ex4-7.htm


    


    
      

    

    


    THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT

    OF
1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE

    DISPOSED
OF UNLESS REGISTERED UNDER THAT ACT

    OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

    


    DAIS
ANALYTIC CORPORATION

    


    SECURED
CONVERTIBLE PROMISSORY NOTE

    
    

     

    
      	$ 	 	Dated:                               
       
	(Original Principal
      Amount) 	 	("Issuance
      Date") 


    

     

    


     

    


    SUBJECT
to receipt from Payee of the principal amount described below on or before
_________     ,
200_, Dais Analytic Corporation, [a New York corporation] (the “Company”), hereby
promises to pay to _________________________________ (the “Payee”), or its
registered assigns, at _____________________________________ the principal
amount of _________________________ ($_________) together with interest thereon
calculated in accordance with the provisions of this Secured Convertible
Promissory Note (as amended, modified and supplemented from time to time, this
“Convertible
Note” and together with any other Convertible Notes issued in the
Convertible Note Issuance (as defined below) or upon transfer or exchange, the
“Convertible
Notes”).

    


    Certain
capitalized terms are defined in Section 10
hereof.

    


    1.           Payment.

    


    (i)           
Payment of
Interest.  Simple interest shall accrue on the unpaid principal
amount of this Convertible Note at a rate equal to nine percent (9%) per annum
(the “Interest
Rate”) commencing on the first day following receipt by Company of the
principal amount and shall be payable at the Maturity Date in cash. Interest
shall be computed on the basis of the actual number of days elapsed and a
365-day year.

    


    (ii)           
Payment of Convertible
Note.  The Company may at any time prior to the Maturity Date
repay in full the outstanding principal amount of the Convertible Note plus any
accrued and unpaid interest in cash to the Payee.

    


    2.           Maturity
Date.  The entire principal amount of this Convertible Note and
all accrued but unpaid interest thereon shall be due and payable in full in cash
in immediately available funds on the twelve (12) month anniversary of the
Issuance Date (such date, the “Maturity
Date”).  On the Maturity Date, the Payee may elect to be paid
in cash or in shares of the Company’s Common Stock (as defined in section
4(ii)).

    


    3.           Closing(s):  This
Convertible Note is issued as one of two or more convertible promissory notes to
be issued by the Company as part of a financing of up to $3,000,000 in the
aggregate (the “Bridge
Financing”) which may consist of one or more closing(s).
The first such closing shall occur prior to November 22, 2007 and the total
gross dollar amount of all investments made as a result of the first closing
shall equal or exceed One Million Dollars ($1,000,000). Additional closings on
the Bridge Financing may be made by Company in Two Hundred Fifty Thousand Dollar
($250,000) increments with the last such closing to occur on or before December
21, 2007. The dates for said closings may be extended for up to thirty (30) days
by the mutual written consent of Company and its placement agent. All payees of
any secured convertible notes issued as a part of the Bridge Financing, shall be
the same level of priority.

     

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 1


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    4.           Conversion.

    


    (i)            Notwithstanding
the above, the Payee may, at any time prior to the Maturity Date, convert the
principal amount of this Convertible Note plus any accrued and unpaid interest
thereon into equity and equity instruments in accordance with the following
provisions (the “Equity”).

    


    (ii)           Upon
any conversion of this Convertible Note,  the number of shares of
Company’s $.01 par value common stock (“Common Stock”) that
shall be issuable to Payee shall be derived by dividing (x) the principal amount
plus any accrued and unpaid interest due and owing on this Convertible Note as
of the date of Conversion, by (y) twenty cents ($.20) (the “Conversion Price”).
No fractional shares shall be issued upon conversion.

    


    (iii)           In
addition, simultaneously with the initial conversion hereunder, a warrant shall
be issuable to the Payee in the form attached hereto as Exhibit A (“Warrant”).  Under
the terms and conditions of the Warrant, Payee may purchase up to a number of
shares of Common Stock equal to the aggregate number of shares of Common Stock
issuable to the Payee under section 4(ii) above assuming the full conversion of
principal and interest under this Note, subject to the exercise limitations set
forth therein.

