Document:

ex10_2.htm

     

    EXHIBIT
10.2 2008 NON-QUALIFIED CONSULTANT STOCK COMPENSATION PLAN

    

    2008
NON-QUALIFIED CONSULTANT

    STOCK
COMPENSATION PLAN

    

    1.           Purpose of Plan

    

    This 2008 NON-QUALIFIED CONSULTANT STOCK
COMPENSATION PLAN (the “Plan”) of Noble Innovations, Inc., a Nevada corporation
(the “Company”) for consultants associated with the Company, is intended to
advance the best interests of the Company by providing those persons who provide
services to the Company, with additional incentive and by increasing their
proprietary interest in the success of the Company, thereby encouraging them to
maintain their relationships with the Company.

    

    2.           Definitions

    

    For Plan purposes, except where the
context might clearly indicate otherwise, the following terms shall have the
meanings set forth below:

    

    “Board” shall mean the Board of
Directors of the Company.

    

    “Committee” shall mean the Compensation
Committee, or such other committee appointed by the Board, which shall be
designated by the Board to administer the Plan, or the Board if no committees
have been established.  The Committee shall be composed of one or more persons
as from time to time are appointed to serve by the Board.  Each member
of the Committee, while serving as such, shall be a disinterested person with
the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of
1934.

    

    “Common Shares” shall mean the
Company’s Common Shares, $0.001 par value per share, or, in the event that the
outstanding Common Shares are hereafter changed into or exchanged for different
shares of securities of the Company, such other shares or
securities.

    

    “Common Stock” shall mean shares of
common stock which are issued by the Company pursuant to Section 5,
below.

    

    “Common
Stock Agreement” means an agreement executed by a Common Stockholder and the
Company, or alternatively a board resolution setting forth the terms of
issuance, as contemplated by Section 5, below, which imposes on the shares of
Common Stock held by the Common Stockholder such restrictions as the Board or
Committee deem appropriate.

    

    “Common
Stockholder” means
any consultant for the Company or other person to whom shares of Common Stock
are issued pursuant to this Plan.

    

    “Company” shall mean Noble Innovations,
Inc., a Nevada corporation, and any subsidiary corporation of Noble Innovations,
Inc.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Fair Market Value” shall mean, with
respect to the date a given stock compensation is granted, the average of the
highest and lowest reported sales prices of the Common Shares, as reported by
such responsible reporting service as the Committee may select, or if there were
not transactions in the Common Shares on such day, then the last preceding day
on which transactions took place.  The above withstanding, the
Committee may determine the Fair Market Value in such other manner as it may
deem more equitable for Plan purposes or as is required by applicable laws or
regulations. The Fair Market Value for purposes of the issuance of common stock
under this plan has been established to be $5.50 per share on September 18,
2008.

    

    3.           Administration of the
Plan

    

    3.1           The
Committee shall administer the Plan and accordingly, it shall have full power to
grant Common Stock, construe and interpret the Plan, establish rules and
regulations and perform all other acts, including the delegation of
administrative responsibilities, it believes reasonable and proper.

    

    3.2           The
determination of those eligible to receive Common Stock, and the amount, type
and timing of each issuance and the terms and conditions of the Common Stock
Agreements shall rest in the sole discretion of the Committee, subject to the
provisions of the Plan.

    

    3.3           The
Board, or the Committee, may correct any defect, supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent it shall
deem necessary to carry it into effect.

    

    3.4           Any
decision made, or action taken, by the Committee or the Board arising out of or
in connection with the interpretation and administration of the Plan shall be
final and conclusive.

    

    3.5           Meetings
of the Committee shall be held at such times and places as shall be determined
by the Committee.  A majority of the members of the Committee shall
constitute a quorum for the transaction of business, and the vote of a majority
of those members present at any meeting shall decide any question brought before
that meeting.  In addition, the Committee may take any action
otherwise proper under the Plan by the affirmative vote, taken without a
meeting, of a majority of its members.

    

    3.6           No
member of the Committee shall be liable for any act or omission of any other
member of the Committee or for any act or omission on his own part, including,
but not limited to, the exercise of any power or discretion given to him under
the Plan, except those resulting from his own gross negligence or willful
misconduct.

