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Unassociated Document

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES MAY NOT BE SOLD,
      TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
      AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT
      REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE
      144
      OR REGULATION S UNDER SAID ACT.

     

     

    CONVERTIBLE
      NOTE

     

    Los
      Angles, CA

     

    
      	May 1, 2008	
              $________

            

    

     

    FOR
      VALUE RECEIVED,
      EMVELCO CORP.,
      a
      Delaware corporation (hereinafter called the “Borrower”),
      hereby promises to pay to the order of __________________ or registered assigns
      (the “Holder”)
      the
      sum of $___________, on May ____, 2010 (the “Maturity
      Date”),
      and
      to pay interest on the unpaid principal balance hereof at the rate of eight
      percent (8%) per annum from ___________, 2008 (the “Issue
      Date”)
      until
      the same becomes due and payable, whether at maturity or upon acceleration
      or by
      prepayment or otherwise. If an Event of Default exists, this Note shall bear
      interest at the maximum permitted rate allowed by the State of Florida per
      annum
      from the due date thereof until such time that the Event of Default is cured
      (“Default
      Interest”).
      Interest shall commence accruing on the issue date, shall be computed on the
      basis of a 365-day year and the actual number of days elapsed and shall be
      payable on the Maturity Date. All payments due hereunder (to the extent not
      converted into common stock, $.0001 par value per share, of the Borrower (the
      “Common
      Stock”)
      in
      accordance with the terms hereof) shall be made in lawful money of the United
      States of America. All payments shall be made at such address as the Holder
      shall hereafter give to the Borrower by written notice made in accordance with
      the provisions of this Note. Whenever any amount expressed to be due by the
      terms of this Note is due on any day which is not a business day, the same
      shall
      instead be due on the next succeeding day which is a business day and, in the
      case of any interest payment date which is not the date on which this Note
      is
      paid in full, the extension of the due date thereof shall not be taken into
      account for purposes of determining the amount of interest due on such date.
      As
      used in this Note, the term “business day” shall mean any day other than a
      Saturday, Sunday or a day on which commercial banks in the city of New York,
      New
      York are authorized or required by law or executive order to remain closed.
      Each
      capitalized term used herein, and not otherwise defined, shall have the meaning
      ascribed thereto in that certain Agreement and Plan of Exchange, dated May
      1,
      2008, pursuant to which this Note was originally issued (the “Purchase
      Agreement”).
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      following terms shall apply to this Note:

     

     

    ARTICLE
      I.  CONVERSION
      RIGHTS

     

    1.1  Conversion
      Right.
      The
      Holder shall have the right from time to time, and at any time on or prior
      to
      the Maturity Date to convert all or any part of the outstanding and unpaid
      principal amount of this Note into fully paid and non-assessable shares of
      Common Stock, as such Common Stock exists on the Issue Date, or any shares
      of
      capital stock or other securities of the Borrower into which such Common Stock
      shall hereafter be changed or reclassified at the conversion price (the
“Conversion
      Price”)
      determined as provided herein (a “Conversion”).
      The
      number of shares of Common Stock to be issued upon each conversion of this
      Note
      shall be determined by dividing the Conversion Amount (as defined below) by
      the
      applicable Conversion Price then in effect on the date specified in the notice
      of conversion, in the form attached hereto as Exhibit A (the “Notice
      of Conversion”),
      delivered to the Borrower by the Holder in accordance with Section 1.3 below;
      provided that the Notice of Conversion is submitted by facsimile (or by other
      means resulting in, or reasonably expected to result in, notice) to the Borrower
      before 6:00 p.m., New York, New York time on such conversion date (the
“Conversion
      Date”).
      The
      term “Conversion
      Amount”
means,
      with respect to any conversion of this Note, the sum of (1) the principal amount
      of this Note to be converted in such conversion plus
      (2)
      accrued and unpaid interest, if any, on such principal amount at the interest
      rates provided in this Note to the Conversion Date plus
      (3)
      Default Interest, if any, on the amounts referred to in the immediately
      preceding clauses (1) and/or (2).

     

    1.2  Conversion
      Price.

     

    The
      Conversion Price shall be $1.00 (the “Conversion Price”).

     

    1.3  Method
      of Conversion.

     

    (a)  Mechanics
      of Conversion.
      Subject
      to Section 1.1, this Note may be converted by the Holder in whole or in part
      at
      any time from time to time after the Issue Date, by (A) submitting to the
      Borrower a Notice of Conversion (by facsimile or other reasonable means of
      communication dispatched on the Conversion Date prior to 6:00 p.m., New York,
      New York time) and (B) subject to Section 1.3(b), surrendering this Note at
      the principal office of the Borrower. 

     

    (b)  Surrender
      of Note Upon Conversion.
      Notwithstanding
      anything to the contrary set forth herein, upon conversion of this Note in
      accordance with the terms hereof, the Holder shall not be required to physically
      surrender this Note to the Borrower unless the entire unpaid principal amount
      of
      this Note is so converted. 

