Document:

SECURED
      PROMISSORY
      NOTE

    

    
      	$500,000	 	
               September
                19,
                2006

            

    

         

    This
      Promissory Note (the "Note") is being executed by SCIENCE DYNAMICS CORPORATION,
      a Delaware corporation ("Purchaser") in favor of and being delivered to Michael
      Ricciardi as a representative of all of the Owners ("Owner Representative")
      in
      connection with that certain Stock Purchase Agreement, dated as September 19,
      2006, by and between Buyer, Ricciardi Technologies, Inc. ("Company") and the
      Owners set forth on Schedule O thereto (the "Purchase Agreement"), and is
      intended to embody that portion of the Purchase Price (as defined in the
      Purchase Agreement) which is payable to the Owners pursuant to Section
      3.1(a)(iii) of the Purchase Agreement. 

    

    FOR
      VALUE
      RECEIVED, the undersigned SCIENCE DYNAMICS CORPORATION, a Delaware corporation
      (hereinafter referred to as “Maker”), does hereby unconditionally promise to pay
      to the order of the individuals listed on Schedule 1 hereto (hereinafter
      collectively referred to as the “holder”) c/o the Owner Representative, at 5704
      Old Clifton Road, Clifton, Virginia 20124-1023, or at such other place or places
      as the holder hereof may from time to time designate in writing, the principal
      sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) together with all accrued
      interest thereon at the rate or rates hereinafter provided until paid, as
      hereinafter provided:

    

    1. Interest,
      principal and all other sums payable hereunder shall be payable, without any
      offset, reduction or recoupment whatsoever, in lawful money of the United States
      of America and in immediately available funds which shall be legal tender in
      payment of all debts and dues, public and private, at the time of payment,
      and
      shall be due and payable as follows:

    

    (a) Interest
      (i) shall accrue from and after the date of this Note at the rate of ten
      percent (10%) per annum on the outstanding principal balance and (ii) shall
      be due and payable by the 1st
      of each
      month this Note is outstanding; and

    

    (b) If
      not
      sooner paid, the entire balance of principal remaining unpaid, plus all accrued
      interest thereon, fees and costs, if any shall be due and payable in full on
      the
      date that is earlier to occur: (i)  twelve (12) months from the date
      hereof and (ii) the consummation of a transfer of all or substantially all
      of the assets or equity securities of Maker to a third party (the “Maturity
      Date”). 

    

    (c) Upon
      the
      occurrence of an Event of Default (as hereinafter defined) under this Note,
      and
      until payment in full of the amount due hereunder, the rate of interest accruing
      on the unpaid principal balance shall be at the rate of 15% per annum compounded
      monthly from and after the date of the Event of Default, irrespective of the
      acceleration of the unpaid principal balance, accrued interest and other charges
      as a result of the occurrence of such Event of Default. This Section
      1(c) shall not be construed as an agreement or privilege to extend the date
      upon which payment in full is due hereunder, nor a waiver of any other right
      or
      remedy available to holder hereunder.

    
      
        
        

      

      
        1

        
          

        

      

       

    

     

    (d) All
      payments shall be applied first on account of late charges (if any), next to
      interest accrued, and the balance to the reduction of principal. 

    

    (e) For
      the
      purposes of computing interest on the debt evidenced hereby, interest shall
      be
      calculated on the basis of a year consisting of three hundred sixty (360) days,
      and shall be charged on the basis of the actual number of calendar days that
      the
      principal amount remains unpaid to the holder hereof.

    

    2.
      Event
      of Default; Remedies.

     

    (a) Each
      of
      the following shall constitute an “Event of Default” hereunder:

     

    (i) Maker’s
      failure to make any required payment of principal and/or interest under this
      Note, on or before the date on which such payment is due and such failure shall
      continue for five (5) business days of when the same shall become due and
      payable; or

     

    (ii)
      Maker’s failure to perform any other agreement or other obligation required
      under this Note or the Pledge Agreement (as defined in Section 10 below), and
      the continuation of such failure for a period of five (5) business days after
      holder gives Maker written notice of such failure to perform; or

     

    (iii) (A) Maker
      shall commence any case, proceeding or other action (1) under any existing
      or
      future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
      insolvency, reorganization or relief of debtors, seeking to have an order for
      relief entered with respect to it, or seeking to adjudicate it a bankrupt or
      insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
      liquidation, dissolution, composition or other relief with respect to it or
      its
      debts, or (2) seeking appointment of a receiver, trustee, custodian,
      conservator or other similar official for it or for all or any substantial
      part
      of Maker’s assets, or Maker shall make a general assignment for the benefit of
      its creditors; or (B) there shall be commenced against Maker any case,
      proceeding or other action of a nature referred to in clause (A) above which
      (1)
      results in entry of an order for relief or any such adjudication or appointment
      or (2) remains undismissed, undischarged or unbonded for a period of thirty
      (30)
      days; or (C) there shall be commenced against Maker any case, proceeding or
      other action seeking issuance of a warrant of attachment, execution, distraint
      or similar process against all or any substantial part of Maker’s assets which
      results in the entry of an order for any such relief which shall not have been
      vacated, discharged, or stayed or bonded pending appeal within thirty (30)
      days
      from the entry thereof, or (D) Maker shall take any action in furtherance of,
      or
      indicating its consent or approval of, or acquiescence in, any of the acts
      set
      forth in clause (A), (B), or (C) above; or (D) Maker shall generally not, or
      shall be unable to, or shall admit in writing its inability to, pay its debts
      as
      they become due.

