Exhibit 10.2
 
SECURED CONVERTIBLE PROMISSORY NOTE
 
Effective Date: April 28, 2014
U.S. $552,500.00

 
FOR VALUE RECEIVED, DNA Precious Metals, Inc., a Nevada corporation
(“Borrower”), promises to pay to Typenex Co-Investment, LLC, a Utah limited
liability company, or its successors or assigns (“Lender”), $552,500.00 and any
interest, fees, charges and late fees on the date that is twenty-one (21) months
after the Purchase Price Date (as defined below) (the “Maturity Date”) in
accordance with the terms set forth herein and to pay interest on the
Outstanding Balance (as defined below) (including all Tranches (as defined
below), both Conversion Eligible Tranches (as defined below) and Subsequent
Tranches (as defined below) that have not yet become Conversion Eligible
Tranches) at the rate of ten percent (10%) per annum from the Effective Date (as
defined below) until the same is paid in full. This Secured Convertible
Promissory Note (this “Note”) is issued and made effective as of April 28, 2014
(the “Effective Date”). For purposes hereof, the “Outstanding Balance” of this
Note means, as of any date of determination, the Purchase Price (as defined
below), as reduced or increased, as the case may be, pursuant to the terms
hereof for redemption, conversion or otherwise, plus any original issue discount
(“OID”), the Carried Transaction Expense Amount (as defined below), accrued but
unpaid interest, collection and enforcements costs (including attorneys’ fees)
incurred by Lender, transfer, stamp, issuance and similar taxes and fees related
to Conversions (as defined below), and any other fees or charges (including
without limitation late charges) incurred under this Note. This Note is issued
pursuant to that certain Securities Purchase Agreement dated April 28, 2014, as
the same may be amended from time to time (the “Purchase Agreement”), by and
between Borrower and Lender. All interest calculations hereunder shall be
computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day
months, shall compound daily and shall be payable in accordance with the terms
of this Note. Certain capitalized terms used herein but not otherwise defined
shall have the meaning ascribed thereto in the Purchase Agreement. Certain other
capitalized terms used herein are defined in Attachment 1 attached hereto and
incorporated herein by this reference.
 
This Note carries an OID of $50,000.00. In addition, Borrower agrees to pay
$5,000.00 to Lender to cover Lender’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with
the purchase and sale of this Note, $2,500.00 of which amount was previously
paid to Lender and $2,500.00 of which amount (the “Carried Transaction Expense
Amount”) is included in the initial principal balance of this Note. The purchase
price for this Note and the Warrant (as defined in the Purchase Agreement) shall
be $500,000.00 (the “Purchase Price”), computed as follows: $552,500.00 original
principal balance, less the OID, less the Carried Transaction Expense Amount.
The Purchase Price shall be payable by delivery to Borrower at Closing of the
Investor Notes and a wire transfer of immediately available funds in the amount
of the Initial Cash Purchase Price. For purposes hereof, the term “Purchase
Price Date” means the date the Initial Cash Purchase Price is delivered by
Lender to Borrower.
 
Notwithstanding any other provision contained in this Note, the conversion by
Lender of any portion of the Outstanding Balance shall only be exercisable in
six (6) tranches (each, a “Tranche”), consisting of (i) an initial Tranche in an
amount equal to $277,500.00 and any interest, costs, fees or charges accrued
thereon or added thereto under the terms of this Note and the other Transaction
Documents (as defined in the Purchase Agreement) (“Tranche #1”), and (ii) five
(5) additional Tranches, each in the amount of $55,000.00, plus any interest,
costs, fees or charges accrued thereon or added thereto under the terms of this
Note and the other Transaction Documents (each, a “Subsequent Tranche”). Tranche
#1 shall correspond to the Initial Cash Purchase Price, $25,000.00 of the OID
and the Carried Transaction Expense Amount, and may be converted any time
subsequent to the Effective Date. The first Subsequent Tranche shall correspond
to Investor Note #1 and $5,000.00 of the OID, the second Subsequent Tranche
shall correspond to Investor Note #2 and $5,000.00 of the OID, the third
Subsequent Tranche shall correspond to Investor Note #3 and $5,000.00 of the
OID, the fourth Subsequent Tranche shall correspond to Investor Note #4 and
$5,000.00 of the OID, and the fifth Subsequent Tranche shall correspond to
Investor Note #5 and $5,000.00 of the OID. Lender’s right to convert any portion
of any of the Subsequent Tranches is conditioned upon Lender’s payment in full
of the Investor Note corresponding to such Subsequent Tranche (upon the
satisfaction of such condition, such Subsequent Tranche becomes a “Conversion
Eligible Tranche”). For the avoidance of doubt, subject to the other terms and
conditions hereof, Tranche #1 shall be deemed a Conversion Eligible Tranche as
of the Purchase Price Date for all purposes hereunder and may be converted in
whole or in part at any time subsequent to the Purchase Price Date, and each
Subsequent Tranche that becomes a Conversion Eligible Tranche may be converted
in whole or in part at any time subsequent to the first date on which such
Subsequent Tranche becomes a Conversion Eligible Tranche. For all purposes
hereunder, Conversion Eligible Tranches shall be converted (or redeemed, as
applicable) in order of the lowest-numbered Conversion Eligible Tranche. At all
times hereunder, the aggregate amount of any costs, fees or charges incurred by
or assessable against Borrower hereunder, including, without limitation, any
fees, charges or premiums incurred in connection with an Event of Default (as
defined below), shall be added to the lowest-numbered then-current Conversion
Eligible Tranche.
 
 
 

--------------------------------------------------------------------------------

 
 
1.             Payment; Prepayment. Provided there is an Outstanding Balance, on
each Installment Date (as defined below), Borrower shall pay to Lender an amount
equal to the Installment Amount (as defined below) due on such Installment Date
in accordance with Section 8. All payments owing hereunder shall be in lawful
money of the United States of America or Conversion Shares (as defined below),
as provided for herein, and delivered to Lender at the address furnished to
Borrower for that purpose. All payments shall be applied first to (a) costs of
collection, if any, then to (b) fees and charges, if any, then to (c) accrued
and unpaid interest, and thereafter, to (d) principal. Notwithstanding the
foregoing or anything to the contrary herein, so long as Borrower has not
received a Lender Conversion Notice (as defined below) or an Installment Notice
(as defined below) from Lender where the applicable Conversion Shares have not
yet been delivered and so long as no Event of Default has occurred since the
Effective Date (whether declared by Lender or undeclared), then Borrower shall
have the right, exercisable on not less than five (5) Trading Days prior written
notice to Lender to prepay the Outstanding Balance of this Note, in full, in
accordance with this Section 1. Any notice of prepayment hereunder (an “Optional
Prepayment Notice”) shall be delivered to Lender at its registered address and
shall state: (y) that Borrower is exercising its right to prepay this Note, and
(z) the date of prepayment, which shall be not less than five (5) Trading Days
from the date of the Optional Prepayment Notice. On the date fixed for
prepayment (the “Optional Prepayment Date”), Borrower shall make payment of the
Optional Prepayment Amount (as defined below) to or upon the order of Lender as
specified by Lender in writing to Borrower not more than one (1) Trading Day
prior to the Optional Prepayment Date. If Borrower exercises its right to prepay
this Note, Borrower shall make payment to Lender of an amount in cash (the
“Optional Prepayment Amount”) equal to 125% multiplied by the then Outstanding
Balance of this Note. If Borrower delivers an Optional Prepayment Notice and
fails to pay the Optional Prepayment Amount due to Lender within two (2) Trading
Days following the Optional Prepayment Date, Borrower shall forever forfeit its
right to prepay this Note pursuant to this Section.
 
