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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]

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    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:
                ___________________________________

            

    

    

    
      
         

      

      
        12Unassociated Document

    

    

    EXHIBIT
      10.1

    

    GlenRose
      Instruments Inc.

    

    4%
      Convertible Debentures Due 2013

    Subscription
      Agreement

    

    Dear
      Sir
      or Madam:

    

    1. Subscription.
      The
      undersigned, intending to be legally bound, irrevocably subscribes for and
      agrees to purchase the aggregate U.S. dollar amount of the 4% Convertible
      Debentures Due 2013 (each a “Debenture” and collectively, the “Debentures”), of
      GlenRose Instruments Inc., a Delaware corporation (the “Company”), indicated on
      the signature page hereof, on the terms and conditions described herein and
      in
      the Debenture. 

    

    The
      undersigned herewith delivers to the Company the consideration (“Purchase
      Price”) required to purchase the Debenture subscribed for hereunder by wire
      transfer funds payable to: GlenRose Instruments Inc., 45 First Avenue, Waltham,
      MA 02451. The minimum subscription is for $500,000 unless otherwise determined
      in the discretion of the Company. Capitalized terms not otherwise defined in
      this Agreement have the meanings specified in the Debenture. 

    

    2. Company
      Representations, Warranties and Covenants.
      Except
      as disclosed pursuant to the Company’s publicly available reports filed with the
      Securities and Exchange Commission (the “SEC”) pursuant to Sections 12, 13 and
      15(d)of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
      the Company represents and warrants to the undersigned as follows as of the
      date
      hereof:

     

    2.01 Organization
      and Standing of the Company.
      The
      Company is a duly organized and validly existing corporation in good standing
      under the laws of the jurisdiction in which it was organized and has all
      requisite corporate power and authority for
      the
      ownership and operation of its properties and for the carrying on of its
      business as now conducted and as now proposed to be conducted. The Company
      is
      duly licensed or qualified and in good standing as a foreign corporation
      authorized to do business in all jurisdictions wherein the character of the
      property owned or leased, or the nature of the activities conducted, by it
      makes
      such licensing or qualification necessary except where the failure to have
      such
      licenses, qualifications or authority would not have a material adverse effect
      on the business of the Company ("Company Adverse Effect").

    

    2.02 Corporate
      Action and Valid Issuance.
      The
      Company has all necessary corporate power and
      authority to execute, deliver and perform its obligations under this Agreement,
      the Investor Rights Agreement executed as of the date hereof, the Debenture
      and
      any other agreements and instruments executed in connection herewith
      (collectively, the “Transaction Agreements”). All corporate action on the part
      of the Company, its officers, directors and stockholders necessary for the
      authorization of the Debentures, the authorization, execution, delivery and
      performance of the Transaction Agreements and the consummation of the
      transactions contemplated therein has been taken. The execution, delivery and
      performance of the Transaction Agreements by the Company, the issuance of the
      Common Stock (the “Conversion Shares”) upon conversion of the Debentures in
      accordance with their terms and the consummation of the other transactions
      contemplated herein do not require any approval of the Company’s stockholders
      (other than such approval as has been obtained). The Transaction Agreements
      have
      been duly executed and delivered by the Company and constitute, and all the
      covenants therein contained constitute the valid and legally binding obligations
      of the Company, enforceable in accordance with their terms, subject only to
      the
      effect of bankruptcy, insolvency, moratorium, and similar laws affecting the
      rights of creditors generally. Neither the issuance of the Debentures, nor
      the
      issuance of shares of Common Stock upon the conversion of the Debentures, is
      subject to preemptive or other similar statutory or contractual rights and
      will
      not conflict with any provisions of any agreement or instrument to which the
      Company is a party or by which it is bound, including without limitation, the
      articles of incorporation and bylaws of the Company. 