     

    (b) Upon
      the
      occurrence of an Event of Default, unless such Event of Default shall have
      been
      expressly waived by holder in writing, the entire unpaid principal balance,
      together with all accrued interest thereon, and all fees, charges, costs and
      expenses, if any, owed by Maker to holder, shall become immediately due and
      payable in full.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    (c) In
      addition to the acceleration of the indebtedness due under this Note as
      described in Section 2(b), upon the occurrence of an Event of Default,
      holder may avail itself of any legal or equitable rights which holder may have
      at law or in equity or under this Note or the Pledge Agreement. The remedies
      of
      holder as provided herein shall be distinct and cumulative, and may be pursued
      singly, successively or together, at the sole discretion of holder, and may
      be
      exercised as often as occasion therefor shall arise. Failure to exercise any
      of
      the foregoing options upon the occurrence of an Event of Default shall not
      constitute a waiver of the right to exercise the same or any other option at
      any
      subsequent time in respect to the same or any other further exercise of the
      same
      or any other right or remedy. Holder shall have no duty to exercise any or
      all
      of the rights and remedies herein provided or contemplated. The acceptance
      by
      holder of any payment hereunder that is less than payment in full of all amounts
      due and payable at the time of such payment shall not constitute a waiver of
      the
      right to exercise any of the foregoing rights or remedies at that time, or
      nullify any prior exercise of any such rights or remedies without the express
      written consent of holder. Provided such transfer is legally permissible
      (including without limitation under applicable bankruptcy law) or is not
      otherwise prevented by applicable law or legal order, upon the occurrence of
      an
      Event of Default, holder also has the right to transfer the shares of Company's
      common stock held under the Pledge Agreement to the names of Owners, and to
      require the Maker to pay all costs and expenses incurred by holder in enforcing
      its rights under this Note and the Pledge Agreement. 

     

    (d) Upon
      the
      occurrence of an Event of Default, if this Note is referred to an attorney
      or
      collection agency for collection, whether or not suit has been filed or any
      other action is instituted or taken to enforce or collect under this Note,
      Maker
      shall pay all of holder’s costs, fees (including reasonable attorneys’ and
      paralegals’ fees) and expenses in connection with such referral and collection
      actions.

     

    3. This
      Note
      may be prepaid in whole or in part at any time.

    

    4. The
      undersigned Maker and endorsers hereof and other parties at any time liable
      hereunder hereby waive presentment, protest and presentation for payment, and
      demand, notice of protest, notice of demand and of dishonor and non-payment
      of
      this Note, and any other notices of whatever kind or nature and expressly agree
      that this Note, or any payment hereunder, may be extended from time to time
      without in any way affecting the liability of the undersigned Maker or any
      such
      other party.

    

    5. All
      notices hereunder shall be given in writing, and shall be deemed given three
      (3)
      business days following the date when mailed by first class certified or
      registered mail, return receipt requested, with proper postage prepaid,
      addressed to Maker at 7150 N. Park Drive, Suite 500, Pennsauken, New Jersey
      08109 and addressed if to the holder hereof to the address set forth on Schedule
      1 hereto or in either case to such other address as either party may from time
      to time designate to the other by like written notice given at least ten (10)
      days prior to the date such change becomes effective. 

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    6. In
      case
      any provision (or any part of any provision) contained in this Note shall for
      any reason be finally held by a court of competent jurisdiction to be invalid,
      illegal or unenforceable in any respect, such invalidity, illegality or
      unenforceability shall not affect any other provision (or remaining part of
      the
      affected provision) of this Note; but this Note shall be construed as if such
      invalid, illegal or unenforceable provision (or part thereof) had never been
      contained herein, but only to the extent it is invalid, illegal or
      unenforceable.

    

    7. This
      Note
      shall apply to and bind the Maker and each of its successors and assigns. Maker
      may not assign its obligations under this Note without the holder's prior
      written consent, and any such assignment shall not relieve Maker of its
      obligations hereunder.

    

    8. The
      validity and construction of this Note and all matters pertaining thereto are
      to
      be determined and construed according to the laws of the State of New Jersey.
      

    

    9. It
      is
      expressly agreed that time is of the essence in the performance of Maker's
      obligations set forth in this Note.

    

    10. This
      Note
      is secured by a pledge of common stock of the Company, pursuant to that certain
      Pledge Agreement between the Owners and the Maker dated as of even date herewith
      (the “Pledge Agreement”)

    

    WITNESS
      the execution hereof by the Maker on the date first hereinabove written.

     

    
      	 	 	 
	 	MAKER:
	 	 
	 	SCIENCE DYNAMICS CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ Paul Burges
	 	
               

              Name: 

            	
              
                

              

              Paul Burgess

            
	 	Title:	CEO

    

    

      
        
          
          

        

        
          4

          
            

          

        

         

      

    

     

    SCHEDULE
      1

    

    Holders

     

    
      	
              Name
                and Address of Owner 

            
	 
	
              Thomas
                Aylesworth 

            
	
              12112
                Elm Forest Way 

              Apt.
                E 

              Fairfax,
                VA 22030 

            
	 
	
              Barry
                Bendel 

            
	
              43952
                Bruceton Mills Circle 

              Ashburn,
                VA 20147 

            
	 
	
              Darrell
                Berger 

            
	
              401
                Holmes Drive, NW Vienna, 

            
	VA
              22180-4163
	 
	
              Laurence
                Blue 

            
	
              15308
                Kwanzan Court, 

            
	Rockville,
              MD
              
	 
	
              Brian
                Burke 

            
	
              13756
                Autumn Vale Ct. 

            
	Chantilly,
              VA
              20151-3543 
	 
	
              Frank
                Debritz 

            
	
              9450
                Kendall Knolls Lane

              Nokesville,
                VA 20181

            
	 
	
              Jeanmarie
                Devolite-Davis

            
	 
	
              2213
                Aryness Dr. 

              Vienna,
                VA 22181 

            
	 
	
              David
                Godso 

            
	
              775
                Bonair Place 

              La
                Jolla, CA 92037 

            
	 
	
              Donald
                Hargett 

            
	
              1916
                Sunrise Drive 

              Potomac,
                MD 20854 

            
	 
	
              Thomas
                Hewitt 

            
	
              1800
                Alexander Bell Drive 

            
	Reston,
              VA 20191
              

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              Markus
                Litscher 

            
	
