Document:

THIS
      RESTRICTED STOCK UNIT AWARD SHALL NOT BECOME EFFECTIVE UNLESS AND UNTIL IT
      IS
      "ACCEPTED" BY YOU IN THE MANNER DESCRIBED BELOW.

    

    RESTRICTED
      STOCK UNIT AWARD NOTICE AND AGREEMENT

     

    This
      Restricted Stock Unit Award Notice and Agreement (this “Agreement”), by and
      between DOV Pharmaceutical, Inc., a Delaware corporation with an address as
      set
      forth on the signature page hereto (the "Company"),
      and
      ___________, a resident of ____________ with an address as set forth on the
      signature page hereto (hereinafter “you” or the “Employee”), is made as of the
      __ day of _______, 2008, and sets forth the terms and conditions of the award
      (the “Award”) of restricted stock units (“RSUs”) granted to you under the
      Company’s 2007 Stock Award and Incentive Plan (the “Plan”). 

    

    1.
      The
      Plan.
      This
      Award is made pursuant to the Plan, the terms and conditions of which are
      incorporated by reference into this Agreement. Capitalized terms used in this
      Agreement not otherwise defined herein shall be deemed to have the meanings
      as
      used or defined in the Plan. References in this Agreement to any specific Plan
      provision shall not be construed as limiting the applicability of any other
      Plan
      provision.

    

    2.
      Award.
      Effective as of the ___day of _________, 2008 (the “Grant Date”), you have been
      granted ________ RSUs under the Plan. An RSU is an unfunded and unsecured
      promise to deliver (or cause to be delivered) to you, subject to the terms
      and
      conditions of this Agreement, one (1) share of the Company's Common Stock,
      par
      value $0.0001 per share (each a “Share” and, collectively, the “Shares”), for
      each RSU being settled, subject to payment of applicable withholding taxes,
      as
      explained in the Plan. Until such delivery, you have only the rights of a
      general unsecured creditor, and no rights as a shareholder of the Company.
      

    

    THIS
      AWARD IS CONDITIONED UPON YOUR EXECUTING THIS AGREEMENT AND RETURNING IT TO
      THE
      COMPANY BY THE DATE SPECIFIED BELOW, AND IS SUBJECT TO ALL TERMS, CONDITIONS
      AND
      PROVISIONS OF THE PLAN AND THIS AGREEMENT. BY EXECUTING THIS AGREEMENT, YOU
      WILL
      HAVE CONFIRMED YOUR ACCEPTANCE OF ALL OF THE TERMS AND CONDITIONS OF THE PLAN
      AS
      WELL AS THIS AGREEMENT.

    

    3.
      Vesting
      and Delivery; Deferral.

    

    (a)
      The
      RSUs will convert into Shares on the date or dates of “vesting” as set forth
      below in accordance with the requirements of the Plan. RSUs granted hereunder
      will be settled by delivery of Shares to you. Such settlement shall occur on
      or
      after the Vesting Date of each RSU as specified below (each such date, a
“Delivery Date”), except settlement shall be deferred in certain cases if
      elected by you pursuant to this Agreement. 

    

    
      	 	
               

               

              Vesting
                Date

            	
              Number
                of Shares Vested

            	
              Percentage
                of 

              Total
                Grant Vested

            	
               

               

              Settlement
                Date

            
	 	 	 	 	 

    

    

    
      
         

      

      
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    While
      continued active employment is not required in order to receive delivery of
      the
      Shares underlying your outstanding RSUs that are vested, all other terms and
      conditions of this Agreement shall continue to apply to such RSUs, and failure
      to meet such terms and conditions may result in the termination of this Award,
      as a result of which no further Shares underlying such vested RSUs will be
      delivered.