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    

    2.03 Securities
      Act. The
      Company has complied and will comply with all applicable federal and state
      securities laws in connection with the issuance of the Debentures and any
      Conversion Shares. Neither the Company nor anyone acting on its behalf has
      offered or will offer to sell the Debentures, or solicit offers with respect
      thereto from, or enter into any preliminary conversations or negotiations
      relating thereto with, any person, so as to bring the issuance and sale of
      the
      Debentures or the issuance of the Conversion Shares under the registration
      provisions of the Securities Act or any state securities laws.

    

    2.04 Employee
      Matters.
      Except
      as would not reasonably likely to result in a Company Adverse Effect, each
      benefit plan of the Company has been established and administered in accordance
      with its terms and in compliance with the applicable provisions of Employee
      Retirement Income Security Act of 1974, as amended, the Internal Revenue Code
      of
      1986, as amended, and other applicable laws, rules and regulations. The Company
      and its subsidiaries are in compliance with all federal, state, local and
      foreign requirements regarding employment. 

    

    2.05 Capitalization;
      Status of Capital Stock

    

    (a) On
      the
      date of this Agreement and immediately prior to the issuance of Debentures
      contemplated by this Agreement, the Company has a total authorized
      capitalization consisting of: (i) 10,000,000 shares of Common Stock of which
      3,117,647 are issued and outstanding and (ii) 3,000,000 shares of Preferred
      Stock, of which none are issued and outstanding. As of the date of this
      Agreement and immediately prior to the issuance of Debentures contemplated
      by
      this Agreement, 700,000 shares of Common Stock have been reserved for issuance
      in accordance with the Company’s 2005 Stock Option and Incentive Plan. Of those
      shares the Company granted: (i) nonqualified options to purchase 230,000 shares
      of the Company’s Common Stock that are currently not exercised and (ii) 15,000
      shares of restricted common stock. 

    

    (b) Schedule
      2.05 sets forth the capitalization of the Company immediately following the
      issuance of the Debentures contemplated by this Agreement including the number
      of shares of the following: (i) issued and outstanding Common Stock; (ii) Common
      Stock reserved for issuance upon conversion of Debenture, including the names
      of
      the holders of the Debentures thereof; (iii) issued stock options, including
      vesting schedule and exercise price; (iv) stock options not yet issued but
      reserved for issuance; (v) issued and outstanding Preferred Stock; and (vi)
      warrants or stock purchase rights, if any. All of the outstanding shares of
      capital stock of the Company have been duly authorized, are validly issued
      and
      are fully paid and nonassessable and were issued in compliance with all
      applicable federal and state securities laws. The Debentures have been duly
      authorized, and when issued, sold and delivered in accordance with the terms
      and
      for the consideration set forth in this Agreement, will be validly issued.
      The
      Company has duly reserved the Conversion Shares for issuance upon conversion
      of
      the Debentures, and the Conversion Shares, when issued and delivered upon
      conversion of the Debentures, will be duly authorized, validly issued and fully
      paid and non assessable. Except as set forth on Schedule
      2.05,
      there
      are no options, warrants or rights to purchase shares of capital stock or other
      securities of the Company authorized, issued or outstanding, nor is the Company
      obligated in any other manner to issue shares of its capital stock or other
      securities. There are no restrictions on the transfer of shares of capital
      stock
      of the Company other than those imposed by the Transaction Agreements and state
      and federal securities laws. No holder of any security of the Company is
      entitled to preemptive or similar statutory or contractual rights, either
      arising pursuant to any agreement or instrument to which the Company is a party,
      or which are otherwise binding upon the Company, which have not been waived.
      The
      offer and sale of all shares of capital stock and other securities of the
      Company issued before the date hereof complied with or were exempt from all
      federal and state securities laws.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    

    2.06 Government
      Consents and Filings. Assuming
      the accuracy of the representations made by the undersigned in Section 2 of
      this
      Agreement, no consent, approval, order or authorization of, or registration,
      qualification, designation, declaration or filing with, any federal, state
      or
      local governmental authority is required on the part of the Company in
      connection with the consummation of the transactions contemplated by this
      Agreement.

