Exhibit 10.1
 
Securities Purchase Agreement

This Securities Purchase Agreement (this “Agreement”), dated as of April 28,
2014, is entered into by and between DNA Precious Metals, Inc., a Nevada
corporation (“Company”), and Typenex Co-Investment, LLC, a Utah limited
liability company, its successors and/or assigns (“Investor”).
 
A.             Company and Investor are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by the
rules and regulations as promulgated by the United States Securities and
Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended
(the “1933 Act”).
 
B.             Investor desires to purchase and Company desires to issue and
sell, upon the terms and conditions set forth in this Agreement (i) a Secured
Convertible Promissory Note, in the form attached hereto as Exhibit A, in the
original principal amount of $552,500.00 (the “Note”), convertible into shares
of common stock, $0.001 par value per share, of Company (the “Common Stock”),
upon the terms and subject to the limitations and conditions set forth in such
Note, and (ii) a Warrant to Purchase Common Stock, in the form attached hereto
as Exhibit B (the “Warrant”).
 
C.             This Agreement, the Note, the Warrant, the Security Agreement (as
defined below), the Investor Notes (as defined below), and all other
certificates, documents, agreements, resolutions and instruments delivered to
any party under or in connection with this Agreement, as the same may be amended
from time to time, are collectively referred to herein as the “Transaction
Documents”.
 
D.             For purposes of this Agreement: “Conversion Shares” means all
shares of Common Stock issuable upon conversion of all or any portion of the
Note; “Warrant Shares” means all shares of Common Stock issuable upon the
exercise of or pursuant to the Warrant; and “Securities” means the Note, the
Conversion Shares, the Warrant and the Warrant Shares.
 
NOW, THEREFORE, Company and Investor hereby agree as follows:
 
1.             Purchase and Sale of Securities.
 
1.1.           Purchase of Securities. On the Closing Date (as defined below),
Company shall issue and sell to Investor and Investor agrees to purchase from
Company the Note and the Warrant. In consideration thereof, Investor shall pay
(i) the amount designated as the initial cash purchase price on Investor’s
signature page to this Agreement (the “Initial Cash Purchase Price”), and (ii)
issue to Company the Investor Notes (the sum of the initial principal amount of
the Investor Notes, together with the Initial Cash Purchase Price, the “Purchase
Price”). The Purchase Price and the OID (as defined herein) are allocated to the
Tranches (as defined in the Note) of the Note and to the Warrant as set forth in
the table attached hereto as Exhibit C.
 
1.2.           Form of Payment. On the Closing Date, (i) Investor shall pay the
Purchase Price to Company by delivering the following at the Closing (as defined
below): (A) the Initial Cash Purchase Price, which shall be delivered by wire
transfer of immediately available funds to Company, in accordance with Company’s
written wiring instructions, (B) Investor Note #1 in the principal amount of
$50,000.00 duly executed and substantially in the form attached hereto as
Exhibit D (“Investor Note #1”); (C) Investor Note #2 in the principal amount of
$50,000.00 duly executed and substantially in the form attached hereto as
Exhibit D (“Investor Note #2”); (D) Investor Note #3 in the principal amount of
$50,000.00 duly executed and substantially in the form attached hereto as
Exhibit D (“Investor Note #3”); (E) Investor Note #4 in the principal amount of
$50,000.00 duly executed and substantially in the form attached hereto as
Exhibit D (“Investor Note #4”); and (F) Investor Note #5 in the principal amount
of $50,000.00 duly executed and substantially in the form attached hereto as
Exhibit D (“Investor Note #5”, and together with Investor Note #1, Investor Note
#2, Investor Note #3, and Investor Note #4, the “Investor Notes”); and (ii)
Company shall deliver the duly executed Note and Warrant on behalf of Company,
to Investor, against delivery of such Purchase Price.
 
 
 

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1.3.           Closing Date. Subject to the satisfaction (or written waiver) of
the conditions set forth in Section 5 and Section 6 below, the date and time of
the issuance and sale of the Securities pursuant to this Agreement (the “Closing
Date”) shall be 5:00 p.m., Eastern Time on or about April 28, 2014, or such
other mutually agreed upon time. The closing of the transactions contemplated by
this Agreement (the “Closing”) shall occur on the Closing Date at the offices of
Investor unless otherwise agreed upon by the parties.
 
1.4.           Collateral for Note. The Note shall be secured by the collateral
set forth in that certain Security Agreement attached hereto as Exhibit E
listing all of the Investor Notes as security for Company’s obligations under
the Transaction Documents (the “Security Agreement”).
 
1.5.           Collateral for Investor Notes. Initially, none of the Investor
Notes will be secured, but all or any of the Investor Notes may become secured
subsequent to the Closing by such collateral and at such time as determined by
Investor in its sole discretion. In the event Investor desires to secure any of
the Investor Notes, Company shall timely execute any and all amendments and
documents and take such other measures requested by Investor that are necessary
or advisable in order to properly secure the applicable Investor Note(s).
 
