Unassociated Document


    


    EXHIBIT
      4.1

    


    THE
      4% CONVERTIBLE DEBENTURE DUE 2013 REPRESENTED BY THIS CERTIFICATE AND THE
      SECURITIES INTO WHICH IT MAY BE CONVERTED HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND NEITHER
      SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED FOR SALE, SOLD, PLEDGED,
      ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH
      RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE SECURITIES LAWS
      OR
      (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDERS OF SUCH
      SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
      COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
      TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES
      LAWS.

    


    


    GlenRose
      Instruments Inc.

    


    4%
      Convertible Debenture Due 2013

    


    No.
      __$____,000

    


    This
      Debenture (the “Debenture”)
      is one
      of a duly authorized issue of Debentures of GlenRose Instruments Inc., a
      corporation duly incorporated under the laws of the State of Delaware, and
      having its principal address at 45 First Avenue, Waltham, Massachusetts 02451
      (the “Company”),
      designated as its 4% Convertible Debentures due 2013, in an aggregate principal
      amount of up to $22,875,000, which amount may be increased at the discretion
      of
      the Company (the “Debentures”).

    


    FOR
      VALUE
      RECEIVED, the Company promises to pay to the order of ___________________ or
      its
      registered assigns (the “Holder”),
      the
      principal sum of _______________United States Dollars (U.S. $______________)
      (the “Principal
      Amount”)
      on
      _______________, 2013, subject to earlier payment as otherwise provided herein
      (the “Maturity
      Date”),
      and to
      pay interest on the Principal Amount outstanding under this Debenture (the
      “Outstanding
      Principal Amount”),
      at the
      rate of 4% per annum, due and payable quarterly in arrears on the 15th day
      of
      October, January, April and July of each year, commencing on October 15, 2008
      (each an “Interest
      Payment Date”)
      and on
      the Maturity Date. Interest shall be calculated based on a 360-day year.
      Interest shall accrue from the most recent date to which interest has been
      paid
      or, if no interest has been paid, from the date of original issuance and shall
      continue until the following Interest Payment Date. Except as otherwise provided
      herein, the interest so payable will be paid to the person in whose name this
      Debenture is registered on the records of the Company regarding registration
      and
      transfers of the Debentures (the “Debenture
      Register”)
      at the
      close of business on the record date for interest payable on such Interest
      Payment Date. The record date for any interest payment is the close of business
      on the date fifteen days prior to the Interest Payment Date, unless such date
      shall not be a business day, in which case on the next preceding business day.
      The Company shall be entitled to withhold from all payments of interest on
      this
      Debenture any amounts required to be withheld under the applicable provisions
      of
      the United States income tax laws as evidenced by an opinion of counsel of
      the
      Company. The Company agrees to pay additional interest on overdue principal,
      and, to the extent lawful, overdue installments of interest at the rate per
      annum of 2%. Payments in respect of the Debenture shall be made by the Company
      by wire transfer of immediately available funds to the account specified by
      the
      Holder.


    
      
         

      

      
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    The
      Company will pay, in cash, the Outstanding Principal Amount and all accrued
      and
      unpaid interest (the “Outstanding
      Amount”)
      due
      upon this Debenture on the Maturity Date.

    


    This
      Debenture is subject to the following additional provisions:

    


    1. Exchange.
      The
      Debentures are exchangeable for an equal aggregate principal amount of
      Debentures of different denominations as requested by the Holder surrendering
      the same. No fees will be charged for such exchange. Notwithstanding the
      foregoing, the Company shall have no obligation to issue new Debentures unless
      and until requested by the Holders thereof. 

    


    2. Transfers.
      This
      Debenture has been issued subject to investment representations of the original
      purchaser hereof and may be transferred or exchanged only (a) in compliance
      with
      the Securities Act of 1933, as amended (the “Act”),
      and
      applicable state securities laws, and (b) in accordance with applicable
      provisions hereof. Prior to due presentment for transfer of this Debenture,
      the
      Company may treat the person in whose name this Debenture is duly registered
      on
      the Company’s Debenture Register as the owner hereof for the purpose of
      receiving payment as herein provided and all other purposes, whether or not
      this
      Debenture is then overdue, and the Company shall not be affected by notice
      to
      the contrary.

    


    3. Definitions.
      For
      purposes hereof the following definitions shall apply:

    


    “2008
      Private Placement” The
      Company’s private placement of up to $22,875,000 of Debentures.