     

    2.07 Litigation.
      There is
      no claim, action, suit, proceeding, arbitration, complaint, charge or
      investigation pending or, to the Company’s knowledge, currently threatened
      against the Company which individually or in the aggregate would reasonably
      be
      expected to have a Company Adverse Effect, nor are there any orders, writs,
      injunctions, judgments or decrees outstanding of any court or governmental
      agency or instrumentality and binding upon the Company that would reasonably
      be
      expected to have a Company Adverse Effect. To the Company’s knowledge, the
      Company is not currently subject to any investigation by any governmental body
      with respect to any allegation of “backdating” options granted to any employees
      or directors that would reasonably be expected to have a Company Adverse Effect.
      

    

    2.08 Intellectual
      Property.
      Except
      as
      would not reasonably be expected to have a Company Adverse Effect: (a) the
      Company owns, or possesses sufficient rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, trade secrets, licenses, domain names, mask works, information
      and
      proprietary rights and processes as are necessary to the conduct of the
      Company’s business as now conducted and as presently proposed to be conducted
      (collectively, “Company Intellectual Property”) necessary for the conduct of its
      business as currently conducted; (b) to the Company’s knowledge, the use by the
      Company of any Company Intellectual Property used in the conduct of the
      Company’s business as currently conducted does not infringe on or otherwise
      violate the rights of any person; (c) the use of any licensed Company
      Intellectual Property by the Company is in accordance with applicable licenses
      pursuant to which the Company acquired the right to use such Company
      Intellectual Property and (d) to the knowledge of the Company, no person is
      challenging, infringing on or otherwise violating any right of the Company
      with
      respect to any Company Intellectual Property owned by and/or exclusively
      licensed to the Company.

    

    2.09 Compliance
      with Other Instruments.
      The
      Company is not in violation or default (a) of any provisions of its articles
      of
      incorporation or bylaws, (b) of any instrument, judgment, order, writ or decree,
      or (c) under any agreement to which it is a party or by which it is bound,
      or of
      any provision of federal or state statute, rule or regulation applicable to
      the
      Company, the violation of which would have a Company Adverse Effect.

    

    2.10 Absence
      of Liens.
      The
      property and assets that the Company owns are free and clear of all mortgages,
      deeds of trust, liens, loans and encumbrances, except for statutory liens for
      the payment of current taxes that are not yet delinquent and encumbrances and
      liens that arise in the ordinary course of business and do not materially impair
      the Company’s ownership or use of such property or assets. With respect to the
      property and assets it leases, the Company is in compliance with such leases
      and, to its knowledge, holds a valid leasehold interest free of any liens,
      claims or encumbrances other than those of the lessors of such property or
      assets.

    

    2.11 Tax
      Returns and Payments.
      There
      are no federal, state, county, local or foreign taxes dues and payable by the
      Company which have not been timely paid. There are no accrued and unpaid
      federal, state, country, local or foreign taxes of the Company which are due,
      whether or not assessed or disputed. There have been no examinations or audits
      of any tax returns or reports by any applicable federal, state, local or foreign
      governmental agency. The Company has duly and timely filed all federal, state,
      county, local and foreign tax returns required to have been filed by it and
      there are in effect no waivers of applicable statutes of limitations with
      respect to taxes for any year.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    2.12 Permits.
      The
      Company has all franchises, permits, licenses and any similar authority
      necessary for the conduct of its business, the lack of which could reasonably
      be
      expected to have a Company Adverse Effect. The Company is not in default in
      any
      material respect under any of such franchises, permits, licenses or other
      similar authority.

    

    2.13 No
      Brokers or Finders.
      No
      person
      other than Ladenburg Thalman & Co. Inc. has or will have, as a result of the
      transactions contemplated by this Agreement, any right, interest or valid claim
      against or upon the Company for any commission, fee or other compensation as
      a
      finder or broker because of any act or omission by the Company or any agent
      of
      the Company.