    


    (iv)           Payee
agrees that all stock certificates representing the Common Stock shall bear the
following legend (or substantially equivalent language):

    


    "THIS NOTE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE
REASONABLY SATISFACTORY TO THE COMPANY THAT THIS NOTE AND THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION HEREOF HAVE MAY BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION
UNDER THE ACT AND SUCH STATE SECURITIES LAWS."

     

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 2


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    


    The
Company agrees to reissue certificates representing any of the Conversion
Shares, without the legend set forth above if at such time, prior to making any
transfer of any such securities, the Payee shall give written notice to the
Company describing the manner and terms of such transfer.  Such
proposed transfer will not be effected until: (a) either (i) the Company has
received an opinion of counsel reasonably satisfactory to the Company, to the
effect that the registration of such securities under the Securities Act is not
required in connection with such proposed transfer, (ii) a registration
statement under the Securities Act covering such proposed disposition has been
filed by the Company with the Securities and Exchange Commission and has become
effective under the Securities Act, (iii) the Company has received other
evidence reasonably satisfactory to the Company that such registration and
qualification under the Securities Act and state securities laws are not
required, or (iv) the Holder provides the Company with reasonable assurances
that such security can be sold pursuant to Rule 144 under the Securities Act;
and (b) either (i) the Company has received an opinion of counsel reasonably
satisfactory to the Company, to the effect that registration or qualification
under the securities or "blue sky" laws of any state is not required in
connection with such proposed disposition, or (ii) compliance with applicable
state securities or "blue sky" laws has been effected or a valid exemption
exists with respect thereto.  The Company will respond to any such
notice from a holder within five (5) Business Days.  In the case of
any proposed transfer under this Section 6, the Company will use reasonable
efforts to comply with any such applicable state securities or "blue sky" laws,
but shall in no event be required, (x) to qualify to do business in any state
where it is not then qualified, (y) to take any action that would subject it to
tax or to the general service of process in any state where it is not then
subject, or (z) to comply with state securities or “blue sky” laws of any state
for which registration by coordination is unavailable to the
Company.  The restrictions on transfer contained in this Section 4(iv)
shall be in addition to, and not by way of limitation of, any other restrictions
on transfer contained in any other section of this Note.  Whenever a
certificate representing the Conversion Shares is required to be issued to a the
Payee without a legend, in lieu of delivering physical certificates representing
the Conversion Shares, the Company shall cause its transfer agent to
electronically transmit the Conversion Shares to the Holder by crediting the
account of the Holder's Prime Broker with DTC through its DWAC system so long as
the Company’s transfer agent is participating in the DWAC system.

    


    (v)           Except
as otherwise expressly provided herein, the conversion of this Convertible Note
shall be deemed to have been effected as of the close of business on the date on
which the Payee gives notice of the conversion to the Company.  At
such time as such conversion has been effected, the rights of the Payee of this
Convertible Note as the Payee of this Convertible Note shall cease.

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 3


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

           


      (vi)           As
soon as possible after a conversion has been effected (but in any event within
Five (5) Business Days (the “Delivery Date”) of
all legal requirements for the issuance of said stock having been met), the
Company shall deliver to the converting holder a certificate or certificates
representing the number of shares Company common stock issuable by reason of
such conversion in the name of the holder.


    

    (vii)           The
Company understands that a delay in the delivery of the shares of Common Stock
upon conversion of this Note beyond the Delivery Date could result in economic
loss to the Payee.  If the Company fails to deliver to the Payee such
shares via DWAC or a certificate or certificates pursuant to this Section
hereunder by the date that is Five (5) Business Days following the Delivery
Date, the Company shall pay to such Payee, in cash, an amount per Business Day
for each Business Day until such shares are delivered via DWAC or certificates
are delivered, together with interest on such amount at a rate of 5% per annum,
accruing until such amount and any accrued interest thereon is paid in full,
equal to 1% of the aggregate principal amount of the Notes requested to be
converted for each business day thereafter (which amount shall be paid as
liquidated damages and not as a penalty).  Nothing herein shall limit
a Payee's right to pursue actual damages for the Company's failure to deliver
certificates representing shares of Common Stock upon conversion within the
period specified herein and such Payee shall have the right to pursue all
remedies available to it at law or in equity (including, without limitation, a
decree of specific performance and/or injunctive relief).