    

    4.           Shares Subject to the
Plan

    

    The total number of shares of the
Company available for issuance of Common Stock under the Plan shall be 570,000
Common Shares, subject to adjustment in accordance with

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Article
7 of the Plan, which shares may be either authorized but unissued or reacquired
Common Shares of the Company.

    

    5.           Award
Of Common Stock

    

    5.1           The
Board or Committee from time to time, in its absolute discretion, may award
Common Stock to consultants for the Company, and such other persons as the Board
or Committee may select.

    

    5.2           Common
Stock shall be issued only pursuant to a Common Stock, Board Resolution, or
Consulting Agreement, which shall be executed by the Common Stockholder, unless
by Board Resolution, and the Company and which shall contain such terms and
conditions as the Board or Committee shall determine consistent with this Plan,
including such restrictions on transfer as are imposed by the Common Stock or
Consulting Agreement.

    

    5.3           Upon
delivery of the shares of Common Stock to the Common Stockholder, below, the
Common Stockholder shall have, unless otherwise provided by the Board or
Committee, all the rights of a stockholder with respect to said shares, subject
to the restrictions in the Common Stock or Consulting Agreement, including the
right to receive all dividends and other distributions paid or made with respect
to the Common Stock.

    

    5.4           All
shares of Common Stock issued under this Plan (including any shares of Common
Stock and other securities issued with respect to the shares of Common Stock as
a result of stock dividends, stock splits or similar changes in the capital
structure of the Company) shall be subject to such restrictions as the Board or
Committee shall provide, which restrictions may include, without limitation,
restrictions concerning voting rights, transferability of the Common Stock and
restrictions based on duration of employment with the Company, Company
performance and individual performance; provided that the Board or Committee
may, on such terms and conditions as it may determine to be appropriate, remove
any or all of such restric­tions.  Common Stock may not be sold or
encumbered until all applicable restrictions have terminated or
expire.  The restrictions, if any, imposed by the Board or Committee
or the Board under this Section 5 need not be identical for all Common Stock and
the imposition of any restrictions with respect to any Common Stock shall not
require the imposition of the same or any other restrictions with respect to any
other Common Stock.

    

    6.           Adjustments or Changes in
Capitalization

    

    6.1           In
the event that the outstanding Common Shares of the Company are hereafter
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of merger, consolidation, other
reorganization, recapitalization, reclassification, combination of shares, stock
split-up or stock dividend, within 6 months from the date hereof, and assuming
the shares issued pursuant to this plan

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    are
still owned or fully controlled by the issuee under this plan, then in that
event there shall be a like adjustment in the number of shares held by such
issuee.

    

    6.2           The
foregoing adjustments and the manner of application of the foregoing provisions
shall be determined solely by the Committee, whose determination as to what
adjustments shall be made and the extent thereof, shall be final, binding and
conclusive.  No fractional Shares shall be issued under the Plan on
account of any such adjustments.

    

    7.           Government and Other
Regulations

    

    The obligation of the Company to issue,
transfer and deliver Common Shares under the Plan shall be subject to all
applicable laws, regulations, rules, orders and approval which shall then be in
effect and required by the relevant stock exchanges on which the Common Shares
are traded and by government entities as set forth below or as the Committee in
its sole discretion shall deem necessary or advisable.

    

    8.           Miscellaneous
Provisions

    

    8.1           Any
expenses of administering this Plan shall be borne by the Company, except the
recipients of the common shares shall be responsible for the costs of
preparation of this registration statement and the filing thereof.

    

    8.2           The
place of administration of the Plan shall be in the State of Nevada, or such
other place as determined from time to time by the Board, and the validity,
construction, interpretation, administration and effect of the Plan and of its
rules and regulations, and rights relating to the Plan, shall be determined
solely in accordance with the laws of the State of Nevada.

    

    8.3           In
addition to such other rights of indemnification as they may have as members of
the Board or the Committee, the members of the Committee shall be indemnified by
the Company against all costs and expenses reasonably incurred by them in
connection with any action, suit or proceeding to which they or any of them may
be party by reason of any action taken or failure to act under or in connection
with the Plan against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action, suit
or proceeding, except a judgment based upon a finding of bad
faith;  provided that upon the institution of any such action, suit or
proceeding a Committee member shall, in writing, give the Company notice thereof
and an opportunity, at its own expense, to handle and defend the same, with
counsel acceptable to the recipient,  before such Committee member
undertakes to handle and defend it on his own behalf.