1.6.           Original Issue Discount; Transaction Expenses. The Note carries
an original issue discount of $50,000.00 (the “OID”). In addition, Company
agrees to pay $5,000.00 to Investor to cover Investor’s legal fees, accounting
costs, due diligence, monitoring and other transaction costs incurred in
connection with the purchase and sale of the Securities, $2,500.00 of which
amount was previously paid to Investor and $2,500.00 (the “Carried Transaction
Expense Amount”) of which amount is included in the initial principal balance of
the Note. The Purchase Price, therefore, shall be $500,000.00, computed as
follows: $552,500.00 original principal balance, less the OID, less the Carried
Transaction Expense Amount. The Initial Cash Purchase Price shall be the
Purchase Price less the sum of the initial principal amounts of the Investor
Notes.
 
2.             Investor’s Representations and Warranties. Investor represents
and warrants to Company that: (i) this Agreement has been duly and validly
authorized; (ii) this Agreement constitutes a valid and binding agreement of
Investor enforceable in accordance with its terms; (iii) Investor is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D of
the 1933 Act, and (iv) this Agreement and the Investor Notes, have been duly
executed and delivered on behalf of Investor.
 
 
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3.             Representations and Warranties of Company. Company represents and
warrants to Investor that: (i) Company is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation and
has the requisite corporate power to own its properties and to carry on its
business as now being conducted; (ii) Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary; (iii) Company has registered its Common Stock under
Section 12(g) of the Securities Exchange Act of 1934, as amended (the “1934
Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d)
of the 1934 Act; (iv) each of the Transaction Documents and the transactions
contemplated hereby and thereby, have been duly and validly authorized by
Company; (v) this Agreement, the Note, the Security Agreement, the Warrant, and
the other Transaction Documents have been duly executed and delivered by Company
and constitute the valid and binding obligations of Company enforceable in
accordance with their terms, subject as to enforceability only to general
principles of equity and to bankruptcy, insolvency, moratorium, and other
similar laws affecting the enforcement of creditors’ rights generally; (vi) the
execution and delivery of the Transaction Documents by Company, the issuance of
Securities in accordance with the terms hereof, and the consummation by Company
of the other transactions contemplated by the Transaction Documents do not and
will not conflict with or result in a breach by Company of any of the terms or
provisions of, or constitute a default under (a) Company’s formation documents
or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of
trust, or other material agreement or instrument to which Company is a party or
by which it or any of its properties or assets are bound, including any listing
agreement for the Common Stock, or (c) to Company’s knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court, United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over Company or any of
Company’s properties or assets; (vii) no further authorization, approval or
consent of any court, governmental body, regulatory agency, self-regulatory
organization, or stock exchange or market or the stockholders or any lender of
Company is required to be obtained by Company for the issuance of the Securities
to Investor; (viii) none of Company’s filings with the SEC contained, at the
time they were filed, any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; (ix) Company has filed all reports, schedules, forms,
statements and other documents required to be filed by Company with the SEC
under the 1934 Act on a timely basis or has received a valid extension of such
time of filing and has filed any such report, schedule, form, statement or other
document prior to the expiration of any such extension; (x) Company is not, nor
has it ever been, a “Shell Company,” as such type of “issuer” is described in
Rule 144(i)(1) under the 1933 Act; (xi) Company has taken no action which would
give rise to any claim by any person or entity for a brokerage commission,
placement agent or finder’s fees or similar payments by Investor relating to the
Note or the transactions contemplated hereby; (xii) except for such fees arising
as a result of any agreement or arrangement entered into by Investor without the
knowledge of Company (a “Investor’s Fee”), Investor shall have no obligation
with respect to such fees or with respect to any claims made by or on behalf of
other persons for fees of a type contemplated in this subsection that may be due
in connection with the transactions contemplated hereby and Company shall
indemnify and hold harmless each of Investor, Investor’s employees, officers,
directors, stockholders, managers, agents, and partners, and their respective
affiliates, from and against all claims, losses, damages, costs (including the
costs of preparation and attorneys’ fees) and expenses suffered in respect of
any such claimed or existing fees (other than Investor’s Fee, if any); and
(xiii) when issued, each of the Securities (including, without limitation, the
Conversion Shares and the Warrant Shares), will be validly issued, fully paid
for and non-assessable, free and clear of all liens, claims, charges and
encumbrances.
 