     

    (c)  Payment
      of Taxes.
      The
      Borrower shall not be required to pay any tax which may be payable in respect
      of
      any transfer involved in the issue and delivery of shares of Common Stock or
      other securities or property on conversion of this Note in a name other than
      that of the Holder (or in street name), and the Borrower shall not be required
      to issue or deliver any such shares or other securities or property unless
      and
      until the person or persons (other than the Holder or the custodian in whose
      street name such shares are to be held for the Holder’s account) requesting the
      issuance thereof shall have paid to the Borrower the amount of any such tax
      or
      shall have established to the satisfaction of the Borrower that such tax has
      been paid.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (d)  Delivery
      of Common Stock Upon Conversion.
      Upon
      receipt by the Borrower from the Holder of a facsimile transmission (or other
      reasonable means of communication) of a Notice of Conversion meeting the
      requirements for conversion as provided in this Section 1.3, the Borrower shall
      issue and deliver or cause to be issued and delivered to or upon the order
      of
      the Holder certificates for the Common Stock issuable upon such conversion
      within two (2) business days after such receipt (and, solely in the case of
      conversion of the entire unpaid principal amount hereof, surrender of this
      Note)
      (such second business day being hereinafter referred to as the “Deadline”)
      in
      accordance with the terms hereof and the Purchase Agreement.

     

    1.4  Concerning
      the Shares.
      The
      shares of Common Stock issuable upon conversion of this Note may not be sold
      or
      transferred unless (i) such shares are sold pursuant to an effective
      registration statement under the Act or (ii) the Borrower or its transfer agent
      shall have been furnished with an opinion of counsel (which opinion shall be
      in
      form, substance and scope customary for opinions of counsel in comparable
      transactions) to the effect that the shares to be sold or transferred may be
      sold or transferred pursuant to an exemption from such registration or
      (iii) such shares are sold or transferred pursuant to Rule 144 under the
      Act (or a successor rule) (“Rule
      144”)
      or
      (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of
      the Borrower who agrees to sell or otherwise transfer the shares only in
      accordance with this Section 1.4 and who is an Accredited Investor (as defined
      in the Purchase Agreement). Except as otherwise provided in the Purchase
      Agreement (and subject to the removal provisions set forth below), until such
      time as the shares of Common Stock issuable upon conversion of this Note have
      been registered under the Act or otherwise may be sold pursuant to Rule 144
      without any restriction as to the number of securities as of a particular date
      that can then be immediately sold, each certificate for shares of Common Stock
      issuable upon conversion of this Note that has not been so included in an
      effective registration statement or that has not been sold pursuant to an
      effective registration statement or an exemption that permits removal of the
      legend, shall bear a legend substantially in the following form, as
      appropriate:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED
      OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
      SCOPE
      CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION
      IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION
      S
      UNDER SAID ACT.”

     

    1.5  Effect
      of Certain Events.

     

    
      
        
        

      

      
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    (a)  Effect
      of Merger, Consolidation, Etc.
      At the
      option of the Holder, the sale, conveyance or disposition of all or
      substantially all of the assets of the Borrower, the effectuation by the
      Borrower of a transaction or series of related transactions in which more than
      50% of the voting power of the Borrower is disposed of, or the consolidation,
      merger or other business combination of the Borrower with or into any other
      Person (as defined below) or Persons when the Borrower is not the survivor
      shall
      either: (i) be deemed to be an Event of Default (as defined in Article III)
      pursuant to which the Borrower shall be required to pay to the Holder upon
      the
      consummation of and as a condition to such transaction an amount equal to the
      Default Amount (as defined in Article III) or (ii) be treated pursuant to
      Section 1.6(b) hereof. “Person”
shall
      mean any individual, corporation, limited liability company, partnership,
      association, trust or other entity or organization.

     

    (b)  Adjustment
      Due to Merger, Consolidation, Etc.
      If,
      at
      any time when this Note is issued and outstanding and prior to conversion of
      all
      of the Notes, there shall be any merger, consolidation, exchange of shares,
      recapitalization, reorganization, or other similar event, as a result of which
      shares of Common Stock of the Borrower shall be changed into the same or a
      different number of shares of another class or classes of stock or securities
      of
      the Borrower or another entity, or in case of any sale or conveyance of all
      or
      substantially all of the assets of the Borrower other than in connection with
      a
      plan of complete liquidation of the Borrower, then the Holder of this Note
      shall
      thereafter have the right to receive upon conversion of this Note, upon the
      basis and upon the terms and conditions specified herein and in lieu of the
      shares of Common Stock immediately theretofore issuable upon conversion, such
      stock, securities or assets which the Holder would have been entitled to receive
      in such transaction had this Note been converted in full immediately prior
      to
      such transaction (without regard to any limitations on conversion set forth
      herein), and in any such case appropriate provisions shall be made with respect
      to the rights and interests of the Holder of this Note to the end that the
      provisions hereof (including, without limitation, provisions for adjustment
      of
      the Conversion Price and of the number of shares issuable upon conversion of
      the
      Note) shall thereafter be applicable, as nearly as may be practicable in
      relation to any securities or assets thereafter deliverable upon the conversion
      hereof. 