              5623
                Tournament Drive 

            
	Haymarket,
              VA 20169
              
	 
	
              Joshua
                Presnell 

            
	
              8951
                Fox Hollow Court 

            
	Dayton,
              OH 45458
              
	 
	
              Domenico
                Ricciardi 

            
	
              5704
                Old Clifton Road 

            
	Clifton,
              VA 20124-1023 
	 
	
              Lino
                Ricciardi 

            
	
              5704
                Old Clifton Road

            
	Clifton,
              VA 20124-1023 
	 
	
              Marie
                Ricciardi 

            
	
              5704
                Old Clifton Road 

            
	Clifton,
              VA 20124-1023 
	 
	
              Michael
                Ricciardi 

            
	
              5704
                Old Clifton Road 

            
	Clifton,
              VA 20124-1023 
	 
	
              Michele
                Ricciardi 

            
	
              5704
                Old Clifton Road 

            
	Clifton,
              VA 20124-1023 
	 
	
              Donald
                Upson 

            
	
              11309
                Markham Ct

            
	Richmond,
              VA 23233 
	 
	
              Daniel
                Young 

            
	
              9473
                Turnberry Dr. 

              Potomac,
                MD 20854 

            

    

    

    
      
        
        

      

      
        6NEITHER
      THIS NOTE NOR THE SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK ISSUABLE UPON
      CONVERSION OF THIS NOTE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS
      AMENDED, OR ANY STATE SECURITIES LAW, AND SUCH SECURITIES MAY NOT BE SOLD OR
      OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      UNDER SAID ACT OR STATE LAW OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION
      IS
      NOT REQUIRED.

    

    
      	
              $4,500,000

            	 	
              New
                York, New York 

              September
                19, 2006

            

    

    

    SCIENCE
      DYNAMICS CORPORATION

    

    6%
      CONVERTIBLE SUBORDINATED NOTE DUE MAY 31, 2007

    

    FOR
      VALUE
      RECEIVED, Science Dynamics Corporation, a Delaware corporation (the “Company”),
      hereby promises to pay to the order of Barron Partners LP or registered assigns
      (the “Holder”), the principal amount of four million five hundred thousand
      dollars ($4,500,000) on May 31, 2007 (“Maturity Date”). Interest on the
      outstanding principal balance shall be paid at the rate of six percent (6%)
      per
      annum, payable in full on the Maturity Date. Interest shall be computed on
      the
      basis of a 360-day year, using the number of days actually elapsed. This Note
      is
      issued pursuant to a securities purchase agreement (the “Agreement”) dated the
      date hereof, by and among the Company and the Barron Partners LP.

    

    Article
      1.

    Covenants
      of the Company

     

    (a)  File
      Restated Certificate of Incorporation .
      Not
      later than one hundred (150) days from the issuance of this Note, the Company
      shall obtain stockholder approval of the Restated Certificate, as defined in
      the
      Agreement, and shall file the Restated Certificate with the Secretary of State
      of the State of Delaware. The Restated Certificate, as filed with the Secretary
      of State, shall include the Statement of Designations of the Series A
      Convertible Preferred Stock as an exhibit.

     

    (b)  Fundamental
      Transaction.
      The
      Company shall not enter into any agreement with respect to any Fundamental
      Transaction, or consummate any Fundamental Transaction prior to the conversion
      of this Note.

     

    Article
      2.

    Events
      of Default; Acceleration

    

    (a)  Events
      of Default Defined.
      The
      entire unpaid principal amount of this Note, together with interest thereon
      shall, on written notice to the Company given by the holders of this Note,
      forthwith become and be due and payable if any one or more the following events
      (“Events of Default”) shall have occurred (for any reason whatsoever and whether
      such happening shall be voluntary or involuntary or be affected or come about
      by
      operation of law pursuant to or in compliance with any judgment, decree, or
      order of any court or any order, rule or regulation of any administrative or
      governmental body) and be continuing. An Event of Default shall
      occur:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (i)  if
      failure shall be made in the payment of the principal or interest on the Note
      when and as the same shall become due and such failure shall continue for a
      period of five (5) business days after such payment is due; or

     

    (ii)  if
      the
      Company shall violate or breach any of the representations, warranties and
      covenants contained in this Note or the Agreement and such violation or breach
      shall continue for thirty (30) days after written notice of such breach shall
      been received by the Company from the Holder; or 

     

    (iii)  if
      the
      Company or any Significant Subsidiary (which term shall mean any subsidiary
      of
      the Company which would be considered a significant subsidiary, as defined
      in
      Rule 1-02 of Regulation S-X of the Securities and Exchange Commission (the
      “Commission”) pursuant to the Securities Act of 1933, as amended (the
“Securities Act”)) shall consent to the appointment of a receiver, trustee or
      liquidator of itself or of a substantial part of its property, or shall admit
      in
      writing its inability to pay its debts generally as they become due, or shall
      make a general assignment for the benefit of creditors, or shall file a
      voluntary petition in bankruptcy, or an answer seeking reorganization in a
      proceeding under any bankruptcy law (as now or hereafter in effect) or an answer
      admitting the material allegations of a petition filed against the Company
      or
      any Significant Subsidiary, in any such proceeding, or shall by voluntary
      petition, answer or consent, seek relief under the provisions of any other
      now
      existing or future bankruptcy or other similar law providing for the
      reorganization or winding up of corporations, or an arrangement, composition,
      extension or adjustment with its or their creditors, or shall, in a petition
      in
      bankruptcy filed against it or them be adjudicated a bankrupt, or the Company
      or
      any Significant Subsidiary or their directors or a majority of its stockholders
      shall vote to dissolve or liquidate the Company or any Significant Subsidiary
      other than a liquidation involving a transfer of assets from a Subsidiary to
      the
      Company or another Subsidiary; or

     

