Exhibit 10.8

 

STOCK PURCHASE AGREEMENT 

 

This Stock Purchase Agreement (this “Agreement”) is entered into as of January
11, 2012, by and between PositiveID Corporation, a Delaware corporation (the
“Seller”), and VeriTeQ Acquisition Corporation, a Florida corporation (the
“Buyer”).

 

A.      The Seller owns 5.0 million shares of the currently issued and
outstanding shares of common stock of PositiveID Animal Health Corporation, a
Florida corporation (the “Company”), which constitutes all of the Company’s
issued and outstanding common stock as of January 11, 2012. The Company has 6.85
million options outstanding as of January 11, 2012.

 

B.      The Buyer is willing to purchase from the Seller, and the Seller is
willing to sell to the Buyer, 5.0 million shares of the Company's common stock
(the “Acquisition Shares”).

 

For valuable consideration received, the parties agree as follows:

 

1.     Purchase and Sale of the Acquisition Shares.

 

1.1      Purchase and Sale of the Acquisition Shares. Subject to the terms and
conditions of this Agreement, at the Closing (as defined herein), the Buyer
agrees to purchase from the Seller, and the Seller agrees to sell and convey to
the Buyer, the Acquisition Shares, free and clear of all liens, claims, security
interests, pledges and encumbrances of every kind.

 

1.2      Closing; Deliveries.

 

(a)      The purchase and sale of the Acquisition Shares (the “Closing”) shall
take place at the offices of the Seller in Delray Beach, Florida, as soon as
practicable, but no later than January 11, 2012, or at such other time and place
as the Buyer and the Seller mutually agree upon, orally or in writing.

 

(b)      As consideration for the Acquisition Shares, at Closing, the Buyer
shall deliver to the Seller a promissory note in the principal amount of Two
Hundred Thousand Dollars ($200,000), executed by the Buyer, which note shall be
the form attached as Exhibit A hereto (the "Note") and shall be secured by a
first priority lien on the assets of the Company, as evidenced by a Security
Agreement between Buyer and the Seller in the form attached as Exhibit B hereto
("Security Agreement").

 

(c)      The Buyer will issue 4.0 million new shares of the Buyer’s common stock
to the Seller. Following the issuance, the total number of shares issued and
outstanding of the Buyer will be 33.15 million.

 

(d)      At Closing, the Buyer shall assume all the obligations of the Company
under the PositiveID Animal Health Corporation 2010 Flexible Stock Plan (the
“Company Stock Plan”), each outstanding option to purchase shares of the Company
common stock under such plan (a “Company Stock Option”) which are set forth in
Exhibit C hereto and the agreements evidencing the grants thereof. As soon as
practicable after Closing, the Buyer shall deliver to the holders of Company
Stock Options appropriate notice setting forth such holders’ right pursuant to
the Company Stock Plan, and the agreements evidencing the grants of such Company
Stock Options shall continue in effect on the same terms and conditions.

 

(e)      The Buyer shall deliver to the Seller such other documents and
instruments, in form and substance reasonably satisfactory to the Seller and its
counsel, as shall be necessary or desirable in order to consummate the
transactions contemplated hereby, each dated the date hereof.

   

(f)      At the Closing, the Seller shall deliver to the Buyer: (i) certificates
representing the Acquisition Shares, together with stock powers, duly endorsed
in blank in proper form for transfer; and (ii) such other documents and
instruments, in form and substance reasonably satisfactory to the Buyer and its
counsel, as shall be necessary or desirable in order to consummate the
transactions contemplated hereby, each dated the date hereof.