4.             Company Covenants. Until all of Company’s obligations hereunder
are paid and performed in full, or within the timeframes otherwise specifically
set forth below, Company shall comply with the following covenants: (i) from the
date hereof until the date that is six (6) months after all the Conversion
Shares and the Warrant Shares either have been sold by Investor, or may
permanently be sold by Investor without any restrictions pursuant to Rule 144,
Company shall timely make all filings required to be made by it under the 1933
Act, the 1934 Act, Rule 144 or any United States securities laws and regulations
thereof applicable to Company or by the rules and regulations of its principal
trading market, and such filings shall conform to the requirements of applicable
laws, regulations and government agencies, and, unless such filings are publicly
available on the SEC’s EDGAR system (via the SEC’s web site at no additional
charge), Company shall provide a copy thereof to Investor promptly after such
filings; (ii) so long as Investor beneficially owns any of the Securities and
for at least twenty (20) Trading Days thereafter, Company shall file all reports
required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934
Act, and shall take all reasonable action under its control to ensure that
adequate current public information with respect to Company, as required in
accordance with Rule 144, is publicly available, and shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would permit such termination; (iii)
the Common Stock shall be listed or quoted for trading on any of (a) the NYSE
Amex, (b) the New York Stock Exchange, (c) the Nasdaq Global Market, (d) the
Nasdaq Capital Market, (e) the OTC Bulletin Board, (f) the OTCQX, or (g) the
OTCQB; (iv) Company shall use the net proceeds received hereunder for working
capital and general corporate purposes only; provided, however, Company will not
use such proceeds to pay fees payable (A) to any broker or finder relating to
the offer and sale of the Securities unless such broker, finder, or other party
is a registered investment adviser or registered broker-dealer and such fees are
paid in full compliance with all applicable laws and regulations, or (B) to any
other party relating to any financing transaction effected prior to the date
hereof; and (v) from and after the date hereof and until all of Company’s
obligations hereunder and the Note are paid and performed in full, Company shall
not transfer, assign, sell, pledge, hypothecate or otherwise alienate or
encumber the Investor Notes in any way without the prior written consent of
Investor.
 
 
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5.             Conditions to Company’s Obligation to Sell. The obligation of
Company hereunder to issue and sell the Securities to Investor at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions:
 
5.1.           Investor shall have executed this Agreement and the Investor
Notes, and delivered the same to Company.
 
5.2.           Investor shall have delivered the Purchase Price in accordance
with Section 1.2 above.
 
6.             Conditions to Investor’s Obligation to Purchase. The obligation
of Investor hereunder to purchase the Securities at the Closing is subject to
the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for Investor’s sole benefit and
may be waived by Investor at any time in its sole discretion:
 
6.1.           Company shall have executed this Agreement and delivered the same
to Investor.
 
6.2.           Company shall have delivered to Investor the duly executed Note
and Warrant in accordance with Section 1.2 above.
 
6.3.           The Irrevocable Letter of Instructions to Transfer Agent shall
have been delivered to and acknowledged in writing by Company’s transfer agent
(the “Transfer Agent”) substantially in the form attached hereto as Exhibit F.
 
6.4.           Company shall have delivered to Investor a fully executed
Secretary’s Certificate evidencing Company’s approval of the Transaction
Documents substantially in the form attached hereto as Exhibit G.
 
6.5.           Company shall have delivered to Investor a fully executed Share
Issuance resolution to be delivered to the Transfer Agent substantially in the
form attached hereto as Exhibit H.
 
6.6.           Company shall have delivered to Investor fully executed copies of
the Security Agreement and all other Transaction Documents required to be
executed by Company herein or therein.
 
 
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7.             Reservation of Shares. At all times during which the Note is
convertible or the Warrant is exercisable, Company will reserve from its
authorized and unissued Common Stock to provide for the issuance of Common Stock
upon the full conversion of the Note and full exercise of the Warrant. Company
will at all times reserve at least (i) three times the number of shares of
Common Stock necessary to convert the total Outstanding Balance (as defined in
and determined pursuant to the Note) of the Note, plus (ii) three times the
number of Warrant Shares (as determined pursuant to the Warrant) deliverable
upon full exercise of the Warrant (the “Share Reserve”), but in any event not
less than 5,475,000 shares of Common Stock shall be reserved at all times for
such purpose (the “Transfer Agent Reserve”). Company further agrees that it will
cause the Transfer Agent to immediately add shares of Common Stock to the
Transfer Agent Reserve in increments of 500,000 shares as and when requested by
Investor in writing from time to time, provided that such incremental increases
do not cause the Transfer Agent Reserve to exceed the Share Reserve. In
furtherance thereof, from and after the date hereof and until such time that the
Note has been paid in full and the Warrant exercised in full, Company shall
require the Transfer Agent to reserve for the purpose of issuance of Conversion
Shares under the Note and Warrant Shares under the Warrant, a number of shares
of Common Stock equal to the Transfer Agent Reserve. Company shall further
require the Transfer Agent to hold such shares of Common Stock exclusively for
the benefit of Investor and to issue such shares to Investor promptly upon
Investor’s delivery of a conversion notice under the Note or a Notice of
Exercise under the Warrant.
 