    (iv)  if
      an
      involuntary petition shall be filed against the Company or any Significant
      Subsidiary seeking relief against the Company or any Significant Subsidiary
      under any now existing or future bankruptcy, insolvency or other similar law
      providing for the reorganization or winding up of corporations, or an
      arrangement, composition, extension or adjustment with its or their creditors,
      and such petition shall not be vacated or set aside within ninety (90) days
      from
      the filing thereof; or

     

    (v)  if
      a
      court of competent jurisdiction shall enter an order, judgment or decree
      appointing, without consent of the Company or any Significant Subsidiary, a
      receiver, trustee or liquidator of the Company or any Significant Subsidiary,
      or
      of all or any substantial part of the property of the Company or any Significant
      Subsidiary, or approving a petition filed against the Company or any Significant
      Subsidiary seeking a reorganization or arrangement of the Company or any
      Significant Subsidiary under the Federal bankruptcy laws or any other applicable
      law or statute of the United States of America or any State thereof, or any
      substantial part of the property of the Company or any Significant Subsidiary
      shall be sequestered; and such order, judgment or decree shall not be vacated
      or
      set aside within ninety (90) days from the date of the entry thereof;
      or

     

    (vi)  if,
      under
      the provisions of any law for the relief or aid of debtors, any court of
      competent jurisdiction shall assume custody or control of the Company or any
      Significant Subsidiary or of all or any substantial part of the property of
      the
      Company or any Significant Subsidiary and such custody or control shall not
      be
      terminated within ninety (90) days from the date of assumption of such custody
      or control.

     

    (b)  Rights
      of Note Holder.
      Nothing
      in this Note shall be construed to modify, amend or limit in any way the right
      of the holder of this Note to bring an action against the Company.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

       

      Article
        3.

    

    Conversion

    

    (a)  Automatic
      Conversion.
      Principal and interest due on this Note shall be automatically converted into
      such number of shares of the Company’s Series A Preferred Stock (the “Series A
      Preferred Stock”) as is determined by dividing the principal amount of the Note
      by the Preferred Stock Conversion Price. Upon such conversion, this Note and
      the
      Company’s obligations under this Note (including the obligation to pay interest)
      shall terminate. 

     

    (b)  Definitions.
      Unless
      otherwise defined in this Note, all terms defined in the Certificate of
      Designation for the Series A Preferred Stock and used in this Note shall have
      the same meanings in this Note as in the Restated Certificate; provided,
      however, that the term “Conversion Shares” shall mean the shares of Series A
      Preferred Stock issuable upon conversion of the Note.

     

    (c)  Conversion
      Price.
      The
      Conversion Price shall initially be fifty seven and one-half cents ($.575).
      In
      the event that the Restated
      Certificate (as defined in the Agreement) is not filed with the Secretary of
      State of the State of Delaware within one hundred fifty days (150) from the
      Closing Date (as defined in the Purchase Agreement), then for each whole or
      partial month that elapses between the 150th
      day from
      the Closing Date and the date of such filing, the Conversion Price then in
      effect shall automatically be reduced by 6%.

     

    (d)  Conversions
      at Option of Holder.
      This
      Note shall be initially convertible, in whole at any time or in part from time
      to time into such number of shares of the Company’s Series A Preferred Stock
      determined by dividing the principal amount of this Note being converted by
      the
      Conversion Price in effect on the date of conversion. Holders shall effect
      conversions by providing the Company with the form of conversion notice attached
      hereto as Annex
      A
      (a
“Notice
      of Conversion”)
      as
      fully and originally executed by the Holder, together with the delivery by
      the
      Holder to the Company of this Note, with this Note being duly endorsed in full
      for transfer to the Company or with an applicable stock power duly executed
      by
      the Holder in the manner and form as deemed reasonable by the transfer agent
      of
      the Common Stock. Each Notice of Conversion shall specify the principal amount
      of this Note to be converted, the principal amount of this Note outstanding
      prior to the conversion at issue, the principal amount of this Note owned
      subsequent to the conversion at issue, and the date on which such conversion
      is
      to be effected, which date may not be prior to the date the Holder delivers
      such
      Notice of Conversion and the Note to the Company by overnight delivery service
      (the “Conversion
      Date”).
      If no
      Conversion Date is specified in a Notice of Conversion, the Conversion Date
      shall be the Trading Day immediately following the date that such Notice of
      Conversion and applicable stock certificates are received by the Company. The
      calculations and entries set forth in the Notice of Conversion shall control
      in
      the absence of manifest or mathematical error. The principal amount of this
      Note
      being converted into Preferred stock in accordance with the terms hereof shall
      be canceled and may not be reissued. 

     

    (e)  Automatic
      Conversion upon the filing of the Restated Certificate of
      Incorporation.
      Upon
      the filing of the Restated Certificate of Incorporation, this Note shall
      automatically be converted into shares of Series A Preferred Stock at the
      Conversion Price.

     

    (f)  Automatic
      Conversion Upon Change of Control.
      This
      Note shall be automatically converted into Series A Preferred Stock at the
      Conversion Price upon the close of business on the business day immediately
      preceding the date fixed for consummation of any transaction resulting in a
      Change of Control of the Company (an “Automatic Conversion Event”). A “Change in
      Control” means a consolidation or merger of the Company with or into another
      company or entity in which the Company is not the surviving entity or the sale
      of all or substantially all of the assets of the Company to another company
      or
      entity not controlled by the then existing stockholders of the Company in a
      transaction or series of transactions. The Company shall not be obligated to
      issue certificates evidencing the Series A Preferred Stock or other
      consideration issuable upon such conversion unless this Note is either delivered
      to the Company or its transfer agent or the Holder notifies the Company or
      its
      transfer agent in writing that such certificates have been lost, stolen, or
      destroyed and executes an agreement satisfactory to the Company to indemnify
      the
      Company from any loss incurred by it in connection therewith. Upon the
      conversion of this Note pursuant to this Section 3(f), the Company shall
      promptly send written notice thereof, by hand delivery or by overnight delivery,
      to the Holder at its address then shown on the records of the Company, which
      notice shall state that this Note must be surrendered at the office of the
      Company (or of its transfer agent for the Common Stock, if applicable). Further,
      since a Change of Control also results in the automatic conversion of the Series
      A Preferred Stock into shares of Common Stock, the Change of Control shall
      also
      result in the conversion of the Series A Preferred Stock into shares of Common
      Stock simultaneously with the conversion of this Note into share of Series
      A
      Preferred Stock.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