    

    2.14 SEC
      Reports; Financial Statements.
      The
      Company has filed all required registration statements, prospectuses, reports,
      schedules, forms, statements and other documents required to be filed by it
      with
      the SEC (the “SEC Reports”) since November 2006. The information contained or
      incorporated by reference in the SEC Reports was true and correct in all
      material respects as of the respective dates of the filing thereof with the
      SEC
      (or if amended or superseded by a filing prior to the date of this Agreement,
      then on the date of such filing); and, as of such respective dates, the SEC
      Reports did not contain an untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading. All of the SEC Reports, as of their respective dates, complied
      as to form in all material respects with the applicable requirements of the
      Securities Act and the Exchange Act and the rules and regulations promulgated
      thereunder. The financial statements of the Company included in the SEC Reports
      (collectively, the “Financial Statements”) fairly present in all material
      respects the consolidated financial position of the Company and its Subsidiaries
      as of the dates indicated, and the results of its operations and cash flows
      for
      the periods therein specified, all in accordance with United States generally
      accepted accounting principles applied on a consistent basis (“GAAP”) throughout
      the periods therein specified (except as otherwise noted therein, and in the
      case of quarterly financial statements except for the absence of footnote
      disclosure and subject, in the case of interim periods, to normal year-end
      adjustments). Except as disclosed in the SEC Reports, the Company and its
      Subsidiaries have not incurred any liabilities that are of a nature that would
      be required to be disclosed on a balance sheet of the Company and its
      Subsidiaries or the footnotes thereto prepared in conformity with GAAP, other
      than (i) liabilities incurred in the ordinary course of business since October
      1, 2006, and (ii) liabilities that would not reasonably be expected to have
      a
      Company Material Adverse Effect. 

    

    2.15 Absence
      of Changes.
      Since
      March 30, 2008, there have not been any changes, circumstances, conditions
      or
      events which individually or in the aggregate have had or would reasonably
      be
      expected to have a Company Material Adverse Effect.

    

    2.16. Officers’
      Conversion of Debt.
      Immediately prior to the execution of this Agreement, all officers, directors,
      managers and affiliates of the Company who had outstanding loans to the Company
      converted all such loans into the same Debentures and each such persons has
      executed an Investors Rights Agreement with the same “lockup” provision to which
      the undersigned has agreed. 

    

    3. Investor
      Representations, Warranties and Covenants.
      The
      undersigned hereby acknowledges, represents and warrants to, and agrees with
      the
      Company as follows as of the date hereof:

    

    (a) The
      undersigned is acquiring the Debenture for the undersigned’s own account as
      principal, for investment purposes only, and not with a view to, or for, resale
      or distribution of all or any part of the Debenture or any shares of the
      Company’s Common Stock, par value $0.01 per share, issued upon conversion of the
      Debenture (the “Underlying Shares”)(the “Debenture and the Underlying Shares are
      collectively referred to herein as the “Securities”), and no other person has a
      direct or indirect beneficial interest in the Securities;

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    (b) The
      undersigned acknowledges its understanding that the offering and sale of the
      Debentures is intended to be exempt from registration under the Securities
      Act
      of 1933, as amended (the “Securities Act”), by virtue of Sections 4(2) of the
      Securities Act and Rule 505 of Regulation D (“Regulation D”) promulgated
      thereunder and Section 4(6) of the Securities Act, and, in furtherance thereof,
      the undersigned represents and warrants to and agrees with the Company that
      the
      undersigned has the financial ability to bear the economic risk of the
      undersigned’s investment, has adequate means for providing for the undersigned’s
      current needs and contingencies and has no need for liquidity with respect
      to
      the undersigned’s investment in the Debenture.