8.             Miscellaneous. The provisions set forth in this Section 8 shall
apply to this Agreement, as well as all other Transaction Documents as if these
terms were fully set forth therein.
 
8.1.           Cross Default. Any Event of Default (as defined in the Note)
shall be deemed a default under this Agreement. Upon a default of this Agreement
by Company, Investor shall have all those rights and remedies available at law
or in equity, including without limitation those remedies set forth in the Note.
 
8.2.           Governing Law; Venue. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Utah for contracts to be
wholly performed in such state and without giving effect to the principles
thereof regarding the conflict of laws. Each party consents to and expressly
agrees that venue for Arbitration (as defined in Exhibit I) of any dispute
arising out of or relating to any Transaction Document or the relationship of
the parties or their affiliates shall be in Salt Lake County or Utah County,
Utah. Without modifying the parties obligations to resolve disputes hereunder
pursuant to the Arbitration Provisions (as defined below), for any litigation
arising in connection with any of the Transaction Documents, each party hereto
hereby (a) consents to and expressly submits to the exclusive personal
jurisdiction of any state or federal court sitting in Salt Lake County, Utah,
(b) expressly submits to the venue of any such court for the purposes hereof,
and (c) waives any claim of improper venue and any claim or objection that such
courts are an inconvenient forum or any other claim or objection to the bringing
of any such proceeding in such jurisdictions or to any claim that such venue of
the suit, action or proceeding is improper.
 
8.3.           Arbitration of Claims. The parties shall submit all Claims (as
defined in Exhibit I) arising under this Agreement or any other Transaction
Document or other agreements between the parties and their affiliates to binding
arbitration pursuant to the arbitration provisions set forth in Exhibit I
attached hereto (the “Arbitration Provisions”). The parties hereby acknowledge
and agree that the Arbitration Provisions are unconditionally binding on the
parties hereto and are severable from all other provisions of this Agreement.
Any capitalized term not defined in the Arbitration Provisions shall have the
meaning set forth in this Agreement. By executing this Agreement, Company
represents, warrants and covenants that Company has reviewed the Arbitration
Provisions carefully, consulted with legal counsel about such provisions (or
waived its right to do so), understands that the Arbitration Provisions are
intended to allow for the expeditious and efficient resolution of any dispute
hereunder, agrees to the terms and limitations set forth in the Arbitration
Provisions, and agrees not take a position contrary to the foregoing
representations. Company acknowledges and agrees that Investor may rely upon the
foregoing representations and covenants of Company regarding the Arbitration
Provisions.
 
 
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8.4.           Counterparts. Each Transaction Document may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument. The parties hereto confirm that
any electronic copy of another party’s executed counterpart of a Transaction
Document (or such party’s signature page thereof) will be deemed to be an
executed original thereof.
 
8.5.           Headings. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.
 
8.6.           Severability. In the event that any provision of this Agreement
is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform to such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.
 
8.7.           Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither Company nor Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the parties hereto.
 
8.8.           Notices. Any notice required or permitted hereunder shall be
given in writing (unless otherwise specified herein) and shall be deemed
effectively given on the earliest of: (a) the date delivered, if delivered by
personal delivery as against written receipt therefor or by e-mail to an
executive officer, or by facsimile (with successful transmission confirmation),
(b) the earlier of the date delivered or the third Trading Day after deposit,
postage prepaid, in the United States Postal Service by certified mail, or (c)
the earlier of the date delivered or the third Trading Day after mailing by
express courier, with delivery costs and fees prepaid, in each case, addressed
to each of the other parties thereunto entitled at the following addresses (or
at such other addresses as such party may designate by five (5) calendar days’
advance written notice similarly given to each of the other parties hereto):
 
If to Company:

DNA Precious Metals, Inc.
Attn: Tony Giuliano
9125 rue Pascal Gagnon, Suite 204
Saint Leonard, Quebec H1P 1Z4
Canada

With a copy to (which copy shall not constitute notice):

______________________
Attn: _________________
______________________
______________________
 
 
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If to Investor:

Typenex Co-Investment, LLC
Attn: John Fife
303 East Wacker Drive, Suite 1200
Chicago, Illinois 60601

With a copy to (which copy shall not constitute notice):

Hansen Black Anderson Ashcraft PLLC
Attn: Jonathan K. Hansen
2940 West Maple Loop, Suite 103
Lehi, Utah 84043

8.9.           Successors and Assigns. This Agreement or any of the severable
rights and obligations inuring to the benefit of or to be performed by Investor
hereunder may be assigned by Investor to a third party, including its financing
sources, in whole or in part, without the need to obtain Company’s consent
thereto. Company may not assign its rights or obligations under this Agreement
or delegate its duties hereunder without the prior written consent of Investor.
 