     

    (c)  Adjustment
      Due to Distribution.
      If
      the
      Borrower shall declare or make any distribution of its assets (or rights to
      acquire its assets) to holders of Common Stock as a dividend, stock repurchase,
      by way of return of capital or otherwise (including any dividend or distribution
      to the Borrower’s shareholders in cash or shares (or rights to acquire shares)
      of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”),
      then
      the Holder of this Note shall be entitled, upon any conversion of this Note
      after the date of record for determining shareholders entitled to such
      Distribution, to receive the amount of such assets which would have been payable
      to the Holder with respect to the shares of Common Stock issuable upon such
      conversion had such Holder been the holder of such shares of Common Stock on
      the
      record date for the determination of shareholders entitled to such
      Distribution.

     

    1.6  Trading
      Market Limitations.
      Unless
      permitted by the applicable rules and regulations of the principal securities
      market on which the Common Stock is then listed or traded, in no event shall
      the
      Borrower issue upon conversion of or otherwise pursuant to this Note shares
      of
      Common Stock unless the Borrower obtains shareholder approval authorizing such
      issuance. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    1.7  Status
      as Shareholder.
      Upon
      submission of a Notice of Conversion by a Holder, (i) the shares covered thereby
      shall be deemed converted into shares of Common Stock and (ii) the Holder’s
      rights as a Holder of such converted portion of this Note shall cease and
      terminate, excepting only the right to receive certificates for such shares
      of
      Common Stock and to any remedies provided herein or otherwise available at
      law
      or in equity to such Holder because of a failure by the Borrower to comply
      with
      the terms of this Note. Notwithstanding the foregoing, if a Holder has not
      received certificates for all shares of Common Stock prior to the tenth (10th)
      business day after the expiration of the Deadline with respect to a conversion
      of any portion of this Note except as set forth in accordance with Section
      1.6,
      then (unless the Holder otherwise elects to retain its status as a holder of
      Common Stock by so notifying the Borrower) the Holder shall regain the rights
      of
      a Holder of this Note with respect to such unconverted portions of this Note
      and
      the Borrower shall, as soon as practicable, return such unconverted Note to
      the
      Holder or, if the Note has not been surrendered, adjust its records to reflect
      that such portion of this Note has not been converted. In all cases, the Holder
      shall retain all of its rights and remedies for the Borrower’s failure to
      convert this Note.

     

     

    ARTICLE
      II.  EVENTS
      OF DEFAULT

     

    If
      any of
      the following events of default (each, an “Event
      of Default”)
      shall
      occur:

     

    2.1  Failure
      to Pay Principal or Interest.
      The
      Borrower fails to pay the principal hereof or interest thereon when due on
      this
      Note and such failure is not cured within ten (10) days of such
      event;

     

    2.2  Receiver
      or Trustee.
      The
      Borrower or any subsidiary of the Borrower shall make an assignment for the
      benefit of creditors, or apply for or consent to the appointment of a receiver
      or trustee for it or for a substantial part of its property or business, or
      such
      a receiver or trustee shall otherwise be appointed;

     

    2.3  Judgments.
      Any
      money judgment, writ or similar process shall be entered or filed against the
      Borrower or any subsidiary of the Borrower or any of its property or other
      assets for more than $1,000,000, and shall remain unvacated, unbonded or
      unstayed for a period of twenty (20) days unless otherwise consented to by
      the
      Holder, which consent will not be unreasonably withheld;

     

    2.4  Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings for relief under any bankruptcy law or any law for the relief of
      debtors shall be instituted by or against the Borrower or any subsidiary of
      the
      Borrower;

     

    
      
        
        

      

      
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    then,
      upon the occurrence and during the continuation of any Event of Default, at
      the
      option of the Holders of a majority of the aggregate principal amount of the
      outstanding Notes issued pursuant to the Purchase Agreement exercisable through
      the delivery of written notice to the Borrower by such Holders (the
“Default
      Notice”),
      the
      Notes become immediately due and payable and the Borrower shall pay to the
      Holder, in full satisfaction of its obligations hereunder.

     

     

    ARTICLE
      III.  MISCELLANEOUS

     

    3.1  Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of the Holder in the exercise of any power, right
      or privilege hereunder shall operate as a waiver thereof, nor shall any single
      or partial exercise of any such power, right or privilege preclude other or
      further exercise thereof or of any other right, power or privileges. All rights
      and remedies existing hereunder are cumulative to, and not exclusive of, any
      rights or remedies otherwise available.

     

    3.2  Notices.
      Any
      notice herein required or permitted to be given shall be in writing and may
      be
      personally served or delivered by courier or sent by United States mail and
      shall be deemed to have been given upon receipt if personally served (which
      shall include telephone line facsimile transmission) or sent by courier or
      three
      (3) days after being deposited in the United States mail, certified, with
      postage pre-paid and properly addressed, if sent by mail. For the purposes
      hereof, the address of the Holder shall be as shown on the records of the
      Borrower; and the address of the Borrower shall be ________________, facsimile
      number: ( ) -. Both the Holder and the Borrower may change the address for
      service by service of written notice to the other as herein
      provided.