     

    (viii)           In
addition to any other rights available to the Payee, if the Company fails to
cause its transfer agent to transmit to the Payee a certificate or certificates
representing the shares of Common Stock issuable upon conversion of this Note on
or before the date that is Five (5) Business Days following the Delivery Date,
and if after such date the Payee is required by its broker to purchase (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Payee of the shares of Common Stock issuable upon
conversion of this Note which the Payee anticipated receiving upon such exercise
(a “Buy-In”),
then the Company shall (1) pay in cash to the Payee the amount by which (x) the
Payee’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of shares of Common Stock issuable upon conversion of
this Note that the Company was required to deliver to the Payee in connection
with the conversion at issue times (B) the price at which the sell order giving
rise to such purchase obligation was executed, and (2) at the option of the
Payee, either reinstate the portion of the Note and equivalent number of shares
of Common Stock for which such conversion was not honored or deliver to the
Payee the number of shares of Common Stock that would have been issued had the
Company timely complied with its conversion and delivery obligations
hereunder.  For example, if the Payee purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Payee $1,000. The
Payee shall provide the Company written notice indicating the amounts payable to
the Payee in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably
requested by the Company.  Nothing herein shall limit a Payee’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon conversion of this
Convertible Note as required pursuant to the terms hereof.

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 4


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    (ix)           The
issuance of certificates for shares of Common Stock upon conversion of this
Convertible Note shall be made without charge to the holder hereof for any
issuance tax in respect thereof or other cost incurred by the Company in
connection with such conversion and the related issuance of shares of Common
Stock.  Upon conversion of this Convertible Note, the Company shall
take all such actions as are necessary in order to insure that the Common Stock
issuable with respect to such conversion shall be validly issued, fully paid and
nonassessable.

    


    (x)          
 The Company shall not close its books against the transfer Common Stock
issued or issuable upon conversion of this Convertible Note in any manner which
interferes with the timely conversion of this Convertible Note.

    


    (xi)           The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of issuance upon
conversion hereunder, such number of shares of Common Stock issuable upon
conversion.  All shares of such capital stock which are so issuable
shall, when issued, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges.  The Company shall take all
reasonable actions necessary to assure that all such Common Stock may be so
issued without violation of any applicable law or governmental
regulation.


      


      (xii)           Payee
acknowledges and agrees that the Securities and Exchange Commission takes the
position that coverage of short sales of shares of the Common Stock “against the
box” prior to the effective date of its registration statement is a violation of
Section 5 of the Securities Act, as set forth in Item 65, Section 5.
Accordingly, Payee agrees not to use any of the shares underlying the Promissory
Note or the Warrant to cover any short sales made prior to the effective date of
any registration statement.

       

    

         
5.           Price
Protection.

     

    (i)             
Adjustments for
Issuance of Additional Shares of Common Stock.

    


        
(A)           In the
event the Company, shall, at any time, from time to time, issue or sell any
additional shares of common stock (other than pursuant to Common Stock
Equivalents (hereafter defined) granted or issued prior to the issuance date of
this Note) (“Additional Shares of Common
Stock”), at a price per share less than the Conversion Price then in
effect or without consideration, then the Conversion Price upon each such
issuance shall be adjusted to that price (rounded to the nearest cent)
determined by multiplying each of the Conversion Price then in effect by a
fraction:

     

                         
(i)           the
numerator of which shall be equal to the sum of (x) the number of shares of
Common Stock outstanding immediately prior to the issuance of such Additional
Shares of Common Stock plus (y) the number
of shares of Common Stock (rounded to the nearest whole share) which the
aggregate consideration for the total number of such Additional Shares of Common
Stock so issued would purchase at a price per share equal to the Conversion
Price then in effect, and

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 5


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

         
(ii)           the
denominator of which shall be equal to the number of shares of Common Stock
outstanding immediately after the issuance of such Additional Shares of Common
Stock.

