EXHIBIT 10.2
 
PATENT SECURITY AGREEMENT

This PATENT SECURITY AGREEMENT (this “Agreement”) is made on this 13th day of
July, 2012 between Dais Analytic Corporation ("Debtor"), and holder of Secured
Convertible Promissory Note dated July 13, 2012   ("Secured Party").

1. SECURITY INTEREST.  Debtor hereby grants to Secured Party a security interest
in (i) all rights, title, and interest in all patents, patent applications and
like protections now owned or hereafter acquired by Debtor and listed on
Schedule I attached hereto (which Schedule may be updated by the Secured Party
from time to time), including, without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same and the proceeds therefrom and (ii) all rents, royalties, license fees and
“accounts” (as defined in the Uniform Commercial Code of the State of Illinois)
with respect to all of the foregoing items in clause (i)  (all of the foregoing,
collectively, the “Collateral”).  The security interest granted hereunder shall
secure the payment and performance of Debtor's obligations under the secured
convertible promissory note issued on or about the date hereof by the Debtor to
the Secured Party in the principal amount of Two Million Dollars ($2,000,000)
(the “Note”), and the full, prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all other
liabilities and obligations of Debtor to the Secured Party due or to become due
or hereafter arising under this Agreement or in connection with the Note (the
“Obligations”).

2. COVENANTS.  Debtor hereby warrants and covenants that during the course of
this Agreement: (a)  The Debtor's place of business is 11552 Prosperous Drive,
Odessa, Florida, 33556 and Debtor will immediately notify Secured Party in
writing of any change in or discontinuance of Debtor's place of business;
(b) Debtor will not sell, dispose, or otherwise transfer all or any portion of
the Collateral or any interest therein other than license grants made by Debtor
in the ordinary course of business, consistent with past practice and on an
arm’s-length basis, in each case, without the prior written consent of Secured
Party; (c) Debtor shall file this Agreement with the U.S. Patent and Trademark
Office no later than ten (10) days after issue of the Note; (d) Debtor shall,
from time to time, execute and file such other documents and instruments, and
take such further actions as the Secured Party may reasonably request to perfect
or continue the perfection of Secured Party’s interest in the Collateral, and
Debtor authorizes Secured Party to file Uniform Commercial Code financing
statements with respect to the Collateral and the security interest granted
herein; (e) to Debtor’s knowledge, this Agreement creates in favor of Secured
Party a valid first priority security interest in the Collateral in the United
States securing the payment and performance of the obligations evidenced by the
Note; and (f) the Debtor shall comply with the covenants set forth on Annex A
hereto.

3. DEFAULT.  The following are each an event of default under this Agreement
(each, an “Event of Default”): (a) any material misrepresentation relating to
this Agreement or the Note on the part of the Debtor, (b) any material
noncompliance with or nonperformance of the Debtor's obligations under the
Noteor this Agreement, (c) if Debtor makes (i) an assignment for the benefit of
creditors, or is subject to (ii) an attachment or receivership of assets that is
not dissolved, or (iii) is subject to the institution of Bankruptcy proceedings,
whether voluntary or involuntary, and (d) any Event of Default as defined in the
Note.  Should an Event of Default occur, Secured Party shall provide Debtor with
written notice detailing the Event of Default. Debtor shall have fifteen (15)
days from receipt of said notice to cure such default.  Should Debtor fail to
cure within the prescribed time period, Secured Party may at any time thereafter
declare the Note in default and all obligations secured hereby immediately due
and payable and shall have the remedies of a secured party under the Uniform
Commercial Code of  the State of Illinois.  Secured Party may require the Debtor
to make the collateral provided hereunder available to the Secured Party at a
place which is mutually convenient. No waiver by Secured Party of any default
shall operate as a waiver of any other default or of the same default on a
future occasion. This Agreement shall inure to the benefit of and bind the
heirs, executors, administrators, successors, and assigns of the parties. This
Agreement shall have the effect of an instrument under seal.
 
 
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3.  TERM.  This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the Obligations have
been paid in full.  Upon satisfaction of the Obligations, the Secured Party
shall execute and deliver such releases or other evidences of satisfaction and
release of this Agreement as may be reasonably requested by the Debtor.

4. MISCELLANEOUS.  Notwithstanding Section 3 above, this Agreement shall remain
in full force and effect and continue to be effective should any petition be
filed by or against the Debtor for liquidation or reorganization, should the
Debtor become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of the Debtor's assets, and shall continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of the
Debtor’s obligations to the Secured Party under the Note, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of such obligations, whether as
a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the obligations
of the Debtor to the Secured Party under the Note shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.  This Agreement shall be governed by the laws of  the State of
Illinois , without regard to its conflict of laws provisions.  Any suit for the
enforcement of the obligations of Debtor to the Secured Party, arising out of or
in any manner relating to this Agreement may be brought in the courts of the
City of Chicago, State of Illinois or of the United States of America sitting in
Chicago, Illinois and the parties hereto consents to the non-exclusive
jurisdiction of such courts.  The Debtor hereby waives any objection that it may
now or hereafter have to the venue of any such suit or any such court or that
such suit was brought in an inconvenient court.  The Debtor shall not be
entitled in any such action or proceeding to assert any defense given or allowed
under the laws of any state other than the State of Illinois unless such defense
is also given or allowed by the laws of the State of Illinois.
 

[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of
the date first written above.
 