     

    3.3  Amendments.
      This
      Note and any provision hereof may only be amended by an instrument in writing
      signed by the Borrower and the Holder. The term “Note” and all reference
      thereto, as used throughout this instrument, shall mean this instrument (and
      the
      other Notes issued pursuant to the Purchase Agreement) as originally executed,
      or if later amended or supplemented, then as so amended or
      supplemented.

     

    3.4  Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to be the benefit of the Holder and its successors and assigns.
      Each
      transferee of this Note must be an “accredited investor” (as defined in Rule
      501(a) of the 1933 Act). This Note may only be assigned with the express written
      consent of the Borrower.

     

    3.5  Cost
      of Collection.
      If
      default is made in the payment of this Note, the Borrower shall pay the Holder
      hereof costs of collection, including reasonable attorneys’ fees.

     

    3.6  Governing
      Law.
      THIS
      NOTE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF CALIFONRIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
      LAWS. THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED
      STATES FEDERAL COURTS LOCATED GEOGRAPHICALLY CLOSEST TO LOS ANGELES, CALIFORNIA
      WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS NOTE, THE AGREEMENTS ENTERED
      INTO
      IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
      BOTH
      PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
      MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
      OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
      RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
      PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN
      ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
      NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE
      AND
      MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
      LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
      THIS NOTE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’
FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
      DISPUTE.

     

    
      
        
        

      

      
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    3.7  Certain
      Amounts.
      Whenever
      pursuant to this Note the Borrower is required to pay an amount in excess of
      the
      outstanding principal amount (or the portion thereof required to be paid at
      that
      time) plus accrued and unpaid interest plus Default Interest on such interest,
      the Borrower and the Holder agree that the actual damages to the Holder from
      the
      receipt of cash payment on this Note may be difficult to determine and the
      amount to be so paid by the Borrower represents stipulated damages and not
      a
      penalty and is intended to compensate the Holder in part for loss of the
      opportunity to convert this Note and to earn a return from the sale of shares
      of
      Common Stock acquired upon conversion of this Note at a price in excess of
      the
      price paid for such shares pursuant to this Note. The Borrower and the Holder
      hereby agree that such amount of stipulated damages is not plainly
      disproportionate to the possible loss to the Holder from the receipt of a cash
      payment without the opportunity to convert this Note into shares of Common
      Stock.

     

    3.8  Denominations.
      At the
      request of the Holder, upon surrender of this Note, the Borrower shall promptly
      issue new Notes in the aggregate outstanding principal amount hereof, in the
      form hereof, in such denominations of at least $250,000 as the Holder shall
      request.

     

    3.9  Purchase
      Agreement.
      By its
      acceptance of this Note, each Holder agrees to be bound by the applicable terms
      of the Purchase Agreement.

     

    3.10  Notice
      of Corporate Events.
      Except
      as otherwise provided below, the Holder of this Note shall have no rights as
      a
      Holder of Common Stock unless and only to the extent that it converts this
      Note
      into Common Stock. The Borrower shall provide the Holder with prior notification
      of any meeting of the Borrower’s shareholders (and copies of proxy materials and
      other information sent to shareholders). In the event of any taking by the
      Borrower of a record of its shareholders for the purpose of determining
      shareholders who are entitled to receive payment of any dividend or other
      distribution, any right to subscribe for, purchase or otherwise acquire
      (including by way of merger, consolidation, reclassification or
      recapitalization) any share of any class or any other securities or property,
      or
      to receive any other right, or for the purpose of determining shareholders
      who
      are entitled to vote in connection with any proposed sale, lease or conveyance
      of all or substantially all of the assets of the Borrower or any proposed
      liquidation, dissolution or winding up of the Borrower, the Borrower shall
      mail
      a notice to the Holder, at least twenty (20) days prior to the record date
      specified therein (or thirty (30) days prior to the consummation of the
      transaction or event, whichever is earlier), of the date on which any such
      record is to be taken for the purpose of such dividend, distribution, right
      or
      other event, and a brief statement regarding the amount and character of such
      dividend, distribution, right or other event to the extent known at such time.
      The Borrower shall make a public announcement of any event requiring
      notification to the Holder hereunder substantially simultaneously with the
      notification to the Holder in accordance with the terms of this Section
      4.6.

     

    3.11  Remedies.
      The
      Borrower acknowledges that a breach by it of its obligations hereunder will
      cause irreparable harm to the Holder, by vitiating the intent and purpose of
      the
      transaction contemplated hereby. Accordingly, the Borrower acknowledges that
      the
      remedy at law for a breach of its obligations under this Note will be inadequate
      and agrees, in the event of a breach or threatened breach by the Borrower of
      the
      provisions of this Note, that the Holder shall be entitled, in addition to
      all
      other available remedies at law or in equity, and in addition to the penalties
      assessable herein, to an injunction or injunctions restraining, preventing
      or
      curing any breach of this Note and to enforce specifically the terms and
      provisions thereof, without the necessity of showing economic loss and without
      any bond or other security being required.

     

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    IN
      WITNESS WHEREOF,
      Borrower has caused this Note to be signed in its name by its duly authorized
      officer this 1st
      day of
      May, 2008.

     

     

    
      	 	 	 
	 	EMVELCO
              CORP. 
	 