     

     

         
(B)           The
provisions of paragraph (A) of Section 5(i) shall not apply to any issuance of
Additional Shares of Common Stock for which an adjustment is provided under
Section 5(ii).  No adjustment of the number of shares of Common Stock
for which this Note shall be convertible shall be made under paragraph (i) of
Section 5(i) upon the issuance of any Additional Shares of Common Stock which
are issued pursuant to the exercise of any Common Stock Equivalents, if any such
adjustment shall previously have been made upon the issuance of such Common
Stock Equivalents pursuant to Section 5(ii).


                      

        (ii)           Issuance of Common Stock
Equivalents. The provisions of this Section 5(ii) shall apply if (a) the
Company, at any time after the issuance date of this Note, shall issue any
securities convertible into or exchangeable for, directly or indirectly, Common
Stock ("Convertible
Securities"), other than the Convertible Notes, or (b) any rights or
warrants or options to purchase any such Common Stock or Convertible Securities
(collectively, the "Common Stock
Equivalents") shall be issued or sold.  If the price per share
for which Additional Shares of Common Stock may be issuable pursuant to any such
Common Stock Equivalent shall be less than the applicable Conversion Price then
in effect, or if, after any such issuance of Common Stock Equivalents, the price
per share for which Additional Shares of Common Stock may be issuable thereafter
is amended or adjusted, and such price as so amended shall be less than the
applicable Conversion Price in effect at the time of such amendment or
adjustment, then the applicable Conversion Price upon each such issuance or
amendment shall be adjusted as provided in the first sentence of subsection
(i)(A) of this Section 5.  No adjustment shall be made to the
Conversion Price upon the issuance of Common Stock pursuant to the exercise,
conversion or exchange of any Convertible Security or Common Stock Equivalent
where an adjustment to the Conversion Price was made as a result of the issuance
or purchase of any Convertible Security or Common Stock Equivalent.

     

                          (iii)           Certain Issues
Excepted.  Anything herein to the contrary notwithstanding, the
Company shall not be required to make any adjustment to the Conversion Price
under this Section 5 in connection with (i) securities issued (other than for
cash) in connection with a merger, acquisition, or consolidation, (ii)
securities issued pursuant to the conversion or exercise of convertible or
exercisable securities issued or outstanding on or prior to the date hereof (so
long as the conversion or exercise price in such securities are not amended to
lower such price and/or adversely affect the Payee), (iii) securities issued in
connection with bona fide strategic license agreements or other partnering
arrangements, (iv) up to 3,000,000 shares of Common Stock issued pursuant to the
Company’s stock option plans and employee stock purchase plans as they now exist
or may exist in the future approved by the Board of Directors, (v) up to 250,000
shares of Common Stock issued to the Company’s consultants for services rendered
to the Company so long as such issuances are approved by the Board of Directors,
and (vi) any warrants issued to the placement agent and its designees for the
transactions contemplated hereby.

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 6


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

    6.           Seniority.  The
obligations of the Company hereunder shall rank senior to any other debt of the
Company (excluding trade payables incurred in the ordinary course of business),
whether now or hereinafter existing.

    


    7.           Method of
Payments.

     

    
      (i)          Payment.  Company will pay all
sums for principal and interest, becoming due on this Convertible Note held by
the Payee not later than 5:00 p.m. Eastern Standard Time, on the date such
payment is due, in immediately available funds, in accordance with reasonable
payment instructions that the Payee may designate in writing, without the
presentation or surrender of such Convertible Note or the making of any notation
thereon.  Any payment made after 5:00 p.m. Eastern Standard Time, on a
Business Day will be deemed made on the next following Business
Day.  If the due date of any payment in respect of this Convertible
Note would otherwise fall on a day that is not a Business Day, such due date
shall be extended to the next succeeding Business Day.