8.10.           Survival. The representations and warranties of Company and the
agreements and covenants set forth in this Agreement shall survive the Closing
hereunder notwithstanding any due diligence investigation conducted by or on
behalf of Investor. Company agrees to indemnify and hold harmless Investor and
all its officers, directors, employees, attorneys, and agents for loss or damage
arising as a result of or related to any breach or alleged breach by Company of
any of its representations, warranties and covenants set forth in this Agreement
or any of its covenants and obligations under this Agreement, including
advancement of expenses as they are incurred.
 
8.11.           Publicity. Company and Investor shall have the right to review a
reasonable period of time before issuance of any press releases, SEC, principal
market or FINRA filings, or any other public statements with respect to the
transactions contemplated hereby; provided, however, that Company shall be
entitled, without the prior approval of Investor, to make any press release or
SEC, principal market or FINRA filings with respect to such transactions as is
required by applicable law and regulations (although Investor shall be consulted
by Company in connection with any such press release prior to its release and
shall be provided with a copy thereof and be given an opportunity to comment
thereon).
 
8.12.           Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
 
 
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8.13.           Investor’s Rights and Remedies Cumulative; Liquidated Damages.
All rights, remedies, and powers conferred in this Agreement and the Transaction
Documents are cumulative and not exclusive of any other rights or remedies, and
shall be in addition to every other right, power, and remedy that Investor may
have, whether specifically granted in this Agreement or any other Transaction
Document, or existing at law, in equity, or by statute, and any and all such
rights and remedies may be exercised from time to time and as often and in such
order as Investor may deem expedient. The parties acknowledge and agree that
upon Company’s failure to comply with the provisions of the Transaction
Documents, Investor’s damages would be uncertain and difficult (if not
impossible) to accurately estimate because of the parties’ inability to predict
future interest rates and future share prices, Investor’s increased risk, and
the uncertainty of the availability of a suitable substitute investment
opportunity for Investor, among other reasons. Accordingly, any fees, charges,
and default interest due under the Transaction Documents are intended by the
parties to be, and shall be deemed, liquidated damages. The parties agree that
such liquidated damages are a reasonable estimate of Investor’s actual damages
and not a penalty, and shall not be deemed in any way to limit any other right
or remedy Investor may have hereunder, at law or in equity. The parties
acknowledge and agree that under the circumstances existing at the time this
Agreement is entered into, such liquidated damages are fair and reasonable and
are not penalties. All fees, charges, and default interest provided for in the
Transaction Documents are agreed to by the parties to be based upon the
obligations and the risks assumed by the parties as of the Closing Date and are
consistent with investments of this type. The liquidated damages provisions of
the Transaction Documents shall not limit or preclude a party from pursuing any
other remedy available at law or in equity; provided, however, that the
liquidated damages provided for in the Transaction Documents are intended to be
in lieu of actual damages.
 
8.14.           Ownership Limitation. Notwithstanding anything to the contrary
contained in this Agreement or the other Transaction Documents, if at any time
Investor shall or would be issued shares of Common Stock under any of the
Transaction Documents, but such issuance would cause Investor (together with its
affiliates) to beneficially own a number of shares exceeding the Maximum
Percentage (as defined in the Note), then Company must not issue to Investor the
shares that would cause Investor to exceed the Maximum Percentage. For purposes
of this Section, beneficial ownership of Common Stock will be determined under
Section 13(d) of the 1934 Act.
 
8.15.           Attorneys’ Fees and Cost of Collection. In the event of any
action at law or in equity to enforce or interpret the terms of this Agreement
or any of the other Transaction Documents, the parties agree that the party who
is awarded the most money shall be deemed the prevailing party for all purposes
and shall therefore be entitled to an additional award of the full amount of the
attorneys’ fees and expenses paid by such prevailing party in connection with
the litigation and/or dispute without reduction or apportionment based upon the
individual claims or defenses giving rise to the fees and expenses. Nothing
herein shall restrict or impair a court’s power to award fees and expenses for
frivolous or bad faith pleading. If (a) the Note or Warrant is placed in the
hands of an attorney for collection or enforcement prior to commencing legal
proceedings, or is collected or enforced through any legal proceeding, or
Investor otherwise takes action to collect amounts due under the Note or to
enforce the provisions of the Note or the Warrant; or (b) there occurs any
bankruptcy, reorganization, receivership of Company or other proceedings
affecting Company’s creditors’ rights and involving a claim under the Note or
the Warrant; then Company shall pay the costs incurred by Investor for such
collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, without limitation,
attorneys’ fees and disbursements.
 