    

    (b)
       (i)
      Except as otherwise expressly provided in this Agreement, as soon as reasonably
      promptly (but in no case more than thirty (30) business days) after the date
      specified as the Settlement Date (or any other date delivery of certificates
      representing the Shares is called for hereunder), the Company shall deliver
      to
      you one or more certificates representing the Shares underlying the number
      or
      percentage of your then outstanding RSUs with respect to which the Settlement
      Date (or other date) has occurred (which number of Shares may be rounded to
      avoid fractional Shares). 

    

    (ii)
      In
      the discretion of the Committee, in lieu of all or any portion of the Shares
      otherwise deliverable in respect of all or any portion of your RSUs, the Company
      may deliver cash, other securities, other Awards or other property, and all
      references in this Agreement to deliveries of Shares shall be deemed to include
      such deliveries of cash, other securities, other Awards or other
      property.

    

    (c)
      Notwithstanding any other term of this Agreement, in the event you die prior
      to
      a Delivery Date, the Shares underlying your then outstanding and vested RSUs
      shall be delivered to the representative of your estate as soon as practicable
      after the date of death and after such documentation as may be reasonably
      requested by the Committee is provided to the Committee. The Committee may
      adopt
      procedures pursuant to which you may be permitted to specifically bequeath
      some
      or all of your outstanding RSUs under your will to an organization described
      in
      Sections 501(c)(3) and 2055(a) of the Code (or such other similar charitable
      organization as may be approved by the Committee).

    

    (d)
      Settlement of any RSU will
      be
      deferred in certain cases if and to the extent so elected by Employee in
      accordance with the signature page of this Agreement. At any time that RSUs
      are
      treated as deferred compensation subject to Code Section 409A, (i) settlement
      may not be accelerated in the discretion of the Company (except to the extent
      permitted under Treas. Reg. § 1.409A-3). Other provisions of this Agreement
      notwithstanding, under U.S. federal income tax laws and Treasury Regulations
      (and other applicable guidance) as presently in effect or hereafter implemented,
      (i) if the timing of any distribution in settlement of RSUs would result in
      Employee’s constructive receipt of income relating to the RSUs prior to such
      distribution, the date of distribution will be the earliest date after the
      specified date of distribution that distribution can be effected without
      resulting in such constructive receipt; and (ii) any rights of Employee or
      retained authority of the Company with respect to RSUs hereunder shall be
      automatically modified and limited to the extent necessary so that Employee
      will
      not be deemed to be in constructive receipt of income relating to the RSUs
      prior
      to the distribution and so that Employee shall not be subject to any penalty
      under Section 409A. Any elective deferral will be subject to such additional
      terms and conditions as the Committee may impose. Please
      note that, even if you elect to defer settlement, the Company is required to
      withhold from you Medicare taxes at the applicable minimum statutory rate at
      such time as the RSUs are no longer subject to a risk of forfeiture upon
      voluntary termination.
      Such
      withholding will be based upon the aggregate Fair Market Value of the Shares
      underlying the deferred RSUs at the applicable date and will be deducted from
      your salary in most cases in the payroll period that immediately follows the
      applicable tax date.

    

    
      
         

      

      
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    4.
      Termination
      of RSUs and Non-Delivery of Shares.

    

    (a)
      Unless the Committee in its sole discretion determines otherwise, and except
      as
      otherwise expressly provided herein, if your employment terminates for any
      reason or you otherwise are no longer actively employed with the Company, your
      rights in respect of any RSUs that are then outstanding but not yet vested
      shall
      terminate immediately, such RSUs shall cease to be outstanding and no further
      Shares shall be delivered in respect thereof.