    

    9.           Written Agreement

    

    The Common Shares issued hereunder
shall be embodied in a board resolution which shall constitute a written Stock
Compensation Agreement which shall be subject to the terms and conditions
prescribed above and shall be signed by the recipient and by the President
or any Vice President of the Company, for and in the name and on behalf of the
Company.

    
      
         

      

      
        4Exhibit 10.2 

THIS PROMISSORY NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO, OR DELIVERY TO THE COMPANY OF
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT OR UNLESS SOLD IN
FULL COMPLIANCE WITH RULE 144 UNDER THE ACT. 

		
	$__________________ 	San Diego, California

September 19, 2008 

PEPPERBALL
TECHNOLOGIES, INC. 

CONVERTIBLE PROMISSORY
NOTE 

        PepperBall
Technologies, Inc., a Colorado corporation (the “Company”), for value
received, hereby promises to pay to ____________________ (the “Holder”),
the principal amount of ____________________________ dollars and no/100 ($____________),
together with interest on the unpaid amount thereof in accordance with the terms hereof,
from the date hereof until paid in accordance with the terms hereof. 

    
    1.        Terms
of the Convertible Promissory Note (the “Note”).  

        
          1.1  
Payment.   Principal and accrued interest hereon shall be payable on the fifteen
month anniversary of the date hereof (the “Maturity Date”). Payments
hereunder shall be made by the Company to the Holder in lawful money of the United States
of America. Interest shall accrue with respect to the unpaid principal amount hereof from
the date of this Note until such principal is paid at the rate of ten percent (10%) per
annum (computed on the basis of actual calendar days elapsed and a year of 360 days) or,
if less, at the highest rate of interest then permitted under applicable law.  

        
          1.2  
Prepayment.   All or a portion of the Issue Price and any accrued but unpaid
interest relating thereto may be prepaid by the Company at any time without penalty. Any
prepayment shall be made at the offices or residence of the Holder, or at such other
place as the Holder shall have designated to the Company in writing, in lawful money of
the United States of America.  

        
          1.3  
Acceleration.   The principal outstanding hereunder and all accrued and unpaid
interest shall be due and payable in full within ten (10) days after notice delivered to
the Company after (a) a decree or order is entered by a court having jurisdiction
adjudging the Company bankrupt or insolvent, or approving a petition seeking
reorganization of the Company is entered, (b) a voluntary case under relevant bankruptcy
law is commenced, or the Company consents to the commencement of a bankruptcy or
insolvency proceeding against it or to the appointment of a receiver, liquidator,
assignee, trustee or similar official, (c) any material portion of the Company’s
assets is attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not been
removed, discharged or rescinded within thirty (30) days, (d) a judgment or other claim
becomes a lien or encumbrance upon any material portion of the Company’s assets and
such lien is not satisfied within ninety (90) days, (e) a notice of lien, levy, or
assessment is filed of record with respect to any of the Company’s assets by the
United States Government or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, and the same is not paid within ninety
(90) days after the Company receives notice thereof, or (f) an assignment of any of the
Company’s assets is made for the benefit of one or more creditors; provided,
however, that none of the foregoing conditions (a) through (f) shall be deemed met where
such action or event is stayed or an adequate bond has been posted pending a good faith
contest by the Company.  

Page 1 

        
          1.4  
Agreement and Plan of Merger and Reorganization.   This Note is issued by the
Company in connection with that certain Agreement and Plan of Merger and Reorganization
dated [ ], 2008 among PepperBall Technologies, Inc., a Delaware corporation, Security
With Advanced Technology, Inc., a Colorado corporation, and PTI Acquisition Corp., a
Delaware corporation (the “Agreement”). This Note is one of a series of
notes (the “Notes”) having like tenor and effect (except for variations
necessary to express the name of the holder, the principal amount of each of the Notes
and the date on which each Note is issued) issued by the Company in accordance with the
terms of the Agreement. The Notes shall rank equally without preference or priority of
any kind over one another, and all payments on account of principal and interest with
respect to any of the Notes shall be applied ratably and proportionately on the
outstanding Notes on the basis of the principal amount of the outstanding indebtedness
represented thereby.  