    

    (c) The
      undersigned is an “accredited investor” as defined in Rule 501(a) of Regulation
      D under the Securities Act; 

    

    (d) The
      undersigned:

    

    (1) The
      undersigned understands and has evaluated the risks of a purchase of the
      Debenture;

    

    (2) has
      been
      given the opportunity to ask questions of and receive answers from the Company
      concerning the terms and conditions of the offering of the Debentures, and
      has
      been given the opportunity to obtain such information as the undersigned has
      deemed necessary regarding the Company, the Debenture or the Underlying Shares
      to the extent that the Company possesses such information or can acquire it
      without unreasonable effort;

    

    (3) has
      not
      relied on any oral representation, warranty or information in connection with
      the offering of the Debentures by the Company, or any officer, employee, agent
      or affiliate of the Company;

    

    (4) has
      determined that the Debenture is a suitable investment for the undersigned
      and
      that at this time the undersigned can bear a complete loss of the undersigned’s
      investment therein;

    

    (5) has
      such
      knowledge and experience in financial and business matters that the undersigned
      is capable of evaluating the merits and risks of the undersigned’s investment in
      the Debenture;

    

    (e)If
      the
      undersigned is a corporation, limited liability company, partnership, trust,
      qualified plan or other entity, it is authorized and qualified to become a
      holder of the Securities, and the person signing this Subscription Agreement
      on
      behalf of such entity has been duly authorized to do so;

    

    (f) Any
      information which the undersigned has heretofore furnished and herewith
      furnishes to the Company with respect to the undersigned’s financial position
      and business experience is correct and complete as of the date of this Agreement
      and if there should be any material change in such information prior to issuance
      to the undersigned of the Debenture, the undersigned will immediately furnish
      such revised or corrected information to the Company;

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    

    (g) The
      foregoing acknowledgments, representations, warranties and agreements shall
      survive the closing at which the Debenture is issued;

    

    (h) The
      undersigned acknowledges that the undersigned has not purchased the Debenture
      as
      a result of any general solicitation or general advertising; and 

    

    (i) The
      undersigned’s overall commitment to investments which are not readily marketable
      is not disproportionate to the undersigned’s net worth, and the undersigned’s
      investment in the Debenture and will not cause such overall commitment to become
      excessive.

    

    4. Investor
      Awareness.
      The
      undersigned acknowledges that:

    

    (a) No
      federal or state agency has passed upon the Securities or made any finding
      or
      determination as to the fairness of this investment;

    

    (b) There
      is
      no established market for the Securities of and no assurance has been given
      that
      any public market for them will develop;

    

    (c) The
      Securities may not be sold, pledged or otherwise transferred, except as may
      be
      permitted under the Securities Act and applicable state securities laws pursuant
      to registration or exemption therefrom; and accordingly, the undersigned may
      be
      required to bear the financial risks of an investment in the Securities for
      an
      indefinite period of time;

    

    (d) The
      undersigned consents to (i) the placing of a legend substantially in the form
      set forth below on the certificates representing the Underlying Shares stating
      that the Underlying Shares have not been registered and setting forth the
      restriction on transfer contemplated hereby, and (ii) the placing of a stop
      transfer order on the books of the Company with respect to the
      Securities.

    

    “The
      shares represented by this certificate have not been registered under the
      Securities Act of 1933, as amended. These shares have been acquired for
      investment and not with a view to distribution or resale and may not be sold,
      mortgaged, pledged, hypothecated or otherwise transferred without an effective
      registration statement for such sales under the Securities Act of 1933, or
      an
      opinion of counsel for the corporation that registration is not required under
      such Act. 

    

    The
      shares represented by this certificate are also subject to the provisions of
      a
      certain Investor Rights Agreement dated ___________, 2008 and may not be
      transferred except in accordance with the provisions of that
      agreement.”