 	 
 	 
 
	 	By:  	 
	 	
              
                

              

              Yossi Attia

              Chief Executive Officer

            
	 	 

    

     

    
      
        
        

      

      
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    EXHIBIT
      A

     

    NOTICE
      OF CONVERSION

    (To
      be
      Executed by the Registered Holder

    in
      order
      to Convert the Notes)

     

    The
      undersigned hereby irrevocably elects to convert $__________ principal amount
      of
      the Note (defined below) into shares of common stock, par value $.0001 per
      share
      (“Common
      Stock”),
      of
      EMVELCO Corp., a Delaware corporation (the “Borrower”)
      according to the conditions of the convertible Notes of the Borrower dated
      as of
      May __, 2008 (the “Notes”),
      as of
      the date written below. If securities 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 and is delivering herewith such certificates. No fee will
      be charged to the Holder for any conversion, except for transfer taxes, if
      any.
      A copy of each Note is attached hereto (or evidence of loss, theft or
      destruction thereof).

     

    The
      Borrower shall electronically transmit the Common Stock issuable pursuant to
      this Notice of Conversion to the account of the undersigned or its nominee
      with
      DTC through its Deposit Withdrawal Agent Commission system (“DWAC
      Transfer”).

     

    Name
      of
      DTC Prime
      Broker:                                                                                                                     

    Account
      Number:                                                                                                                                     

     

    In
      lieu
      of receiving shares of Common Stock issuable pursuant to this Notice of
      Conversion by way of a DWAC Transfer, the undersigned hereby requests that
      the
      Borrower issue a certificate or certificates for the number of shares of Common
      Stock set forth below (which numbers are based on the Holder’s calculation
      attached hereto) in the name(s) specified immediately below or, if additional
      space is necessary, on an attachment hereto:

     

    
      Name:                                                                                                                                         
                          

      Address:                                                                                                                                       
                       

       

    

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable to the undersigned upon conversion of the Notes
      shall
      be made pursuant to registration of the securities under the Securities Act
      of
      1933, as amended (the “Act”),
      or
      pursuant to an exemption from registration under the Act.

     

    Date
      of
      Conversion:___________________________

    Applicable
      Conversion Price:____________________

    Number
      of
      Shares of Common Stock to be Issued Pursuant to

    Conversion
      of the Notes:______________

    Signature:___________________________________

    Name:______________________________________

    Address:____________________________________

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    The
      Borrower shall issue and deliver shares of Common Stock to an overnight courier
      not later than three business days following receipt of the original Note(s)
      to
      be converted, and shall make payments pursuant to the Notes for the number
      of
      business days such issuance and delivery is late.

     

    
      
        
        

      

      
        10Exhibit 10.2 

AMENDED
AND RESTATED

RESTRICTED
STOCK PLAN II

OF

TECHNITROL, INC.

          Pursuant
to the terms and conditions contained in the Technitrol, Inc. Incentive
Compensation Plan, a Restricted Stock Plan II (the “Plan”) was adopted for
employees (the “Employees”) of Technitrol, Inc. and its subsidiaries
(collectively the “Company”) effective the 26th day of September, 1984, and was
subsequently amended and restated, effective as of February 12, 1999. The Plan
was amended and restated in its entirety effective as of January 1, 2001 and
again as of April 30, 2003. The Plan is hereby amended and restated as of
February 15, 2008.

          1.
Purpose

                    (a)
This Plan is intended to provide a method whereby the officers of Technitrol,
Inc. and key employees of the Company who are largely responsible for the
operations of the Company may be offered incentives in addition to those of
current compensation and future pensions to continue in the service of the
Company and all of its stockholders. Such incentives shall be in the form of
shares of the Common Stock of the Company (the “Shares”). The Plan is also
intended to enable the Company to obtain and retain the services of qualified
executive officers and key employees, and to reward and motivate them, by
providing them with the opportunity to become owners of Common Stock of
Technitrol, Inc.

                    (b)
Shares of the Company’s common stock awarded under this Plan shall be
immediately issued to the participating Employees in their own names, with all
attendant rights of a stockholder (including, the right to receive dividends
thereon and to vote such Shares, but excluding the right to physically possess
such Shares for so long as they are restricted, as set forth in this Plan),
subject to the restrictions, limitations, terms and conditions set forth in the
Plan.

          2.
Eligible Employees; Administration

                    (a)
The Employees of the Company eligible to participate in the Plan shall be the
officers of Technitrol, Inc. and the other key employees in the Company’s
corporate office and its operating business segments as determined from time to
time by a Committee (the “Committee”) appointed by the Company’s Board of
Directors (the “Board”). The Committee shall be the body which administers this
Plan. The Committee must consist of at least two members, each of whom is a
“non-employee director” (as defined in Section 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended).