8.16.           Waiver. No waiver of any provision of this Agreement shall be
effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall
constitute a waiver of any other provision or consent to any other prohibited
action, whether or not similar. No waiver or consent shall constitute a
continuing waiver or consent or commit a party to provide a waiver or consent in
the future except to the extent specifically set forth in writing.
 
 
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8.17.           Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY
WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS
WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER
COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH
PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING
SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.
 
8.18.           Time of the Essence. Time is expressly made of the essence of
each and every provision of this Agreement and the other Transaction Documents.
 
[Remainder of page intentionally left blank; signature page follows]
 
 
 
 
 
 
 
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SUBSCRIPTION AMOUNT:

Principal Amount of Note:
$552,500.00
   
Initial Cash Purchase Price:
$250,000.00

IN WITNESS WHEREOF, the undersigned Investor and Company have caused this
Agreement to be duly executed as of the date first above written.
 

 
INVESTOR:
     
Typenex Co-Investment, LLC
     
By:
Red Cliffs Investments, Inc., its Manager
               
By:
/s/ John M. Fife, President
       John M. Fife, President

 
COMPANY:
     
DNA Precious Metals, Inc.
         
By:
/s/ Tony Giuliano
 
Printed Name:
Tony Giuliano
 
Title:
Chief Financial Officer

 

ATTACHED EXHIBITS:

Exhibit A
Note

Exhibit B
Warrant

Exhibit C
Allocation of Purchase Price

Exhibit D
Form of Investor Note

Exhibit E
Security Agreement

Exhibit F
Irrevocable Transfer Agent Instructions

Exhibit G
Secretary’s Certificate

Exhibit H
Share Issuance Resolution

Exhibit I
Arbitration Provisions

 
 

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EXHIBIT I

ARBITRATION PROVISIONS

1.     Dispute Resolution. For purposes of this Exhibit I, the term “Claims”
means any disputes, claims, demands, causes of action, liabilities, damages,
losses, or controversies whatsoever arising from related to or connected with
the transactions contemplated in the Transaction Documents and any
communications between the parties related thereto, including without limitation
any claims of mutual mistake, mistake, fraud, misrepresentation, failure of
formation, failure of consideration, promissory estoppel, unconscionability,
failure of condition precedent, rescission, and any statutory claims, tort
claims, contract claims, or claims to void, invalidate or terminate the
Agreement or any of the other Transaction Documents. The parties hereby agree
that the arbitration provisions set forth in this Exhibit I (“Arbitration
Provisions”) are binding on the parties hereto and are severable from all other
provisions in the Transaction Documents. As a result, any attempt to rescind the
Agreement or declare the Agreement or any other Transaction Document invalid or
unenforceable for any reason is subject to these Arbitration Provisions. These
Arbitration Provisions shall also survive any termination or expiration of the
Agreement.
 
2.     Arbitration. Except as otherwise provided herein, all Claims must be
submitted to arbitration (“Arbitration”) pursuant to the terms set forth in
these Arbitration Provisions. The parties agree that the award of the arbitrator
shall be final and binding upon the parties; shall be the sole and exclusive
remedy between them regarding any Claims, counterclaims, issues, or accountings
presented or pleaded to the arbitrator; and shall promptly be payable in United
States dollars free of any tax, deduction or offset (with respect to monetary
awards). Any costs or fees, including without limitation attorneys’ fees,
incident to enforcing the arbitrator’s award shall, to the maximum extent
permitted by law, be charged against the party resisting such enforcement. The
award shall include Default Interest (as defined in the Note) both before and
after the award. Judgment upon the award of the arbitrator may be entered in any
court of competent jurisdiction, or application may be made to such court for a
judicial acceptance of the award or an order of enforcement. The parties hereby
incorporate herein the provisions and procedures set forth in the Utah Uniform
Arbitration Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time
to time, the “Arbitration Act”). In the event of conflict between the terms of
these Arbitration Provisions and the provisions of the Arbitration Act, the
terms of these Arbitration Provisions shall control.
 
3.     Arbitration Proceedings. Arbitration between the parties will be subject
to the following procedures:
 
3.1.         Pursuant to Section 110 of the Arbitration Act, the parties agree
that a party may initiate Arbitration by giving written notice to the other
party (“Arbitration Notice”) in the same manner that notice is permitted under
Section 8.8 of the Agreement; provided, however, that the Arbitration Notice may
not be given by email or fax. Arbitration will be deemed initiated as of the
date that the Arbitration Notice is deemed delivered under Section 8.8 of the
Agreement (the “Service Date”). After the Service Date, information may be
delivered, and notices may be given, by email or fax pursuant to Section 8.8 of
the Agreement. The Arbitration Notice must describe the nature of the
controversy, the remedies sought, and the election to commence Arbitration
proceedings. All Claims in the Arbitration Notice must be pleaded consistent
with the Utah Rules of Civil Procedure.
 