 

1.3      Certain Agreements.

 

(a)      Embedded Bio Sensor Patent License. The Seller hereby grants to the
Buyer and the Buyer hereby accepts a non-exclusive, perpetual, non-transferable,
license to utilize Seller’s United States Patent No. 7,125,382 “Embedded
bio-sensor system” for the purpose of designing and constructing, using, selling
and offering to sell products or services related to the VeriChip Business (as
defined in Section 6.1 below) for human applications only but excluding the
Restricted Applications. “Restricted Applications” means any product or
application involving blood glucose detection or diabetes management, including,
the GlucoChip, a glucose-sensing microchip, based on the Seller’s proprietary
intellectual property, which is being developed by the Seller in conjunction
with Receptors LLC. The Buyer shall pay the Seller a ten percent (10%) royalty
on gross revenues attributable to the VeriChip Products. Any royalty payments
due under this Section 1.3(a) shall be paid via check or wire transfer within 30
days following the end of each month.

 

 
 

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(b)      Medical Components Agreement. The Buyer shall pay the Seller twenty
percent (20%) of gross revenues of the Buyer from Medical Components, Inc.
(“Medcomp”) under that certain Development and Supply Agreement with Medcomp
dated April 2, 2009. Any royalty payments due under this Section 1.3(b) shall be
paid via check or wire transfer within 30 days following the end of each month.
The Seller's right to any royalty payments under this Section 1.3(b) shall
terminate three (3) years following written approval by the United States Food
and Drug Administration of the Medcomp product that incorporates the VeriChip
Product.

 

2.      Representations and Warranties of the Seller. The Seller represents and
warrants to the Buyer that the following representations are true and complete
as of the Closing, except as otherwise indicated:

 

2.1      Authorization. The Seller has full power and authority to enter into
this Agreement. The Agreement, when executed and delivered by the Seller, will
constitute valid and legally binding obligations of the Seller, enforceable in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and any other
laws of general application affecting enforcement of creditors’ rights
generally, and as limited by laws relating to the availability of a specific
performance, injunctive relief, or other equitable remedies.

 

2.2      Title. The Acquisition Shares are free and clear of all pledges,
security interests, liens, charges, encumbrances, agreements, claims and options
of whatever nature. Upon consummation of the transaction contemplated hereby,
the Buyer will acquire good and valid title to the Acquisition Shares free and
clear of all pledges, security interests, liens, charges, encumbrances,
agreements, claims and options of whatever nature. To the Seller's knowledge,
the Acquisition Shares were issued to the Seller in compliance with all
applicable federal and state securities laws and regulations.

 

2.3      No Conflict. Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the transactions contemplated hereby
(i) will violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of the Seller, (ii) is prohibited by or requires the
Seller to obtain or make any consent, approval, registration or filing under any
law, regulation, judgment, order, decree or other restriction of any government,
governmental agency, court, body, department, authority, or other person or
entity; or (iii) will result in the creation or imposition of any lien, claim,
charge, restriction or encumbrance of any kind or give to any person (other than
the Buyer) any interest or right in or with respect to the Acquisition Shares.
The Seller is not a party to any contract or subject to any legal restriction
that would prevent or restrict complete fulfillment by the Seller of all of the
terms and conditions of this Agreement or compliance with any of its obligations
hereunder.

 

3.      Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller that the following representations are true and complete
as of the Closing:

 

3.1      Organization and Good Standing. The Buyer is a corporation duly
incorporated and organized, validly existing and its status is active under the
laws of the State of Florida.

 

3.2      Authorization. The Buyer has full power and authority to enter into
this Agreement, the Note, the Security Agreement, and the other documents
contemplated hereby, including, but not limited to, the Note, the Security
Agreement, the License Agreement, and the Shared Services Agreement
(collectively, the “Transaction Documents”). The Transaction Documents, when
executed and delivered by the Buyer, will constitute a valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and any other laws of general application affecting
enforcement of creditors’ rights generally, and as limited by laws relating to
the availability of a specific performance, injunctive relief, or other
equitable remedies.