    

                           

    (ii)           Transfer and
Exchange.  Upon surrender of any Convertible Note for
registration of transfer or for exchange to the Company at its principal office,
the Company at its sole expense will execute and deliver in exchange therefore a
new Convertible Note or Convertible Notes, as the case may be, as requested by
the holder, which aggregate the unpaid principal amount of such Convertible
Note, dated so that there will be no loss of interest on the Convertible Note
and otherwise of like tenor. The issuance of new Convertible Notes shall be made
without charge to the holder(s) of the surrendered Convertible Note for any
issuance tax in respect thereof or other cost incurred by the Company in
connection with such issuance. Notwithstanding any provision of this Agreement
to the contrary, this Convertible Note and any equity issued subject to its
conversion may be transferred by Payee (or any Person taking from Payee) to any
other Person without prior written approval of the Company so long as such
transferee agrees in writing to be bound by all the terms and provisions of this
Note and the Subscription Agreement. Without limiting the generality of the
foregoing provision, Company may withhold consent to any transfer which would
result in the Convertible Note or the equity issued thereunder being held by a
competitor of the Company as reasonably determined in good faith by the
Company.

    


    (iii)           Replacement.  Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any Convertible Note and, in the case of any such
loss, theft or destruction of any Convertible Note, upon receipt of an indemnity
reasonably satisfactory to the Company or, in the case of any such mutilation,
upon the
surrender and cancellation of such Convertible Note, the Company, at its
expense, will execute and deliver, in lieu thereof, a new Convertible Note of
like tenor and dated the date of such lost, stolen, destroyed or mutilated
Convertible Note.

     

     

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 7


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    


    8.           Consolidation, Merger and
Sale. During the term of the Convertible Note, Company will not (a)
consolidate or merge with or into (or permit any subsidiary to consolidate or
merge with or into) any other person without requiring said consolidation or
merger be coincident with the repayment of this Convertible Note, (b) sell or
otherwise dispose of (or permit any subsidiary to sell or otherwise dispose of)
substantially all of its property or assets in one or more transactions to, any
other person or entity without requiring said sale or disposal be coincident
with the repayment of this Convertible Note.

     

    
      9.           Convertible Notes.  All Convertible
Notes issued as part of the Bridge Financing shall be on the same terms and
shall be in substantially the same form. 

        Notwithstanding
the foregoing, Company may undertake any act or combination of acts otherwise
precluded by any provision of Section 8(a) or (b) upon prior written consent of
Convertible Noteholders representing seventy five percent (75%) of the aggregate
principal amount of all Convertible Notes then
outstanding.

      

    

     

                  
10.           Events of
Default.  If any of the following events take
place (each, an “Event
of Default”), Payee shall provide Debtor with written notification
describing in detail the Event of Default whereupon Debtor shall have sixty (60)
days from receipt thereof to cure (unless a shorter period is specified below)
and if Debtor fails to cure said default within the foregoing period the Payee,
at its option, may declare all principal and accrued and unpaid interest thereon
and all other amounts payable under this Convertible Note immediately due and
payable:

    


    
      	
               
      

            	
              (i)

            	
              A
      receiver, liquidator or trustee of Company or any substantial part of
      Company’s assets or properties is appointed by a court order;
      or

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Company
      is adjudicated bankrupt or insolvent;
or

            


    

    


    
      	
               
      

            	
              (iii)

            	
              Any
      of Company’s property is sequestered by or in consequence of a court order
      and such order remains in effect;
or

            


    

    


    
      	
               
      

            	
              (iv)

            	
              Company
      files a petition in voluntary bankruptcy or requests reorganization under
      any provision of any bankruptcy, reorganization or insolvency law or
      consents to the filing of any petition against it under such law,
      or

            


    

     

     

     

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 8


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      


      
        	
                 
      

              	
                (v)

              	
                Any
      petition against Company is filed under bankruptcy, receivership or
      insolvency law and said petition is not vacated;
  or