 
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3.2.         Within ten (10) calendar days after the Service Date, Investor
shall select and submit to Company the names of three arbitrators that are
designated as “neutrals” or qualified arbitrators by Utah ADR Services
(http://www.utahadrservices.com) (such three designated persons are referred to
herein as the “Proposed Arbitrators”). Within ten (10) calendar days after
Investor has submitted to Company the names of the Proposed Arbitrators, Company
must select, by written notice to Investor, one (1) of the Proposed Arbitrators
to act as the arbitrator for the parties under these Arbitration Provisions. If
Company fails to select one of the Proposed Arbitrators in writing within such
10-day period, then Investor may select the arbitrator from the Proposed
Arbitrators by providing written notice of such selection to Company. If
Investor fails to identify the Proposed Arbitrators within the time period
required above, then Company may at any time prior to Investor designating the
Proposed Arbitrators select one (1) arbitrator from Utah ADR Services by written
notice to Investor. Subject to subparagraph 3.12 below, the cost of the
arbitrator must be paid equally by both parties; provided, however, that if one
party refuses or fails to pay its portion of the arbitrator fee, then the other
party can advance such unpaid amount (subject to the accrual of Default Interest
thereupon), with such amount added to or subtracted from, as applicable, the
award granted by the arbitrator. If Utah ADR Services ceases to exist or to
provide a list of neutrals, then the arbitrator shall be selected under the then
prevailing rules of the American Arbitration Association. The date that the
selected arbitrator agrees in writing to serve as the arbitrator hereunder is
referred to herein as the “Arbitration Commencement Date”.
 
3.3.         An answer and any counterclaims to the Arbitration Notice, which
must be pleaded consistent with the Utah Rules of Civil Procedure, shall be
required to be delivered to the other party within twenty (20) calendar days
after the Service Date. Upon request, the arbitrator is hereby instructed to
render a default award, consistent with the relief requested in the Arbitration
Notice, against a party that fails to submit an answer within such time period.
 
3.4.         The party that delivers the Arbitration Notice to the other party
shall have the option to also commence legal proceedings with any state or
federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”),
subject to the following: (i) the complaint in the Litigation Proceedings is to
be substantially similar to the claims set forth in the Arbitration Notice,
provided that an additional cause of action to compel arbitration may also be
included therein, (ii) so long as the other party files an answer to the
complaint in the Litigation Proceedings and an answer to the Arbitration Notice,
the Litigation Proceedings will be stayed pending an award of the Arbitrator
hereunder, (iii) if the other party fails to file an answer in the Litigation
Proceedings or an answer in the Arbitration Proceedings, then the party
initiating Arbitration shall be entitled to a default judgment consistent with
the relief requested, to be entered in the Litigation Proceedings, and (iv) any
legal or procedural issue arising under the Arbitration Act that requires a
decision of a court of competent jurisdiction may be determined in the
Litigation Proceedings. Any award of the arbitrator may be entered in such
Litigation Proceedings pursuant to the Arbitration Act.
 
3.5.         Pursuant to Section 118(8) of the Arbitration Act, the parties
agree that discovery shall be conducted in accordance with the Utah Rules of
Civil Procedure; provided, however, that incorporation of such rules will in no
event supersede the Arbitration Provisions set forth herein, including without
limitation the time limitation set forth in Paragraph 3.9 below, and the
following:
 
(a)           Discovery will only be allowed if the likely benefits of the
proposed discovery outweigh the burden or expense, and the discovery sought is
likely to reveal information that will satisfy a specific element of a claim or
defense already pleaded in the Arbitration. The party seeking discovery shall
always have the burden of showing that all of the standards and limitations set
forth in these Arbitration Provisions are satisfied. The scope of discovery in
the Arbitration proceedings shall also be limited as follows:
 
(i)          To facts directly connected with the transactions contemplated by
the Agreement.
 
(ii)         To facts and information that cannot be obtained from another
source that is more convenient, less burdensome or less expensive.
 
(b)           No party shall be allowed (a) more than fifteen (15)
interrogatories (including discrete subparts), (b) more than fifteen (15)
requests for admission (including discrete subparts), (c) more than ten (10)
document requests (including discrete subparts), or (d) more than three
depositions (excluding expert depositions) for a maximum of seven (7) hours per
deposition.
 
3.6.         Any party submitting any written discovery requests, including
interrogatories, requests for production, subpoenas to a party or a third party,
or requests for admissions, must prepay the estimated attorneys’ fees and costs,
as determined by the arbitrator, before the responding party has any obligation
to produce or respond.
 