                    (b)
Except as limited by the express provisions of the Plan or by resolutions
adopted by the Board, the Committee shall have sole and complete authority and
discretion (1) to 

select Employees and award Shares, (2) to determine
the form and content of awards of Shares to be issued under the Plan, (3) to
interpret the Plan, (4) to prescribe, amend and rescind rules and regulations
relating to the Plan, and (5) to make all other determinations necessary or
advisable for the administration of the Plan. The Committee shall have and may
exercise such other power and authority as may be delegated to it by the Board
from time to time. A majority of the entire Committee shall constitute a quorum
and the action of a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing or electronically by a majority
of the Committee without a meeting, shall be deemed the action of the
Committee. If there are only two Committee members, they must act unanimously.

                    (c)
In addition to such other rights of indemnification as they may have, the
members of the Committee shall be indemnified by the Company in connection with
any claim, action, suit or proceeding relating to any action taken or failure to
act under or in connection with the Plan or any grant under the Plan to the
full extent provided for under the Company’s governing instruments with respect
to the indemnification of Directors.

          3.
Issuance of Shares; Performance Based Grants; Maximum Shares

                    (a)
Subject to the restrictions, terms, limitations and conditions contained in the
Plan and imposed by the Committee consistent with the Plan, the Committee shall
cause the Company to award and issue such number of Shares to such of the Employees
from time to time as it in its sole discretion determines after consultation
with the management of the Company. Upon such issuance, such Shares shall be
validly issued and fully paid by the Company and shall be nonassessable.
Consistent with the provisions of the Plan, the date of award (for purposes of
determining the time denominated restriction period in Paragraph 4 hereof) will
be the date of the meeting at which the Committee grants the Shares. Beneficial
ownership is deemed to accrue to the Employee on the date the Company instructs
its transfer agent to issue the Shares. Such Shares shall remain in the
physical possession of the Company during any restriction period (as defined in
Paragraph 4 (a) below). Each Employee, if requested by the Company, as a
condition to transfer to him or her such Shares on the transfer books of the
Company (and in order to facilitate return to the Company pursuant to Paragraph
4 hereof), shall, if so requested by the Committee, execute and deliver to the
Company a blank stock power relating to such shares issued to him or her.

                    (b)
Such Shares may be issued at the sole discretion of the Committee from time to
time on a regular or irregular basis, or as a reward for outstanding
achievement or performance, or as an inducement to accept employment with the
Company, or on account of such other criteria as may be established by the
Committee. Notwithstanding the foregoing, all awards of Shares made to the
Chief Executive Officer of Technitrol, Inc. shall, and any awards made to other
Employees may, be based on the attainment of certain criteria to be designated
by the Committee and specifically identified at the time of grant of the Shares
from among the following criteria: cash flow, net operating profit, economic
profit, earnings per share, gross or net revenue growth, annual performance
compared to approved plans, return on equity, assets, capital investment or
sales, net income growth, total shareholder return, expense management, market
share, performance compared to market indices chosen by the Committee,
acquisitions and/or divestitures, integration of acquisitions, consolidation or
integration of product 

- 2 -

divisions/groups/lines, geographical changes in
operations, changes in markets addressed, changes in analysts’ coverage of the
Company, new product introduction, succession planning, organizational
development and/or talent management/retention. For the Chief Executive
Officer, such criteria may also include metrics with respect to the mentoring
of senior executives as part of their leadership development, and developing
strategic plans/alternatives for the Company or parts of it. The Committee may
use some or all of these performance criteria, either singly or together, and
may link them to the performance of Technitrol, Inc. or any subsidiary,
division or individual. The Committee shall have the sole and absolute
authority to determine whether the performance criteria has been satisfied. The
Committee may also require that the Chief Executive Officer of Technitrol, Inc.
remain in the employ of the Company for some time after the attainment of the
performance criteria prior to the removal of the restrictions on ownership as
contained in Section 4(a) below.

                    (c)
Notwithstanding the foregoing, no Employee may be awarded more than 100,000
Shares in any 12-month period nor more than 300,000 Shares over the Employee’s
entire employment with the Company.

          4.
Restrictions; Removal

                    (a)
Except as otherwise set forth in this Plan, all Shares issued pursuant to this
Plan shall be subject to the following restrictions. Such Shares may not be
sold, transferred, assigned, pledged or otherwise alienated, encumbered or
hypothecated until the restriction period as set forth in subparagraphs (b) and
(c) below (the “Restriction Period”) has ended.

                    (b)
Except as otherwise set forth in this Section 4, the Restriction Period related
to the Shares issued to each Employee from time to time shall end upon the
expiration of the third anniversary of the award of such Shares to all
Employees other than the Chief Executive Officer of Technitrol, Inc. or such
other Employees who have been awarded Shares to which performance criteria set
forth in Section 3(b) above apply in which case the Restriction Period shall
end upon attainment, if at all, of the performance criteria chosen by the
Committee plus the fulfillment of the additional employment obligations, if
any, set forth in the last sentence of Section 3(b) above. The Committee may
reduce (but not increase) the number of Shares to take into account additional
factors that the Committee determines relevant to measure performance. Upon the
end of the Restriction Period the Shares theretofore subject to such restrictions
shall be delivered to the Employee free from the restrictions provided herein.
The stock power, if any, relating to such Shares shall be destroyed. 