     

    5. Miscellaneous.

    

    (a) Indemnity
      by Investor.
      The
      investor agrees to indemnify and hold harmless the Company, its affiliates,
      directors, officers, employees, agents and controlling persons (the Company
      and
      each such person being a “Company Indemnified Party”), from and against any and
      all losses, claims, damages, liabilities and expenses whatsoever (including,
      but
      not limited to, any and all expenses whatsoever reasonably incurred
      investigating, preparing or defending against any litigation commenced or
      threatened or any claim whatsoever), joint or several, as incurred, to which
      such Company Indemnified Party may become subject under any applicable United
      States federal or state law or the laws of any other domestic or foreign
      jurisdiction, or otherwise, and related to or arising out of or based upon
      any
      false representation, warranty or acknowledgment, or breach or failure by the
      undersigned to comply with any covenant or agreement made by the undersigned
      herein or in any other document furnished by the undersigned to any of the
      foregoing in connection with this transaction.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    

    (b) Indemnity
      by the Company.
      The
      Company agrees to indemnify and hold harmless the undersigned, its affiliates,
      directors, officers, employees, agents and controlling persons (the undersigned
      and each such person being an “Investor Indemnified Party”), from and against
      any and all losses, claims, damages, liabilities and expenses whatsoever
      (including, but not limited to, any and all expenses whatsoever reasonably
      incurred investigating, preparing or defending against any litigation commenced
      or threatened or any claim whatsoever), joint or several, as incurred, to which
      such Investor Indemnified Party may become subject arising out of or resulting
      from (1) any inaccuracy or breach of the Company’s representations and
      warranties in this Agreement or (2) the Company’s breach of agreements or
      covenants made by the Company in this Agreement or (3) any action, suit,
      proceeding or investigation by any governmental entity or any other person
      relating to this Agreement or the transactions contemplated hereby.

    

    (c) Modification.
      Except
      as otherwise provided herein, neither this Agreement nor any provisions hereof
      shall be modified, discharged or terminated except by an instrument in writing
      signed by the party against whom any waiver, change, discharge or termination
      is
      sought.

    

    (d) Binding
      Effect.
      Except
      as otherwise provided herein, this Agreement shall be binding upon and inure
      to
      the benefit of the parties and their heirs, executors, administrators,
      successors, legal representatives and assigns. If the undersigned is more than
      one person, the obligation of the undersigned shall be joint and several and
      the
      agreements, covenants, representations, warranties and acknowledgments herein
      contained shall be deemed to be made by and be binding upon each such person
      and
      his heirs, executors, administrators and successors.

    

    (e) Entire
      Agreement.
      This
      instrument contains the entire agreement of the parties and there are no
      representations, warranties, acknowledgments, covenants or other agreements
      except as stated or referred to herein.

    

    (f) Assignability.
      This
      Agreement is not transferable or assignable by the undersigned.

    

    (g) Governing
      Law and Forum.
      Notwithstanding
      the place where this Agreement may be executed by any of the parties hereto,
      all
      the terms and provisions hereof shall be construed in accordance with and
      governed by the laws of the Commonwealth of Massachusetts, without giving effect
      to its conflict of law principles. Any dispute which may arise out of or in
      connection with this Agreement shall be adjudicated before a court located
      in
      Middlesex County, Massachusetts and the parties hereby submit to the exclusive
      jurisdiction of the courts of the Commonwealth of Massachusetts located in
      Boston, Massachusetts and of the federal courts in Boston, Massachusetts with
      respect to any action or legal proceeding commenced by any party, and
      irrevocably waive any objection they now or hereafter may have respecting the
      venue of any such action or proceeding brought in such a court or respecting
      the
      fact that such court is an inconvenient forum, relating to or arising out of
      this Agreement or any acts or omissions relating to the sale of the Shares,
      and
      the undersigned consents to the service of process in any such action or legal
      proceeding by means of registered or certified mail, return receipt requested,
      in care of the address set forth below or such other address as the undersigned
      shall furnish in writing to the Company. In the event any such action is
      brought, whether at law or in equity, then the prevailing party shall be paid
      its reasonable attorney's fees, expenses and disbursements arising out of such
      action. The undersigned hereby waives trial by jury in any action or proceeding
      involving, directly or indirectly, any matter (whether sounding in tort,
      contract, fraud or otherwise) in any way arising out of or in connection with
      this Agreement or the Holder’s purchase of the Shares.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    (h) Expenses
      and Other Rights.
      The
      Company shall pay reasonable out-of-pocket fees and expenses up to $15,000
      incurred by the undersigned in connection with the Transaction
      Agreements.
      The
      Company agrees that if it enters into an agreement in connection with the
      Debentures with another investor that provides for a material economic benefit
      or material right that is not provided to the undersigned in the Transaction
      Agreements, the undersigned shall be automatically entitled to such material
      economic benefit or right without the execution of any amendment to the
      Transaction Agreements.

