EXHIBIT 10.4
 
ESCROW AGREEMENT
 
THIS ESCROW AGREEMENT (the “Agreement”) is made as of the 29th day of February,
2012 by and among SpectrumDNA, Inc., a Delaware corporation (“SpectrumDNA”),
SpectrumDNA Studios, Inc., a Delaware corporation (“SpectrumDNA Studios”)
(SpectrumDNA and SpectrumDNA Studios collectively referred to herein as the
“Company”), James Banister, an individual (“Banister”), Parrish Ketchmark, an
individual (“Ketchmark”), and Kaye Cooper Fiore Kay & Rosenberg, LLP (the
“Escrow Agent”).
 
Recitals
 
WHEREAS, the parties hereto propose to enter into a transaction (“Transaction”)
whereby, among other things, (i) SpectrumDNA will redeem Thirty Million Six
Hundred Fifteen Thousand (30,615,000) shares of the common stock, par value
$0.001 per share (the “Common Stock”), of SpectrumDNA, and warrants to acquire
One Hundred Forty-Eight Thousand Five Hundred Eighty-Six (148,586) shares of
Common Stock (collectively referred to as “Banister’s Equity Securities”), in
consideration for the transfer to Banister of certain intellectual property
owned by SpectrumDNA and SpectrumDNA Studios, Inc. and a payment of Seven
Thousand Five Hundred Dollars ($7,500), (ii) the Board of Directors of the
Company will appoint Ketchmark as President, Chief Executive Officer and a
director of the Company effective as of the Initial Closing Date (as hereinafter
defined), and (iii) Banister will resign as a director of the Company effective
as of the Final Closing Date (as hereinafter defined);
 
WHEREAS, SpectrumDNA shall, with the assistance of Ketchmark, undertake a
private offering (the “Private Offering”) of its securities in order to raise
approximately $50,000 (the “Offering Proceeds”) for the purpose of financing the
Company’s participation in the Transaction, provide working capital for the
Company’s operating costs and extinguish certain of its liabilities; and

WHEREAS, the Escrow Agent has agreed to assist the other parties as provided
below in receiving and disbursing documents, instruments, funds and other
materials in connection with the Transaction as provided herein.
 
Agreement
 
NOW, THEREFORE, the parties hereto agree as follows:
 
1.  Private Offering.  Subsequent to the date hereof, SpectrumDNA agrees with
the assistance of Ketchmark to undertake the Private Offering.  In connection
therewith, Ketchmark agrees to use his best efforts to assist in the completion
of the Private Offering as soon as possible and prior to March 30, 2012 (the
“Initial Closing Date”).
 
2.  Deposit of Funds. The parties agree that the Offering Proceeds shall be
deposited in escrow (the “Escrow Account”) to be held and released by Escrow
Agent solely in accordance with the terms of this Agreement.
 
3.  Deposit of Initial Closing Date Transaction Documents. On or before the
Initial Closing Date, the relevant parties hereto shall deliver to the Escrow
Agent the following original documents (except where noted), fully executed by
all appropriate parties, together with completed exhibits and attachments
thereto (collectively, the “Initial Closing Date Transaction Documents”):
 
 
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(a)  Redemption Agreement between SpectrumDNA and Banister in the form attached
hereto as Exhibit A;
 
(b)  Corporate Resolutions of the Board of Directors of SpectrumDNA appointing
Ketchmark to the positions of CEO and President of SpectrumDNA.
 
4.  Deposit of Final Closing Date Transaction Documents. On or before the Final
Closing Date (as hereinafter defined), the relevant parties hereto shall deliver
to the Escrow Agent the following original documents (except where noted), fully
executed by all appropriate parties, together with completed exhibits and
attachments thereto (collectively, the “Final Closing Date Transaction
Documents”):
 
(a)  Original share certificates and warrants representing Banister’s Equity
Securities, held in Banister’s name and presented for cancellation pursuant to
the Redemption Agreement;
 
(b)  Assignment of Property Agreement between the Company and Banister in the
form attached hereto as Exhibit B (the “Assignment Agreement”);
 
(c)  Stock powers executed by Banister with Medallion Guarantee assigning
Banister’s Equity Securities to SpectrumDNA;
 
(d)  Agreement for Separation and Release between the Company and Banister in
the form attached hereto as Exhibit C;
 
(e)  Letter of resignation from Banister as a member of the Board of Directors
of the Company;
 
(f)  Corporate Resolutions of the Board of Directors of SpectrumDNA appointing
Ketchmark as the sole member of the Board of Directors of SpectrumDNA, subject
to the resignation of Banister as a director.
 
5.  SpectrumDNA Shareholder Approval.  As soon as reasonably practicable
following the Initial Closing Date, but no later than seven (7) days thereafter,
SpectrumDNA shall provide the Escrow Agent written verification (the
“Shareholder Approval Notice”) that it has obtained consent of the holders of a
majority of the issued and outstanding shares of common stock of SpectrumDNA in
favor of the transaction contemplated by the Assignment Agreement (the “Final
Closing Date”).
 
 
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6.  Disbursements.
 