    


    “Common
      Stock”
      shall
      mean the Common Stock, $0.01 par value per share, of the Company.

    


    “Company”
      shall
      have the meaning set forth in the first introductory paragraph.

    


    “Conversion
      Notice”
      shall
      have the meaning set forth in Paragraph 5(c).

     

    “Conversion
      Price”
      shall
      mean $7.00, subject to adjustment from time to time as set forth in
      Paragraph 7 hereof.

    


    “Debenture”
      shall
      have the meaning set forth in the first introductory paragraph.

    


    “Debenture
      Register” shall
      have the meaning set forth in the second introductory paragraph.

    


    “Debentures”
      shall
      have the meaning set forth in the first introductory paragraph.

    


    “Events
      of Default”
      shall
      have the meaning set forth in Paragraph 14.

    


    “Exchange
      Act” shall
      mean the Securities Exchange Act of 1934, as amended.

    


    “Final
      Closing Date”
      shall
      mean the final closing date of the 2008 Private Placement (such date being
      ____________, 2008).

    


    “Fundamental
      Change” shall
      have the meaning set forth in Paragraph 6(b).

    


    “Fundamental
      Change Purchase Date” shall
      have the meaning set forth in Paragraph 6(b).


    
      
         

      

      
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    “Holder”
      shall
      have the meaning set forth in the second introductory paragraph.

    


    “Holder
      Conversion Date”
      shall
      have the meaning set forth in Paragraph 5(c).

    


    “Interest
      Payment Date” shall
      have the meaning set forth in the second introductory paragraph.

    


    “Investor
      Rights Agreement” shall
      have the meaning set forth in the Subscription Agreement.

    


    “Maturity
      Date” shall
      have the meaning set forth in the second introductory paragraph.

    


    “Outstanding
      Amount” shall
      have the meaning set forth in the third introductory paragraph.

    


    “Outstanding
      Principal Amount” shall
      have the meaning set forth in the second introductory paragraph.

    


    “Principal
      Amount” shall
      have the meaning set forth in the second introductory paragraph.

    


    “Qualified
      Offering” shall
      mean the Company’s first firm commitment underwritten public offering of its
      Common Stock registered under the Securities Act 

    


    “Qualified
      Registration”
      shall
      mean the registration of the Company’s securities on Form 10 pursuant to Section
      12(b) or 12(g) of the Exchange Act.

    


    “Redemption
      Date”
      shall
      have the meaning set forth in Paragraph 6(a)(iii).

    


    “Redemption
      Debentures” shall
      have the meaning set forth in Paragraph 6(d).

    


    “Redemption
      Price” shall
      have the meaning set forth in Paragraph 6(c).

    


    “Redemption
      Notice” shall
      have the meaning set forth in Paragraph 6(a).

    


    “Securities
      Act”
      means
      the Securities Act of 1933, as amended.

    


    “Subscription
      Agreement”
      shall
      mean the agreement entered into by and between the Company and the Holder for
      the purchase of the Debenture.

    


    “Underlying
      Shares”
      shall
      mean the shares of Common Stock into which this Debenture is
      convertible.

    


    In
      addition, other terms defined in the Subscription Agreement and not otherwise
      defined herein shall have the same meanings herein as are set forth for such
      terms in the Subscription Agreement. 

    


    4. Maturity.
      On the
      Maturity Date, the Outstanding Amount of this Debenture shall be payable in
      cash. 


    
      
         

      

      
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    5. Conversion.
      This
      Debenture is subject to conversion as follows:

    


    (a) Holder’s
      Right to Convert.
      The
      Outstanding Amount of this Debenture shall be convertible at any time, in whole
      or in part, at the option of the Holder hereof, into fully paid, validly issued
      and nonassessable shares of Common Stock.

    


    (b) Conversion
      Price for Converted Shares.
      Subject
      to Paragraph 5(a), the Outstanding Amount of this Debenture that is converted
      into shares of Common Stock shall be convertible into the number of shares
      of
      Common Stock calculated by dividing the Outstanding Amount of this Debenture
      submitted for conversion by the Conversion Price.