2.             Security. This Note is secured by that certain Security Agreement
of even date herewith, as the same may be amended from time to time (the
“Security Agreement”), executed by Borrower in favor of Lender encumbering the
Investor Notes, as more specifically set forth in the Security Agreement, all
the terms and conditions of which are hereby incorporated into and made a part
of this Note.
 
 
2

--------------------------------------------------------------------------------

 
 
3.             Lender Optional Conversion.
 
3.1.           Lender Conversion Price. Subject to adjustment as set forth in
this Note, the conversion price for each Lender Conversion (as defined below)
shall be $0.40 (the “Lender Conversion Price”). For avoidance of doubt, Lender
shall be entitled to convert only at the Lender Conversion Price, which shall be
$0.40, unless an Event of Default, Dilutive Issuance or stock event described in
Sections 7.2 or 7.3 occurs, in which event Lender’s conversion rights shall be
as modified hereinafter.
 
3.2.           Lender Conversions. Lender has the right at any time after the
Purchase Price Date, including without limitation until any Optional Prepayment
Date (even if Lender has received an Optional Prepayment Notice), at its
election, to convert (each instance of conversion is referred to herein as a
“Lender Conversion”) all or any part of the Outstanding Balance into shares
(“Lender Conversion Shares”) of fully paid and non-assessable common stock,
$0.001 par value per share (“Common Stock”), of Borrower as per the following
conversion formula: the number of Lender Conversion Shares equals the amount
being converted (the “Conversion Amount”) divided by the Lender Conversion
Price. Conversion notices in the form attached hereto as Exhibit A (each, a
“Lender Conversion Notice”) may be effectively delivered to Borrower by any
method of Lender’s choice (including but not limited to facsimile, email, mail,
overnight courier, or personal delivery), and all Lender Conversions shall be
cashless and not require further payment from Lender. Borrower shall deliver the
Lender Conversion Shares from any Lender Conversion to Lender in accordance with
Section 9 below within three (3) Trading Days of Lender’s delivery of the Lender
Conversion Notice to Borrower.
 
3.3.           Application to Installments. Notwithstanding anything to the
contrary herein, including without limitation Section 8 hereof, Lender may, in
its sole discretion, apply all or any portion of any Lender Conversion toward
any Installment Conversion (as defined below), even if such Installment
Conversion is pending, as determined in Lender’s sole discretion, by delivering
written notice of such election (which notice may be included as part of the
applicable Lender Conversion Notice) to Borrower at any date on or prior to the
applicable Installment Date. In such event, Borrower may not elect to allocate
such portion of the Installment Amount being paid pursuant to this Section 3.3
in the manner prescribed in Section 8.3; rather, Borrower must reduce the
applicable Installment Amount by the Conversion Amount described in this Section
3.3.
 
4.             Defaults and Remedies.
 
4.1.           Defaults. The following are events of default under this Note
(each, an “Event of Default”): (i) Borrower shall fail to pay any principal when
due and payable (or payable by Conversion) hereunder; or (ii) Borrower shall
fail to deliver any Conversion Shares or True-Up Shares (as defined below) in
accordance with the terms hereof or any Warrant Shares in accordance with the
terms of the Warrant; or (iii) Borrower shall fail to pay any interest or any
other amount when due and payable (or payable by Conversion) hereunder; or (iv)
a receiver, trustee or other similar official shall be appointed over Borrower
or a material part of its assets and such appointment shall remain uncontested
for twenty (20) days or shall not be dismissed or discharged within sixty (60)
days; or (v) Borrower shall become insolvent or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any; or (vi) Borrower shall make a general
assignment for the benefit of creditors; or (vii) Borrower shall file a petition
for relief under any bankruptcy, insolvency or similar law (domestic or
foreign); or (viii) an involuntary proceeding shall be commenced or filed
against Borrower; or (ix) Borrower shall become delinquent in its filing
requirements as a fully-reporting issuer registered with the SEC; or (x)
Borrower shall fail to observe or perform any covenant, obligation, condition or
agreement of Borrower contained herein or in any other Transaction Document,
including without limitation all covenants to timely file all required quarterly
and annual reports and any other filings that are necessary to enable Lender to
sell Conversion Shares, Warrant Shares and True-Up Shares pursuant to Rule 144;
or (xi) any representation, warranty or other statement made or furnished by or
on behalf of Borrower to Lender herein, in any Transaction Document, or
otherwise in connection with the issuance of this Note shall be false,
incorrect, incomplete or misleading in any material respect when made or
furnished; or (xii) the occurrence of a Fundamental Transaction without Lender’s
prior written consent; or (xiii) Borrower shall fail to maintain the Share
Reserve as required under the Purchase Agreement; or (xiv) Borrower effectuates
a reverse split of its Common Stock without twenty (20) Trading Days prior
written notice to Borrower; or (xv) any money judgment, writ or similar process
shall be entered or filed against Borrower or any subsidiary of Borrower or any
of its property or other assets for more than $100,000, and shall remain
unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless
otherwise consented to by Lender; or (xvi) Borrower is not DWAC Eligible.
 
 
3

--------------------------------------------------------------------------------

 
 