       

    

    (g)  Mechanics
      of Conversion

     

    (i)  Delivery
      of Certificate Upon Conversion.
      Except
      as otherwise set forth herein, not later than three Trading Days after each
      Conversion Date (the “Share
      Delivery Date”),
      the
      Company shall deliver to the Holder (A) a certificate or certificates which,
      after the Effective Date, shall be free of restrictive legends and trading
      restrictions (other than those required by the Agreement) representing the
      number of shares of Series A Preferred Stock being acquired upon the conversion
      of this Note, and (B) a bank check in the amount of accrued and unpaid dividends
      (if the Company has elected or is required to pay accrued dividends in cash).
      After the Effective Date, the Company shall, upon request of the Holder, deliver
      any certificate or certificates required to be delivered by the Company under
      this Section electronically through the Depository Trust Company or another
      established clearing Company performing similar functions if the Company’s
      transfer agent has the ability to deliver shares of Series A Preferred Stock
      in
      such manner. If in the case of any Notice of Conversion such certificate or
      certificates are not delivered to or as directed by the applicable Holder by
      the
      third Trading Day after the Conversion Date, the Holder shall be entitled to
      elect by written notice to the Company at any time on or before its receipt
      of
      such certificate or certificates thereafter, to rescind such conversion, in
      which event the Company shall immediately return the this Note to the
      Holder.

     

    (ii)  Obligation
      Absolute; Partial Liquidated Damages.
      The
      Company’s obligations to issue and deliver the Conversion Shares upon conversion
      of this Note in accordance with the terms hereof are absolute and unconditional,
      irrespective of any action or inaction by the Holder to enforce the same, any
      waiver or consent with respect to any provision hereof, the recovery of any
      judgment against any Person or any action to enforce the same, or any setoff,
      counterclaim, recoupment, limitation or termination, or any breach or alleged
      breach by the Holder or any other Person of any obligation to the Company or
      any
      violation or alleged violation of law by the Holder or any other person, and
      irrespective of any other circumstance which might otherwise limit such
      obligation of the Company to the Holder in connection with the issuance of
      such
      Conversion Shares. In the event a Holder shall elect to convert any or all
      of
      this Note, the Company may not refuse conversion based on any claim that such
      Holder or any one associated or affiliated with the Holder of has been engaged
      in any violation of law, agreement or for any other reason (other than the
      inability of the Company to issue shares of Common Stock as a result of the
      4.9%
      Limitation) unless, an injunction from a court, on notice, restraining and
      or
      enjoining conversion of all or part of this Note shall have been sought and
      obtained and the Company posts a surety bond for the benefit of the Holder
      in
      the amount of 150% of the Conversion Value of the principal amount of the Note
      outstanding (i.e.,
      the
      value of the shares of Preferred Stock issued upon conversion of such principal
      amount of this Note) which is subject to the injunction, which bond shall remain
      in effect until the completion of arbitration/litigation of the dispute and
      the
      proceeds of which shall be payable to such Holder to the extent it obtains
      judgment. In the absence of an injunction precluding the same, the Company
      shall
      issue Conversion Shares or, if applicable, cash, upon a properly noticed
      conversion. If the Company fails to deliver to the Holder such certificate
      or
      certificates pursuant to Section 3(g)(i) within two Trading Days of the Share
      Delivery Date applicable to such conversion, the Company shall pay to such
      Holder, in cash, as liquidated damages and not as a penalty, for each $5,000
      of
      Conversion Value of Note being converted, $50 per Trading Day (increasing to
      $100 per Trading Day after three (3) Trading Days and increasing to $200 per
      Trading Day six (6) Trading Days after such damages begin to accrue) for each
      Trading Day after the Share Delivery Date until such certificates are delivered.
      Nothing herein shall limit a Holder’s right to pursue actual damages for the
      Company’s failure to deliver certificates representing shares of Preferred Stock
      upon conversion within the period specified herein and such Holder shall have
      the right to pursue all remedies available to it hereunder, at law or in equity
      including, without limitation, a decree of specific performance and/or
      injunctive relief.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

       

    

    (iii)  Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Conversion.
      If the
      Company fails to deliver to the Holder such certificate or certificates pursuant
      to Section 6(d)(i) by a Share Delivery Date, and if after such Share Delivery
      Date the Holder purchases (in an open market transaction or otherwise) Preferred
      Stock to deliver in satisfaction of a sale by such Holder of the Conversion
      Shares which the Holder was entitled to receive upon the conversion relating
      to
      such Share Delivery Date (a “Buy-In”),
      then
      the Company shall pay in cash to the Holder the amount by which (x) the Holder’s
      total purchase price (including brokerage commissions, if any) for the Preferred
      Stock so purchased exceeds (y) the product of (1) the aggregate number of shares
      of Preferred Stock that such Holder was entitled to receive from the conversion
      at issue multiplied by (2) the price at which the sell order giving rise to
      such
      purchase obligation was executed. For example, if the Holder purchases Preferred
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted conversion of a portion of this Note with respect to which the
      aggregate sale price giving rise to such purchase obligation is $10,000, under
      clause (A) of the immediately preceding sentence the Company shall be required
      to pay the Holder $1,000. The Holder shall provide the Company written notice
      indicating the amounts payable to the Holder in respect of the Buy-In, together
      with applicable confirmations and other evidence reasonably requested by the
      Company. Nothing herein shall limit a Holder’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 Preferred Stock upon conversion of this Note as required pursuant
      to
      the terms hereof.