(a)  Upon Initial Closing Date.  Subject to the completion of the Private
Offering on or before the Initial Closing Date and receipt of the Initial
Closing Transaction Documents, the Escrow Agent shall disburse the agreement
noted in Section 3(a) to each of the parties thereto, and the document in
Section 3(b) to Ketchmark.
 
(b)  Upon the Final Closing Date.  Upon receipt of the Shareholder Approval
Notice and each of the fully executed Final Closing Transaction Documents on or
before the Final Closing Date, Escrow Agent shall undertake disbursement as
follows:
 
(i)  Escrow Agent shall disburse from the Offering Proceeds, the following
amounts to the following parties:
 
RECIPIENT
AMOUNT
James Banister
$7,500

 
(ii)  The Escrow Agent shall disburse the agreements noted in Sections 4(b) and
4(d) to each of the parties thereto, the document in Section 4(f) to Ketchmark
and the items in Sections 4(a), 4(c) and 4(e) to SpectrumDNA.
 
(iii)  Upon receipt by Escrow Agent of a verified bank account in the name of
SpectrumDNA, with Parrish Ketchmark listed as an approved signatory to the
account, Escrow Agent shall disburse the remaining balance of the Offering
Proceeds, by wire transfer or check, to said account.
 
5.  Termination of Escrow.  The Escrow and this Agreement shall terminate:
 
(a)  In the event the Offering Proceeds or any of the Initial Closing
Transaction Documents are not received in Escrow on or before the Initial
Closing Date, Escrow Agent shall release any amounts deposited in the Escrow
Account to the investors in the Private Offering, and shall return those
documents and other materials deposited in Escrow to the party depositing such
material, and the Escrow and this Agreement shall terminate; and
 
(b)  In any event, upon the written consent of all parties hereto.
 
 
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6.  Matters Related to the Escrow Agent.
 
(a)   Duties of Escrow Agent.  Escrow Agent’s rights, duties and obligations are
strictly limited to those expressly set forth in this Agreement, and Escrow
Agent shall be under no implied obligation or subject to any implied liability
hereunder. Escrow Agent shall not be required to take notice of any default or
any other matter, nor shall Escrow Agent be bound or required to give notice of
demand, or required to take any action whatever except as herein expressly
provided.  Escrow Agent shall not be liable for any loss or damage unless caused
by its own gross negligence or willful misconduct.
 
(b)   Authorization to Open the Escrow Account.  This Agreement is to be
executed by the parties hereto so that an agreement bearing each party’s
original signature can be held by the Escrow Agent.  The parties hereto hereby
authorize Escrow Agent to establish and administer the Escrow Account upon
receipt of a fully executed copy of this Agreement.
 
(c)   Deposit of Funds.  All funds received by the Escrow Agent shall be
deposited with other escrow funds in an attorney trust account or accounts, with
any state or national bank, and may be transferred to any other such attorney
trust account or accounts.  All disbursements shall be made by check or wire
transfer unless otherwise specified herein.
 
(d)   Deposited Documents.  Escrow Agent is not required to determine (or
consider) the effectiveness, correctness, validity or adequacy of any document
that is submitted to Escrow Agent.
 
(e)   Conflicting Instructions.  Upon receipt of any conflicting instructions,
Escrow Agent is no longer obligated to take any further action in connection
with this escrow but shall immediately contact the parties hereto for further
instructions.
 
(f)    Methods of Communications.  Escrow Agent may act in reliance upon any
instrument or signature believed to be genuine and may assume that any person
purporting to give any notice or make any statement in connection with the
provisions hereof has been authorized to do so.  Escrow Agent is requested and
authorized, but not obligated, to rely upon and act in accordance with any
communication which may be given by telephone, facsimile or other electronic
transmission.  Escrow Agent shall be entitled, but not bound, to treat such
communication as fully authorized and binding and shall be entitled to take such
steps in connection with or in reliance on such communication.
 
(g)   Right to Interplead.  If any controversy arises between or among the
parties hereto or with any third party with respect to the Escrow Account,
Escrow Agent shall not be required to resolve the same or to take any action to
do so but may, at its discretion, institute such interpleader or other
proceedings as it deems proper.  Escrow Agent may rely on any joint written
instructions as to the disposition of funds, assets, documents or other things
held in escrow.
 
(h)  Resignation and Termination.  Escrow Agent may, upon providing fifteen (15)
days’ written notice to the parties hereto, resign its position and terminate
its liabilities and obligations hereunder.  In the event Escrow Agent is not
notified within fifteen (15) days of the identity and location of the successor
escrow agent, Escrow Agent shall be entitled to transfer all property held in
the Escrow Account to a court of competent jurisdiction with a request to have a
successor appointed.  Upon filing such action and delivering such property,
Escrow Agent’s obligations and responsibilities shall cease.  Similarly, the
parties hereto may also jointly terminate Escrow Agent and appoint a successor
escrow agent by providing fifteen (15) days’ written notice to Escrow Agent.
 
