ex10-2.htm


    
      

    

    Exhibit
      10.2

     

    THIS
      NOTE
      AND THE COMMON STOCK REFERENCED HEREIN HAVE NOT BEEN REGISTERED WITH OR APPROVED
      OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY
      STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY AND ARE BEING OFFERED
      PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
      ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).

     

    THE
      SALE,
      ASSIGNMENT, CONVEYANCE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
      REPRESENTED BY THIS NOTE OR THE UNDERLYING COMMON STOCK TO U.S. PERSONS, AS
      DEFINED IN RULE 902(k) PROMULGATED UNDER THE SECURITIES ACT, IS PROHIBITED
      EXCEPT (1) PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

     

    This
      note is one of a series of notes
      (the “Bridge Notes”) issued in the aggregate principal amount of
      $2,000,000.

     

    APPLIED
      DNA SCIENCES, INC.

     

    
      	September
              ___, 2007	 	
              $________________

            


    

     

    10%
      SECURED CONVERTIBLE PROMISSORY NOTE

     

    Applied
      DNA Sciences, Inc., a Nevada corporation (the “Company”), for value received,
      hereby promises to pay to ______________________________ (the “Holder,” which
      term shall in every instance refer to any owner or holder of this Note) at
      ________________________________ or at any other place that the Holder may
      designate in writing to the Company, on September __, 2008 (the “Maturity
      Date”), the principal sum of _____________________ THOUSAND AND NO/100 DOLLARS
      ($______) in such coin or currency of the United States of America as at the
      time of payment shall be legal tender for the payment of public and private
      debts, and to pay interest on the outstanding principal sum hereof at the rate
      of ten percent (10%) per annum.  Payment of principal and accrued and
      unpaid interest, if any, shall be payable on the Maturity Date in like coin
      or
      currency to the Holder hereof at the address of the Holder on file with the
      Company or at such other place as the Holder shall have notified the Company
      in
      writing at least five (5) days before the Maturity Date, provided that any
      payment otherwise due on a Saturday, Sunday or legal bank holiday may be paid
      on
      the following business day.

     

    This
      Note
      is secured by a security interest in all the assets of the Company as set forth
      in Section 4 hereof (the “Security Agreement”).  Reference herein to
      the Security Agreement shall in no way impair the absolute and unconditional
      obligation of the Company to pay both principal and interest hereon as provided
      herein.

     

    The
      rights and remedies of the Holder hereunder are subject to the terms and
      conditions of the Security Agreement and the provisions of the Uniform
      Commercial Code as enacted in the State of Nevada including, without limitation,
      powers with respect to the enforceability and collectibility of all amounts
      due
      hereunder.  Reference to the Uniform Commercial Code of the State of
      Nevada is made for a complete description of the rights, powers and obligations
      of the Holder.

     

    
      
        
        

      

      
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    1.  Transfers
      of Note to Comply with the Securities Act

     

    THE
      HOLDER AGREES THAT THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION
      OF
      THE NOTE MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
      DISPOSED OF EXCEPT (1) PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR
      (2)
      PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM.

     

    2.  Prepayment;
      Repayment Upon Consolidation or Merger

     

    (a)  The
      principal amount of this Note may be prepaid by the Company, in whole or in
      part, on three days prior written notice without premium or penalty, at any
      time.  Upon any prepayment of the entire principal amount of this
      Note, all accrued, but unpaid, interest shall be paid to the Holder on the
      date
      of prepayment.  The date upon which the Company prepays the principal
      plus all accrued and unpaid interest due on this Note shall be hereinafter
      referred to as the “prepayment date.”

     

    (b)  This
      Note
      shall be paid in full, without premium, in the event the Company consolidates
      or
      merges with another corporation, unless (i) the Company shall be the surviving
      corporation in such consolidation or merger or (ii) the other corporation
      controls, is under common control with or is controlled by the Company
      immediately prior to the consolidation or merger whether or not the Company
      shall be the surviving corporation in such consolidation or merger, in which
      event this Note shall remain outstanding as an obligation of the consolidated
      or
      surviving corporation.

     

    3.  Conversion
      of Note

     

    (a)  This
      Note
      and any accrued and unpaid interest hereon shall automatically convert on the
      first anniversary of the date hereof into fully paid and non-assessable shares
      of Common Stock of the Company, par value $0.001 per share (the “Common Stock”),
      at a price equal to 70% of the average volume weighted average price of the
      Common Stock for the ten trading days prior to the Closing Date (the
“Automatic Conversion Price”).