    


    (c) (i)
       Mechanics
      of Conversion.
      In order
      to convert this Debenture (in whole or in part) into shares of Common Stock,
      the
      Holder shall surrender this Debenture, by either overnight courier or two-day
      courier, to the Company, and shall give written notice in the form of
Exhibit
      2
      hereto
      (the “Conversion
      Notice”)
      by
      facsimile (with the original of such notice forwarded with the foregoing
      courier) to the Company that the Holder elects to convert all or the portion
      of
      the Outstanding Amount of this Debenture specified therein, which such notice
      and election shall be irrevocable by the Holder; provided,
      however,
      that
      the Company shall not be obligated to issue certificates evidencing the shares
      of Common Stock issuable upon such conversion unless this Debenture with
      evidence of the principal amount hereof to be converted is delivered to the
      Company as provided above, or the Holder notifies the Company that this
      Debenture has been lost, stolen or destroyed and promptly executes an agreement
      reasonably satisfactory to the Company to indemnify the Company from any loss
      which may be incurred by it in connection with this Debenture. The date on
      which
      a Conversion Notice is given (the “Holder
      Conversion Date”)
      shall
      be deemed to be the date the Company received by facsimile the Conversion
      Notice, as evidenced by a printed confirmation of receipt received by the Holder
      or confirmed by telephone conference between the Holder and the
      Company.

    


    (ii)  Issuance
      of Certificates.
      In the
      case of any Conversion Notice given by the Holder to the Company, the Company
      shall issue and deliver as promptly as practicable and in no event later than
      five (5) business days after delivery to the Company of the Debenture, or after
      receipt of such agreement and indemnification, to such Holder or to its
      designee, a certificate or certificates for the number of shares of Common
      Stock
      to which the Holder shall be entitled, together with a Debenture for the
      Outstanding Amount not submitted for conversion, if any. The person or persons
      entitled to receive the shares of Common Stock issuable upon conversion shall
      be
      treated for all purposes as the record holder or holders of such shares of
      Common Stock on the Holder Conversion Date.

     

    6. Redemption.

    (a) Company
      Option to Redeem. Any
      portion of this Debenture may be redeemed at the Company’s option expressed by a
      written notice (a “Redemption
      Notice”)
      to the
      Holder; provided
      that:

     

    (i) a
      registration statement under the Securities Act and
      a
      registration with a U.S. national securities exchange are then in effect
      covering the Underlying Shares;

     

    (ii)
       the
      average closing bid price per share of Common Stock, as reported on such
      national securities exchange, shall have been not less than $14.00 per share
      for
      a minimum of twenty (20) out of thirty (30) trading days prior to the date
      of
      the Redemption Notice; and

     

    (iii) the
      Redemption Notice delivered by the Company shall be received by the Holder
      at
      least ten (10) trading days (but not more than thirty (30) trading days) prior
      to the date of redemption (the “Redemption
      Date”).

     


    
      
         

      

      
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    (b) Holder
      Option to Redeem. If there shall occur a Fundamental Change (the “Fundamental
      Change”), the
      Holder shall have the right, at such Holder’s option, to require the Company to
      purchase for cash all or any portion of such Holder’s Debenture on a date
      selected by the Company (the “Fundamental
      Change Purchase Date”),
      which
      Fundamental Change Purchase Date shall be no later then thirty (30) calendar
      days after the occurrence of such Fundamental Change, at the redemption price
      specified below in Section 6(c). A Fundamental Change shall be deemed to have
      occurred at such time as any of the following events shall occur:

     

    (i) any
      person or group (as defined under Section 13(d) of the Exchange Act), other
      than
      the Company, its subsidiaries or any employee benefits plan of the Company
      or
      its subsidiaries, files a Schedule 13D or Schedule TO or any successor schedule,
      form or report pursuant to the Exchange Act, disclosing that such person has
      become the beneficial owner of shares with a majority of the total voting power
      of the Company’s outstanding voting securities; unless such beneficial ownership
      arises solely as a result of a revocable proxy delivered in response to a proxy
      or consent solicitation made pursuant to the applicable rules and regulations
      under the Exchange Act;

     

    (ii) the
      Company consolidates with or merges with or into another person (other than
      a
      subsidiary of the Company), or sells, conveys, transfers, leases or otherwise
      disposes of all or substantially all of its properties and assets to any person
      (other than a subsidiary of the Company) or any person (other than a subsidiary
      of the Company) consolidates with or merges with or into the Company, and the
      outstanding voting securities of the Company are reclassified into, converted
      for or converted into the right to receive any other property or security,
      provided that none of these circumstances will be a Fundamental Change if
      persons that beneficially own the voting securities of the Company immediately
      prior to the transaction own, directly or indirectly, shares with a majority
      of
      the total voting power of all outstanding voting securities of the surviving
      or
      transferee person immediately after the transaction in substantially the same
      proportion as their ownership of the Company’s voting securities immediately
      prior to the transaction; or

     

    (iii) the
      Company’s stockholders or Board of Directors adopts a plan for the liquidation
      or dissolution of the Company.