   

3.3      Purchase Entirely for Own Account. The Buyer is acquiring its interest
in the Acquisition Shares for its own account, and not as a nominee for any
person other than the Buyer and its affiliates. The Buyer is not acquiring the
Acquisition Shares with a view to or for sale or transfer in connection with any
distribution of the Acquisition Shares except pursuant to transactions
registered under the Securities Act of 1933, as amended (the “Securities Act”)
or exempt from such registration; provided, however, that the disposition of its
property shall at all times be within its control. The Buyer, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Acquisition Shares,
and has so evaluated the merits and risks of such investment. The Buyer is able
to bear the economic risk of an investment in the Acquisition Shares and, at the
present time, is able to afford a complete loss of such investment.

 

3.4      Disclosure of Information. The Buyer has had an opportunity to discuss
the Company's business, management, financial affairs and the terms and
conditions of the offering of the Acquisition Shares with the Company's
management and has had an opportunity to review the Company's books and records.

  

 
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3.5      Restricted Securities. The Buyer understands that the Acquisition
Shares are “restricted securities” under applicable U.S. federal and state
securities laws and that, pursuant to these laws, the Buyer must hold the
Acquisition Shares indefinitely unless they are registered with the Securities
and Exchange Commission and qualified by state authorities, or an exemption from
such registration and qualification requirements is available. The Buyer
acknowledges that the Seller has no obligation to register or qualify the
Acquisition Shares for resale.

 

3.6      Accredited Investor. The Buyer is an accredited investor as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act

 

4.      Conditions of the Buyer’s Obligations at the Closing. The obligations of
the Buyer to the Seller under this Agreement at the Closing are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:

 

4.1      Representations and Warranties. The representations and warranties of
the Seller contained in Section 2 shall be true and correct in all material
respects on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.

 

4.2      Performance. The Seller shall have performed and complied with all
covenants, agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the
Closing.

 

4.3      Compliance Certificate. The Seller shall deliver to the Buyer at the
Closing a certificate certifying that the conditions specified in Sections 4.1
and 4.2 have been fulfilled.

 

4.4      Qualifications. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Acquisition Shares pursuant to this Agreement shall be obtained and effective as
of the Closing.

 

4.5      Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Buyer, and the Buyer (or its counsel) shall have received all such counterpart
original and certified or other copies of such documents as reasonably
requested.

 

4.6      License Agreement. The Seller shall deliver to the Buyer the License
Agreement, executed by the Seller (the “License Agreement”).

 

5.      Conditions of the Seller’s Obligations at the Closing. The obligations
of the Seller to the Buyer under this Agreement are subject to the fulfillment,
on or before the Closing, of each of the following conditions, unless otherwise
waived:

 

5.1      Representations and Warranties. The representations and warranties of
the Buyer contained in Section 3 shall be true and correct in all material
respects on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing.

 

5.2      Performance. The Buyer shall have performed and complied with all
covenants, agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it or him on or before the
Closing.

 

5.3      Compliance Certificate. The Buyer shall deliver to the Seller at the
Closing a certificate certifying that the conditions specified in Sections 5.1
and 5.2 have been fulfilled.

 

5.4      Qualifications. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Acquisition Shares pursuant to this Agreement shall be obtained and effective as
of the Closing.

 

5.5      Consents. The third party consents set forth on Schedule 5.5 shall have
been obtained.

 

5.6      Seller Board/Independent Committee Approval. A certificate of a
secretary of the Seller certifying to the resolutions of the board of directors
of the Seller and an independent committee of the board of directors of the
Seller approving this Agreement and the transactions contemplated hereby.

 

5.7      Shared Services Agreement. The Seller and the Buyer shall have entered
into a Shared Services Agreement substantially in the form of Exhibit D attached
hereto (the “Shared Services Agreement”).

 

 
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5.8      Note and Security Agreement. The Buyer shall deliver to the Seller the
Note and Security Agreement, executed by Buyer.

 

5.9       License Agreement. The Buyer shall deliver to the Seller the License
Agreement substantially in the form of Exhibit E attached hereto, executed by
the Buyer.