     

    (iv)  Reservation
      of Shares Issuable Upon Conversion.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      its authorized and unissued shares of Series A Preferred Stock solely for the
      purpose of issuance upon conversion of this Note, each as herein provided,
      free
      from preemptive rights or any other actual contingent purchase rights of persons
      other than the Holders, not less than such number of shares of the Series A
      Preferred Stock as shall (subject to any additional requirements of the Company
      as to reservation of such shares set forth in the Purchase Agreement) be
      issuable (taking into account the adjustments and restrictions of Section 3(h))
      upon the conversion of this Note. The Company covenants that all shares of
      Preferred Stock that shall be so issuable shall, upon issue, be duly and validly
      authorized, issued and fully paid, nonassessable. 

     

    (v)  Fractional
      Shares.
      Upon a
      conversion hereunder, the Company shall not be required to issue stock
      certificates representing fractions of shares of the Series A Preferred Stock.
      All fractional shares shall be carried forward and any fractional shares which
      remain after the Holder converts the full principal amount of this Note shall
      be
      dropped and eliminated.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

       

    

    (vi)  Transfer
      Taxes.
      The
      issuance of certificates for shares of the Preferred Stock on conversion of
      this
      Note shall be made without charge to the Holders thereof for any documentary
      stamp or similar taxes that may be payable in respect of the issue or delivery
      of such certificate, provided that the Company shall not be required to pay
      any
      tax that may be payable in respect of any transfer involved in the issuance
      and
      delivery of any such certificate upon conversion in a name other than that
      of
      the Holder and the Company shall not be required to issue or deliver such
      certificates unless or until the person or persons requesting the issuance
      thereof shall have paid to the Company the amount of such tax or shall have
      established to the satisfaction of the Company that such tax has been
      paid.

     

    (vii)  Absolute
      Obligation.
      Except
      as expressly provided herein, no provision of this Note shall alter or impair
      the obligation of the Company, which is absolute and unconditional, to pay
      the
      liquidated damages (if any) on, this Note at the time, place, and rate, and
      in
      the coin or currency, herein prescribed.

     

    (h)  Fundamental
      Transaction.
      A
      Fundamental Transaction shall mean (A) the merger or consolidation of the
      Company with or into another Person, (B) any sale of all or substantially all
      of
      the Company’s assets in one or a series of related transactions, (C) any tender
      offer or exchange offer (whether by the Company or another Person) pursuant
      to
      which holders of Common Stock are permitted to tender or exchange their shares
      for other securities, cash or property, or (D) any reclassification of the
      Common Stock or any compulsory share exchange pursuant to which the Common
      Stock
      is effectively converted into or exchanged for other securities, cash or
      property. 

     

    Article
      4.

    Subordination

     

    (a)  Agreement
      of Subordination.
      The
      Company, for itself, its successors and assigns, covenants and agrees, and
      the
      Holder of this Note by his or her acceptance of this Note likewise covenants
      and
      agrees, that the payment of the principal of and interest on this Note is hereby
      expressly subordinated, to the extent and in the manner hereinafter set forth,
      to the prior payment in full of all Senior Indebtedness, as hereinafter defined.
      The provisions of this Article 4 shall constitute a continuing offer to all
      persons who, in reliance upon such provision, become holders of, or continue
      to
      hold, Senior Indebtedness, and such provisions are made for the benefit of
      the
      holders of Senior Indebtedness, and such holders are hereby made obligees
      hereunder the same as if their names were written herein as such, and they
      and/or each of them may proceed to enforce such provisions.

     

    (b)  Company
      Not to Make Payments with Respect to Note in Certain
      Circumstances.

     

    (i)  Upon
      the
      maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise,
      all principal thereof and premium, if any, and interest thereon shall first
      be
      paid in full, or such payment duly provided for in cash or in a manner
      satisfactory to the holder or holders of such Senior Indebtedness, before any
      payment is made by the Company (A) on account of the principal of or interest
      on
      this Note or (B) to acquire this Note.

     

    (ii)  Upon
      the
      happening of an event of default with respect to any Senior Indebtedness, as
      such event of default is defined therein or in the instrument under which it
      is
      outstanding, permitting the holders to accelerate the maturity thereof, then,
      unless and until such event of default shall have been cured or waived or shall
      have ceased to exist, no payment shall be made by the Company (A) on account
      of
      the principal of or interest on this Note or (B) to acquire this
      Note.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

       

    

    (iii)  Subject
      to Paragraphs 4(b)(i) and (ii), as long as any Senior Indebtedness shall be
      outstanding, (A) the Company shall not make any payment of principal on this
      Note except upon the Maturity Date, and (B) the Company may pay interest on
      this
      Note as long as the payment of such principal or interest will not result in
      an
      event of default under the terms of the instruments pursuant to which the Senior
      Indebtedness is issued.

     

    (iv)  In
      the
      event that, notwithstanding the provision of this Paragraph 4(b), the Company
      shall make any payment to the Holder of this Note on account of the principal
      of
      or interest on this Note after the happening of a default in payment of the
      principal of or premium, if any, or interest on Senior Indebtedness or after
      receipt by the Company of written notice of an event of default with respect
      to
      any Senior Indebtedness, then unless and until such default or event of default
      shall have been cured or waived or shall have ceased to exist, such payment
      shall be held by the holder of this Note in trust for the benefit of, and shall
      be paid forthwith over and delivered to, the holders of Senior Indebtedness
      (pro
      rata as to each of such holders on the basis of the respective amounts of Senior
      Indebtedness held by them) or their representative or the trustee under the
      indenture or other agreement (if any) pursuant to which any instruments
      evidencing any Senior Indebtedness may have been issued, as their respective
      interests may appear, for application to the payment of all Senior Indebtedness
      remaining unpaid to the extent necessary to pay all Senior Indebtedness in
      full
      in accordance with the terms of such Senior Indebtedness, after giving effect
      to
      any concurrent payment or distribution to or for the holders of Senior
      Indebtedness.