4.2.           Remedies. Upon the occurrence of any Event of Default, Lender may
at any time thereafter accelerate this Note by written notice to Borrower, with
the Outstanding Balance becoming immediately due and payable in cash at the
Mandatory Default Amount (as defined hereafter). Notwithstanding the foregoing,
upon the occurrence of any Event of Default, Lender may, at its option, elect to
increase the Outstanding Balance by applying the Default Effect (subject to the
limitation set forth below) via written notice to Borrower without accelerating
the Outstanding Balance, in which event the Outstanding Balance shall be
increased as of the date of the occurrence of the applicable Event of Default
pursuant to the Default Effect, but the Outstanding Balance shall not be
immediately due and payable unless so declared by Lender (for the avoidance of
doubt, if Lender elects to apply the Default Effect pursuant to this sentence,
it shall reserve the right to declare Outstanding Balance immediately due and
payable at any time and no such election by Lender shall be deemed to be a
waiver of its right to declare the Outstanding Balance immediately due and
payable as set forth herein unless otherwise agreed to by Lender in writing).
Notwithstanding the foregoing, upon the occurrence of any Event of Default
described in clauses (iv), (v), (vi), (vii) or (viii) of Section 4.1, the
Outstanding Balance as of the date of acceleration shall become immediately and
automatically due and payable in cash at the Mandatory Default Amount, without
any written notice required by Lender. The “Mandatory Default Amount” means the
greater of (i) the Outstanding Balance (including all Tranches, both Conversion
Eligible Tranches and Subsequent Tranches that have not yet become Conversion
Eligible Tranches) divided by the Installment Conversion Price (as defined
below) on the date the Mandatory Default Amount is either demanded or paid in
full, whichever has a lower Installment Conversion Price, multiplied by the
volume weighted average price (the “VWAP”) on the date the Mandatory Default
Amount is either demanded or paid in full, whichever has a higher VWAP, or (ii)
125% multiplied by the Outstanding Balance (the “Default Effect”), provided that
the Default Effect may only be applied with respect to two (2) Events of
Default. At any time following the occurrence of any Event of Default, upon
written notice given by Lender to Borrower, (a) interest shall accrue on the
Outstanding Balance beginning on the date the applicable Event of Default
occurred at an interest rate equal to the lesser of 22% per annum or the maximum
rate permitted under applicable law (“Default Interest”), (b) the Lender
Conversion Price for all Lender Conversions occurring after the date of the
applicable Event of Default shall equal the lower of the Lender Conversion Price
applicable to any Lender Conversion and the Market Price (as defined below) as
of any applicable date of Conversion, and (c) the true-up provisions of Section
11 below shall apply to all Lender Conversions that occur after the date the
applicable Event of Default occurred. Additionally, following the occurrence of
any Event of Default, Borrower may, at its option, pay any Lender Conversion in
cash instead of Lender Conversion Shares by paying to Lender on or before the
applicable Delivery Date (as defined below) a cash amount equal to the number of
Lender Conversion Shares set forth in the applicable Lender Conversion Notice
multiplied by the highest intra-day trading price of the Common Stock that
occurs during the period beginning on the date the applicable Event of Default
occurred and ending on the date of the applicable Lender Conversion Notice. In
connection with acceleration described herein, Lender need not provide, and
Borrower hereby waives, any presentment, demand, protest or other notice of any
kind, and Lender may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such acceleration may be rescinded and
annulled by Lender at any time prior to payment hereunder and Lender shall have
all rights as a holder of the Note until such time, if any, as Lender receives
full payment pursuant to this Section 4.2. No such rescission or annulment shall
affect any subsequent Event of Default or impair any right consequent thereon.
Nothing herein shall limit Lender’s right to pursue any other remedies available
to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to Borrower’s failure to
timely deliver Conversion Shares upon Conversion of the Notes as required
pursuant to the terms hereof.
 
 
4

--------------------------------------------------------------------------------

 
 
4.3.           Certain Additional Rights. Notwithstanding anything to the
contrary herein, in the event Borrower fails to make any payment or otherwise to
deliver any Conversion Shares as and when required under this Note, then (i) the
Lender Conversion Price for all Lender Conversions occurring after the date of
such failure to pay shall equal the lower of the Lender Conversion Price
applicable to any Lender Conversion and the Market Price as of any applicable
date of Conversion, and (ii) the true-up provisions of Section 11 below shall
apply to all Lender Conversions that occur after the date of such failure to
pay, provided that all references to the “Installment Notice” in Section 11
shall be replaced with references to a “Lender Conversion Notice” for purposes
of this Section 4.3, all references to “Installment Conversion Shares” in
Section 11 shall be replaced with references to “Lender Conversion Shares” for
purposes of this Section 4.3, and all references to the “Installment Conversion
Price” in Section 11 shall be replaced with references to the “Lender Conversion
Price” for purposes of this Section 4.3.
 
4.4.           Cross Default. A breach or default by Borrower of any covenant or
other term or condition contained in any Other Agreements (as defined below)
shall, at the option of Lender, be considered a default under this Note, in
which event Lender shall be entitled (but in no event required) to apply all
rights and remedies of Lender under the terms of this Note. “Other Agreements”
means, collectively, (a) all existing and future agreements and instruments
between, among or by Borrower (or an affiliate), on the one hand, and Lender (or
an affiliate), on the other hand, and (b) any financing agreement or a material
agreement that affects Borrower’s ongoing business operations. For the avoidance
of doubt, all existing and future loan transactions between Borrower and Lender
and their respective affiliates will be cross-defaulted with each other loan
transaction and with all other existing and future debt of Borrower to Lender.
 
5.             Unconditional Obligation; No Offset. Borrower acknowledges that
this Note is an unconditional, valid, binding and enforceable obligation of
Borrower not subject to offset (except as set forth in Section 20 below),
deduction or counterclaim of any kind. Borrower hereby waives any rights of
offset it now has or may have hereafter against Lender, its successors and
assigns, and agrees to make the payments or conversions called for herein in
accordance with the terms of this Note.
 
6.             Waiver. No waiver of any provision of this Note 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.
 
7.             Rights Upon Issuance of Securities.
 
7.1.           Subsequent Equity Sales. If Borrower or any subsidiary thereof,
as applicable, at any time this Note is outstanding, shall sell or grant any
option to any party to purchase, or sell or grant any right to reprice, or issue
any Common Stock, preferred shares convertible into Common Stock, or debt,
warrants, options or other instruments or securities which are convertible into
or exercisable for shares of Common Stock (together herein referred to as
“Equity Securities”), including without limitation any Deemed Issuance (as
defined below), at an effective price per share less than the Lender Conversion
Price (such lower price, the “Base Share Price” and such issuance collectively,
a “Dilutive Issuance”) (if the holder (including Lender) of any Equity
Securities so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options, or rights per share which are issued
in connection with such issuance, be entitled to receive shares of Common Stock
at an effective price per share that is less than the Lender Conversion Price,
such issuance shall be deemed to have occurred for less than the Lender
Conversion Price on such date of the Dilutive Issuance), then, the Lender
Conversion Price shall be reduced and only reduced to equal the Base Share
Price. Such adjustment shall be made whenever such Common Stock or Equity
Securities are issued. Borrower shall notify Lender, in writing, no later than
the Trading Day following the issuance of any Common Stock of Equity Securities
subject to this Section 7.1, indicating therein the applicable issuance price,
or applicable reset price, exchange price, conversion price, or other pricing
terms (such notice, the “Dilutive Issuance Notice”). For purposes of
clarification, whether or not Borrower provides a Dilutive Issuance Notice
pursuant to this Section 7.1, upon the occurrence of any Dilutive Issuance, on
the date of such Dilutive Issuance the Lender Conversion Price shall be lowered
to equal the Base Share Price regardless of whether Lender accurately refers to
the Base Share Price in any Installment Notice or Lender Conversion Notice.
 
 
5

--------------------------------------------------------------------------------

 
 
7.2.           Adjustment of Lender Conversion Price upon Subdivision or
Combination of Common Stock. Without limiting any provision hereof, if Borrower
at any time on or after the Effective Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Lender Conversion
Price in effect immediately prior to such subdivision will be proportionately
reduced. Without limiting any provision hereof, if Borrower at any time on or
after the Effective Date combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Lender Conversion Price in effect immediately
prior to such combination will be proportionately increased. Any adjustment
pursuant to this Section 7.2 shall become effective immediately after the
effective date of such subdivision or combination. If any event requiring an
adjustment under this Section 7.2 occurs during the period that a Lender
Conversion Price is calculated hereunder, then the calculation of such Lender
Conversion Price shall be adjusted appropriately to reflect such event.
 