                    (c)
Notwithstanding subparagraph (b) above, the Committee may with respect to
Employees other than the Chief Executive Officer of Technitrol, Inc., specify
in an award that the Restriction Period related to the Shares issued to such
Employee shall terminate upon the attainment of certain performance goals as
specified in such award. The Committee shall have the sole and absolute
authority to determine whether the Employee has satisfied such performance goal
or other terms and conditions set forth in the award. 

                    (d)
If an Employee dies or becomes totally disabled (as determined by the Company’s
long-term disability insurance carrier at the time of the event) or retires on
or after

- 3 -

his or her normal retirement date (as defined in the
Technitrol, Inc. Retirement Plan) prior to the expiration of three (3) years
from the date Shares were issued to him or her under this Plan, then the
Restriction Period shall end upon the date that death occurs or complete
disability is deemed to have occurred, or that normal retirement is effective,
and the Committee shall cause the Plan to be implemented in accordance with the
provisions of Paragraph 4 and 5 of the Plan. 

                    (e)
If an Employee elects to retire before his/her normal retirement date but on or
after his/her early retirement date (as defined in the Technitrol, Inc.
Retirement Plan) or has employment terminated by the Company other than for
cause (as defined below) prior to the expiration of the Restriction Period,
then subject to the provisions of the following sentence, the Employee shall be
entitled to pro-rata vesting, based on the number of whole months elapsed since
the award of such Shares divided by thirty-six, as to both the award of Shares
provided in this Paragraph 4 and the cash award provided in Paragraph 5.
Ownership of Shares not finally vested in the Employee after early retirement
or termination other than for cause shall revert to the Company and the
Employee shall have no further record, legal, beneficial or equitable interest
in such Shares. 

                    (f)
If an Employee resigns or has employment terminated by the Company for cause
(as defined below) prior to the expiration of the Restriction Period, ownership
of all Shares issued to the Employee still subject to the restrictions provided
herein shall revert to the Company, and Employee shall have no further record,
legal, beneficial or equitable interest in such Shares. 

                    (g)
Nothing herein contained shall in any way interfere with the right of the
Company to terminate the employment of the Employee for any reason whatsoever
or for no reason. 

                    (h)
Notwithstanding the foregoing, in the case of subsections (d) and (e) above,
the Committee shall have the right with respect to termination of the
Restriction Period to adjust the effective award upward (but not in excess of
the original award of Shares) or downward in its sole discretion, taking into
account such factors as it determines to be relevant. 

                    (i)
For purposes of the Plan, “cause” shall mean (A) the continued and willful
failure of the Employee to follow the lawful orders of his/her direct superior,
(B) violation by the Employee of a material published rule or regulation of the
Company or a provision of the Company’s Statement of Principles (in effect from
time to time) or (C) conviction of a crime which renders the Employee unable to
perform his/her duties effectively; provided that in the case of (A) or (B),
the Company shall give the Employee written notice of the action or omission
which the Company believes to constitute cause and the Employee shall have 30
calendar days to cure such action or omission. Determination of “cause” by the
Committee shall be final and binding on all parties.

          5.
Additional Cash Award

                    (a)
If the Employee continues in the employ of the Company through the end of the
Restricted Period or otherwise becomes entitled to be treated as vested under
either

- 4 -

Paragraph 4(d) or 4(e) hereof, then subject to the
limitations and conditions contained in Paragraph 4 (e), and the provisions of
the remainder of this paragraph, the Employee shall also receive a cash award
(the “Cash Award”) equal to the quotient of (i) the product of (A) the
market value of the Company’s Common Stock the subject of such award (as indicated
by the closing price on the stock exchange on which the Company’s shares are
listed in the Wall Street Journal as of the date the Restricted Period
ends or the date of the modified award under Paragraph 4 (e), if earlier),
multiplied by (B) the highest individual Federal income tax rate (including any
surcharge) then in effect, divided by (ii) 1 minus the highest individual
Federal income tax rate (including any surcharge) then in effect. In the event
that the Employee is a taxpayer of the United States, and the opportunity to
make an election under Section 83(b) of the U.S. Internal Revenue Code of 1986
as amended (an “83(b) Election”) is available to the Employee, (irrespective of
whether the law of his state of domicile recognizes such election) then,
whether or not the employee makes the 83(b) Election (see Paragraph 9 below for
how the 83(b) Election is properly made) the amount of the Cash Award shall not
exceed 65% of the market value of the Company’s Common Stock (determined as
above) subject to the award as of the date beneficial ownership accrued to the
Employee. An 83(b) Election has the effect of including the value of the Common
Stock Award as of the date beneficial ownership accrued to the Employee and the
Cash Award in the Employee’s compensation for income tax purposes in the year
of the award, instead of the year during which the Restriction Period ends.
(See also Paragraph 9.) If an 83(b) Election is not available to the Employee,
the amount of the Cash Award shall not exceed 165% of the market value of the
Company’s Common Stock subject to the award as of the date beneficial ownership
accrued to the Employee.

                    (b)
For purposes of this paragraph, the Committee shall have the sole discretion of
determining whether an Employee is a taxpayer of the United States, and whether
an 83(b) election is available to the Employee, based on the facts and
circumstances and the Committee’s interpretation of the Internal Revenue Code
and regulations thereunder.