    

    (b)
      Unless the Committee in its sole discretion determines otherwise, and except
      as
      provided in Paragraphs 6 and 7, your rights in respect of all of your
      outstanding RSUs (whether or not vested) immediately shall terminate, such
      RSUs
      shall cease to be outstanding and no further Shares shall be delivered in the
      event that: 

    

    (i)
      a
      Forfeiture Event shall have occurred and be continuing; 

    

    (ii)
      you
      fail to certify, in accordance with such procedures as may be established by
      the
      Committee from time to time, that you have complied, or the Committee determines
      that you in fact have failed to comply in any material respect, with all the
      terms and conditions of the Plan and this Agreement. On each Delivery Date
      by
      accepting the delivery of Shares you shall be deemed to have represented and
      certified at such time that you have complied with all the terms and conditions
      of the Plan and this Agreement;

    

    (iii)
      the
      Committee in its sole discretion determines that you failed to meet, in any
      material respect, any obligation you may have under any agreement between you
      and the Company, or any agreement entered into in connection with your
      employment with the Company, including, without limitation, the Company’s notice
      period requirement applicable to you, any offer letter, employment agreement
      or
      any shareholders’ agreement to which other similarly situated employees of the
      Company are a party; or

    

    (vi)
      as a
      result of any action brought by you, it is determined that any of the terms
      or
      conditions for delivery of Shares in respect of this Agreement are invalid.
      

    

    5.
      Repayment.
      The
      provisions of Section 10(a) of the Plan (which requires Award recipients to
      repay to the Company amounts delivered to them if the Committee determines
      that
      all terms and conditions of this Agreement in respect of such delivery were
      not
      satisfied) shall apply to this Award.

    

    6.
      Change
      in Control.
      Notwithstanding anything to the contrary in this Agreement, in the event a
      Change in Control shall occur and within twelve (12) months thereafter the
      Company terminates your employment without cause or you terminate your
      employment for “good reason” as such term is generally understood, all Shares
      underlying your then outstanding RSUs, whether or not vested, shall be deemed
      fully vested and delivered.

    

    7.
      Dividend
      Equivalents.
      Each
      RSU shall include a Dividend Equivalent right. Accordingly, with respect to
      each
      of your outstanding RSUs, at or after the time of distribution of any regular
      cash dividend paid by DOV in respect of a Share the record date for which occurs
      on or after a Delivery Date, you shall be entitled to receive an amount (less
      applicable withholding) equal to such regular dividend payment as would have
      been made in respect of the Share underlying such outstanding RSU. Payment
      in
      respect of a Dividend Equivalent right shall be made only with respect to RSUs
      that are outstanding on the applicable record date. 

    

    
      
         

      

      
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    8.
      Certain
      Additional Terms, Conditions and Agreements.

    

    (a)
      The
      delivery of Shares is conditioned on your satisfaction of any applicable
      withholding taxes in accordance with Section 11(d) of the Plan. To the extent
      permitted by applicable law, the Company, in its sole discretion, may require
      you to provide amounts equal to all or a portion of any federal, state, local,
      foreign or other tax obligations imposed on you or the Company in connection
      with the grant, vesting or delivery of this Award by requiring you to choose
      between remitting such amount (i) in cash (or through payroll deduction or
      otherwise) or (ii) in the form of proceeds from the Company’s executing a sale
      of Shares delivered to you pursuant to this Award. In addition, if you are
      an
      individual with separate employment contracts (at any time during and/or after
      the Company’s fiscal year), the Company may, in its sole discretion, require you
      to provide for a reserve in an amount the Company determines is advisable or
      necessary in connection with any actual, anticipated or potential tax
      consequences related to your separate employment contracts by requiring you
      to
      choose between remitting such amount (i) in cash (or through payroll deduction
      or otherwise) or (ii) in the form of proceeds from the Company’s executing a
      sale of Shares delivered to you pursuant to this Award (or any other outstanding
      Awards under the Plan). In no event, however, shall any choice you may have
      under the preceding two sentences determine, or give you any discretion to
      affect, the timing of the delivery of Shares or the timing of payment of tax
      obligations.

    

    (b)
      Your
      rights in respect of your RSUs are conditioned on the receipt to the full
      satisfaction of the Committee of any required consents that the Committee may
      reasonably determine to be necessary or advisable.

