ex10-1.htm


    
      

    

    Exhibit
      10.1

     

    SUBSCRIPTION
      AGREEMENT

    


    Applied
      DNA Sciences, Inc.

    25
      Health
      Sciences Drive, Suite 113

    Stony
      Brook,  New York 11790

    


    Gentlemen
      and Ladies:

    


    The
      undersigned (the “Subscriber”) hereby subscribes for ________ unit(s)
      (the “Units”), at a price of $100,000 per Unit, each consisting of (i) a
      $100,000 principal amount 10% secured convertible promissory note (each a
“Note,” or collectively, the “Notes”) of Applied DNA Sciences,
      Inc., a Nevada corporation (the “Company”), and (ii) a warrant (each a
“Warrant,” or collectively, the “Warrants”) to purchase 200,000
      shares of the Company’s common stock, $0.001 par value (the “Common
      Stock”), exercisable for a period of four years commencing on the first
      anniversary of the date of the closing of the first purchase and sale of such
      Units (the “Closing Date”) at a price of $0.50 per
      share.  These Units are part of an offering of up to twenty (20) such
      Units by the Company to one or more subscribers (the
“Offering”).  Each Warrant may be redeemed at the option of the
      Company at a redemption price of $0.01 upon the earlier of (i) the date three
      years from issuance and (ii) the date the Company’s stock has traded on The Over
      the Counter Bulletin Board or a national securities exchange at or above $1.00
      per share for 20 consecutive trading days.  The Notes and accrued but
      unpaid interest thereon automatically convert into shares of Common Stock on
      the
      first anniversary of the Closing Date at a price equal to 70% of the average
      volume weighted average price of the Common Stock for the ten trading days
      prior
      to the Closing Date (the “Automatic Conversion Price”).  The
      Notes are convertible at the option of the holder into shares of Common Stock
      at
      a price equal to the greater of (i) 50% of the average price of the Common
      Stock
      for the ten trading days prior to the date of the notice of conversion and
      (ii)
      the Automatic Conversion Price, at any time prior to the first anniversary
      of
      the Closing Date.  In addition, at any time prior to conversion, the
      Company will have the right to prepay the Notes and accrued but unpaid interest
      thereon upon 3 days notice, such notice to allow the holders of the Notes to
      convert the Notes into shares of Common Stock prior to such
      repayment.

     

    Until
      the
      principal and interest owed under the Notes are paid in full, or converted
      into
      the Common Stock, the Notes will be secured by a security interest in all of
      the
      assets of the Company.  This security interest will be pari
      passu with the security interest granted to the holders of $150,000 of
      $50,000 principal amount secured convertible promissory notes of the Company
      bearing interest at 10% per annum issued on June 27, 2007 (the “June Notes”),
      with the security interest granted to James A. Hayward, a director, the Chairman
      of the Board of Directors, our President and Chief Executive Officer, for an
      aggregate principal amount of $550,000 in secured convertible promissory notes
      of the Company bearing interest at 10% per annum issued on April 23, 2007,
      June
      30, 2007 and July 30, 2007 (the “Hayward Notes”), and with the security
      interest granted to the holder of a $100,000 principal amount secured
      convertible promissory note of the Company bearing interest at 10% per annum
      issued on August 8, 2007 (the “August Note”).  The Company may
      issue up to $19,200,000 of debt in addition to the amounts sold in the Offering
      that may be secured by a security interest in all of the Company’s assets, which
      would be pari passu to the security interest granted to the holders of
      the Notes, the June Notes, the Hayward Notes and the August Note.

     

    The
      Notes
      bear interest at the rate of 10% per annum.  All principal and all
      accrued and unpaid interest under the Notes shall be payable in full on the
      date
      12-months subsequent to the Closing Date, referred to hereinafter as the
“Maturity Date.”

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    1.  Subscription.
      Subject to the terms and conditions hereof, the Subscriber agrees to pay
      $__________________ by check or wire transfer of immediately available funds
      as
      consideration for the Subscriber’s Note(s) and the Warrant(s).  The
      Subscriber tenders herewith a check made payable at the direction of the Company
      or wire transfer, in the amount of $__________________.  The
      Subscriber acknowledges and agrees that this subscription is irrevocable by
      the
      Subscriber but is subject to acceptance by the Company.