 
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(a)           All discovery requests must be submitted in writing to the
arbitrator and the other party before issuing or serving such discovery
requests. The party issuing the written discovery requests must include with
such discovery requests a detailed explanation of how the proposed discovery
requests satisfy the requirements of these Arbitration Provisions and the Utah
Rules of Civil Procedure. Any party will then be allowed to submit to the
arbitrator an estimate of the attorneys’ fees and costs associated with
responding to such written discovery requests and a written challenge to each
applicable discovery request. After receipt of an estimate of attorneys’ fees
and costs and/or challenge to one or more discovery requests, the arbitrator
will make a finding as to the likely attorneys’ fees and costs associated with
responding to the discovery requests and issue an order that (A) requires the
requesting party to prepay the attorneys’ fees and costs associated with
responding to the discovery requests, and (B) requires the responding party to
respond to the discovery requests as limited by the arbitrator within a certain
period of time after receiving payment from the requesting party.
 
(b)            In order to allow a written discovery request, the arbitrator
must find that the discovery request satisfies the standards set forth in these
Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator
must strictly enforce these standards. If a discovery request does not satisfy
any of the standards set forth in these Arbitration Provisions or the Utah Rules
of Civil Procedure, the arbitrator may modify such discovery request to satisfy
the applicable standards, or strike such discovery request in whole or in part.
 
(c)           The parties hereby agree that the following information is not
directly connected with the Transaction Documents and thus are not discoverable:
transactions with third parties (e.g., trading records not directly related to a
conversion contemplated under the Agreement) or any information related to an
affiliate of a party hereto.
 
(d)           Discovery deadlines will be set forth in a scheduling order issued
by the arbitrator. The parties hereby authorize and direct the arbitrator to
take such actions and make such rulings as may be necessary to carry out the
parties’ intent for the arbitration proceedings to be efficient and expeditious.
 
3.7.         Each party will be required to submit expert reports (and rebuttals
thereto) by the deadlines established by the arbitrator. Expert reports must
contain the following: (1) a complete statement of all opinions the expert will
offer at trial and the basis and reasons for them; (2) the expert’s name and
qualifications, including a list of all publications within the preceding 10
years, and a list of any other cases in which the expert has testified at trial
or in a deposition or prepared a report within the preceding 10 years; and (4)
the compensation to be paid for the expert’s study and testimony. The parties
are entitled to depose any other party’s expert witness one time for no more
than 4 hours. An expert may not testify in a party’s case-in-chief concerning
any matter not fairly disclosed in the expert report.
 
3.8.         All information disclosed by either party during the Arbitration
process (including without limitation information disclosed during the discovery
process) shall be considered confidential in nature. Each party agrees not to
disclose any confidential information received from the other party during the
discovery process unless (i) prior to or after the time of disclosure such
information becomes public knowledge or part of the public domain, not as a
result of any inaction or action of the receiving party, (ii) such information
is required by a court order, subpoena or similar legal duress to be disclosed
if such receiving party has notified the other party thereof in writing and
given it a reasonable opportunity to obtain a protective order from a court of
competent jurisdiction prior to disclosure; or (iii) disclosed to the receiving
party’s agents, representatives and legal counsel on a need to know basis who
each agree in writing not to disclose such information to any third party.
Pursuant to Section 118(5) of the Arbitration Act, any arbitrator selected is
hereby authorized and directed to issue a protective order to prevent the
disclosure of privileged information and confidential information upon the
written request of either party.
 
 
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3.9.         The parties hereby authorize and direct the arbitrator to take such
actions and make such rulings as may be necessary to carry out the parties’
intent for the arbitration proceedings to be efficient and expeditious. Pursuant
to Section 120 of the Arbitration Act, the parties hereby agree that an award of
the arbitrator must be made within 150 days after the Arbitration Commencement
Date. The arbitrator is hereby authorized and directed to hold a scheduling
conference within ten (10) calendar days after the Arbitration Commencement Date
in order to establish a scheduling order with various binding deadlines for
discovery, expert testimony, and the submission of documents by the parties to
enable the arbitrator to render a decision prior to the end of such 150-day
period. The Utah Rules of Evidence will apply to any final hearing before the
arbitrator.
 
3.10.       The arbitrator shall have the right to award or include in the
arbitrator’s award any relief which the arbitrator deems proper in the
circumstances, including, without limitation, specific performance and
injunctive relief, provided that the arbitrator may not award exemplary or
punitive damages.
 
3.11.       If any part of these Arbitration Provisions is found to violate
applicable law or to be illegal, then such provision shall be modified to the
minimum extent necessary to make such provision enforceable under applicable
law.
 
3.12.       The arbitrator is hereby directed to require the losing party to (i)
pay the full amount of the costs and fees of the arbitrator, and (ii) reimburse
the prevailing party the reasonable attorneys’ fees, arbitrator costs,
deposition costs, and other discovery costs incurred by the prevailing party.
 
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