     

    (c) Redemption
      Price.
      The
      redemption price for the portion of this Debenture being redeemed shall equal
      one hundred percent (100%) of the Outstanding Principal Amount of this Debenture
      being so redeemed (the “Redemption
      Price”),
      along
      with any accrued but unpaid interest. The Redemption Price shall be payable
      in
      cash in United States Dollars.

     

    (d) Mechanics
      of Redemption—Company Option in Redeem.
      In the
      case of redemption pursuant to Section 6(a), if less than all of the Outstanding
      Amount of Debentures are to be redeemed at any time, the selection of Debentures
      for redemption will be made by the Company on a pro rata basis. In the event
      the
      Company shall be required or elects to redeem any part or all of the Outstanding
      Amount of the Debentures, the Company shall send by either overnight courier
      or
      two-day courier (with a copy sent by facsimile) confirmation of such
      determination or obligation to the record Holders of the Debentures being
      redeemed (the“Redemption
      Debentures”),
      which
      confirmation shall be included in the Redemption Notice. Such confirmation
      shall
      specify the Redemption Date, which shall be at least ten (10) business days
      (but
      not more than thirty (30) business days) after receipt by the Holder of the
      Redemption Notice. On the Redemption Date, the Redemption Debentures shall
      be
      redeemed automatically without any further action by the Holders of such
      Debentures and whether or not the Debentures are surrendered to the Company;
      provided,
      that
      the Company shall be obligated to pay the cash consideration due to a Holder
      of
      such Debentures upon redemption only when such Debentures are either delivered
      to the principal office of the Company or the Holder notifies the Company that
      such Debentures have been lost, stolen or destroyed and executes an agreement
      reasonably satisfactory to the Company to indemnify the Company from any loss
      which may be incurred by it in connection with such Debenture. Thereupon, there
      shall be promptly issued and delivered to such Holder, within seven (7) business
      days after the Redemption Date and delivery to the Company of such Debentures,
      or after receipt of such agreement and indemnification, at the address of such
      Holder on the books of the Company, payment in immediately available funds
      to
      the name as shown on the books of the Company in the amount of the Redemption
      Price as calculated as set forth in Paragraph 6(b). 

     


    
      
         

      

      
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    Notwithstanding
      anything to the contrary contained herein, the Holders’ rights of conversion
      pursuant to Paragraph 5 hereof shall not be limited in any manner by the
      Company’s rights of redemption pursuant to this Paragraph 6.

     

    (e) Mechanics
      of Redemption—Holder Right to Redeem. In the case of redemption pursuant to
      Section 6(b), as promptly as practicable following the date the Company publicly
      announces the Fundamental Change transaction, but in no event less than 10
      business days prior to the anticipated effective date of a Fundamental Change
      in
      the case of a Fundamental Change within the control of the Company or of which
      the Company has at least 10 business days prior notice, the Company shall mail
      a
      written notice of Fundamental Change by first-class mail to the Holder. If
      the
      Holder so elects, the Company shall purchase from the Holder the Debenture
      at
      the redemption price specified in Section 6(c) on the Fundamental Change
      Purchase Date.

     

    7. Adjustments
      to the Conversion Price.

     

    (a) Adjustment
      for Subdivisions, Combinations, etc. If
      the
      Company shall subdivide its outstanding Common Stock by split-up, spin-off,
      or
      otherwise, or combine its outstanding Common Stock, then the number of shares
      issuable upon conversion of this Debenture and the Conversion Price in effect
      as
      of the date of such subdivision, split-up, spin-off, or combination shall be
      proportionally adjusted to give effect thereto. 