     

    (c)  Notes
      Subordinated to Prior Payment of all Senior Indebtedness on Dissolution,
      Liquidation or Reorganization of Company.
      Upon
      any distribution of assets of the Company upon any dissolution, winding up,
      liquidation or reorganization of the Company (whether in bankruptcy, insolvency
      or receivership proceedings or upon an assignment for the benefit of creditors
      or otherwise):

     

    (i)  The
      holders of all Senior Indebtedness shall first be entitled to receive payment
      in
      full of the principal thereof, premium, if any, and interest due thereon before
      the holder of this Note are entitled to receive any payment on account of the
      principal of or interest on this Note (other than securities of the Company
      or
      any other entity provided for by a plan of reorganization or readjustment which
      stock and securities are subordinated to the payment of all Senior Indebtedness
      and securities received in lieu thereof which may at the time be outstanding);
      and

     

    (ii)  Any
      payment or distribution of assets of the Company of any kind or character
      whether in cash, property or securities (other than securities that are
      subordinated to the payment of all Senior Indebtedness and securities received
      in lieu thereof which may at the time be outstanding), to which the holder
      of
      this Note would be entitled except for the provisions of this Article 4, shall
      be paid by the liquidating trustee or agent or other person making such payment
      of distribution, whether a trustee in bankruptcy, a receiver or liquidating
      trustee or other trustee or agent, directly to the holders of Senior
      Indebtedness or their representative or representatives, or to the trustee
      or
      trustees under any indenture under which any instruments evidencing any of
      such
      Senior Indebtedness may have been issued, to the extent necessary to make
      payment in full of all Senior Indebtedness remaining unpaid, after giving effect
      to any concurrent payment or distribution or provision therefor to the holders
      of such Senior Indebtedness.

     

    (iii)  In
      the
      event that, notwithstanding the foregoing provision of this Paragraph 4(c),
      any
      payment or distribution of assets of the Company of any kind or character,
      whether in cash, property or securities (other than shares representing equity
      of the Company as reorganized or readjusted, or securities of the Company or
      any
      other entity provided for by a plan of reorganization or readjustment which
      stock and securities are subordinated to the payment of all Senior Indebtedness
      and securities received in lieu thereof which may at the time be outstanding),
      shall be received by the holder of this Note on account of principal of or
      interest on this Note before all Senior Indebtedness is paid in full, or
      effective provision made for its payment or distribution, such payment or
      distribution shall be received and held in trust for and shall be paid over
      to
      the holders of the Senior Indebtedness remaining unpaid or unprovided for or
      their representative or representatives, or to the trustee or trustees under
      any
      indenture under which any instruments evidencing any of such Senior Indebtedness
      may have been issued, for application to the payment of such Senior Indebtedness
      until all such Senior Indebtedness shall have been paid in full, after giving
      effect to any concurrent payment or distribution or provision therefor to the
      holders of such Senior Indebtedness.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

       

    

    (d)  Noteholder
      to be Subrogated to Right of Holders of Senior Indebtedness.
      Subject
      to the payment in full of all Senior Indebtedness, the holders of the Notes
      shall be subrogated, pro rata, to the rights of the holders of Senior
      Indebtedness to receive payments or distributions of assets of the Company
      applicable to the Senior Indebtedness until all amounts owing on the Notes
      shall
      be paid in full, and, for the purpose of such subrogation, no payments or
      distributions to the holders of the Senior Indebtedness by or on behalf of
      the
      Company or by or on behalf of the holder of this Notes by virtue of this Article
      4 which otherwise would have been made to the holder of this Notes shall, as
      between the Company and the holder of this Note, be deemed to be payment by
      the
      Company to or on account of the Senior Indebtedness, it being understood that
      the provisions of this Article 4 are, and are intended solely, for the purpose
      of defining the relative rights of the holders of the Notes, on the one hand,
      and the holders of the Senior Indebtedness, on the other hand.

     

    (e)  Obligation
      of the Company Unconditional.
      Nothing
      contained in this Article 4 or elsewhere in this Note is intended to or shall
      impair as between the Company and the holder of this Note, the obligation of
      the
      Company, which is absolute and unconditional, to pay to the holder of this
      Note
      the principal of and interest on this Note as and when the same shall become
      due
      and payable in accordance with its terms, or is intended to or shall affect
      the
      relative rights of the holder of this Note and creditors of the Company other
      than the holders of the Senior Indebtedness, nor shall anything herein or
      therein prevent the holder of this Note of this Note from exercising all
      remedies otherwise permitted by applicable law upon default under this Note,
      subject to the rights, if any, under this Article 4 of the holders of Senior
      Indebtedness in respect of cash, property or securities of the Company received
      upon the exercise of any such remedy; provided, however, that the holder of
      this
      Note shall not exercise any remedies if the exercise of such remedies would
      result in an event of default under the terms of the Senior Indebtedness. Upon
      any distribution of assets of the Company referred to in this Article 4, the
      holders of this Note shall be entitled to rely upon any order or decree made
      by
      any court of competent jurisdiction in which any dissolution, winding up,
      liquidation or reorganization proceedings are pending, or a certificate of
      the
      liquidating trustee or agent or other person making any distribution to the
      holder of this Note for the purpose of ascertaining the persons entitled to
      participate in such distribution, the holders of the Senior Indebtedness and
      other indebtedness of the Company, the amount thereof or payable thereon, the
      amount or amounts paid or distributed thereon and all other facts pertinent
      thereto or to this Article 4. In no event shall any provision of this Article
      4
      be interpreted as limiting or abrogating the right of the holder of this Note
      to
      convert principal and interest thereon pursuant to Article 3 of this
      Note.