    


    2.  Security.  Until
      the principal and interest owed under the Notes are paid in full, or converted
      into Common Stock, the Notes will be secured by a security interest in all
      of
      the assets of the Company.  This security interest will be pari
      passu with the security interest granted to the holders of the March Notes,
      the June Notes, the Hayward Notes and the August Note.  The Company
      may issue up to $17,700,000 of debt in addition to the amounts sold in the
      Offering that may be secured by a security interest in all of the Company’s
      assets, which would be pari passu to the security interest granted to
      the holders of the Notes,, the June Notes, the Hayward Notes and the August
      Note.

    


    3.  Closing.  The
      Subscriber understands and agrees that the Company intends to make an initial
      closing of this offering of Units in the Company on or before October 31, 2007,
      but that the same may be extended for three additional periods, each such period
      not to exceed thirty (30) days, at the sole decision of the Company, without
      notice to any Subscriber. If the Company does not accept the Subscriber prior
      to
      Closing Date, this Subscription Agreement and Confidential Offering
      Questionnaire, together with the Subscriber’s funds and any other documents
      delivered to the Company, shall be promptly returned to the
      Subscriber.

    


    4.  Subscription
      Compliance.  The Subscriber agrees that this subscription is
      subject to the following terms and conditions:

    


    The
      Company shall have the right, in its sole discretion, to: (i) accept or reject
      this subscription; (ii) determine whether this Subscription Agreement has been
      properly completed by the Subscriber and (iii) determine whether the Subscriber
      has met all of the Company’s requirements for investment in a
      Unit.  If the Company deems this subscription to be defective,
      deficient or otherwise non-compliant with the terms of this offering, the
      Subscriber’s funds will be returned promptly to the Subscriber without interest
      or deduction.

    


    5.           Receipt
      of Information.

    


    
      	
              a.  

            	
              The
                Subscriber and Subscriber’s purchaser representative, if any, have
                received a copy of the Confidential Private Placement Term Sheet
                dated
                September 8, 2007.  The Subscriber, either alone or together
                with Subscriber’s purchaser representative, if any, have such knowledge
                and experience in financial and business matters as to be able to
                evaluate
                the merits and risks of an investment in the
                Company.

            


    

    


    
      	
              b.  

            	
              The
                Subscriber and Subscriber’s representative, if any, have had the
                opportunity to ask questions of and receive answers from the Company
                concerning the terms and conditions of the offering of the Units
                by the
                Company and to obtain any additional information Subscriber has requested
                which is necessary to verify the accuracy of the information furnished
                to
                the Subscriber concerning the Company and such
                offering.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    6.           Representations
      of Subscriber. In connection with the purchase of the Units, the
      Subscriber hereby represents and warrants to the Company as
      follows:

    


    
      	
              a.  

            	
              The
                Subscriber is an “accredited investor” as defined in Rule 501 of
                Regulation D promulgated under the
                Act.

            


    

    


    
      	
              b.  

            	
              The
                Unit(s) is being purchased for the Subscriber’s own account without the
                participation of any other person, with the intent of holding the
                Unit(s)
                for investment and without the intent of participating, directly
                or
                indirectly, in a distribution of the Unit(s) and not with a view
                to, or
                for a resale in connection with, any distribution of the Unit(s)
                or any
                portion thereof, nor is the undersigned aware of the existence of
                any
                distribution of the Company’s securities.  Furthermore, the
                undersigned has no present intention of dividing such Unit(s) with
                others
                or reselling or otherwise disposing of any portion of such Unit(s),
                either
                currently or after the passage of a fixed or determinable period
                of time,
                or upon the occurrence or nonoccurrence of any predetermined event
                or
                circumstance.

            


    

    


    
      	
              c.  

            	
              The
                Subscriber has no need for liquidity with respect to his purchase
                of a
                Unit(s) and is able to bear the economic risk of an investment in
                the
                Unit(s) for an indefinite period of time and is further able to afford
                a
                complete loss of such investment.

            


    

    


    
      	
              d.  

            	
              The
                Subscriber represents that his financial commitment to all investments
                (including his investment in the Company) is reasonable relative
                to his
                net worth and liquid net worth.

            


    

    


    
      	
              e.  