7.3.           Other Events. In the event that Borrower (or any subsidiary)
shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect Lender from dilution
or if any event occurs of the type contemplated by the provisions of this
Section 7 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or
other rights with equity features), then Borrower’s board of directors shall in
good faith determine and implement an appropriate adjustment in the Lender
Conversion Price so as to protect the rights of Lender, provided that no such
adjustment pursuant to this Section 7.3 will increase the Lender Conversion
Price as otherwise determined pursuant to this Section 7, provided further that
if Lender does not accept such adjustments as appropriately protecting its
interests hereunder against such dilution, then Borrower’s board of directors
and Lender shall agree, in good faith, upon an independent investment bank of
nationally recognized standing to make such appropriate adjustments, whose
determination shall be final and binding and whose fees and expenses shall be
borne by Borrower.
 
8.             Borrower Installments.
 
8.1.           Installment Conversion Price. Subject to the adjustments set
forth herein, the conversion price for each Installment Conversion (the
“Installment Conversion Price”) shall be the lesser of (i) the Lender Conversion
Price, or (ii) 65% (the “Conversion Factor”) of the average of the three (3)
lowest Closing Bid Prices in the twenty (20) Trading Days immediately preceding
the applicable Conversion (the “Market Price”), provided that if at any time the
average of the three (3) lowest Closing Bid Prices in the twenty (20) Trading
Days immediately preceding any date of measurement is below $0.20, then in such
event the then-current Conversion Factor shall be reduced by 5% for all future
Conversions (e.g., 65% to 60%). Additionally, if at any time after the Effective
Date Borrower is not DWAC Eligible, then the then-current Conversion Factor will
automatically be reduced by 5% for all future Conversions. If at any time after
the Effective Date, the Conversion Shares are not DTC Eligible, then the
then-current Conversion Factor will automatically be reduced by an additional 5%
for all future Conversions. For example, the first time Borrower is not DWAC
Eligible, the Conversion Factor for future Conversions thereafter will be
reduced from 65% to 60% for purposes of this example. Following such event, the
first time the Conversion Shares are no longer DTC Eligible, the Conversion
Factor for future Conversions thereafter will be reduced from 60% to 55% for
purposes of this example.
 
 
6

--------------------------------------------------------------------------------

 
 
8.2.           Installment Conversions. Beginning on the date that is six (6)
months after the Purchase Price Date and on the same day of each month
thereafter until the Maturity Date (each, an “Installment Date”), Borrower shall
pay to Lender the applicable Installment Amount due on such date, subject to the
provisions of this Section 8. Payments of each Installment Amount may be made
(a) in cash, or (b) by converting such Installment Amount into shares of Common
Stock (“Installment Conversion Shares”, and together with the Lender Conversion
Shares, the “Conversion Shares”) in accordance with this Section 8 (each an
“Installment Conversion”, and together with Lender Conversions, a “Conversion”)
per the following formula: the number of Installment Conversion Shares equals
the portion of the applicable Installment Amount being converted divided by the
Installment Conversion Price, or (c) by any combination of the foregoing, so
long as the cash is delivered to Lender on the applicable Installment Date and
the Installment Conversion Shares are delivered to Lender on or before the
applicable Delivery Date. Notwithstanding the foregoing, Borrower will not be
entitled to elect an Installment Conversion with respect to any portion of any
applicable Installment Amount and shall be required to pay the entire amount of
such Installment Amount in cash if on the applicable Installment Notice Due Date
(defined below) there is an Equity Conditions Failure (as defined below), and
such failure is not waived in writing by Lender. Moreover, in the event Borrower
desires to pay all or any portion of any Installment Amount in cash, it must
notify Lender in writing of such election and the portion of the applicable
Installment Amount it elects to pay in cash not more than twenty-five (25) or
less than fifteen (15) Trading Days prior to the applicable Installment Date. If
Borrower fails to so notify Lender, it shall not be permitted to elect to pay
any portion of such Installment Amount in cash unless otherwise agreed to by
Lender in writing or proposed by Lender in an Installment Notice delivered by
Lender to Borrower. Notwithstanding the foregoing or anything to the contrary
herein, Borrower shall only be obligated to deliver Installment Amounts with
respect to Tranches that have become Conversion Eligible Tranches and shall have
no obligation to pay to Lender any Installment Amount with respect to any
Tranche that has not become a Conversion Eligible Tranche. In furtherance
thereof, in the event Borrower has repaid all Conversion Eligible Tranches
pursuant to the terms of this Note, it shall have no further obligations to
deliver any Installment Amount to Lender unless and until any Subsequent Tranche
that was not previously a Conversion Eligible Tranche becomes a Conversion
Eligible Tranche pursuant to the terms of this Note.
 
8.3.           Allocation of Installment Amounts. On or prior to each
Installment Date (each, an “Installment Notice Due Date”), Lender may, but shall
not be obligated to, propose an allocation of the applicable Installment Amount
between payment of the applicable Installment Amount in cash and via an
Installment Conversion by delivery of a notice to Borrower by email or fax
substantially in the form attached hereto as Exhibit B (each, an “Installment
Notice”). Following its receipt of such an Installment Notice, Borrower may
either ratify Lender’s proposed allocation or elect to change the allocation by
written notice to Lender by email or fax on or before 12:00 p.m. New York time
on the applicable Installment Date, so long as the sum of the cash payments and
the amount of Installment Conversions equal the applicable Installment Amount,
provided that Borrower may not change the allocation to increase the portion of
the Installment Amount payable in cash unless it has previously given Lender not
more than twenty-five (25) or less than fifteen (15) Trading Days advance
written notice of such election as set forth in Section 8.2 above. If Borrower
fails to notify Lender of its election to change the allocation prior to the
deadline set forth in the previous sentence, it shall be deemed to have ratified
and accepted the allocation set forth in the applicable Installment Notice. If
Lender does not deliver an Installment Notice to Borrower as set forth above in
this Section 8.3, then Borrower may, subject to the last two sentences of
Section 8.2 above, propose an allocation in an Installment Notice delivered to
Lender by email or fax on or before 5:00 p.m. New York time on the applicable
Installment Date, provided that if Borrower fails to notify Lender of its
allocation election prior to such deadline, it shall be deemed to have elected
to allocate the entire Installment Amount to be converted via an Installment
Conversion. Borrower acknowledges and agrees that regardless of which party
prepares the applicable Installment Notice, the amounts and calculations set
forth thereon are subject to correction or adjustment because of error, mistake,
or any adjustment resulting from an Event of Default or other adjustment
permitted under the Transaction Documents (an “Adjustment”). Furthermore, no
error or mistake in the preparation of such notices, or failure to apply any
Adjustment that could have been applied prior to the preparation of an
Installment Notice may be deemed a waiver of Lender’s right to enforce the terms
of any Note, even if such error, mistake, or failure to include an Adjustment
arises from Lender’s own calculation. Borrower shall deliver the Installment
Conversion Shares from any Installment Conversion to Lender in accordance with
Section 9 below on or before each applicable Installment Date.
 