     

    (f)  Subordination
      Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior
      Indebtedness.
      No
      right of any present or future holders of any Senior Indebtedness to enforce
      subordination as herein provided shall at any time in any way be prejudiced
      or
      impaired by any act or failure to act on the part of the Company or by any
      act
      or failure to act, in good faith, by any such holder, or by any noncompliance
      by
      the Company with the terms, provisions and covenants of this Note, regardless
      of
      any knowledge thereof which any such holder may have or be otherwise charged
      with.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

       

    

    (g)  Definition
      of Senior Indebtedness.
      The
      term “Senior Indebtedness” is defined to mean the principal of and premium, if
      any, and interest on and any obligations of the Company with respect to the
      Company’s indebtedness to all indebtedness and obligations (other than the
      Notes) of the Company for money borrowed to banks, insurance companies and
      other
      institutional lenders.

     

    (h)  Additional
      Agreement.
      The
      holder of this Note, by its acceptance of this Note, agrees to execute any
      formal instruments of subordination which may be reasonably requested by any
      holder of Senior Indebtedness. 

     

    Article
      5.

    Miscellaneous

    

    (a)  Transferability.
      This
      Note shall not be transferred except in a transaction exempt from registration
      pursuant to the Securities Act and applicable state securities law. The Company
      shall treat as the owner of this Note the person shown as the owner on its
      books
      and records.

     

    (b)  Limited
      Right of Prepayment.
      The
      Company shall have no right to prepay this Note without the prior written
      consent of the Holder, which consent may be given or withheld by the Holder
      in
      its sole discretion. Any prepayment shall be accompanied by interest on this
      Note to the date of prepayment.

     

    (c)  WAIVER
      OF TRIAL BY JURY.
      IN ANY
      LEGAL PROCEEDING TO ENFORCE PAYMENT OF THIS NOTE, THE COMPANY WAIVES TRIAL
      BY
      JURY.

     

    (d)  WAIVER
      OF ANY RIGHT OF COUNTERCLAIM.
      EXCEPT
      AS PROHIBITED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT TO ASSERT ANY CLAIM
      IT
      MAY HAVE AGAINST THE HOLDER OF THIS NOTE BY WAY OF A COUNTERCLAIM (OTHER THAN
      A
      COMPULSORY COUNTERCLAIM) IN ANY ACTION ON THIS NOTE.

     

    (e)  Usury
      Saving Provision.
      All
      payment obligations arising under this Note are subject to the express condition
      that at no time shall the Company be obligated or required to pay interest
      at a
      rate which could subject the holder of this Note to either civil or criminal
      liability as a result of being in excess of the maximum rate which the Company
      is permitted by law to contract or agree to pay. If by the terms of this Note,
      the Company is at any time required or obligated to pay interest at a rate
      in
      excess of such maximum rate, the applicable rate of interest shall be deemed
      to
      be immediately reduced to such maximum rate, and interest thus payable shall
      be
      computed at such maximum rate, and the portion of all prior interest payments
      in
      excess of such maximum rate shall be applied and shall be deemed to have been
      payments in reduction of principal.

     

    (f)  Notice
      to Company.
      Notice
      to the Company shall be given to the Company at its principal executive offices,
      presently located at Science Dynamics Corporation, 7150 North Park Drive, Suite
      500, Pennsauken, NJ 08109, attention of Mr. Paul Burgess, CEO, or to such other
      address or person as the Company may, from time to time, advise the holder
      of
      this Note, or to the holder of this Note at the address set forth on the
      Company’s records, with a copy to Asher S. Levitsky PC, Sichenzia Ross Friedman
      Ference LLP 1065 Avenue of he Americas, New York, New York 10018. Notice shall
      be given by hand delivery, certified or registered mail, return receipt
      requested, overnight courier service which provides evidence of delivery, or
      by
      telecopier if confirmation of receipt is given or of confirmation of
      transmission is sent as herein provided.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    (g)  Governing
      Law.
      This
      Note shall be governed by the laws of the State of New York applicable to
      agreements executed and to be performed wholly within such state. The Company
      hereby (i) consents to the exclusive jurisdiction of the United States District
      Court for the Southern District of New York and Supreme Court of the State
      of
      New York in the County of New York in any action relating to or arising out
      of
      this Note, (ii) agrees that any process in any such action may be served upon
      it
      either (x) by certified or registered mail, return receipt requested, or by
      an
      overnight courier service which obtains evidence of delivery, with the same
      full
      force and effect as if personally served upon him in New York City or (y) any
      other manner permitted by law, and (iii) waives any claim that the jurisdiction
      of any such tribunal is not a convenient forum for any such action and any
      defense of lack of in personam jurisdiction with respect thereto.

     

    (h)  Expenses.
      In the
      event that the Holder commences a legal proceeding in order to enforce its
      rights under this Note, the Company shall pay all reasonable legal fees and
      expenses incurred by the holder with respect thereto.

     

    IN
      WITNESS WHEREOF, the Company has executed this Note as of the date and year
      first aforesaid.

     

    
      	 	 	 
	 	SCIENCE
              DYNAMICS
              CORPORATION 
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Joseph Noto, CFO

    

    

    
      
        
          
          

        

        
          -10-

          
            

          

        

         

      

    

    
NOTICE
      OF
      CONVERSION

    [To
      be
      Signed Only Upon Conversion

    of
      Part
      or All of Notes]

    

    Science
      Dynamics Corporation 

    

          
      The undersigned, the holder of the foregoing Note, hereby surrenders such Note
      for conversion into shares of Series A Preferred Stock of Science Dynamics
      Corporation. to the extent of $       *
      unpaid principal amount of due on such Note, and requests that the certificates
      for such shares be issued in the name of ___________________,
      and
      delivered to -__________________,whose
      address is_____________________.        .

     

    Dated:___________________     

     

    ________________________      

    (Signature)

    

    (Signature
      must conform in all respects to name of holder as specified on the face of
      the
      Note.)

     

    * Insert
      here the unpaid principal amount of the Note (or, in the case of a partial
      conversion, the
      portion thereof as to which the Note is being converted). In the case of a
      partial conversion, a new Note will be issued and delivered, representing the
      unconverted portion of the unpaid principal amount of this Note, to or upon
      the
      order of the holder surrendering such Note.

    
      
        
        

      

      
        -11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]