SECURED CONVERTIBLE PROMISSORY NOTE

Exhibit 10.2

THE SECURITIES REPRESENTED BY THIS NOTE AND ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS UNDER THE 1933 ACT, AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES AND THE SECURITIES ISSUED UPON EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED, NOR MAY THIS NOTE BE EXERCISED, EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT.

SECURED CONVERTIBLE PROMISSORY NOTE

          FOR VALUE RECEIVED, PepperBall Technologies, Inc., a Colorado corporation (the “ Company ”), hereby promises to pay to the order of [_________________________________] (the “ Holder ”), in lawful money of the United States at the address of the Holder set forth herein, the principal amount of $ [____________] (“ Principal Amount ”), together with Interest (as defined in Section 2). This Promissory Note (this “ Note ”) has been executed by the Company on the date set forth above (the “ Effective Date ”) pursuant to the Securities Purchase Agreement entered into on the Effective Date by and between the Company and the Holder (the “ Purchase Agreement ”). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Purchase Agreement.

          1. Principal Amount . The Company hereby promises to pay to the order of the Holder, in lawful money of the United States at the address of the Holder set forth below, the Principal Amount, together with Interest, which shall accrue from the date hereof (less any amounts paid under Section 2 below) until December 31, 2010 the date of payment in full of the aggregate Principal Amount together with any unpaid Interest, or the conversion of this Note pursuant to the terms hereof. The Principal Amount shall be paid by the Company on the Maturity Date (as defined in Section 3), unless earlier paid or converted.

          2. Interest . The outstanding Principal Amount shall bear simple interest (“ Interest ”) at the rate of 10% per annum (calculated on the basis of the actual number of days elapsed in a 360-day year) payable on the Maturity Date (unless earlier paid or converted). Interest shall accrue until December 31, 2009 to be paid at Maturity Date. Commencing January 1, 2010, Interest shall be paid quarterly in arrears beginning with the quarter ended March 31, 2010, with such Interest to be paid by the tenth day of the month following quarter end.

          3. Maturity . Unless this Note is earlier accelerated, prepaid or converted as set forth below, the outstanding Principal Amount and all unpaid Interest thereon shall be paid in full on December 31, 2010 (the “ Maturity Date ”).

          4. Security Interest . As security for all present and future indebtedness of the Company to Holder, the Holder grants to Holder a security interest in all of Company’s personal property located in California, now owned or subsequently acquired, including without limitation all of the following: all accounts, cash, patents, copyrights, trademarks, goodwill, general intangibles, deposit accounts, inventory, fixtures and equipment, as such terms are defined in Division 9 of the Uniform Commercial Code in effect on the date hereof, but excluding any equipment subject to existing equipment leases and such other equipment or motor vehicles acquired hereafter under such facilities (collectively, the “Collateral”). Company authorizes Holder to execute such documents and take such actions a Holder reasonably deems appropriate from time to time to perfect or continue the security interest granted hereunder. Company shall take such steps as Holder may reasonable request to perfect the security interest granted hereunder. In all cases, such security interest shall be subject to the Subordination Agreement between the Company, Agility Capital, LLC and Holder, executed as of the date of this Note.

          5. Application of Payments .

          5.1 Except as otherwise expressly provided herein, each payment under this Note shall be applied (i) first to the repayment of any sums incurred by the Holder for the payment of any expenses in enforcing the terms of this Note, (ii) then to the payment of Interest, and (iii) then to the reduction of the Principal Amount.

          5.2 Upon payment in full of the Principal Amount and applicable accrued and unpaid Interest thereon or the conversion of such amount pursuant to Section 6, this Note shall be marked “Paid in Full” and returned to the Company.

          6. Prepayment . This Note (including the Principal Amount and all accrued Interest thereon) may be prepaid in full or in part at any time with thirty days Notice by the Company to the Holder.

          7. Subordination. The Holder hereby acknowledges and agrees that this Note is subject to and limited by the terms of a Subordination Agreement with Agility Capital, LLC. To the extent that the Agility Capital, LLC obligation is paid off, Holder agrees to execute a new subordination agreement at the Company’s reasonable request, to allow the Company to secure an accounts receivable and / or inventory line of credit under reasonable commercial terms, to support its operations.

          8. Note Conversion .

          8.1 Conversion . At the sole discretion of the Holder, the outstanding Principal Amount and any accrued but unpaid Interest thereon shall be convertible into shares of the Company’s Common Stock (or at the sole option of the Holder, shares of non-voting Series C Preferred Stock, no par value per share (“ Preferred Stock ”), at a conversion price per share of Common Stock equal to $0.10 (the “ Conversion Price ”) on the date of such conversion (the “ Conversion Date ”). Conversion requests would be made in minimum increments of the greater of $50,000 or the remaining balance of the Holder’s Note.

          8.2 Conversion Procedures . As promptly as practicable after the Conversion Date, the Company, at its expense, will issue and deliver to the Holder a certificate(s) for the number of full shares of Common Stock, or if applicable Series C Preferred Stock issuable upon such conversion. Upon the conversion of this Note, the Holder shall surrender this Note, duly endorsed, at the principal office of the Company and the Company shall be forever released from all its obligations and liabilities under this Note. No fractional shares of t