    2.           Conversion.  

        
          2.1  
At the Option of the Holder.   Holder shall have the right, upon surrender to the
Company of this Note at the principal office of the Company accompanied by a written
conversion request notice, to convert all or any portion of the indebtedness owing under
this Note into shares of the Company’s Common Stock at a conversion price equal to
the average closing price of the Company’s Common Stock on the Nasdaq Capital Market
(or such other exchange or quotation service on which the Company’s Common Stock is
listed or quoted at such time, as the case may be) for the six-month period ended on the
trading day immediately prior to the date the Holder requests such conversion. Prior to
the execution of this Note, the Company shall have reserved and set aside for issuance to
Holder such number of shares of Common Stock as would be issuable upon conversion of this
Note. Notwithstanding the provisions of this Section 2.1, the Company shall not be
required to honor any conversion request that relates to the conversion of less than the
lesser of (i) $100,000, or (ii) the full amount of principal and accrued interest under
this Note.  

        
          2.2  
Effectiveness of Conversion.   Any conversion pursuant to Section 2.1 shall
be deemed to have been effected as of the close of business on the date on which this
Note is surrendered at the principal office of the Company accompanied by a written
conversion request notice. At such time as such conversion has been effected, the rights
of Holder under this Note, to the extent of the conversion, shall cease, and Holder shall
thereafter be deemed to have become the holder of record of the shares of capital stock
issuable upon such conversion.  

Page 2 

        
          2.3  
Issuance of Certificates.   As soon as is reasonably practicable after a conversion
has been effected (but in any event within ten (10) business days thereafter), the
Company shall deliver to Holder a certificate or certificates representing the number of
shares of capital stock (excluding any fractional share) issuable by reason of such
conversion in such name or names and such denomination or denominations as Holder has
specified.  

        
          2.4  
No Fractional Shares.   If any fractional share of capital stock would, except for
the provisions hereof, be deliverable upon conversion of this Note, the Company, in lieu
of delivering such fractional share, shall pay an amount equal to the value of such
fractional share, as determined by the per share conversion price used to effect such
conversion.  

        
          2.5  
Issuance Costs.   The issuance of certificates for shares of capital stock issuable
upon conversion of this Note shall be made without charge to Holder for any issuance tax
in respect thereof or other cost incurred by the Company in connection with such
conversion and the related issuance of such shares of capital stock. Upon conversion of
this Note, the Company shall take all such actions as are necessary in order to ensure
that the capital stock issuable with respect to such conversion shall be validly issued,
fully paid and nonassessable.  

        
          2.6  
Compliance with Laws and Regulations.   The Company shall take all such actions as
may be necessary to assure that all shares of capital stock issued upon conversion may be
so issued without violation of any applicable law or governmental regulation or any
requirement of any domestic securities exchange upon which such shares of capital stock
may be listed (except for official notice of issuance which shall be immediately
delivered by the Company upon such issuance).  

    3.           Investment
Representations.  

        
          3.1  
Investment Intent.   Holder hereby represents to the Company that Holder is
acquiring this Note and all underlying shares of Common Stock which may be issued upon
conversion of this Note (the “Note Stock”) for Holder’s own account
for investment purposes only and not for the purpose of resale or distribution. Holder
has no contract, undertaking, agreement or arrangement with any person to sell, transfer
or pledge to such person, or anyone else, all or any part of the Note or the Note Stock,
and Holder has no present plan to enter into any such contract, undertaking, agreement or
arrangement. Holder further agrees to execute and deliver any further investment
certificates as counsel to the Company deems necessary or advisable to comply with state
or federal securities laws.  

        
          3.2  
Investor Diligence.   Holder has received all the information it considers necessary
or appropriate for deciding to acquire this Note and the Note Stock. Holder further
represents that it has had an opportunity to ask questions and receive answers from
Company regarding the terms and conditions of the offering of this Note and the business,
properties, prospects and financial condition of Company.  