            	
              The
                Subscriber recognizes that the Unit(s) will be: (i) sold to the Subscriber
                without registration under any United States federal or other law
                relating
                to the registration of securities for sale and (ii) issued and sold
                in
                reliance on the exemption from registration under the Nevada Securities
                Act, as amended (the “Nevada
                Act”).

            


    

    


    
      	
              f.  

            	
              The
                Subscriber is aware that any resale of the Unit(s) cannot be made
                except
                in accordance with the registration requirements of the United States
                Securities Act of 1933, as amended (the “Securities Act”) or an
                exemption therefrom.

            


    

    


    
      	
              g.  

            	
              The
                Subscriber represents and warrants that all offers and sales of the
                Unit(s) shall be made pursuant to an exemption from registration
                under the
                Act or pursuant to registration under the Act, and the Subscriber
                will not
                engage in any hedging or short selling transactions with regard to
                the
                Unit(s) or the underlying common
                stock.

            


    

    


    
      	
              h.  

            	
              The
                Subscriber is not acquiring the Unit(s) based upon any representation,
                oral or written, by any person with respect to the future value of,
                or
                income from, the Unit(s) but rather upon an independent examination
                and
                judgment as to the prospects of the
                Company.

            


    

    


    
      	
              i.  

            	
              The
                Subscriber understands that the Company is an early stage Company,
                has
                little or no operating funds and has a minimal operating history.
                The
                Subscriber appreciates and understands the risks involved with investing
                in a Company with a limited operating history and has read and understands
                the risk factors set forth in the Confidential Private Placement
                Term
                Sheet dated September 8, 2007 and in the Company’s Annual Report on Form
                10-KSB, filed on January 16, 2007, and in its subsequent quarterly
                reports
                on Form 10-QSB.  Copies of such material are attached to the
                Confidential Private Placement Term Sheet and can be obtained by
                visiting
                the Securities and Exchange Commission’s website at
                http://www.sec.gov.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              j.  

            	
              The
                Subscriber represents, warrants and agrees that it will not sell
                or
                otherwise transfer the Notes and Warrants included in the Units or
                the
                Common Stock issuable upon conversion of the Notes and exercise of
                the
                Warrants without registration under the Securities Act or an exemption
                therefrom, and fully understands and agrees that the Subscriber must
                bear
                the economic risk of its purchase because, among other reasons, the
                Notes
                and Warrants included in the Units and the Common Stock issuable
                upon
                conversion of the Notes and exercise of the Warrants have not been
                registered under the Securities Act or under the securities laws
                of any
                state and, therefore, cannot be resold, pledged, assigned or otherwise
                disposed of unless they are subsequently registered under the Securities
                Act and under the applicable securities laws of such states, or an
                exemption from such registration is available.  In particular,
                the Subscriber is aware that the Notes and Warrants included in the
                Units
                and the Common Stock issuable upon conversion of the Notes and exercise
                of
                the Warrants are “restricted securities,” as such term is defined in Rule
                144 promulgated under the Securities Act (“Rule 144”), and they may
                not be sold pursuant to Rule 144 unless all of the conditions of
                Rule 144
                are met.

            


    

    


    
      	
              k.  

            	
              The
                Company, by and through itself and/or legal counsel, has made no
                representations or warranties as to the suitability of the Subscriber’s
                investment in the Company, the length of time the undersigned will
                be
                required to own the Unit(s), or the profit to be realized, if any,
                as a
                result of investment in the Company.  Neither the Company nor
                its counsel has made an independent investigation on behalf of the
                Subscriber, nor has the Company, by and through itself and counsel,
                acted
                in any advisory capacity to the
                Subscriber.

            


    

    


    
      	
              l.  

            	
              The
                Company, by and through itself and/or legal counsel, has made no
                representations or warranties that the past performance or experience
                on
                the part of the Company, or any partner or affiliate, their partners,
                salesmen, associates, agents, or employees or of any other person,
                will in
                any way indicate the predicted results of the ownership of the
                Unit(s).

            


    

    


    
      	
              m.  

            	
              The
                Company has made available for inspection by the undersigned, and
                his
                purchaser representative, if any, the books and records of the Company.
                Upon reasonable notice, such books and records will continue to be
                made
                available for inspection by investors upon reasonable notice during
                normal
                business hours at the principal place of business of the
                Company.