 
7

--------------------------------------------------------------------------------

 
 
9.             Method of Conversion Share Delivery. On or before the close of
business on the third (3rd) Trading Day following the Installment Date or the
third (3rd) Trading Day following the date of delivery of a Lender Conversion
Notice, as applicable (the “Delivery Date”), Borrower shall, provided it is DWAC
Eligible at such time, deliver or cause its transfer agent to deliver the
applicable Conversion Shares electronically via DWAC to the account designated
by Lender in the applicable Lender Conversion Notice or Installment Notice. If
Borrower is not DWAC Eligible, it shall deliver to Lender or its broker (as
designated in the Lender Conversion Notice or Installment Notice, as
applicable), via reputable overnight courier, a certificate representing the
number of shares of Common Stock equal to the number of Conversion Shares to
which Lender shall be entitled, registered in the name of Lender or its
designee. For the avoidance of doubt, Borrower has not met its obligation to
deliver Conversion Shares by the Delivery Date unless Lender or its broker, as
applicable, has actually received the certificate representing the applicable
Conversion Shares no later than the close of business on the relevant Delivery
Date pursuant to the terms set forth above.
 
10.           Conversion Delays. If Borrower fails to deliver Conversion Shares
or True-Up Shares in accordance with the timeframes stated in Sections 3, 8, 9,
or 11, as applicable, Lender, at any time prior to selling all of those
Conversion Shares or True-Up Shares, as applicable, may rescind in whole or in
part that particular Conversion attributable to the unsold Conversion Shares or
True-Up Shares, with a corresponding increase to the Outstanding Balance (any
returned Conversion Amount will tack back to the Purchase Price Date). In
addition, for each Conversion, in the event that Conversion Shares or True-Up
Shares are not delivered by the fourth Trading Day (inclusive of the day of the
Conversion or the True-Up Date (as defined below), as applicable), a late fee
equal to the greater of $500.00 per day and 2% of the applicable Conversion
Amount or Installment Amount, as applicable (but in any event the cumulative
amount of such late fees shall not exceed the applicable Conversion Amount or
Installment Amount) will be assessed for each day after the third Trading Day
(inclusive of the day of the Conversion and the True-Up Date) until Conversion
Share or True-Up Share delivery is made; and such late fee will be added to the
Outstanding Balance (under Lender’s and Borrower’s expectations that any late
fees charged will tack back to the Purchase Price Date).
 
11.           True-Up. On the date that is twenty-three (23) Trading Days (a
“True-Up Date”) from each date Borrower delivers Free Trading (as defined below)
Installment Conversion Shares to Lender, there shall be a true-up where Lender
shall have the right to require Borrower to deliver to Lender additional
Installment Conversion Shares (“True-Up Shares”) if the Installment Conversion
Price as of the True-Up Date is less than the Installment Conversion Price used
in the applicable Installment Notice. In such event, Borrower shall deliver to
Lender within three (3) Trading Days of the date Lender delivers notice of its
right to receive True-Up Shares to Borrower (pursuant to a form of notice
substantially in the form attached hereto as Exhibit C) the number of True-Up
Shares equal to the difference between the number of Installment Conversion
Shares that would have been delivered to Lender on the True-Up Date based on the
Installment Conversion Price as of the True-Up Date and the number of
Installment Conversion Shares originally delivered to Lender pursuant to the
applicable Installment Notice. For the avoidance of doubt, if the Installment
Conversion Price as of the True-Up Date is higher than the Installment
Conversion Price set forth in the applicable Installment Notice, then Borrower
shall have no obligation to deliver True-Up Shares to Lender, nor shall Lender
have any obligation to return any excess Installment Conversion Shares to
Borrower under any circumstance.
 
 
8

--------------------------------------------------------------------------------

 
 
12.           Ownership Limitation. Notwithstanding anything to the contrary
contained in this Note or the other Transaction Documents, if at any time Lender
shall or would be issued shares of Common Stock under any of the Transaction
Documents, but such issuance would cause Lender (together with its affiliates)
to beneficially own a number of shares exceeding 4.99% of the number of shares
of Common Stock outstanding on such date (including for such purpose the shares
of Common Stock issuable upon such issuance) (the “Maximum Percentage”), then
Borrower must not issue to Lender shares of the Common Stock which would exceed
the Maximum Percentage. For purposes of this Section, beneficial ownership of
Common Stock will be determined pursuant to Section 13(d) of the 1934 Act. The
shares of Common Stock issuable to Lender that would cause the Maximum
Percentage to be exceeded are referred to herein as the “Ownership Limitation
Shares”. Borrower will reserve the Ownership Limitation Shares for the exclusive
benefit of Lender. From time to time, Lender may notify Borrower in writing of
the number of the Ownership Limitation Shares that may be issued to Lender
without causing Lender to exceed the Maximum Percentage. Upon receipt of such
notice, Borrower shall be unconditionally obligated to immediately issue such
designated shares to Lender, with a corresponding reduction in the number of the
Ownership Limitation Shares. Notwithstanding the forgoing, the term “4.99%”
above shall be replaced with “9.99%” at such time as the Market Capitalization
of the Common Stock is less than $10,000,000.00. Notwithstanding any other
provision contained herein, if the term “4.99%” is replaced with “9.99%”
pursuant to the preceding sentence, such increase to “9.99%” shall remain at
9.99% until increased, decreased or waived by Lender as set forth below.
 
13.           Payment of Collection Costs. If this Note 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 Lender
otherwise takes action to collect amounts due under this Note or to enforce the
provisions of this Note then Borrower shall pay the costs incurred by Lender for
such collection, enforcement or action including, without limitation, attorneys’
fees and disbursements. Borrower also agrees to pay for any costs, fees or
charges of its transfer agent that are charged to Lender pursuant to any
Conversion or issuance of shares pursuant to this Note.
 
14.           Opinion of Counsel. In the event that an opinion of counsel is
needed for any matter related to any Note, Lender has the right to have any such
opinion provided by its counsel. Lender also has the right to have any such
opinion provided by Borrower’s counsel.
 
15.           Governing Law. This Note shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal
laws of the State of Utah, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Utah or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Utah. The provisions set forth in the Purchase Agreement
to determine the proper venue for any disputes are incorporated herein by this
reference.
 
 
9

--------------------------------------------------------------------------------

 
 
16.           Resolution of Disputes.
 
16.1.           Arbitration of Disputes. By its acceptance of this Note, each
party hereto agrees to be bound by the Arbitration Provisions set forth as an
Exhibit to the Purchase Agreement.
 