     

    (b)  The
      Holder shall have the right at any time on or prior to the first anniversary
      of
      the date hereof, to convert all or any part of the entirety of the principal
      and
      accrued but unpaid interest then outstanding under this Note into that number
      of
      fully paid and non-assessable shares of Common Stock at a price equal to the
      greater of (i) 50% of the average price of the Common Stock for the ten trading
      days prior to the date the Company receives the notice of conversion, rounded
      up
      to the nearest whole share, and (ii) the Automatic Conversion
      Price.

     

    4.  Security
      Agreement.  In order to secure the obligations of the Company
      under this Note and the Bridge Notes, the Company hereby grants a security
      interest in all of the assets of the Company, which security interest is
pari passu with the security interest granted to the holders of
      $150,000 of $50,000 principal amount secured convertible promissory notes of
      the
      Company bearing interest at 10% per annum issued on June 27, 2007 (the “June
      Notes”), with the security interest granted to James A. Hayward, a director, the
      Chairman of the Board of Directors, our President and Chief Executive Officer,
      for an aggregate principal amount of $550,000 in secured convertible promissory
      notes of the Company bearing interest at 10% per annum issued on April 23,
      2007,
      June 30, 2007 and July 30, 2007 (the “Hayward Notes”), and with the security
      interest granted to the holder of a $100,000 principal amount secured
      convertible promissory note of the Company bearing interest at 10% per annum
      issued on August 8, 2007 (the “August Note”).  The Company reserves
      the right to issue $19,200,000 of debt in addition to amounts sold in the
      offering, of which the Bridge Notes are a part, secured by a security interest
      in all of the Company’s assets, which security interest would be pari
      passu to the security interest granted to the holders of the Notes, the
      June Notes, the Hayward Notes and the August Note.

     

    
      
        
        

      

      
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    5.  Events
      of Default and Remedies

     

    (a)  Any
      one
      or more of the following events (each an “Event of Default”) which shall have
      occurred and be continuing shall constitute an event of default:

     

    (i)  A
      default
      in the payment of the principal or accrued interest on this Note or upon any
      other indebtedness of the Company after the date hereof that is greater than
      $100,000, as and when the same shall become due, whether by default or
      otherwise, which default shall have continued for a period of five (5) business
      days; or

     

    (ii)  Any
      representation or warranty made by the Company or any officer of the Company
      in
      the Notes, or in any agreement, report, certificate or other document delivered
      to the Holder pursuant to the Notes shall have been incorrect in any material
      respect when made which shall not have been remedied ten (10) days after written
      notice thereof shall have been given by the Holder; or

     

    (iii)  The
      Company or any subsidiary (A) shall institute any proceeding or voluntary case
      seeking to adjudicate it bankrupt or insolvent, or seeking dissolution,
      liquidation, winding up, reorganization, arrangement, adjustment, protection,
      relief or composition of it or its debts under any law relating to bankruptcy,
      insolvency or reorganization or relief of debtors, or seeking the entry of
      any
      order for relief or the appointment of a receiver, trustee, custodian or other
      similar official for such the Company or any subsidiary or for any substantial
      part of its property, or shall consent to the commencement against it of such
      a
      proceeding or case, or shall file an answer in any such case or proceeding
      commenced against it consenting to or acquiescing in the commencement of such
      case or proceeding, or shall consent to or acquiesce in the appointment of
      such
      a receiver, trustee, custodian or similar official; (B) shall be unable to
      pay
      its debts as such debts become due, or shall admit in writing its inability
      to
      apply its debts generally; (C) shall make a general assignment for the benefit
      of creditors; or (D) shall take any action to authorize or effect any of the
      actions set forth above in this subsection 5(a)(iii); or

     

    (iv)  Any
      proceeding shall be instituted against the Company seeking to adjudicate it
      a
      bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
      reorganization, arrangement, adjustment, protection, relief of debtors, or
      seeking the entry of an order for relief or the appointment of a receiver,
      trustee, custodian or other similar official for the Company or for any
      substantial part of its property, and either such proceeding shall not have
      been
      dismissed or shall not have been stayed for a period of sixty (60) days or
      any
      of the actions sought in such proceeding (including, without limitation, the
      entry of any order for relief against it or the appointment of a receiver,
      trustee, custodian or other similar official for it or for any substantial
      part
      of its property) shall occur; or

     

    (v)  One
      or
      more final judgments, arbitration awards or orders for the payment of money
      in
      excess of $1,000,000 in the aggregate shall be rendered against the Company,
      which judgment remains unsatisfied for thirty (30) days after the date of such
      entry.

     

    
      
        
        

      

      
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    (vi)  Delisting
      of the Common Stock from the principal market or exchange on which the Common
      Stock is listed for trading; the Company’s failure to comply with the conditions
      for listing; or notification that the Company is not in compliance with the
      conditions for such continued listing.

     

    (vii)  The
      issuance of an SEC stop trade order or an order suspending trading of the Common
      Stock from the principal market or exchange on which the Common Stock is listed
      for trading for longer than five (5) trading days.

