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Form of Stockholder Note

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Exhibit 10.2


THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY APPLICABLE STATE OR FEDERAL SECURITIES LAW. NO OFFER, SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS PROMISSORY NOTE MAY BE MADE UNLESS THIS PROMISSORY NOTE IS REGISTERED UNDER THE ACT AND ANY OTHER APPLICABLE SECURITIES LAW, OR AN EXEMPTION FROM ANY SUCH REGISTRATION REQUIREMENTS IS APPLICABLE TO SUCH TRANSACTION.


THIS PROMISSORY NOTE IS BEING EXECUTED AND DELIVERED IN CONNECTION WITH, AND IS SUBJECT TO THE TERMS AND CONDITIONS OF, A STOCK PURCHASE AGREEMENT DATED JANUARY 2, 2003 TO WHICH A SUBSIDIARY OF THE COMPANY AND THE PAYEE ARE PARTIES (THE "PURCHASE AGREEMENT"). EACH HOLDER OF THIS PROMISSORY NOTE, BY SUCH HOLDER'S ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THIS PROMISSORY NOTE.


FORM OF PROMISSORY NOTE


Principal Amount: $________________ Date: January 2, 2003


FOR VALUE RECEIVED, K-TRON INTERNATIONAL, INC., a New Jersey corporation (the "Company") promises to pay to ______________________ ("Payee"), at ______________________ or such other place as may be designated in writing by Payee at least seven days prior to any payment, the principal sum of ____________________ ($_________) (the "Principal Amount") in accordance with the terms of this Note. Unless the context otherwise requires, the term "Noteholder" means the person named as Payee above or any other person who shall at the time be the permitted assignee of this Note.


SECTION 1. Principal and Interest Payments. Payments of the Principal Amount shall be made as follows: (a) one installment of __________________ Dollars ($_________) shall be made on January 2, 2005, (b) one installment of __________________ Dollars ($_________) shall be made on January 2, 2006, and (c) one installment of __________________ Dollars ($_________) shall be made on January 2, 2007. Interest shall accrue on the Principal Amount outstanding from time to time at a simple rate per annum equal to six percent (6%) and all such accrued interest shall be payable quarterly beginning April 2, 2003 and the second day of July, October, January and April thereafter and such other date on which the Principal Amount shall be due and payable hereunder. All payments under this Note shall be paid by check or wire transfer of immediately available funds in lawful money of the United States of America on the date when due to an account designated in writing by the Noteholder (as defined herein).


SECTION 2. Voluntary Prepayment. The Company may prepay this Note in full or in part without premium or penalty. Any such prepayments shall first be applied against accrued interest and thereafter against any unpaid Principal Amount.
SECTION 3. Representations and Warranties. The Company represents and warrants to Payee as follows:


(a) Corporate Existence. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey.


(b) Corporate Power and Authorization. The Company has the corporate power to execute, deliver and perform this Note. The execution, delivery and performance hereof by the Company have been duly authorized by all necessary corporate action. This Note is a legal, valid and binding obligation of the Company and is enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and by general principles of equity (whether considered in an action at law or in equity).


(c) Validity of Contemplated Transactions; Etc. The execution, delivery and performance of this Note by the Company will not contravene or violate (a) any law, rule or regulation to which the Company is subject, (b) any judgment, order, writ, injunction or decree of any court, arbitrator or governmental or regulatory official, body
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