Debtor:
     
DAIS ANALYTIC CORPORATION
       
By:
/s/ Timothy N. Tangredi     Timothy N. Tangredi     President and Chief
Executive Officer              
Secured Party:
         
/s/ M. Gostomski
   
M. Gostomski
 

 
[Patent Security Agreement
dated July 13, 2012]
 
 
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Schedule i
to Patent Security Agreement
 

  1. Patent No. 6,841,601– Cross-linked polymer electrolyte membranes for heat
and moisture exchange devices. This patent was issued on January 11, 2005.      
  
2.
Patent No. 6,413,298 – Water and ion-conducting membranes and uses thereof. This
patent was issued on July 2, 2002.

 

 
3.
Patent No. 6,383,391 – Water and ion-conducting membranes and uses thereof. This
patent was issued on May 7, 2002.

 

 
4.
Patent No. 6,110,616 – Ion-conducting membrane for fuel cell. This patent was
issued on August 29, 2000.

 

 
5.
Patent No. 5,679,482 – Fuel Cell incorporating novel ion-conducting
membrane. This patent was issued on October 21, 1997.

 

 
6.
Patent No. 5,468,574 – Fuel Cell incorporating novel ion-conducting membrane.
This patent was issued on October 21, 1995.

 

 
7.
Patent No. 7,179,860 – Cross-linked polymer electrolyte membranes for heat, ion
and moisture exchange devices. This patent was issued on February 20, 2007.
 
 
8.
U.S. Application No: 11/879,482– Nanoparticle Ultra Capacitor
 
 
9.
Patent Application  U.S. -12/442,582– Enhanced HVAC System and Method

 

 
10.
Patent Application  China-  200880009211.4 - Multiphase Selective Transport
Through a Membrane

 

 
11.
Patent Application  U.S. - #12/523,470 - Multiphase Selective Transport Through
a Membrane
 
 
12.
Patent Application  Europe – 08728059.0- Multiphase Selective Transport Through
a Membrane
 
 
13.
Patent Application  Hong Kong – 10106074.4 - Multiphase Selective Transport
Through a Membrane
 
 
14.
Patent Application  China–  200880023707.7 - Molecule Sulphonation Process*
 
 
15.
Patent Application  U.S. – #12/599,200 - Molecule Sulphonation Process*

 

 
16.
Patent Application U.S.– #12/664,762 - Stable and Compatible Polymer Blends*

 
_________________________________________
* Patent applications jointly owned with Aegis Biosciences, LLC.
 
[Patent Security Agreement
dated July 13, 2012]
 
 
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Schedule i
to Patent Security Agreement, Continued
 

 
17.
Patent Application Europe- 08771840.9- Stable and Compatible Polymer Blends*
 
 
18.
Patent Application Hong Kong- Stable and Compatible Polymer Blends
[unpublished]*
 
 
19.
Patent Application China- 200880103522.7 - Stable and Compatible Polymer Blends*
 
 
20.
Patent  Application  U.S.- # 11/988,818– Novel Coblock Polymers and Methods for
Making Same
 
 
21.
Patent Application –Energy Storage Devises Including a Multilayer Electrolyte
[unpublished]
 
 
22.
Anionic Exchange Electrolyte Polymer Membranes [unpublished]
 
 
23.
PROVISIONAL Patent  Application- Air Conditioning and Refrigeration Based on
Molecular transport of Water [unpublished]

_________________________________________
* Patent applications jointly owned with Aegis Biosciences, LLC.
 
[Patent Security Agreement
dated July 13, 2012]
 
 
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Annex A – Additional Covenants

1.  
The Debtor shall give the Secured Party prompt written notice of any non
provisional published patent application filed with the United States Patent and
Trademark Office or any similar office or agency, and, upon the request of the
Secured Party, the Debtor shall execute and deliver a supplement hereto (in form
and substance satisfactory to the Secured Party) to evidence the Secured Party's
security interest in and lien on such patent of the Debtor relating thereto or
represented thereby.

 
2.  
The Debtor shall take all actions reasonably necessary to prosecute to allowance
applications for patents and maintain all patents (now or hereafter existing)

 
3.  
The Debtor shall take all steps reasonably necessary, in its good faith business
judgment, to seek to recover any and all damages for infringement,
misappropriation or dilution of the Collateral, unless such infringement,
misappropriation or dilution could not reasonably be expected to have a material
adverse effect on the Debtor or its ability to satisfy the Obligations or unless
the Debtor determines, in its good faith business judgment, that seeking
recovery for such infringement, misappropriation or dilution is uneconomical or
otherwise not in the best interests of the Debtor.  Upon the occurrence and
during the continuance of any event of default under the Note (an “Event of
Default”), the Secured Party shall have the right to exercise all rights and
remedies available at law or in equity.  From and after the occurrence and
during the continuance of an Event of Default, the Secured Party shall have the
right, but shall not be obligated, to bring suit or take any other action to
enforce the Collateral and, if the Secured Party shall commence any such suit or
take any such action, Debtor shall, at the request of the Secured Party, do any
and all reasonable lawful acts and execute any and all proper documents
reasonably required by the Secured Party in aid of such enforcement.

4.  
The Debtor shall not create, cause to be crated or permit to exist any lien,
security interest or encumbrance on any portion of the Collateral in favor of
any person or entity other than the Secured Party.

 
[Patent Security Agreement
dated July 13, 2012]
 
 
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