     

    (viii)  The
      failure by the Company to issue shares of Common Stock to the Holder upon
      exercise by the Holder of the conversion rights of the Holder in accordance
      with
      the terms of this Note, or the failure to transfer or cause its transfer agent
      to transfer (electronically or in certificated form) any certificate for shares
      of Common Stock issued to the Holder upon conversion of or otherwise pursuant
      to
      this Note as and when required by this Note, or the failure to remove any
      restrictive legend (or to withdraw any stop transfer instructions in respect
      thereof) on any certificate for any shares of Common Stock issued to the Holder
      upon conversion of or otherwise pursuant to this Note as and when required
      by
      this Note, and any such failure shall continue uncured for ten (10) days after
      the Company shall have been notified thereof in writing by the
      Holder;

     

    (ix)  Except
      as
      permitted herein, the Company shall encumber or hypothecate the collateral
      subject to the Security Agreement to any party;

     

    (b)  In
      the
      event of and immediately upon the occurrence of an Event of Default, the Note
      shall become immediately due and payable without any action by the Holder and
      the Note shall bear interest until paid at the rate of ten percent (10%) per
      annum. If an Event of Default occurs and is continuing, Holder may pursue any
      available remedy to collect the payment of all amounts due under the Note or
      to
      enforce the performance of any provision of the Note. No waiver of any default
      under the Note shall be construed as a waiver of any subsequent default, and
      the
      failure to exercise any right or remedy thereunder shall not waive the right
      to
      exercise such right or remedy thereafter.

     

    (c)  The
      Company covenants that in case the principal of, and accrued interest on, the
      Note becomes due and payable by declaration or otherwise, then the Company
      will
      pay in cash to the Holder of this Note, the whole amount that then shall have
      become due and payable on this Note for principal or interest, as the case
      may
      be, and in addition thereto, such further amount as shall be sufficient to
      cover
      the costs and expenses of collection, including reasonable fees and
      disbursements of the Holder’s legal counsel. In case the Company shall fail
      forthwith to pay such amount, the Holder may commence an action or proceeding
      at
      law or in equity for the collection of the sums so due and unpaid, and may
      prosecute any such action or proceeding to judgment or final decree against
      Company or other obligor upon this Note, wherever situated, the monies
      adjudicated or decreed to be payable.

     

    (d)  The
      Company agrees that it shall give notice to the Holder at its registered address
      by facsimile, confirmed by certified mail, of the occurrence of any Event of
      Default within ten (10) days after such Event of Default shall have
      occurred.

     

    
      
        
        

      

      
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    6.  Unconditional
      Obligation; Fees, Waivers, Other

     

    (a)  The
      obligations to make the payments provided for in this Note are absolute and
      unconditional and not subject to any defense, set-off, counterclaim, rescission,
      recoupment or adjustment whatsoever.

     

    (b)  If,
      following the occurrence of an Event of Default, Holder shall seek to enforce
      the collection of any amount of principal of and/or interest on this Note,
      there
      shall be immediately due and payable from the Company, in addition to the then
      unpaid principal of, and accrued unpaid interest on, this Note, all costs and
      expenses incurred by Holder in connection therewith, including, without
      limitation, reasonable attorneys’ fees and disbursements.

     

    (c)  No
      forbearance, indulgence, delay or failure to exercise any right or remedy with
      respect to this Note shall operate as a waiver or as an acquiescence in any
      default, nor shall any single or partial exercise of any right or remedy
      preclude any other or further exercise thereof or the exercise of any other
      right or remedy.

     

    (d)  This
      Note
      may not be modified or discharged (other than by payment or conversion) except
      by a writing duly executed by the Company and Holder.

     

    (e)  Holder
      hereby expressly waives demand and presentment for payment, notice of
      nonpayment, notice of dishonor, protest, notice of protest, bringing of suit,
      and diligence in taking any action to collect amounts called for hereunder,
      and
      shall be directly and primarily liable for the payment of all sums owing and
      to
      be owing hereon, regardless of and without any notice, diligence, act or
      omission with respect to the collection of any amount called for hereunder
      or in
      connection with any right, lien, interest or property at any and all times
      which
      the Company had or is existing as security for any amount called for
      hereunder.

     

    7.  Miscellaneous

     

    (a)  The
      headings of the various paragraphs of this Note are for convenience of reference
      only and shall in no way modify any of the terms or provisions of this
      Note.

     

    (b)  This
      Note
      has been issued by the Company pursuant to authorization of the Board of
      Directors of the Company.

     

    All
      notices required or permitted to be given hereunder shall be in writing and
      shall be deemed to have been duly given when personally delivered or sent by
      registered or certified mail (return receipt requested, postage prepaid),
      facsimile transmission or overnight courier to the Holder at the address in
      the
      records of the Company, to the Company at 25 Health Sciences Dr., Stony Brook,
      New York 11790 or at such other address as the intended recipient shall have
      hereafter given to the other party hereto pursuant to the provisions of this
      Note.