16.2.           Calculation Disputes. Notwithstanding the Arbitration
Provisions, in the case of a dispute as to any arithmetic calculation hereunder,
including without limitation calculating the Outstanding Balance, Lender
Conversion Price, Lender Shares to be delivered, Installment Conversion Price,
Installment Conversion Shares to be delivered, the Market Price, or the VWAP
(collectively, “Calculations”), Borrower or Lender (as the case may be) shall
submit the disputed determinations or arithmetic calculations (as the case may
be) via facsimile or email with confirmation of receipt (a) within two (2)
Trading Days after receipt of the applicable notice giving rise to such dispute
to Borrower or Lender (as the case may be) or (b) if no notice gave rise to such
dispute, at any time after Lender learned of the circumstances giving rise to
such dispute. If Lender and Borrower are unable to agree upon such determination
or calculation within two (2) Trading Days of such disputed determination or
arithmetic calculation (as the case may be) being submitted to Borrower or
Lender (as the case may be), then Borrower shall, within two (2) Trading Days,
submit via facsimile the disputed Calculation to an independent, reputable
investment bank or accounting firm selected by Lender. Borrower shall cause the
investment bank or accounting firm to perform the determinations or calculations
(as the case may be) and notify Borrower and Lender of the results no later than
ten (10) Trading Days from the time it receives such disputed determinations or
calculations (as the case may be). Such investment bank’s or accounting firm’s
determination or calculation with respect to the disputes set forth in this
Section 16.2 (as the case may be) shall be binding upon all parties absent
demonstrable error. The investment banker’s or accounting firm’s fee for
performing such Calculation shall be paid by the incorrect party, or if both
parties are incorrect, by the party whose Calculation is furthest from the
correct Calculation as determined by the investment banker or accounting firm.
In the event Borrower is the losing party, no extension of the Delivery Date
shall be granted and Borrower shall incur all effects for failing to deliver the
applicable Conversion Shares in a timely manner as set forth in this Note.
 
17.           Cancellation. After repayment or conversion of the entire
Outstanding Balance (including without limitation delivery of True-Up Shares
pursuant to the payment of the final Installment Amount, if applicable), this
Note shall be deemed paid in full, shall automatically be deemed canceled, and
shall not be reissued.
 
18.           Amendments. The prior written consent of both parties hereto shall
be required for any change or amendment to this Note.
 
19.           Assignments. Borrower may not assign this Note without the prior
written consent of Lender. This Note and any shares of Common Stock issued upon
conversion of this Note may be offered, sold, assigned or transferred by Lender
without the consent of Borrower.
 
20.           Offset Rights. Notwithstanding anything to the contrary herein or
in any of the other Transaction Documents, (a) the parties hereto acknowledge
and agree that Lender maintains a right of offset pursuant to the terms of the
Investor Notes that, under certain circumstances, permits Lender to deduct
amounts owed by Borrower under this Note from amounts otherwise owed by Lender
under the Investor Notes, and (b) in the event of the occurrence of any Event of
Default (as defined the Investor Notes or any other note issued by the initial
Lender in connection with the Purchase Agreement), or at any other time,
Borrower shall be entitled to deduct and offset any amount owing by the initial
Lender under the Investor Notes from any amount owed by Borrower under this Note
(the “Borrower Offset Right”). In the event that Borrower’s exercise of Borrower
Offset Right results in the full satisfaction of Borrower’s obligations under
this Note, Lender shall return the original Note to Borrower marked “cancelled”
or, in the event this Note has been lost, stolen or destroyed, a lost note
affidavit in a form reasonably acceptable to Borrower. For the avoidance of
doubt, Borrower shall not incur any prepayment premium set forth in Section 1
hereof with respect to any portions of this Note that are satisfied by way of
Borrower Offset Right.
 
 
10

--------------------------------------------------------------------------------

 
 
21.           Time of the Essence. Time is expressly made of the essence with
respect to each and every provision of this Note and the documents and
instruments entered into in connection herewith.
 
22.           Notices. Whenever notice is required to be given under this Note,
unless otherwise provided herein, such notice shall be given in accordance with
the subsection of the Purchase Agreement titled “Notices.”
 
[Remainder of page intentionally left blank; signature page follows]

 
 
 
11

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the
Effective Date set out above.
 

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

 
ACKNOWLEDGED, ACCEPTED AND AGREED:
 
LENDER:
 
Typenex Co-Investment, LLC
 
By:
Red Cliffs Investments, Inc., its Manager
                   
By:
/s/ John M. Fife, President
     
John M. Fife, President
 

 

 

 
[Signature Page to Secured Convertible Promissory Note]
 

--------------------------------------------------------------------------------

 
 
ATTACHMENT 1
DEFINITIONS
 
For purposes of this Note, the following terms shall have the following
meanings:
 
A1.           “Deemed Issuance” means an issuance of Common Stock that shall be
deemed to have occurred on the latest possible permitted date pursuant to the
terms hereof or any applicable Warrant in the event Borrower fails deliver
Conversion Shares as and when required pursuant to Sections 3 or 8 of the Note
or Warrant Shares (as defined in the Purchase Agreement) as and when required
pursuant to the Warrant. For the avoidance of doubt, if Borrower has elected or
is deemed under Section 8.3 to have elected to make an Installment Payment in
Installment Conversion Shares and fails to deliver such Installment Conversion
Shares, such failure shall be considered a Deemed Issuance hereunder even if an
Equity Conditions Failure exists at that time or other relevant date of
determination.
 
A2.           “DTC” means the Depository Trust Company.
 
A3.           “DTC Eligible” means, with respect to the Common Stock, that such
Common Stock is eligible to be deposited in certificate form at the DTC, cleared
and converted into electronic shares by the DTC and held in the name of the
clearing firm servicing Lender’s brokerage firm for the benefit of Lender.
 
A4.           “DTC/FAST Program” means the DTC’s Fast Automated Securities
Transfer Program.
 
A5.           “DWAC” means Deposit Withdrawal at Custodian as defined by the
DTC.
 
A6.           “DWAC Eligible” means that (i) Borrower’s Common Stock is eligible
at DTC for full services pursuant to DTC’s operational arrangements, including
without limitation transfer through DTC’s DWAC system, (ii) Borrower has been
approved (without revocation) by the DTC’s underwriting department, (iii)
Borrower’s transfer agent is approved as an agent in the DTC/FAST Program, (iv)
the Conversion Shares (as defined below) are otherwise eligible for delivery via
DWAC; (v) Borrower has previously delivered all Conversion Shares to Lender via
DWAC; and (vi) Borrower’s transfer agent does not have a policy prohibiting or
limiting delivery of the Conversion Shares via DWAC.
 