    

    (c)
      You
      understand and agree that by accepting this Award you have agreed to become
      subject to the Company’s policies in effect from time to time and at any time
      concerning trading in Stock and hedging or pledging Stock and equity-based
      compensation or other awards, and confidential or proprietary information,
      and
      to effect sales of Shares delivered to you in respect of your RSUs in accordance
      with such rules and procedures as may be adopted from time to time with respect
      to sales of such Shares (which may include, without limitation, restrictions
      relating to the timing of sale requests, the manner in which sales are executed,
      pricing method, consolidation or aggregation of orders and volume limits
      determined by the Company). In addition, you understand and agree that you
      shall
      be responsible for all brokerage costs and other fees or expenses associated
      with your Award including, without limitation, such brokerage costs and other
      fees or expenses in connection with the sale of Shares delivered to you
      hereunder.

    

    (d)
      Your
      participation in the Plan is voluntary. The value of the RSUs is an
      extraordinary item of compensation. As such, the RSUs are not part of normal
      or
      expected compensation for purposes of calculating any severance, resignation,
      redundancy, end of service payments, bonuses, long-service awards, pension
      or
      retirement benefits or similar payments. 

    

    (e)
      The
      RSUs
      and the granting thereof shall not constitute or be evidence of any agreement
      or
      understanding, express or implied, that you have a right to continue as an
      officer or employee of the Company for any period of time, or at any particular
      rate of compensation. You
      acknowledges and agree that the Plan is discretionary in nature and limited
      in
      duration, and may be amended, cancelled, or terminated by the Committee, in
      its
      sole discretion, at any time, provided, however that any outstanding RSUs shall
      not be materially and adversely affected. The grant of RSUs under the Plan
      is a
      one-time benefit and does not create any contractual or other right to receive
      a
      grant of restricted stock RSUs or stock options or benefits in lieu of RSUs
      or
      stock options in the future. Future grants, if any, will be at the sole
      discretion of the Committee, including, but not limited to, the timing of any
      grant, the number of RSUs and vesting provisions.

     

    
      
         

      

      
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    (f)
      All
      certificates representing non-vested Shares shall have endorsed thereon, in
      addition to any other legends required by applicable securities laws, a legend
      substantially as follows:

     

    "THE
      SALE
      OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE,
      WHETHER VOLUNTARY, INVOLUNTARY, OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN
      RESTRICTIONS ON SALE AND TRANSFER (INCLUDING FORFEITURE) AS SET FORTH IN THE
      DOV
      PHARMACEUTICAL, INC. 2007 STOCK AWARD AND INCENTIVE PLAN AND IN THE ASSOCIATED
      RESTRICTED STOCK UNIT AWARD AGREEMENT, EACH AS AMENDED OR AMENDED AND RESTATED
      FROM TIME TO TIME. COPIES OF THE PLAN AND AGREEMENT MAY BE OBTAINED FROM DOV
      PHARMACEUTICAL, INC."

     

    10.
      Right
      of Offset.
      The
      obligation to deliver Shares under this Agreement is subject to Section 11(f)
      of
      the Plan, which provides for the Company’s right to offset against such
      obligation any outstanding amounts you owe to the Company and any amounts the
      Committee deems appropriate pursuant to any tax equalization policy or
      agreement.

     

    11.
      Modifications
      and Amendments; Waivers and Consents.
      

     

    (a)
      Except as set forth in Section 11(b) below, the terms and provisions of this
      Agreement may not be modified, amended, renewed, or terminated, nor may any
      term, condition or breach of any term or condition be waived, except by a
      writing signed by the Company and you. Any waiver of any term, condition or
      breach hereof shall not be a waiver of any other term or condition or of the
      same term or condition for the future, or of any subsequent breach

     

    (b)
      Notwithstanding any other provision of this Agreement, the Committee reserves
      the right at any time to amend the terms and conditions set forth in this
      Agreement, and the Board may amend the Plan in any respect; provided
      that, no
      such amendment shall materially and adversely affect your rights and obligations
      under this Agreement without your consent; and provided further that the
      Committee expressly reserves its rights to amend the Agreement and the Plan
      as
      described in the Plan. Any amendment of this Agreement shall be in writing
      signed by an authorized member of the Committee or a person or persons
      designated by the Committee.