     

    (b) Adjustment
      for Dividends and Distributions.
      In the
      event the Company at any time or from time to time after the Final Closing
      Date
      makes, or fixes a record date for the determination of holders of Common Stock
      entitled to receive, a dividend or other distribution payable in Common Stock
      (or rights to acquire Common Stock), then and in each such event, provision
      shall be made so that the Holders of Debentures shall receive upon conversion
      thereof pursuant to Paragraph 5 hereof, in addition to the number of shares
      of
      Common Stock receivable thereupon, the amount of such other securities of the
      Company to which a Holder on the relevant record or payment date, as applicable,
      of the number of shares of Common Stock so receivable upon conversion would
      have
      been entitled, plus any dividends or other distributions which would have been
      received with respect to such securities, had such Holder thereafter, during
      the
      period from the date of such event to and including the Holder Conversion Date
      retained such securities, subject to all other adjustments called for during
      such period under this Paragraph 7 with respect to the rights of the Holders
      of
      the Debentures. For purposes of this Paragraph 7(b), the number of shares of
      Common Stock so receivable upon conversion shall be deemed to be that number
      which the Holder would have received upon conversion of the entire Outstanding
      Amount hereof if the Holder Conversion Date had been the day the Company set
      as
      the record date for such dividend or distribution.

     

    (c) Adjustment
      for Merger, Reorganization, etc. In
      the
      event that at any time or from time to time after the Final Closing Date, the
      Common Stock issuable upon conversion of the Debentures is changed into the
      same
      or a different number of shares of any class or classes of stock, whether in
      connection with a merger or consolidation, by recapitalization,
      reclassification, reorganization or otherwise (other than a subdivision,
      combination of shares or stock dividend provided for elsewhere in this Paragraph
      7), then and in each such event each Holder of Debentures shall have the right,
      for a period of thirty (30) days following receipt of the Company’s notice of
      such adjustment, to convert such Debentures into the kind of securities
      receivable by a holder of Common Stock upon such merger, recapitalization,
      reclassification or other change, all subject to further adjustment as provided
      herein. 

     


    
      
         

      

      
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    (d) Certificate
      as to Adjustments.
      Upon
      each occurrence of an adjustment pursuant to this Paragraph 7, the Company
      at
      its expense shall furnish to each Holder a certificate setting forth (i) in
      reasonable detail the facts upon which such adjustment is based, and (ii) the
      number of shares of Common Stock and the amount of other property or securities
      that after giving effect thereto would be received by the Holder upon conversion
      of this Debenture.

     

    (e) Minimum
      Adjustments.
      No
      adjustment of the Conversion Price shall be made unless such adjustment would
      require an increase or decrease of at least $.10 in such price; provided that
      any adjustments which by reason of this Paragraph 7(f) are not required to
      be
      made shall be carried forward and shall be made at the time of and together
      with
      the next subsequent adjustment which, together with any adjustment(s) so carried
      forward, shall require an increase or decrease of at least $.10 in the
      Conversion Price then in effect hereunder.

     

    (f) Board
      Discretion.
      Any
      determination as to whether an adjustment in the Conversion Price in effect
      hereunder is required pursuant to Paragraph 7, or as to the amount of any such
      adjustment, if required, shall be binding upon the holders of this Debenture
      and
      the Company if made in good faith by the Board of Directors of the Company,
      absent manifest error.

     

    8. Fractional
      Shares.
      No
      fractional shares of Common Stock or scrip representing fractional shares of
      Common Stock shall be issuable hereunder. The number of shares of Common Stock
      that are issuable upon any conversion shall be rounded down to the nearest
      whole
      share, and the Company shall pay the Holder in cash with respect to any
      fractional shares.

     

    9. Reservation
      of Stock Issuable Upon Conversion.
      

     

    Reservation
      Requirement.
      The
      Company has reserved and the Company shall continue to reserve and keep
      available at all times, free of preemptive rights, shares of Common Stock for
      the purpose of enabling the Company to satisfy any obligation to issue shares
      of
      its Common Stock upon conversion of the Debentures. 

     

    10. Other
      Covenants of the Company.

     

    (a) The
      Company shall not intentionally take any action, which would be reasonably
      likely to impair the contractual rights and privileges of the Debentures set
      forth herein or of the Holders thereof.

     

    (b) The
      Company shall not redeem (other than pursuant to Paragraph 6), retire, purchase
      or otherwise acquire, directly or indirectly, Debentures held by any Holder
      unless the Company shall have offered to redeem, retire, purchase or otherwise
      acquire, as the case may be, the same proportion of the aggregate principal
      amount of Debentures held by each other Holder of Debentures at the time
      outstanding upon the same terms and conditions and such offer shall remain
      open
      for a period of at least thirty (30) business days.