A7.           “Equity Conditions Failure” means that any of the following
conditions has not been satisfied during any applicable Equity Conditions
Measuring Period (as defined below): (i) with respect to the applicable date of
determination all of the Conversion Shares are freely tradable under Rule 144 or
without the need for registration under any applicable federal or state
securities laws (in each case, disregarding any limitation on conversion of this
Note); (ii) on each day during the period beginning one month prior to the
applicable date of determination and ending on and including the applicable date
of determination (the “Equity Conditions Measuring Period”), the Common Stock is
listed or designated for quotation (as applicable) on any of The New York Stock
Exchange, NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Global Market,
the Nasdaq Capital Market, the OTC Bulletin Board, the OTCQX or the OTCQB (each,
an “Eligible Market”) and shall not have been suspended from trading on any such
Eligible Market (other than suspensions of not more than two (2) Trading Days
and occurring prior to the applicable date of determination due to business
announcements by Borrower); (iii) on each day during the Equity Conditions
Measuring Period, Borrower shall have delivered all shares of Common Stock
issuable upon conversion of this Note on a timely basis as set forth in
Section 9 hereof and all other shares of capital stock required to be delivered
by Borrower on a timely basis as set forth in the other Transaction Documents;
(iv) any shares of Common Stock to be issued in connection with the event
requiring determination may be issued in full without violating Section 12
hereof (Lender acknowledges that Borrower shall be entitled to assume that this
condition has been met for all purposes hereunder absent written notice from
Lender); (v) any shares of Common Stock to be issued in connection with the
event requiring determination may be issued in full without violating the rules
or regulations of the Eligible Market on which the Common Stock is then listed
or designated for quotation (as applicable); (vi) on each day during the Equity
Conditions Measuring Period, no public announcement of a pending, proposed or
intended Fundamental Transaction shall have occurred which has not been
abandoned, terminated or consummated; (vii) Borrower shall have no knowledge of
any fact that would reasonably be expected to cause any of the Conversion Shares
to not be freely tradable without the need for registration under any applicable
state securities laws (in each case, disregarding any limitation on conversion
of this Note); (viii) on each day during the Equity Conditions Measuring Period,
Borrower otherwise shall have been in material compliance with each, and shall
not have breached any, term, provision, covenant, representation or warranty of
any Transaction Document; (ix) without limiting clause (viii) above, on each day
during the Equity Conditions Measuring Period, there shall not have occurred an
Event of Default or an event that with the passage of time or giving of notice
would constitute an Event of Default; (x) on each Installment Notice Due Date
and each Installment Date, the average and median daily dollar volume of the
Common Stock on its principal market for the previous twenty-three (23) Trading
Days shall be greater than $10,000.00; (xi) the ten (10) day average VWAP of the
Common Stock is greater than $0.10, and (xii) the Common Stock shall be DWAC
Eligible as of each applicable Installment Notice Due Date and Installment Date.
 
 
Attachment 1 to Secured Convertible Promissory Note, Page 1

--------------------------------------------------------------------------------

 
 
A8.           “Free Trading” means that (a) the shares or certificate(s)
representing the applicable shares of Common Stock have been cleared and
approved for public resale by the compliance departments of Lender’s brokerage
firm and the clearing firm servicing such brokerage, and (b) such shares are
held in the name of the clearing firm servicing Lender’s brokerage firm and have
been deposited into such clearing firm’s account for the benefit of Lender.
 
A9.           “Fundamental Transaction” means that (y) (i) Borrower or any of
its subsidiaries shall, directly or indirectly, in one or more related
transactions, consolidate or merge with or into (whether or not Borrower or any
of its subsidiaries is the surviving corporation) any other person or entity, or
(ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one
or more related transactions, sell, lease, license, assign, transfer, convey or
otherwise dispose of all or substantially all of its respective properties or
assets to any other person or entity, or (iii) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions,
allow any other person or entity to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of
voting stock of Borrower (not including any shares of voting stock of Borrower
held by the Person or Persons making or party to, or associated or affiliated
with the persons or entities making or party to, such purchase, tender or
exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, consummate a stock or share
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with any
other person or entity whereby such other person or entity acquires more than
50% of the outstanding shares of voting stock of Borrower (not including any
shares of voting stock of Borrower held by the other persons or entities making
or party to, or associated or affiliated with the other persons or entities
making or party to, such stock or share purchase agreement or other business
combination), or (v) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, reorganize, recapitalize or
reclassify the Common Stock, other than an increase in the number of authorized
shares of Borrower’s Common Stock, or (z) any “person” or “group” (as these
terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the
rules and regulations promulgated thereunder) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding
voting stock of Borrower.
 
A10.            “Installment Amount” means $34,531.25 ($552,500.00 ÷ 16), plus
the sum of any accrued and unpaid interest that has been added to the
lowest-numbered then-current Conversion Eligible Tranche as of the applicable
Installment Date and accrued, and unpaid late charges that have been added to
the lowest-numbered then-current Conversion Eligible Tranche, if any, under this
Note as of the applicable Installment Date, and any other amounts accruing or
owing to Lender under this Note as of such Installment Date; provided, however,
that, if the remaining amount owing under all then-existing Conversion Eligible
Tranches or otherwise with respect to this Note as of the applicable Installment
Date is less than the Installment Amount set forth above, then the Installment
Amount for such Installment Date (and only such Installment Amount) shall be
reduced (and only reduced) by the amount necessary to cause such Installment
Amount to equal such outstanding amount.
 
A11.           “Market Capitalization of the Common Stock” shall mean the
product equal to (a) the average VWAP of the Common Stock for the immediately
preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of
outstanding shares of Common Stock as reported on Borrower’s most recently filed
Form 10-Q or Form 10-K. By written notice to Borrower, Lender may increase,
decrease or waive the Maximum Percentage as to itself but any such waiver will
not be effective until the 61st day after delivery thereof. The foregoing 61-day
notice requirement is enforceable, unconditional and non-waivable and shall
apply to all affiliates and assigns of Lender.
 
A12.           “Payment Default” means (i) an Event of Default that occurs
pursuant to Sections 4.1(i), 4.1(ii) or 4.1(iii) hereof, or (ii) any failure,
for any reason, by Borrower to timely pay any amount due hereunder, whether by
Installment Amount, or pursuant to a Lender Conversion, Maturity Date or
otherwise. For avoidance of doubt, any such failure shall be a Payment Default
for purposes of this Note including, without limitation, Section 16.1 hereof,
irrespective of any defenses, excuses or Claims asserted by Borrower.
 
 
Attachment 1 to Secured Convertible Promissory Note, Page 2

--------------------------------------------------------------------------------

 
 
A13.           “Trading Day” shall mean any day on which the Common Stock is
traded or tradable for any period on the Common Stock’s principal market, or on
the principal securities exchange or other securities market on which the Common
Stock is then being traded.
 
 
 
 
 
 
 
Attachment 1 to Secured Convertible Promissory Note, Page 3

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
Typenex Co-Investment, LLC
303 East Wacker Drive, Suite 1200
Chicago, Illinois 60601

 
DNA Precious Metals, Inc.
Date: __________________

Attn: Tony Giuliano
9125 rue Pascal Gagnon, Suite 204
Saint Leonard, Quebec H1P 1Z4
Canada

 
LENDER CONVERSION NOTICE
 
The above-captioned Lender hereby gives notice to DNA Precious Metals, Inc., a
Nevada corporation (the “Borrower”), pursuant to that certain Secured
Convertible Promissory Note made by Borrower in favor of Lender on April 28,
2014 (the “Note”), that Lender elects to convert the portion of the Note balance
set forth below into fully paid and non-assessable shares of Common Stock of
Borrower as of the date of conversion specified below. Said conversion shall be
based on the Lender Conversion Price set forth below. In the event of a conflict
between this Lender Conversion Notice and the Note, the Note shall govern, or,
in the alternative, at the election of Lender in its sole discretion, Lender may
provide a new form of Lender Conversion Notice to conform to the Note.
Capitalized terms used in this notice without definition shall have the meanings
given to them in the Note.
 