     

    12.
      Non-transferability.
      

    

    (a)
      Except as otherwise may be provided in this Paragraph 12 or as otherwise may
      be
      provided by the Committee, the limitations on transferability set forth in
      Section 11(b) of the Plan shall apply to this Award. Any purported transfer
      or
      assignment in violation of the provisions of this paragraph 12 or Section 11(b)
      of the Plan shall be null and void. The Committee may adopt procedures pursuant
      to which some or

    all
      recipients of RSUs may transfer some or all of their RSUs through a gift for
      no
      consideration to any child, stepchild, grandchild, parent, stepparent,
      grandparent, spouse, sibling, niece, nephew, mother-in-law, father-in-law,
      son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive
      relationships, any person sharing the recipient’s household (other than a tenant
      or employee), a trust in which these persons have more than 50% of the
      beneficial interest, and any other entity in which these persons (or the
      recipient) own more than 50% of the voting interests.

    

    (b)
      In
      addition to the transfer restrictions referred to above, you recognize that
      federal and state securities laws govern and may restrict your right to sell
      or
      otherwise dispose of the RSUs after vesting. You also understand that local
      non-United States laws may also govern your disposition of Shares if you are
      located outside of the United States.

     

    
      
         

      

      
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    13.
      Delay
      in Payment.
      To the
      extent required in order to avoid the imposition of any interest and/or
      additional tax under Section 409A(a)(1)(B) of the Code, any payments or
      deliveries due as a result of your termination of employment with the Company
      may be delayed for six months if you are deemed to be a “specified employee” as
      defined in Section 409A(a)(2)(i)(B) of the Code.

     

    14.
      Notices.
      Any
      notice or other communication to be made, served or given to the Company under
      or pursuant to the terms hereof shall be in writing and shall be addressed
      to
      the Company at the address set forth on the signature page hereto or as
      otherwise requested by the Company, and any notice to be given to you shall
      be
      in writing and addressed to your address maintained from time to time in the
      employment records of the Company or any affiliate, or at such other address
      as
      either party may hereafter designate in writing to the other. Such notice shall
      be sent by personal delivery or by registered or certified mail, return receipt
      requested, postage prepaid, or by a nationally known overnight courier (or
      internationally known courier if sent from outside of the United States),
      providing written proof of delivery. Any notice sent in the manner set forth
      above shall be deemed to have been given and received upon receipt if personally
      delivered, two (2) days after it has been delivered to a nationally
      (internationally) known overnight courier, and three (3) days after it has
      been
      deposited in the United States mail (or other non-United States
      government-sponsored mail system) if sent by mail. If a notice is delivered
      otherwise than as set forth above, it shall be deemed to have been given when
      received. The substance of any notice shall be deemed to have been fully
      acknowledged in the event of refusal of acceptance by the party to whom the
      notice is addressed.

     

     

    15.
      Binding
      Effect.
      This
      Agreement shall be binding upon, and shall inure to the benefit of both parties
      hereto and their respective permitted successors, assigns, heirs, beneficiaries
      and representatives. 

