with the following sentences effective as of January 1, 2009:  “Such severance shall be paid as salary continuation in accordance with the Company’s regular payroll practices commencing with the payroll period ending immediately after the thirtieth day after the date of the Employee’s separation from service as defined under the Section 409A Provisions (the “Separation From Service”).  The Company shall pay the severance only if the Employee also incurs a Separation From Service.  If the Employee is terminated without Cause, or Resigns for Good Reason, or dies, and also incurs a Separation From Service, Employee will also be entitled to one year of accelerated vesting on the Options to be granted pursuant to this Agreement.”

3.

Entire Agreement.  This Amendment is the final, complete, and exclusive Amendment between the parties relating to the subject matter hereof, and supersedes all prior or contemporaneous proposals, understandings, representations, warranties, promises, and other

communications, whether oral or written, relating to such subject matter.  Unless specifically amended by this Amendment, all the provisions of the Employment Agreement remain unchanged and continue in full force and effect.  If any provision of the Employment Agreement, as further amended by this Amendment, is held by a court of competent jurisdiction to be unenforceable, the remaining provisions will be unaffected and remain in effect.

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

Glowpoint, Inc.
By:  /s/ Joseph Laezza	/s/ Edwin F. Heinen
Name: Joseph Laezza Title: President	Edwin F. Heinen

EX-10.10

Exhibit 10.10

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement (as defined below) (the “Amendment”), dated March 12, 2009, is by and between Glowpoint, Inc., a Delaware corporation (“Glowpoint”), and David W. Robinson (the “Employee”).  Capitalized terms used but not otherwise defined in this Amendment will have the meanings set forth in the Employment Agreement.

WHEREAS, the Employee and Glowpoint entered into an Employment Agreement on May 1, 2006, as amended on April 24, 2007, September 20, 2007, and April 30, 2008 (collectively, the “Employment Agreement”);

WHEREAS, the Employee’s employment term is currently scheduled to expire on May 4, 2010 (the “Expiration Date”);

WHEREAS, Glowpoint wishes to extend the Expiration Date, and the Employee wishes to continue to work for Glowpoint until the extended Expiration Date;

WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) requires employment agreement provisions that are nonqualified plans of deferred compensation under Code Section 409A to satisfy certain provisions of Code Section 409A and the regulations thereunder (the “Section 409A Provisions”); and

WHEREAS, Glowpoint and the Employee wish to satisfy the Section 409A Provisions prior to a vesting event and avoid the tax consequences of a failure to satisfy the Section 409A Provisions upon or after a vesting event.

NOW, THEREFORE, in consideration of the mutual covenants set forth in the Employment Agreement and this Amendment, the parties further amend the Employment Agreement as follows:

1.

Term.  The Employment Agreement is hereby amended to delete “the two-year period commencing on May 4, 2008” in the first sentence of Section 1.1 and replace it with “until January 31, 2011”.

2.

Section 2.3 of Employment Agreement.  The following sentence is added to the end of Section 2.3 of the Employment Agreement effective as of January 1, 2009: “The Company shall pay the incentive compensation no later than March 15 of the calendar year following the calendar year for which the Employee earned the incentive compensation.”

3.

Section 3.3 of Employment Agreement.  The second and third sentences of Section 3.3 of the Employment Agreement are deleted, and replaced with the following sentences effective as of January 1, 2009:  “Such severance shall be paid as salary continuation

in accordance with the Company’s regular payroll practices commencing with the payroll period ending immediately after the thirtieth day after the date of the Employee’s separation from service as defined under the Section 409A Provisions (the “Separation From Service”).  The Company shall pay the severance only if the Employee also incurs a Separation From Service.  If the Employee is terminated without Cause, or Resigns for Good Reason, or dies, and also incurs a Separation From Service, Employee will also be entitled to one year of accelerated vesting on the Options to be granted pursuant to this Agreement.”

4.

Entire Agreement.  This Amendment is the final, complete, and exclusive Amendment between the parties relating to the subject matter hereof, and supersedes all prior or contemporaneous proposals, understandings, representations, warranties, promises, and other communications, whether oral or written, relating to such subject matter.  Unless specifically amended by this Amendment, all the provisions of the Amended Employment Agreement remain unchanged and continue in full force and effect.  If any provision of the Amended Employment Agreement, as further amended by this Amendment, is held by a court of competent jurisdiction to be unenforceable, the remaining provisions will be unaffected and remain in effect.

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

Glowpoint, Inc.
By:  /s/ Joseph Laezza	/s/ David W. Robinson
Name: Joseph Laezza Title: President	David W. Robinson

EX-17.1

Exhibit 17.1

March 18, 2009

To the Glowpoint Board of Directors,

I hereby resign from Glowpoint’s Board of Directors and any committees thereof effective immediately.  My resignation is not attributable to any disagreement I may have.

In my opinion, the Company has reached such a level of maturations that I feel comfortable resigning from Glowpoint’s Board of Directors after founding the Company 17 years prior.