              


      

    

     

    
      	
               
      

            	
              (vi)

            	
              Company
      makes a formal general assignment for the benefit of its creditors or
      consents to the appointment of a receiver or liquidator of Company for all
      of its property; or

            


    

    


    
      	
               
      

            	
              (vii)

            	
              Company dissolves, liquidates or
      ceases  all business activity other than in the ordinary course
      of business; or

            


    

     

    
      


      
        	
                 
      

              	
                (viii)

              	
                
                  Company
      breaches any material covenant or agreement on its part contained in this
      Convertible Note, the Subscription Agreement, the Security Agreement or
      any agreement delivered in connection with the Bridge Financing;
      or

                

              


      

    

    


    
      	
               
      

            	
              (ix)

            	
              the
      Company shall fail to make any principal or interest payments on the date
      such payments are due and such default is not fully cured within thirty
      (30) days after the occurrence thereof;
or

            


    

    


    
      	
               
      

            	
              (x)

            	
              the
      suspension from listing, without subsequent listing on any one of, or the
      failure of the Common Stock to be listed or quoted on at least one of the
      Pink Sheets LLC, OTC Bulletin Board, the American Stock Exchange, the
      Nasdaq Global Market, the Nasdaq Capital Market or The New York Stock
      Exchange, Inc. for a period of ten (10) consecutive Business Days;
      or

            


    

    


    
      	
               
      

            	
              (xi)

            	
              the
      Company's notice to the Payee, including by way of public announcement, at
      any time, of its inability to comply or its intention not to comply with
      conversions of this Note into shares of Common Stock;
  or

            


    

    


    
      	
               
      

            	
              (xii)

            	
              the
      Company shall fail to (i) timely deliver the shares of Common Stock upon
      conversion of the Note, (ii) file the registration statement in accordance
      with the terms of the Registration Rights Agreement or (iii) make the
      payment of any fees and/or liquidated damages under this Note, the
      Subscription Agreement, the Registration Rights Agreement or any other
      agreement delivered in connection with the Bridge Financing, which failure
      in the case of items (i) and (ii) of this subclause (xii) is not remedied
      within ten (10) Business Days after the incurrence thereof and, solely
      with respect to item (iii) above, ten (10) Business Days after the Payee
      delivers written notice to the Company of the incurrence thereof;
      or

            


    

     

     

     

     

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 9


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      


      
        	
                 
      

              	
                (xiii)

              	
                
                  the
      Company shall (A) default in any payment of any amount or amounts of
      principal of or interest on any indebtedness (other than the indebtedness
      hereunder) the aggregate principal amount of which indebtedness is in
      excess of $100,000 or (B) default in
      the observance or performance of any other agreement or condition relating
      to any indebtedness or contained in any instrument or agreement
      evidencing, securing or relating thereto, or any other event shall occur
      or condition exist, the effect of which default or other event or
      condition is to cause, or to permit the holder or holders or beneficiary
      or beneficiaries of such indebtedness to cause with the giving of notice
      if required, such indebtedness to become due prior to its stated maturity;
      or

                

              


      

    

    
       

      
        
          	
                   
      

                	
                  (xiv)

                	
                  
                    
                      the
      occurrence of an Event of Default under the other Notes issued pursuant to
      the Bridge
Financing.

                    

                  

                




      

    

    
      
        	 	11.  	Definitions. 
	 	 


      

    

    


    “Business Day” means a
day (other than a Saturday or Sunday) on which banks generally are open in New
York, New York for the conduct of substantially all of their
activities.

    


    “Conversion Shares”
with respect to the shares of Common Stock issuable upon conversion of the
Convertible Note.

    


    “Convertible
Noteholder” with respect to any Convertible Note, means at any time each
Person then the record owner hereof and “Convertible
Noteholders” means all of such Convertible Noteholders
collectively.

    


    “Convertible Note
Issuance” shall mean the Secured Convertible Promissory Notes due on the
Maturity Date issued by the Company to the Payee and other Convertible
Noteholders (each in the form of this Convertible Note) in the original
principal amount not to exceed $3,000,000 in the aggregate.