            


    

    


    
      	
              n.  

            	
              The
                Unit(s) was not offered to the Subscriber by means of publicly
                disseminated advertisement or sales literature, nor is the Subscriber
                aware of any offers made to other persons by such
                means.

            


    

    


    
      	
              o.  

            	
              All
                information which the Subscriber has provided to the Company concerning
                the Subscriber is correct and complete as of the date set forth at
                the end
                of this Subscription Agreement, and if there should be any material
                adverse change in such information prior to receiving notification
                that
                this subscription has been accepted, the undersigned will immediately
                provide the Company with such
                information.

            


    

    


    7.          
      Agreements
      of Subscriber.  The Subscriber agrees as
      follows:

    


    
      	
              c.  

            	
              The
                sale of the Unit(s) by the Company has not been recommended by any
                United
                States federal or other securities commission or regulatory authority.
                Furthermore, the foregoing authorities have not confirmed the accuracy
                or
                determined the adequacy of this Subscription Agreement or the Confidential
                Private Placement Term Sheet dated September 8,
                2007.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              d.  

            	
              The
                Unit(s) and the underlying common stock will not be offered for sale,
                sold, or transferred other than pursuant to: (i) an effective registration
                under the Nevada Act or in a transaction which is otherwise in compliance
                with the Nevada Act; (ii) an effective registration under the Act
                or in a
                transaction otherwise in compliance with the Act; and (iii) evidence
                satisfactory to the Company of compliance with the applicable securities
                laws of other jurisdictions. The Company shall be entitled to rely
                upon an
                opinion of counsel satisfactory to it with respect to compliance
                with the
                above laws.

            


    

    


    
      	
              e.  

            	
              The
                Company is under no obligation to register the Unit(s) or to comply
                with
                any exemption available for sale of the Unit(s) without registration,
                and
                the information necessary to permit routine sales of securities of
                the
                Company under Rule 144 of the Act may not be available when you desire
                to
                resell them pursuant to Rule 144 of the Act. The Company is under
                no
                obligation to act in any manner so as to make Rule 144 available
                with
                respect to the Unit(s).

            


    

    


    
      	
              f.  

            	
              There
                is no established market for the Units and it is not anticipated
                that any
                public market for the Units will develop in the
                future.

            


    

    


    
      	
              g.  

            	
              The
                Company may, if it so desires, refuse to permit the transfer of the
                Unit(s) unless the request for transfer is accompanied by an opinion
                of
                counsel acceptable to the Company to the effect that neither the
                sale nor
                the proposed transfer will result in any violation of the Act or
                the
                applicable securities laws of any other
                jurisdiction.

            


    

    


    
      	
              h.  

            	
              A
                legend indicating that the Unit(s) and the underlying common stock
                have
                not been registered under such securities laws and referring to the
                restrictions and transferability of Unit(s) and the underlying common
                stock may be placed on the certificates or instruments delivered
                to the
                Subscriber or any substitutes thereof and any transfer agent of the
                Company may be instructed to require compliance
                therewith.

            


    

    


    8.           Indemnification
      of the Company. The undersigned understands the meaning and legal
      consequences of the representations and warranties contained herein, and hereby
      agrees to indemnify and hold harmless, the Company, its respective agents,
      officers, managers and affiliates from and against any and all
      damages, losses, costs and expenses (including reasonable attorneys’ fees) which
      they or any of them may incur by reason of the failure of the Subscriber to
      fulfill any of the terms of this Subscription Agreement, or by reason of any
      breach of the representations and warranties made by the Subscriber herein,
      or
      in any document provided by the Subscriber to the Company.

    


    9.           Representative
      Capacity. If an investment in the Company is being made by a
      corporation, trust or estate, the undersigned individual signing on behalf
      of
      the Subscriber, represents that he has all right and authority, in his capacity
      as an officer, managing member, trustee, executor or other representative of
      such corporation, trust or estate, as the case may be, to make such decision
      to
      invest in the Company and to execute and deliver this Subscription Agreement
      on
      behalf of such corporation, trust or estate as the case may be, enforceable
      in
      accordance with its terms. The undersigned individual also represent that any
      such corporation, trust or estate was not formed for the purpose of buying
      the
      Unit(s) hereby subscribed.