                    (c)
Notwithstanding the foregoing, with respect to the Chief Executive Officer of
Technitrol, Inc., the Cash Award shall be the full amount of the tax on the
award (so that the limitation in Section 5(a) shall not apply) plus the tax on
the Cash Award, all of which shall be calculated at the rate of 41.5%. 

                    (d)
The Cash Award less applicable withholding taxes shall be paid to the Employee
recipient not later than (A) in cases where no 83(b) Election is made,
seventy-five (75) days after (i) the last day of the calendar year in which the
date the Restriction Period ends or (ii) the date on which the modified award
under Paragraph 4 is approved by the Committee (in the case of Paragraph 4(e))
or (B) in the case where an 83(b) Election is made within the time period
required by Section 83(b) and the rules and regulations hereunder. 

          6.
Other Restrictions

                    Consistent
with the purposes of the Plan, the Committee may impose other restrictions on
Shares issued hereunder, including, without limitation, restrictions under the
Securities Act of 1933, under the requirements of any stock exchange upon which
such Shares are then listed, and under any blue sky or securities laws
applicable to such Shares.

- 5 -

          7.
Change of Control

                    (a)
Notwithstanding anything to the contrary in the Plan, in the event there is a
“change of control” of Technitrol, Inc., then, in that event, notwithstanding
the provisions of Paragraph 4 hereof, the Restriction Period for any Shares
granted under the Plan shall terminate on the date of such change of control
and all Shares shall be vested 100% in all Employees and distributed to them
immediately, free of any and all restrictions, accompanied by the Cash Awards
in the maximum amounts provided in Paragraph 5 hereof. 

                    (b)
For purposes of the Plan, “change of control” means the occurrence of either of
the following events: (1) any “Person” or “Persons” as defined in Sections
13(b) and 14(b) of Securities Exchange Act of 1934, as amended (the “Act”), is
or becomes the “Beneficial Owner” (as defined in Rule 13(d)-3 of the Act),
directly or indirectly, of securities of the Company representing more than
twenty-five percent (25%) of the combined voting power of the Company’s then
outstanding securities or (2) more than fifty percent (50%) of the assets of
the Company, which are used to generate more than fifty percent of the earnings
of the Company in any one of the last three fiscal years, are disposed of, directly
or indirectly, by the Company (including stock or assets of a subsidiary(ies))
in a sale, exchange, merger, reorganization or similar transaction.

          8.
Assignment

                    Awards
may not be sold, pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will or by the laws of descent and distribution. 

          9.
83 (b) Election

                    If
an employee who is a taxpayer of the United States makes an 83(b) Election in
the year of the award of Shares, the Company, then, agrees to pay the Cash
Award (as described in Paragraph 5 hereof) for all grants in the year of the
award pursuant to the provision of Paragraph 5 above. This election must be
made within the time and manner prescribed by the Internal Revenue Code as then
in effect. The Employee must sign and date an 83(b) Election Notification Form,
and provide a copy to the Corporate Secretary of Technitrol, Inc. The Committee
may, in its discretion, preclude any employee from making such 83(b) Election.
In this case, the limitation on the cash award shall be calculated as if an
83(b) Election is not available to the employee, as stated in 5(a) above. 

          10.    
Effect of Changes in Common Stock

                    (a)
Recapitalizations; Stock Splits, Etc. The number and kind of shares
reserved for issuance under the Plan, and the number and kind of shares subject
to outstanding awards shall be proportionately adjusted for any increase,
decrease, change or exchange of Shares for a different number or kind of shares
or other securities of the Company which results from a merger, consolidation,
recapitalization, reorganization, reclassification, stock dividend, split-up,
combination of shares, or similar event in which the number or kind of shares
is 

- 6 -

changed without the receipt or payment of
consideration by the Company.

                    (b)
Conditions and Restrictions on New, Additional, or Different Shares or
Securities. If, by reason of any adjustment made pursuant to this Section, an
Employee becomes entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to the award before the adjustment was made.

                    (c)
Other Issuances. Except as expressly provided in this Section, the
issuance by the Company or an affiliate of shares of stock of any class, or of
securities convertible into Shares or stock of another class, for cash or
property or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect, and no
adjustment shall be made with respect to, the number or class of Shares then
subject to awards or reserved for issuance under the Plan.

          11.    
Amendment; Termination

                    The
Board of Directors of Technitrol, Inc. may from time to time amend the terms of
the Plan and, with respect to any Shares at the time not issued pursuant to the
Plan, suspend or terminate the Plan; provided, however, the Committee may seek
shareholder approval of an amendment if it is determined to be required by or
advisable under regulations of the Securities and Exchange Commission, the
rules of any stock exchange on which the Company’s stock is listed or other
applicable law or regulation.

                    No
amendment, suspension or termination of the Plan shall, without the consent of
any affected holders of Shares
issued pursuant to the Plan, alter or impair any rights or obligations under
any Shares theretofore granted under the Plan.

          12.    
Governing Law

          This
Plan shall be governed by the law of the Commonwealth of Pennsylvania, except
to the extent that federal law is deemed to apply.

- 7 -

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