    

    

    [The
      balance of this page has been intentionally left blank.]

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned has executed this Agreement on this ___ day
      of
      _____, 2008.

    

    
      	
              Manner
                in which Title is to be held (Please Check One):

            
	 	 	 
	
              1.

            	
              ___

            	
              Individual

            
	
              2.

            	
              ___

            	
              Joint
                Tenants With Right of Survivorship

            
	
              3.

            	
              ___

            	
              Community
                Property

            
	
              4.

            	
              ___

            	
              Tenants
                in Common

            
	
              5.

            	
              ___

            	
              Married
                with Separate Property

            

    

    

    EXECUTION
      BY NATURAL PERSONS

     

    

    

    
      
        

      

    

    Exact
      Name(s) in Which Title is to be Held

    (If
      Joint
      Tenant or Tenants in Common, both persons must

    sign
      and
      this page must contain all information for both persons).

     

    

    

    
      	
              ___________________________________

            	 	
              ___________________________________

            
	
              Signature

            	 	
              Signature
                

            
	 	 	 
	
              ___________________________________

               

            	 	
              ___________________________________

               

            
	
              Name
                (Please Print)

            	 	
              Name
                (Please Print)

            
	 	 	 
	
              __________________________________

            	 	
              __________________________________

            
	
              Residence:
                Number and Street

            	 	
              Residence:
                Number and Street

            
	 	 	 
	
              ___________________________________

            	 	
              ___________________________________

            
	
              City,
                State, Zip Code

            	 	
              City,
                State, Zip Code

            
	 	 	 
	
              ___________________________________

            	 	
              ___________________________________

            
	
              Social
                Security Number

            	 	
              Social
                Security Number

            
	 	 	 
	
              ___________________________________

            	 	 
	
              Telephone
                Number

            	 	 
	 	 	 
	
              ___________________________________

            	 	 
	
              Email

            	 	 

    

    

    Accepted
      this ___ day of _____ 2008, on behalf of the Company

    

    

    GLENROSE
      INSTRUMENTS INC.

    

    By: __________________________

    

    Name: Anthony
      S. Loumidis

    Title: Chief
      Financial Officer

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    EXECUTION
      BY SUBSCRIBER THAT IS AN ENTITY

    

    (Corporation,
      Limited Liability Company, Partnership, Trust, Etc.)

    

    ______________________________________________

    Name
      of
      Entity (Please Print)

    

    

    Date
      of
      Incorporation or Organization: _____________________________________________________

     

    State
      of
      Principal Offices: ______________________________________________________________

     

    Federal
      Taxpayer Identification Number: ___________________________________________________

     

    

    
      	 	
              By:

            	
              __________________________________

            
	 	 	 
	 	
              Title:
                

            	
              __________________________________

            
	 	 	 
	 	
              Address:

            	
              __________________________________

            
	 	 	 
	 	_________________________________________
	 	 	 
	 	_________________________________________
	 	 	 
	 	_________________________________________
	 	Taxpayer
              Identification Number

    

    

    Accepted
      this ___ day of _____ 2008, on behalf of the Company

    

    

    GLENROSE
      INSTRUMENTS INC.