  /s/ Richard Reiss

Richard Reiss

EX-17.2

Exhibit 17.2

March 18, 2009

To the Glowpoint Board of Directors,

I hereby resign from Glowpoint’s Board of Directors and any committees thereof effective immediately.  My resignation is not attributable to any disagreement I may have.

  /s/ Aziz Ahmad

Aziz Ahmad

EX-99.1

EXHIBIT 99.1

Contact:

Jonathan Brust

Glowpoint, Inc.

312-235-3888 x 2052

jbrust@glowpoint.com

www.glowpoint.com

Glowpoint Eliminates Remaining Debt; Raises Additional Equity Capital

Announces Realignment of the Management Team

HILLSIDE, N.J. – March 19, 2009 – Glowpoint, Inc. (OTC:GLOW.OB), a leading provider of advanced video communications solutions, today announced the completion of a series of transactions designed to support and advance the Company’s stated goals of driving revenue growth and achieving positive operating cash flow. Following this transaction, the Company boasts a solid balance sheet, a clean capital structure, and a realigned senior leadership team focused on capitalizing on the many opportunities for growth and building on its industry leadership position. In addition to the transaction, the Company has announced the resignation of CEO Michael Brandofino. The highlights of this transaction and the changes in management include:

·

Additional Equity Capital: The Company raised additional equity capital with gross proceeds of approximately $1.8 million by selling shares of its newly-created Series A-1 Convertible Preferred Stock at an effective price per share of $0.40 and Series A-3 Warrants with an exercise price of $0.40 per share. The Series A-1 Convertible Preferred Stock is identical in all material respects to the Series A Convertible Preferred Stock first issued by the Company in November 2008. All outstanding shares of the Company’s Series A Preferred were exchanged on a 1-for-1 basis for shares of Series A-1 Preferred in connection with the closing. The effective price of $0.40 per common share represents approximately a 40% premium over the 10-day volume weighted average price of the Company’s common stock prior to closing. Dividends on the Series A-1 Preferred, which cannot begin accruing until Novemb er 2009, shall be payable quarterly in cash or kind at the option of the Company until September 2010, and quarterly in cash or kind at the option of the holder thereafter.

·

Eliminated All Outstanding Debt: The Company exchanged or paid off all of its outstanding senior secured convertible notes in connection with the financing – exchanging approximately $1.1 million of such indebtedness for shares of its Series A-1 Convertible Preferred Stock and Series A-3 Warrants and prepaying the remaining indebtedness of approximately $0.72 million in a negotiated transaction funded by the equity raise.

·

Simplified Capital Structure: As of the Closing, the Company’s capital structure consisted of common stock, one series of convertible preferred stock, warrants and options.

·

Realigned Management Team: Concurrent with the above, Michael Brandofino voluntarily resigned as Chief Executive Officer and a member of the Board of Directors.  Additionally, Aziz Ahmad and Richard Reiss also voluntarily resigned from the Board.  Following these changes, Joe Laezza, Glowpoint’s President and Chief Operating Officer, and David Robinson, its Executive Vice President, were named the Company’s Co-Chief Executive Officers and members of the Board. The new appointments reflect the Company’s execution strategy focused on global distribution and cost effective delivery of service, all in support of its ongoing commitment to achieve profitability.

“My decision to leave was obviously a difficult one to make, but I have proven over the years that I will always do what’s best for the Company and our investors,” Mr. Brandofino stated. “I wish the remaining management team the best of luck and have confidence they will continue to drive the Glowpoint vision and positive growth trends that have been realized over the last couple of years.”

Mr. Robinson stated, “The Company is committed to achieving and maintaining positive operating income and increasing shareholder value by focusing on execution, cost reductions and superior customer service. Joe and I are both very enthusiastic about the opportunity in front of Glowpoint and look forward to working together to solidify and expand its position as an industry leader with unmatched service and technological capabilities.” Joe Laezza added, “David and I are grateful to Mike Brandofino for his years of service and important contributions to the Company and wish him the best in his future endeavors.”

The Series A-1 Convertible Preferred Stock and warrants were issued to institutional investors and certain company insiders, each of whom is an accredited investor, in reliance upon exemptions from registration pursuant to Sections 3(a)(9) and 4(2) of the Securities Act of 1933, as amended, and Regulation D thereunder. Pursuant to the terms of the financing, the Company has agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the shares of common stock underlying the Series A-3 warrants.

For additional information, please refer to the Company's Form 8-K to be filed with the Securities and Exchange Commission with respect to this transaction.

About Glowpoint

Glowpoint, Inc. (OTC BB: GLOW.OB) is a leading provider of advanced video communications solutions.  Glowpoint’s suite of advanced and robust telepresence and video communications solutions enable organizations to communicate with each other over disparate networks and technology platforms. Glowpoint supports thousands of video communications system in over 35 countries with its 24/7 video management services, powering major broadcasters, Fortune 500 companies, as well as global carriers and video equipment manufacturers and their customers around the world. To learn more, visit www.glowpoint.com.