     

    (c)
       The
      Company shall not, without the consent of a majority in interest of the Holders
      of any outstanding Debentures, (i) consolidate with or merger with or into
      any
      person or (ii) sell, convey, transfer, or otherwise dispose of or lease all
      or
      substantially all of its assets in one transaction or a series of related
      transactions to any person; provided, however, that this Section 10(c) shall
      not
      be applicable in the event of a consolidation or merger of a wholly-owned
      subsidiary of the Company with and into the Company. 

     


    
      
         

      

      
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    11. Obligations
      Absolute.
      No
      provision of this Debenture, other than conversion as provided herein, shall
      alter or impair the obligation of the Company, which is absolute and
      unconditional, to pay the principal of, and interest on, this Debenture at
      the
      time, place and rate, and in the manner, herein prescribed.

     

    12. Waivers
      of Demand, Etc.
      The
      Company hereby expressly waives demand and presentment for payment, notice
      of
      nonpayment, protest, notice of protest, notice of dishonor, notice of intent
      to
      accelerate, prior notice of bringing of suit and diligence in taking any action
      to collect amounts called for hereunder and will be directly and primarily
      liable for the payments of all sums owing and to be owing hereon, regardless
      of
      and without any notice (except as required by law), diligence, act or omission
      as or with respect to the collection of any amount called for
      hereunder.

     

    13. Replacement
      Debentures.
      In the
      event that the Holder notifies the Company that its Debenture has been lost,
      stolen or destroyed, a replacement Debenture identical in all respects to the
      original Debenture (except for registration number and Outstanding Amount,
      if
      different than that shown on the original Debenture) shall be issued to the
      Holder, provided that the Holder executes and delivers to the Company an
      agreement reasonably satisfactory to the Company to indemnify the Company from
      any loss incurred by it in connection with the Debenture and provided that
      the
      Company is provided a form of Debenture for such replacement
      purposes.

     

    14.
       Defaults.
      If one
      or more of the following described “Events
      of Default”
      shall
      occur:

     

    
      	 	
              (a)

            	
              Any
                of the representations or warranties made by the Company in this
                Debenture, the Subscription Agreement or the Investor Rights Agreement,
                or
                in any certificate or financial statements of the Company furnished
                by or
                on behalf of the Company in connection with the execution and delivery
                of
                this Debenture, the Subscription Agreement or the Investor Rights
                Agreement shall be false or (when taken together with other information
                furnished by or on behalf of the Company) misleading at the time
                made;
                or

            


    

    


    
      	 	
              (b)

            	
              The
                Company shall fail to perform or observe any covenant or agreement
                in this
                Debenture, the Subscription Agreement or the Investor Rights Agreement,
                or
                any other covenant, term, provision, condition, agreement or obligation
                of
                the Company under this Debenture, and such failure shall continue
                uncured
                for a period of fifteen (15) business days after notice from the
                Holder of
                such failure; or

            


    

    


    
      	 	
              (c)

            	
              The
                Company shall fail to make payments of principal or interest when
                due,
                including upon a Fundamental Change Purchase Date, and any such failure
                shall continue uncured for a period of five (5) days after the due
                date;
                or

            


    

    


    
      	 	
              (d)

            	
              The
                Company shall (1) admit in writing its inability to pay its debts
                generally as they mature; (2) make a general assignment for the benefit
                of
                creditors or commence proceedings for its dissolution; or (3) apply
                for or
                consent to the appointment of a trustee, liquidator or receiver for
                it or
                for a substantial part of its property or business;
                or

            


    

    


    
      	 	
              (e)

            	
              A
                trustee, liquidator or receiver shall be appointed for the Company
                or for
                a substantial part of its property or business without its consent
                and
                shall not be discharged within sixty (60) days after such appointment;
                or

            


    


    
      
         

      

      
        8

        
          

        

      

      
         

      

    


    


    


    
      	 	
              (f)

            	
              Any
                governmental agency or any court of competent jurisdiction shall
                assume
                custody or control of the whole or any substantial portion of the
                properties or assets of the Company or any of its subsidiaries and
                shall
                not be dismissed within sixty (60) days thereafter; or
                

            


    

     

    
      	 	