 

5.10      Issuance of the Buyer’s Shares. The Buyer shall have issued 4.0
million new shares of the Buyer’s common stock to the Seller.

 

6.      Non-Competition.

 

6.1      Non-Competition. During the period beginning on the Closing and ending
four (4) years later, (i) the Buyer and its successors and assigns shall not
engage (whether as an owner, operator, manager, employee, officer, director,
consultant, advisor, representative or otherwise), directly or indirectly,
anywhere in the world, in any business competitive with the Seller’s current
businesses or with the businesses then currently conducted by the Seller,
including, but not limited to, products or services relating to blood glucose
measurement and diabetes management, and (ii) the Seller and its respective
successors and assigns shall not engage (whether as an owner, operator, manager,
employee, officer, director, consultant, advisor, representative or otherwise),
directly or indirectly, anywhere in the world, in any business competitive with
the Company’s VeriChip Business (as defined below) or Health Link Business (as
defined below). The Buyer and the Seller each expressly acknowledge and agree
that each and every restriction imposed by this Section 6.1 is reasonable with
respect to subject matter and time period.

 

For purposes herein, the “VeriChip Business” shall mean the development
manufacture, distribution and sale of implantable radio-frequency identification
technologies (“VeriChip Product”), including all of VeriChip Product’s
identification derivatives, readers, transponders, implanters, and packaging
devices, and related services. For the avoidance of doubt, for purposes herein,
the VeriChip Business does not include the GlucoChip, a glucose-sensing
microchip, based on Seller’s proprietary intellectual property, which is being
developed by Seller in conjunction with Receptors LLC or any product developed
by Seller related to GlucoChip, glucose detection and/or diabetes management.
For purposes herein, the “Health Link Business” shall mean Seller’s
patient-controlled, online repository to store personal health information and
to connect the patient to a multitude of customized materials such as
personalized health education and online connectivity to caregivers.

 

Notwithstanding the foregoing, the provisions of this Section 6.1 shall not
prohibit the ownership by the Seller of an aggregate interest of ten percent
(10%) of the Company.

 

6.2      Injunctive Relief; Enforcement. Each of the Buyer and the Seller,
acknowledges and agrees that in the event of a breach of any of the provisions
of this Section 6, monetary damages shall not constitute a sufficient remedy.
Consequently, in the event of any such breach, the non-breaching party and/or
its respective successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violations of the provisions hereof,
in each case without the requirement of posting a bond or providing actual
damages. If the final judgment of a court of competent jurisdiction declares
that any term or provision of this Section 6 is invalid or unenforceable, each
of Buyer and the Seller agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.

 

7.      Indemnification.

 

7.1      Indemnification by the Buyer. The Buyer agrees to hold harmless,
defend, and indemnify the Seller and its officers, directors, subsidiaries,
affiliates, employees, agents, attorneys, representatives, successors and
assigns (collectively the “Seller Indemnified Parties”) from and against, and
pay to the applicable Seller Indemnified Parties the amount of any and all
losses, liabilities, claims, obligations, deficiencies, demands, judgments,
damages (including incidental and consequential damages), interest, fines,
penalties, claims, suits, actions, causes of action, assessments, awards, costs
and expenses (including the costs of investigation and defense and attorneys’
and other professionals’ fees), whether or not involving a third party claim
arising out of or relating to (individually, a “Loss” and collectively, the
“Losses”):

 

(a)      the failure of any of the representations or warranties made by the
Buyer in this Agreement to be true and correct in all respects at and as of the
Closing Date;

  

 
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(b)      the breach of any covenant or other agreement on the part of the Buyer
under this Agreement;

 

(c)      any claims or demands against any Seller Indemnified Party arising out
of or resulting to the Assumed Liabilities (as defined below);

 

(d)      any claims or demands against any Seller Indemnified Party arising out
of or resulting to Buyer’s ownership, lease, use or operation of the Company
after the Closing;

 

(e)      any claims or demands arising out of or relating to that certain
Amended and Restated Supply, License and Development Agreement between the
Seller and Digital Angel Corporation dated December 27, 2005, as amended;

 

(f)      any claims or demands arising out of or relating to that certain Asset
Purchase Agreement among the Seller, Digital Angel Corporation, and Destron
Fearing Corporation dated November 12, 2008; and

 

(g)      any claims or demands arising out of or relating to that certain Letter
Agreement between the Seller and Digital Angel Corporation dated May 15, 2008.