    


    10.         Special
      Power of Attorney.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              a.

            	
              The
                Subscriber, by executing this Subscription Agreement, irrevocably
                makes,
                constitutes and appoints any executive officer of the Company, and
                each of
                them individually, as the undersigned’s true and lawful attorney, for the
                undersigned and in the undersigned’s name, place and stead, and for the
                use and benefit of the undersigned, to execute and acknowledge and,
                to the
                extent necessary, to file and
                record:

            


    

    


    
      	
            	
              1.

            	
              such
                certificates, instruments and documents as may be required to be
                filed by
                the Company or which the Company deems advisable to file under the
                laws of
                the State of Nevada or any other state or jurisdiction in which the
                Company transacts business; and

            


    

    


    
      	
            	
              2.

            	
              all
                conveyances or other instruments or documents necessary, appropriate
                or
                convenient to effect the dissolution and termination of the
                Company.

            


    

    


    
      	
            	
              b.

            	
              Such
                a power of attorney:

            


    

    


    
      	
            	
              1.

            	
              is
                a special power of attorney coupled with an interest and is irrevocable;
                and;

            


    

    


    
      	
            	
              2.

            	
              shall
                survive the death or disability of the
                Subscriber.

            


    

    


    
      	
               

            	
              c.

            	
              The
                Subscriber hereby agrees to be bound by any representations made
                by the
                Company or its substitutes acting pursuant to this Special Power
                of
                Attorney, and the undersigned hereby waives any and all defenses
                which may
                be available to him to contest, negate or disaffirm its actions or
                the
                actions of his substitutes under this Special Power of Attorney.
                The
                powers herein granted are granted for the sole and exclusive benefit
                of
                the undersigned and not on behalf of any other person, in whole or
                in
                part.

            


    

    


    11.         Subscription
      Not Revocable. The undersigned hereby acknowledges and agrees that the
      undersigned is not entitled to cancel, terminate or revoke this Subscription
      Agreement or any agreements of the undersigned hereunder and that this
      Subscription Agreement shall survive the dissolution, death or disability of
      the
      undersigned.

    


    12.         Restrictions
      on Transferability. The undersigned understands and agrees that the
      Unit(s) shall not be sold, pledged, hypothecated or otherwise transferred unless
      the Unit(s) is registered under the Act and applicable state securities laws
      or
      an exemption from such registration is available.

    


    13.         Governing
      Law. This Subscription Agreement is being delivered and is intended to
      be performed in the State of New York, and shall be construed and enforced
      in
      accordance with, and the law of such state shall govern the rights of
      parties.

    


    14.         Numbers
      and Gender. In this Agreement, the masculine gender includes the
      feminine gender and the neuter and the singular includes the plural, where
      appropriate to the context.

    


    


    


    


    


    


    


    THIS
      SPACE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    APPLIED
      DNA SCIENCES , INC.

    SIGNATURE
      PAGE TO

    SUBSCRIPTION
      AGREEMENT

    


    Subscriber
      hereby elects to subscribe under the Subscription Agreement for a total of
      $______________ Units (NOTE: to be completed by subscriber) and executes the
      Subscription Agreement.

    


    IN
      WITNESS WHEREOF, the undersigned has executed this Subscription Agreement on
      the
      date set forth below.

    


    Date
      of
      Execution: September __, 2007

    


                                IF
      INDIVIDUAL
      INVESTOR:

    


    


                                                                                                                                           ____________________________________________________

                                (Signature)


    


    
                                                                                                                                             ____________________________________________________

                                                     
(Printed
        Name)

    

    


    


                                IF
      CORPORATION,
      TRUST,

                                ESTATE
      OR
      REPRESENTATIVE:

    


    


    
                                                                                                                                             ____________________________________________________        

    

                                Name
      of
      Investor

     

     

                                                                                                                                                                                       
      By: 
________________________________________________________

                                                                                                                                                                                       
      Name:

                                Title:

    


    


    (Investors
      do not write below this line)

    
      
        

      

    

    


    APPROVED
      THIS ____ DAY OF SEPTEMBER, 2007

    


    APPLIED
      DNA SCIENCES, INC.

    


    


    By: 
      _____________________________                                                   

    Name:

    Title:

     

     

    7