    

    

    By:
      ___________________________

    

    Name: Anthony
      S. Loumidis

    Title: Chief
      Financial Officer

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    ACCREDITED
      INVESTOR QUESTIONNAIRE

    

    Please
      check the box below that best characterizes the person or entity subscribing
      for
      the Shares under the terms of the foregoing Subscription Agreement.

     

     

    
      	 	o	
              Any
                natural person whose individual net worth, or joint net worth with
                that
                person’s spouse, at the time of his purchase exceeds US
                $1,000,000;

            

    

     

    
      	 	o	
              Any
                natural person who had an individual income in excess of $200,000
                in each
                of the two most recent years or joint income with that person’s spouse in
                excess of $300,000 in each of those years and has a reasonable expectation
                of reaching the same income level in the current
                year;

            

    

     

    
      	 	o	
              Any
                organization described in Section 501(c)(3) of the Internal Revenue
                Code,
                a corporation, a Massachusetts or similar business trust or a partnership,
                in each case, not formed for the purpose of this investment, with
                total
                assets in excess of US $5,000,000;

            

    

     

    
      	 	o	
              Any
                director, executive officer, or general partner of the issuer of
                the
                securities being offered or sold, or any director, executive officer,
                or
                general partner of a general partner of that
                issuer;

            

    

     

    
      	 	o	
              Any
                trust with total assets in excess of US $5,000,000, not formed for
                the
                specific purpose of acquiring the securities offered, whose purchase
                is
                directed by a sophisticated person as described in Rule 506(b)(2)(ii)
                of
                the Securities Act of 1933;

            

    

     

    
      	 	o	
              Any
                entity in which all of the equity owners are accredited
                investors;

            

    

     

    
      	 	o	
              Any
                private business development company as defined in Section 202(a)(22)
                of
                the Investment Advisers Act of
                1940;

            

    

     

    
      	 	o	
              Any
                Small Business Investment Company licensed by the U.S. Small Business
                Administration under Section 301(c) or (d) of the Small Business
                Investment Act of 1958;

            

    

     

    
      	 	o	
              Any
                investment company registered under the Investment Company Act of
                1940 or
                a business development company as defined in Section 2(a)(48) of
                that
                Act;

            

    

     

    
      	 	o 	
              Any
                bank as defined in Section 3(a)(2) or a savings and loan association
                or
                other institution defined in Section 3(a)(5)(A) of the Securities
                Act of
                1933 acting in either an individual or fiduciary
                capacity;

            

    

     

    
      	 	o	
              Any
                insurance company as defined in Section 2(13) of the Securities Act
                of
                1933;

            

    

     

    
      	 	o	
              Any
                employee benefit plan within the meaning of Title I of the Employee
                Retirement Income Security Act of 1974 whose investment decision
                is made
                by a fiduciary which is either a bank, savings and loan association,
                insurance company, or registered investment advisor, or whose total
                assets
                exceed US $5,000,000, or, if a self-directed plan, a plan whose investment
                decisions are made solely by persons who are accredited
                investors;

            

    

     

    
      	 	o	
              Any
                broker or dealer registered pursuant to Section 15 of the Securities
                Exchange Act of 1934; or

            

    

     

    
      	 	o	
              Any
                plan established and maintained by a state, its political subdivisions,
                or
                any agency or instrumentality of a state or its political subdivisions
                for
                the benefit of its employees, if such plan has total assets in excess
                of
                $5,000,000.

            

    

     

    
      	 	o 	
              None
                of the above.

            

    

    

    
      	
              Name
                of Subscriber:

            	
              _____________________________

            	 
	 	 	 
	
              Social
                Security Number / TIN:

            	
              _____________________________

            	 
	 	 	 

    

     

     

    
      
         

      

      
        11

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