    


    “Person” means any
person or entity of any nature whatsoever, specifically including an individual,
a firm, a company, a corporation, a partnership, a limited liability company, a
trust or other entity.

    


    “Security Agreement”
means the Security Agreement containing mutually agreed terms to be executed by
the Payee and the Company on or prior to the Issuance Date, as amended, modified
or supplemented from time to time.

    


    12.           Security
Agreement.  This Convertible Note shall be secured by the
Security Agreement.  Payee shall be entitled to all rights of the
“Secured Party”
as defined in the Security Agreement.

     

     

     

     

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 10


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    


    13.           Amendment and
Waiver.  The provisions of this Convertible Note may not be
modified, amended or waived, and the Company may not take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
without the written consent of the holders of a majority of the then outstanding
principal amount of all similar convertible notes issued in the Convertible Note
Issuance (including this Convertible Note); provided, however, that any
amendment to this Convertible Note which (i) changes the Interest Rate in
Section 1 hereof, (ii) changes the Maturity Date in Section 2 hereof or (iii)
adversely affects the Payee's rights under a conversion , must be approved in
writing by the holder of this Convertible Note.

    


    14.           Remedies
Cumulative.  No remedy herein conferred upon the Payee is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.

    


    15.           Remedies Not
Waived.  No course of dealing between the Company and the Payee
or any delay on the part of the Payee in exercising any rights hereunder shall
operate as a waiver of any right of the Payee.

    


    16.           Assignments.  The
Payee may assign,
participate, transfer or otherwise convey this Convertible Note and any of its
rights or obligations hereunder or interest herein to any Person that the
Company consents to (such consent not to be unreasonably withheld or
delayed), and this Convertible Note shall inure to the benefit of the
Payee’s successors and assigns.  The Company shall not assign or
delegate this Convertible Note or any of its liabilities or obligations
hereunder without the consent of holder which shall not be unreasonably withheld
or delayed.

    


    17.           Headings.  The
headings of the sections and paragraphs of this Convertible Note are inserted
for convenience only and do not constitute a part of this Convertible
Note.

    


    18.           Severability.  If
any provision of this Convertible Note is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Convertible Note
will remain in full force and effect.  Any provision of this
Convertible Note held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.

    


    19.           Cancellation.  After
all principal and accrued interest at any time owed on this Convertible Note
have been paid in full, or this Convertible Note has been converted this
Convertible Note will be deemed cancelled, shall be surrendered by holder to the
Company  and will not be reissued.

     

     

     

     

    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 11


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


                           
20.           Place of Payment and
Notices.  Payment of principal and interest is to be delivered
to the Convertible Noteholder of this Convertible Note at the address first
written above, or at such other address as such Convertible Noteholder has
specified by prior written notice Company.  No notice shall be deemed
to have been delivered to Company until five (5) Business Days following actual
receipt thereof at the foregoing address.

    


    21.           Submission to
Jurisdiction.  Any legal action or proceeding with respect to
this Convertible Note shall be brought in the courts of the State of New York or
of the United States of America sitting in Manhattan, New York, and, by
execution, delivery and acceptance of this Convertible Note, both the Company
and Payee hereby accept for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts.

    


    (i)           The
Company and Payee hereby irrevocably waive, in connection with any such action
or proceeding, any objection, including, without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which they
may now or hereafter have to the bringing of any such action or proceeding in
such respective jurisdictions.

    


    (ii)           Nothing
herein shall affect the right of the Payee or Company to serve process in any
other manner permitted by law.

    


    22.           GOVERNING
LAW.  ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS CONVERTIBLE NOTE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR
PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK.

    


    IN
WITNESS WHEREOF, the Company has executed and delivered this Secured Convertible
Promissory Note on the date first written above.

    


    
      
        	 	DAIS ANALYTIC
      CORPORATION	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


      

    

     

     

    
 

    


    Secured Convertible
Promissory Note – Dais Analytic Corp. – Page 12