 
A.
Date of Conversion:    ____________

 
B.
Lender Conversion #:   ____________

 
C.
Conversion Amount:   ____________

 
D.
Lender Conversion Price:  _______________

 
E.
Lender Conversion Shares:  _______________ (C divided by D)

 
F.
Remaining Outstanding Balance of Note:  ____________*

 
G.
Remaining balance of Investor Note(s): ____________*

 
H.
Outstanding Balance of Note net of balance of Investor Note(s): ____________* (F
minus G)

 
* Subject to adjustments for corrections, defaults, interest and other
adjustments permitted by the Transaction Documents (as defined in the Purchase
Agreement).
 
The Conversion Amount converted hereunder shall be deducted from the following
Conversion Eligible Tranche(s):
 
Conversion Amount
Tranche No.
           

 
Please transfer the Lender Conversion Shares electronically (via DWAC) to the
following account:
Broker:  _________________________
 
Address:
___________________
DTC#:  __________________________
   
___________________
Account #:  _______________________
   
___________________
Account Name:  ___________________
   
___________________

 
Exhibit A to Secured Convertible Promissory Note, Page 1

--------------------------------------------------------------------------------

 
 
To the extent the Lender Conversion Shares are not able to be delivered to
Lender electronically via the DWAC system, deliver all such certificated shares
to Lender via reputable overnight courier after receipt of this Conversion
Notice (by facsimile transmission or otherwise) to:
_____________________________________
_____________________________________
_____________________________________

Sincerely,
 
Lender:
 
Typenex Co-Investment, LLC
 
By:
Red Cliffs Investments, Inc., its Manager
               
By:
       
John M. Fife, President
 

 
 
 
 
 
 

 
Exhibit A to Secured Convertible Promissory Note, Page 2

--------------------------------------------------------------------------------

 
 
EXHIBIT B
DNA Precious Metals, Inc.
9125 rue Pascal Gagnon, Suite 204
Saint Leonard, Quebec H1P 1Z4
Canada

 
Typenex Co-Investment, LLC
Date: _____________

Attn: John Fife
303 E. Wacker Dr., Suite 1200
Chicago, IL 60601
 
INSTALLMENT NOTICE
 
The above-captioned Borrower hereby gives notice to Typenex Co-Investment, LLC,
a Utah limited liability company (the “Lender”), pursuant to that certain
Secured Convertible Promissory Note made by Borrower in favor of Lender on April
28, 2014 (the “Note”), of certain Borrower elections and certifications related
to payment of the Installment Amount of $_________________ due on ___________,
201_ (the “Installment Date”). In the event of a conflict between this
Installment Notice and the Note, the Note shall govern, or, in the alternative,
at the election of Lender in its sole discretion, Lender may provide a new form
of Installment Notice to conform to the Note. Capitalized terms used in this
notice without definition shall have the meanings given to them in the Note.
 
INSTALLMENT CONVERSION AND CERTIFICATIONS
AS OF THE INSTALLMENT DATE
 
A.
INSTALLMENT CONVERSION

 
 
A.
Installment Date: ____________, 201_

 
B.
Installment Amount:   ____________

 
C.
Portion of Installment Amount Borrower elected to pay in cash: ____________

 
D.
Portion of Installment Amount to be converted into Common Stock: ____________ (B
minus C)

 
E.
Installment Conversion Price:  _______________ (lower of (i) Lender Conversion
Price in effect and (ii) Market Price as of Installment Date)

 
F.
Installment Conversion Shares:  _______________ (D divided by E)

 
G.
Remaining Outstanding Balance of Note:  ____________ *

 
H.
Remaining balance of Investor Note(s): ____________*

 
I.
Outstanding Balance of Note net of balance of Investor Note(s): ____________* (G
minus H)

 
B.
EQUITY CONDITIONS CERTIFICATION

 
1.
Market Capitalization of the Common Stock:________________

 
(Check One)
 
2.
_________ Borrower herby certifies that no Equity Conditions Failure exists as
of the Installment Date.

 
3.
_________ Borrower hereby gives notice that an Equity Conditions Failure has
occurred and requests a waiver from Lender with respect thereto. The Equity
Conditions Failure is as follows:

 
 
Exhibit B to Secured Convertible Promissory Note, Page 1

--------------------------------------------------------------------------------

 

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
 
 
Sincerely,
 
Borrower:  DNA Precious Metals, Inc.
 
 
By: ___________________________________
 
Name: ______________________________
 
Title: _______________________________
 

 

 
 
 
Exhibit B to Secured Convertible Promissory Note, Page 2

--------------------------------------------------------------------------------

 
 
EXHIBIT C

 
Typenex Co-Investment, LLC
303 East Wacker Drive, Suite 1200
Chicago, Illinois 60601

 
DNA Precious Metals, Inc.
Date: __________________

Attn: Tony Giuliano
9125 rue Pascal Gagnon, Suite 204
Saint Leonard, Quebec H1P 1Z4
Canada
 
TRUE-UP NOTICE
 
The above-captioned Lender hereby gives notice to DNA Precious Metals, Inc., a
Nevada corporation (the “Borrower”), pursuant to that certain Secured
Convertible Promissory Note made by Borrower in favor of Lender on April 28,
2014 (the “Note”), of True-Up Conversion Shares related to _____________, 201_
(the “Installment Date”). In the event of a conflict between this True-Up Notice
and the Note, the Note shall govern, or, in the alternative, at the election of
Lender in its sole discretion, Lender may provide a new form of True-Up Notice
to conform to the Note. Capitalized terms used in this notice without definition
shall have the meanings given to them in the Note.
 
TRUE-UP CONVERSION SHARES AND CERTIFICATIONS
AS OF THE TRUE-UP DATE
 
1.
TRUE-UP CONVERSION SHARES

 
 
A.
Installment Date: ____________, 201_

 
 
B.
True-Up Date: ____________, 201_

 
 
C.
Portion of Installment Amount converted into Common Stock:  _____________

 
 
D.
True-Up Conversion Price:  _______________ (lower of (i) Lender Conversion Price
in effect and (ii) Market Price as of True-Up Date)

 
 
E.
True-Up Conversion Shares:  _______________ (C divided by D)

 
 
F.
Installment Conversion Shares delivered: ________________

 
 
G.
True-Up Conversion Shares to be delivered: ________________ (only applicable if
E minus F is greater than zero)

 
2.
EQUITY CONDITIONS CERTIFICATION (Section to be completed by Borrower)

 
 
A.
Market Capitalization of the Common Stock:________________

 
(Check One)
 
 
B.
_________ Borrower herby certifies that no Equity Conditions Failure exists as
of the applicable True-Up Date.

 
 
Exhibit C to Secured Convertible Promissory Note, Page 1

--------------------------------------------------------------------------------

 
 
 
C.
_________ Borrower hereby gives notice that an Equity Conditions Failure has
occurred and requests a waiver from Lender with respect thereto. The Equity
Conditions Failure is as follows:

 
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
 
 
Sincerely,
 
Lender:                      
 
Typenex Co-Investment, LLC
 
By:
Red Cliffs Investments, Inc., its Manager
                   
By:
       
John M. Fife, President
 

 
 
ACKNOWLEDGED AND CERTIFIED BY:
 
Borrower:  DNA Precious Metals, Inc.
 
 
By: ___________________________________
 
Name: _____________________________
 
Title: ______________________________
 
 
Exhibit C to Secured Convertible Promissory Note, Page 2

--------------------------------------------------------------------------------