              (g)

            	
              Bankruptcy,
                reorganization, insolvency or liquidation proceedings or other
                proceedings, or relief under any bankruptcy law or any law for the
                relief
                of debt, shall be instituted by or against the Company and, if instituted
                against the Company or any of its subsidiaries, shall not be dismissed
                within sixty (60) days after such institution, or the Company or
                any of
                its subsidiaries shall by any action or answer approve of, consent
                to, or
                acquiesce in any such proceedings or admit to any material allegations
                of,
                or default in answering a petition filed in, any such proceeding;
                or

            


    

     

    
      	 	
              (h)

            	
              the
                failure by the Company or any of its subsidiaries to make any payment
                by
                the end of any applicable grace period after maturity of any principal
                and/or accrued interest with respect to debt, where the amount of
                such
                unpaid and due principal and/or accrued interest is in an aggregate
                amount
                in excess of $325,000 or (ii) there is an acceleration of any principal
                and/or accrued interest is in an amount in excess of $325,000 because
                of a
                default with respect to such debt;
                or

            


    

     

    
      	 	
              (i)

            	
              the
                failure by the Company to provide the notice specified in Section
                6(e) on
                a timely basis; or

            


    

     

    
      	 	
              (j)

            	
              the
                failure by the Company to deliver all cash and any shares of Common
                Stock
                when such cash and Common Stock, if any, are required to be delivered
                upon
                conversion of the Debenture, and the Company does not remedy such
                default
                within ten (10) days; 

            


    

    


    then,
      or
      at any time thereafter prior to the date on which all continuing Events of
      Default have been cured, and in each and every such case, unless such Event
      of
      Default shall have been waived in writing by the Holder (which waiver shall
      not
      be deemed to be a waiver of any subsequent default), at the option of the Holder
      and in the Holder’s sole discretion, the Holder may, by notice to the Company
      declare this Debenture immediately due and payable, and the Holder may
      immediately, and without expiration of any period of grace, enforce any and
      all
      of the Holder’s rights and remedies provided herein or any other rights or
      remedies afforded by law. In such event, the Debenture shall be redeemed at
      a
      redemption price per Debenture equal to the Redemption Price provided in
      Paragraph 6(c). 

    


    15. Savings
      Clause.
      In case
      any provision of this Debenture is held by a court of competent jurisdiction
      to
      be excessive in scope or otherwise invalid or unenforceable, such provision
      shall be adjusted rather than voided, if possible, so that it is enforceable
      to
      the maximum extent possible, and the validity and enforceability of the
      remaining provisions of this Debenture will not in any way be affected or
      impaired thereby.

     

    16. Entire
      Agreement.
      This
      Debenture and the agreements referred to in this Debenture constitute the full
      and entire understanding and agreement between the Company and the Holder with
      respect to the subject hereof. Neither this Debenture nor any term hereof may
      be
      amended, waived, discharged or terminated other than by a written instrument
      signed by the Company and a majority of the Outstanding Principal Amount of
      the
      Debentures.

     


    
      
         

      

      
        9

        
          

        

      

      
         

      

    


    


     

    17. Assignment,
      Etc.
      Subject
      to any applicable law and the requirements set forth in the legend set forth
      hereon, any Holder may, without notice, transfer or assign this Debenture.
      The
      Company agrees that, subject to compliance with the applicable law, after
      receipt by the Company of written notice of assignment from the Holder or from
      the Holder’s assignee, all principal, interest, and other amounts which are then
      due and thereafter become due under this Debenture shall be paid to such
      assignee at the place of payment designated in such notice. This Debenture
      shall
      be binding upon the Company and its successors and shall inure to the benefit
      of
      the Holder and its successors and assigns.

     

    18. No
      Waiver.
      No
      failure on the part of the Holder to exercise, and no delay in exercising any
      right, remedy or power hereunder shall operate as a waiver thereof, nor shall
      any single or partial exercise by the Holder of any right, remedy or power
      hereunder preclude any other or future exercise of any other right, remedy
      or
      power. Each and every right, remedy or power hereby granted to the Holder or
      allowed it by law or other agreement shall be cumulative and not exclusive
      of
      any other, and may be exercised by the Holder from time to time.