(i)    Indemnification.  The parties hereto jointly and severally indemnify and
hold harmless Escrow Agent from loss, damage or any claims made against Escrow
Agent arising out of or relating to this Agreement, unless caused by Escrow
Agent’s own negligence or willful misconduct, such indemnification to include
all costs and expenses incurred by Escrow Agent, including but not limited to
reasonable attorneys’ fees.
 
 
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7.  General Provisions.
 
(a)   Assignment.  Neither this Agreement nor any right or obligation created
hereby may be assigned by any party without the prior written consent of the
other parties or their successors, provided that no consent will be required for
assignments resulting from the death of a natural person.
 
(b)   Notices.  All notices or other communications required or permitted to be
given hereunder shall be in writing, shall be addressed as provided below and
shall be considered as properly given (i) if delivered in person, (ii) if sent
by overnight delivery service, (iii) if mailed by first-class United States
mail, postage prepaid, registered or certified with return receipt requested, or
(iv) if sent by facsimile copy or email and confirmed.  Notice so given shall be
effective upon receipt by the addressee; provided, however, that if any notice
is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon tender.  For the purposes of
notice, the addresses of the parties shall be as noted below; provided that any
party shall have the right to change its address for notice hereunder by giving
written notice to the other parties. The initial addresses and facsimile numbers
of the parties are as follows:
 
To:
SpectrumDNA, Inc. and SpectrumDNA Studios, Inc.
 
SpectrumDNA, Inc.
 
P.O. Box 682798
 
Park City, UT 84068
 
Attn: Rebecca Hershinger
   
To:
James Banister
 
James Banister
 
941 Cutter Lane
 
Park City, UT 84098
 
Facsimile: (435) 604-7675
   
To:
Parrish Ketchmark
 
Parrish Ketchmark
 
PO Box 14214
 
Research Triangle Park, NC 27709-4214
 
Facsimile: (919) 361-0046
   
To:
Kaye Cooper Fiore Kay & Rosenberg, LLP
 
Kaye Cooper Fiore Kay & Rosenberg, LLP
 
30A Vreeland Road, Suite 230
 
Florham Park, NJ 07932
 
Attn:  David M. Kaye, Esq.
 
Facsimile: (973) 443-0609

 
 
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(c)  Governing Law; Interpretation.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New Jersey.  As
all parties are represented by counsel and as all parties have equal negotiating
power, there shall be no construction in favor of any party due to the fact that
counsel for the other party was responsible for the drafting of the documents.
 
(d)  Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all of which together shall constitute a single
agreement. The counterparts may be delivered by facsimile transmission or by
electronic mail in portable document format (.pdf).
 
(e)  Severability.  If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, the same shall not affect any other provision
of this Agreement, but this Agreement shall be construed in a manner which, as
nearly as possible, reflects the original intent of the parties.
 
(f)   Amendment and Modification.  This Agreement may be amended or modified
only by written agreement executed by the parties hereto.
 
(g)  Waiver.  Any waiver of any of the provisions or conditions of this
Agreement or any of the rights of a party hereto shall be valid only if set
forth in an instrument in writing signed by the party granting such waiver.  Any
waiver or failure to insist upon strict compliance with any obligation,
covenant, agreement or condition shall not operate as a waiver of any other
provision.
 
(h)  Binding Effect.  This Agreement shall inure to the benefit of and be
binding upon the parties, their legal representatives, successors, and permitted
assigns and shall be effective as of the date it is accepted by the Escrow
Agent.  Any corporation into which Escrow Agent may merge, sell, or transfer its
escrow business and assets shall automatically be and become successor Escrow
Agent hereunder and shall be vested with all powers as was its predecessor
without the execution or filing of any instruments, or any further act, deed or
conveyance on the part of the parties hereto.
 
(i)   Disputes.  Any dispute arising under or in connection with this Agreement
shall be resolved by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, in the state of New Jersey by a
single arbitrator.  The arbitrator will be an active New Jersey State Bar member
in good standing.  In addition to all other powers, the arbitrator shall have
the right to determine all issues of arbitrability and shall have the authority
to issue subpoenas. Judgment on any arbitration award may be entered in any
court with jurisdiction.
 
(j)   Attorneys’ Fees.  The prevailing party in any dispute arising from this
Agreement shall be entitled to recover from the nonprevailing party its
reasonable attorneys’ fees and expenses, including any incurred in connection
with any appeal.
 
(k)  Entire Agreement.  This Agreement sets forth the entire understanding and
agreement of the parties hereto relating to the Escrow Account and supersedes
any and all other understandings, negotiations or agreements relating to the
Escrow Account.
 

 
[signature page follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
 

  SPECTRUMDNA, INC.          
 
By:
/s/ Rebecca Hershinger       Rebecca Hershinger       Chief Financial Officer  
          SPECTRUMDNA STUDIOS, INC.          
By:
/s/ Rebecca Hershinger       Rebecca Hershinger       Chief Financial Officer  
         
By:
/s/ James Banister       JAMES BANISTER            
 
/s/ Parrish Ketchmark       PARRISH KETCHMARK           Escrow Agent:  KAYE
COOPER FIORE     KAY & ROSENBERG, LLP            
By:
David M. Kaye       David M. Kaye, Esq.       Partner  

 

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