     

     

    16.
      Governing
      Law and Jurisdiction.
      This
      Agreement shall be construed and enforced in accordance with the terms of
      Section 11(l) of the Plan providing for use of the internal laws of the State
      of
      New Jersey in the United States; provided,
      however,
      that,
      insofar as the Company is incorporated under the laws of the State of Delaware
      in the United States, the General Corporate Law of the State of Delaware (or
      any
      successor statute) shall govern those matters that apply to the internal
      governance of the Company. Furthermore, you hereby irrevocably submit to the
      co-exclusive jurisdiction of (i) the Superior Court of New Jersey, and (ii)
      the
      United States District Court for the District of New Jersey, to resolve any
      and
      all issues that may arise out of or relate to this Agreement. THE SECURITIES
      ISSUED HEREUNDER SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE SECURITIES
      LAWS
      OF THE UNITED STATES AND ANY OTHER APPLICABLE LAWS. Each of the parties hereto
      further agrees that service of any process, summons, notice or documents by
      United States registered mail, return receipt requested, or
      internationally-known courier, in accordance with the provisions of Section
      14
      above, shall be effective service of process for any action, suit or proceeding.
      

     

     

    17.
      Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, but shall be interpreted as if it were written so as to
      be
      enforceable to the maximum extent permitted by applicable law, and any such
      prohibition or unenforceability in any jurisdiction shall not invalidate or
      render unenforceable such provision in any other jurisdiction. To the extent
      permitted by applicable law, the parties waive any provision of law that renders
      any provisions hereof prohibited or unenforceable in any respect.

     

    
      
         

      

      
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    18.
      Entire
      Agreement.
      This
      Agreement, together with the Notice of Grant and the Plan, collectively
      constitute the entire agreement and understanding between the parties hereto
      with respect to the subject matter hereof and supersede all prior oral or
      written agreements and understandings relating to the subject matter hereof.
      If
      there is any conflict between the provisions of this Agreement and mandatory
      provisions of the Plan, the provisions of the Plan shall govern. No statement,
      representation, warranty, covenant or agreement not expressly set forth in
      this
      Agreement or incorporated herein by reference shall affect or be used to
      interpret, change or restrict the express terms and provisions of this
      Agreement.

     

    19.
      Deadline;
      Acceptance.
      This
      Agreement must be executed and delivered to the Company no later than the ___
      day of ____, 2008, after which date it shall become null and void. By accepting
      this Agreement, you are accepting the Award as set forth in this Agreement
      and
      agreeing to the terms and conditions hereof, including all provisions of the
      Plan. You further acknowledge both that you have received a copy of the Plan
      as
      well as the fact that a copy of the Plan as filed with the U.S. Securities
      and
      Exchange Commission is available for your review at any time. 

     

    

    

    

    [Signature
      page follows]

    

    
      
         

      

      
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              Sincerely,
                

               

              DOV PHARMACEUTICAL,
                INC.

            
	 
 	 
 	
               

               

               

              
 

            
	 	By:  	 
	 	
              

            
	 	 

    

     

     

    Agreed and Accepted:

    
      	 	 	 	 
	 	 	 	 
	
              

            	 	 	
            
	
              Name:

               

              Address:

            	 	 	 

    

     

     

    

    Please
      initial only one:

    

    ____ I
      hereby
      elect to have my RSUs settled at the Delivery Dates without further deferral
      (this election will apply if no box is checked).

    

    ____ I
      hereby
      elect to defer the settlement of my RSUs until the first business day of the
      year  
      (date
      must be after the Stated Vesting Date) (subject to accelerated settlement of
      the
      deferred RSUs in certain cases upon a Change in Control and earlier settlement
      of previously vested RSUs in the event of employee’s termination of employment
      for any reason, including retirement).

    

    ____ I
      hereby
      elect to defer the settlement of my RSUs until the termination of my employment
      for any reason, including retirement (subject to accelerated settlement in
      certain cases upon a Change in Control). 

     

    
Page
      8 of 8EXHIBIT
      4.1

     

    Form
      of Convertible Debenture

    

    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.
                  __

              	
                $___________

              

      

    

     

    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.

    

    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).

    

    “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. 

    

    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”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (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). 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. 

     

    (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. 

     

    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

            

    

    

    
      	 	
              (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.

     

    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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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

            

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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:
                ___________________________________

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