     

    19. Miscellaneous.
      Unless
      otherwise provided herein, any notice or other communication to a party
      hereunder shall be deemed to have been duly given if personally delivered or
      sent by registered or certified mail, return receipt requested, postage prepaid
      with a copy in each case sent on the same day to the party by facsimile, Federal
      Express or other overnight delivery service to said party at its address set
      forth herein or such other address as either may designate for itself in such
      notice to the other and communications shall be deemed to have been received
      when delivered personally or, if sent by mail, when actually received by the
      party to whom it is addressed. Copies of all notices to the Company shall be
      sent to GlenRose Instruments Inc., 45 First Avenue, Waltham, Massachusetts
      02451, attention: President, and to William O. Flannery, Esq., Corporate
      Counsel, 945 Lenox Road, Richmond, Massachusetts, 01254, Facsimile No. (413)
      698-3506. Whenever the sense of this Debenture requires, words in the singular
      shall be deemed to include the plural and words in the plural shall be deemed
      to
      include the singular. Paragraph headings are for convenience only and shall
      not
      affect the meaning of this document.

     

    20. Choice
      of Law and Venue: Waiver of Jury Trial.
      THIS
      DEBENTURE SHALL BE CONSTRUED UNDER THE LAWS OF THE COMMONMWEALTH OF
      MASSACHUSETTS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF
      LAW
      THEREOF. Each of the Company and the Holder hereby (i) irrevocably submits
      to
      the exclusive jurisdiction of the federal or state courts located in the
      Commonwealth of Massachusetts for the purposes of any suit, action or proceeding
      arising out of or relating to this Debenture and (ii) 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 proceeding is improper. Each of the Company and the Holder consents
      to
      process being served in any such suit, action or proceeding by mailing a copy
      thereof to the Company or to the Holder, as the case may be, at the address
      in
      effect for notices to it under this Debenture and agrees that such service
      shall
      constitute good and sufficient service of process and notice thereof. Nothing
      in
      this paragraph shall affect or limit any right to serve process in any other
      manner permitted by law.

     

    [SIGNATURE
      PAGE FOLLOWS]

     


    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      the
      Company has caused this instrument to be duly executed by an officer thereunto
      duly authorized.

    


    


    
      	 	
              Dated:
                __________, 2008

            
	 	 
	 	
              GlenRose
                Instruments Inc.

            
	 	 
	 	 
	 	 
	 	
              _________________________

            
	 	
              Name:
                Anthony S. Loumidis 

            
	 	
              Title:
                Chief Financial Officer

            


    

    



    
      
         

      

      
        11

        
          

        

      

      
         

      

    


    


    EXHIBIT
      1

    


    CONVERSION
      NOTICE

    FOR

    4%
      CONVERTIBLE DEBENTURE DUE 2013

    


    


    The
      undersigned, as Holder of the 4% Convertible Debenture due 2013 of GlenRose
      Instruments Inc. (“Company”),
      No. 1, in the Outstanding Principal Amount of U.S. $12,000,000 (the
“Debenture”), hereby irrevocably elects to convert U.S. $__________ of the
      Outstanding Principal Amount of the Debenture and U.S.$__________ of interest
      accrued but unpaid under the Debenture, into shares of Common Stock, par value
      $0.01 per share (the “Common Stock”), of Company according to the conditions of
      the Debenture, as of the date written below. The undersigned hereby requests
      that share certificates for the Common Stock to be issued to the undersigned
      pursuant to this Conversion Notice be issued in the name of, and delivered
      to,
      the undersigned or its designee as indicated below. If shares are to be issued
      in the name of a person other than the undersigned, the undersigned will pay
      all
      transfer taxes payable with respect thereto. No fee will be charged to the
      Holder for any conversion, except for transfer taxes, if any.

    


    


    
      	
              Conversion
                Information:

            	
              Name
                of Holder:______________________________________ 

            
	 	 
	 	
              Signature:___________________________________________

            
	 	 
	 	
              Name:______________________________________________

            
	 	 
	 	
              Address:
                ____________________________________________

            
	 	 
	 	
              ____________________________________________________

            
	 	 
	 	
              ____________________________________________________

            
	 	 
	 	
              Issue
                Common Stock to: ________________________________

            
	 	 
	 	
              Address:
                ____________________________________________

            
	 	 
	 	
              ____________________________________________________

            
	 	 
	 	
              ____________________________________________________

            
	 	 
	 	
              Date
                of Conversion:
                ___________________________________

            


    

    


    
      
         

      

      
        12