        
          3.3  
Accredited Investor.   Holder is an “accredited investor” as that term is
defined in Regulation D under the Securities Act of 1933, as amended (the “Act”).  

        
          3.4  
Restricted Securities.   Holder understands that neither this Note nor the Note
Stock have been registered under the Act, and therefore they may not be sold, assigned or
transferred unless (i) a registration statement under the Act is in effect with respect
thereto or (ii) an exemption from registration is found to be available to the
satisfaction of the Company.  

Page 3 

        
          3.5  
Legend.   Holder further acknowledges and agrees that the stock certificates
evidencing the Note Stock shall bear a restrictive legend, substantially in the following
form (in addition to such other restrictive legends as are required or deemed advisable
under the provisions of this Note, any applicable law or any other agreement to which
Holder is a party):  

“THE SECURITIES EVIDENCED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS (A)
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, AND APPLICABLE STATE
SECURITIES LAWS, COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THE COMPANY
RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO
THE COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE COMPANY
OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.” 

    4.           Miscellaneous.  

        
          4.1  
Transfer of Note.   This Note shall not be transferable or assignable in any manner,
and no interest shall be pledged or otherwise encumbered by the Holder without the
express written consent of the Company, and any such attempted disposition of this Note
or any portion hereof shall be of no force or effect.  

        
          4.2  
Titles and Subtitles.   The titles and subtitles used in this Note are for
convenience only and are not to be considered in construing or interpreting this Note.  

        
          4.3  
Notices.   Unless otherwise indicated herein, any notice required or permitted
hereunder shall be given in writing and shall be deemed effectively given (i) upon
personal delivery to the party to be notified, (ii) when sent by electronic mail or
confirmed facsimile if sent during normal business hours of the recipient, and if not
sent during normal business hours, then on the next business day, (iii) five (5) days
after having been sent by registered or certified mail, return receipt requested, postage
prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All such
notices shall be sent to the address as set forth on the signature page hereof or at such
other address as such party may designate by ten (10) days’ advance written notice
to the other party.  

        
          4.4  
Attorneys’ Fees.   If any action at law or in equity is necessary to enforce or
interpret the terms of this Note, the prevailing party shall be entitled to reasonable
attorneys’ fees, costs and disbursements in addition to any other relief to which
such party may be entitled.  

        
          4.5  
Amendments and Waivers.   Any term of this Note may be amended and the observance of
any term of this Note may be waived (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company and the
holders of at least a majority of the aggregate principal amount of the Notes then
outstanding. Any amendment or waiver effected in accordance with this Section 4.5 shall
be binding upon the Holder of this Note, each future holder hereof and the Company.  

Page 4 

        
          4.6  
Severability.   If one or more provisions of this Note are held to be unenforceable
under applicable law, such provision shall be excluded from this Note and the balance of
the Note shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.  

        
          4.7  
Governing Law.   This Note shall be governed by and construed and enforced in
accordance with the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within California.  

        
          4.8  
Excessive Interest.   Notwithstanding any other provision herein to the contrary,
this Note is hereby expressly limited so that the interest rate charged hereunder shall
at no time exceed the maximum rate permitted by applicable law. If, for any circumstance
whatsoever, the interest rate charged exceeds the maximum rate permitted by applicable
law, the interest rate shall be reduced to the maximum rate permitted, and if Holder
shall have received an amount that would cause the interest rate charged to be in excess
of the maximum rate permitted, such amount that would be excessive interest shall be
applied to the reduction of the principal amount owing hereunder and not to the payment
of interest, or if such excessive interest exceeds the unpaid balance of principal, such
excess shall be refunded to the Company.  

[Remainder of page
intentionally left blank] 

Page 5 

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

		
		PEPPERBALL TECHNOLOGIES, INC.

By: _________________________________     

Address: 6142 Nancy Ridge Drive, Suite 101

         
        San Diego, CA 92121

ACKNOWLEDGED AND AGREED: 

_____________________________________________

(Print Name of Holder) 

_____________________________________________
(Signature of Holder) 

_____________________________________________
(Title of Holder if Not an
Individual) 

	Address: 	____________________________

 ____________________________

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