     

    (c)  The
      Company may consider and treat the entity in whose name this Note shall be
      registered as the absolute owner thereof for all purposes whatsoever (whether
      or
      not this Note shall be overdue) and the Company shall not be affected by any
      notice to the contrary. Subject to the limitations herein stated, the registered
      owner of this Note shall have the right to transfer this Note by assignment,
      and
      the transferee thereof shall, upon his registration as owner of this Note,
      become vested with all the powers and rights of the transferor. Registration
      of
      any new owners shall take place upon presentation of this Note to the Company
      at
      its principal offices, together with a duly authenticated assignment. In case
      of
      transfer by operation of law, the transferee agrees to notify the Company of
      such transfer and of his address, and to submit appropriate evidence regarding
      the transfer so that this Note may be registered in the name of the transferee.
      This Note is transferable only on the books of the Company by the holder hereof,
      in person or by attorney, on the surrender hereof, duly endorsed. Communications
      sent to any registered owner shall be effective as against all holders or
      transferees of the Note not registered at the time of sending the
      communication.

     

    
      
        
        

      

      
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    (d)  Payments
      of principal and interest shall be made as specified above to the registered
      owner of this Note. No interest shall be due on this Note for such period of
      time that may elapse between the maturity of this Note and its presentation
      for
      payment.

     

    (e)  The
      Holder shall not, by virtue, hereof, be entitled to any rights of a shareholder
      in the Company, whether at law or in equity, and the rights of the Holder are
      limited to those expressed in this Note.

     

    (f)  Upon
      receipt by the Company of evidence reasonably satisfactory to it of the loss,
      theft, destruction or mutilation of this Note, and (in the case of loss, theft
      or destruction) of reasonably satisfactory indemnification, and upon surrender
      and cancellation of this Note, if mutilated, the Company shall execute and
      deliver a new Note of like tenor and date.

     

    (g)  Except
      as
      otherwise provided herein, this Note shall be construed and enforced in
      accordance with the laws of the State of New York, without giving effect to
      the
      conflicts of law principles thereof or the actual domiciles of the parties.
      The
      Company and the Holder hereby consent to the jurisdiction of the Courts of
      the
      State of New York and the United States District Courts situated therein in
      connection with any action concerning the provisions of this Note instituted
      by
      the Holder against the Company.

     

    (h)  The
      Company and the Holder(i) agree that any legal suit, action or proceeding
      arising out of or relating to this Note shall be instituted exclusively in
      the
      New York State Supreme Court, County of New York or in the United States
      District Court for the Southern District of New York, (ii) waive any objection
      which the Holder or the Company may have now or hereafter based upon forum
      non conveniens or to the venue of any such suit, action or proceeding, and
      (iii) irrevocably consents to the jurisdiction of the New York State Supreme
      Court, County of New York and the United States District Court for the Southern
      District of New York in any such suit, action or proceeding. The Holder and
      the
      Company further agree to accept and acknowledge service of any and all process
      which may be served in any such suit, action or proceeding in the New York
      State
      Supreme Court, County of New York or in the United States District Court for
      the
      Southern District of New York and agree that service of process upon the
      Company, mailed by certified mail to the Company’s address, will be deemed in
      every respect effective service of process, in any suit, action or proceeding.
      FURTHER, THE HOLDER AND THE COMPANY HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
      TO
      ENFORCE THIS NOTE AND IN CONNECTION WITH ANY DEFENSE, COUNTERCLAIM OR CROSS
      CLAIM ASSERTED IN ANY SUCH ACTION.

     

    (i)  No
      recourse shall be had for the payment of the principal or interest of this
      Note
      against any incorporator or any past, present or future stockholder officer,
      director, agent or attorney of the Company, or of any successor corporation,
      either directly or through the Company or any successor corporation, otherwise,
      all such liability of the incorporators, stockholders, officers, directors,
      attorneys and agents being waived, released and surrendered by the Holder hereof
      by the acceptance of this Note.

     

    
      
        
        

      

      
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    (j)  This
      Note
      shall bind the Company and its successors and assigns.

     

    


     

    


     

    


     

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    IN
      WITNESS WHEREOF, the undersigned has duly executed and delivered this 10%
      Secured Convertible Promissory Note as of the day and year first above
      written.

     

                                                                                                                                                                                                                          
      APPLIED DNA SCIENCES, INC.

     

     

    By: 
      ________________________________________________

                                                                                                                                                                                                        Name: James
      A. Hayward

                                                                                                                                                                                                        Title: Chief
      Executive Officer

     

     

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