 

For purposes herein, “Assumed Liabilities” shall mean:

 

(i)      Any and all liabilities, whether primary or secondary, known or
unknown, accrued or contingent, of any kind or nature, arising out of or
relating to the operation of the VeriChip Business prior to and after January
11, 2012; and

 

(ii)      Any and all liabilities, whether primary or secondary, known or
unknown, accrued or contingent, of any kind or nature, arising out of or
relating to the operation of the Health Link Business prior to and after January
11, 2012.

 

7.2      Indemnification by the Seller. The Seller agrees to hold harmless,
defend, and indemnify the Buyer and its officers, directors, subsidiaries,
affiliates, employees, agents, attorneys, representatives, successors and
assigns (collectively the “Buyer Indemnified Parties”) from and against, and pay
to the applicable Buyer Indemnified Parties the amount of any and all Losses
arising out of or relating to:

 

(a)      the failure of any of the representations or warranties made by the
Seller in this Agreement to be true and correct in all respects at and as of the
Closing Date; and

 

(b)      the breach of any covenant or other agreement on the part of the Seller
under this Agreement.

 

7.3      Procedures of Indemnification. The procedures for indemnification shall
be as follows:

 

(a)      A claim for indemnification for any matter not involving a third party
claim may be asserted by notice to the party from whom indemnification is
sought; provided, however, that failure to so notify the indemnifying shall not
preclude the indemnified party from any indemnification which it may claim in
accordance with this Section 7.

 

(b)      In the event that any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, audit, examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving, any court or
other governmental entity or any arbitrator or arbitration shall be instituted
or that any claim or demand shall be asserted by any third party in respect of
which indemnification may be sought under Section 7.3 hereof (a “Third Party
Claim”), the indemnified party shall promptly cause written notice of the
assertion of any Third Party Claim of which it has knowledge which is covered by
this indemnity to be forwarded to the indemnifying party. The failure of the
indemnified party to give reasonably prompt notice of any Third Party Claim
shall not release, waive or otherwise affect the indemnifying party’s
obligations with respect thereto except to the extent that the indemnifying
party can demonstrate actual loss and prejudice as a result of such failure.
Subject to the provisions of this Section 7.3, the indemnifying party shall have
the right, at its sole expense, to be represented by counsel of its choice,
which must be reasonably satisfactory to the indemnified party, and to defend
against, negotiate, settle or otherwise deal with any Third Party Claim which
relates to any Losses indemnified against hereunder; provided that the
indemnifying party shall have acknowledged in writing to the indemnified party
its unqualified obligation to indemnify the indemnified party as provided
hereunder. If the indemnifying party elects to defend against, negotiate, settle
or otherwise deal with any Third Party Claim which relates to any Losses
indemnified by it hereunder, it shall within five (5) days of the indemnified
party’s written notice of the assertion of such Third Party Claim (or sooner, if
the nature of the Third Party Claim so requires) notify the indemnified party of
its intent to do so; provided, that the indemnifying party must conduct the
defense of the

 

 
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Third Party Claim actively and diligently thereafter in order to preserve its
rights in this regard. If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal with any Third Party Claim which relates to
any Losses indemnified against hereunder, fails to notify the indemnified party
of its election as herein provided or contests its obligation to indemnify the
indemnified party for such Losses under this Agreement, the indemnified party
may defend against, negotiate, settle or otherwise deal with such Third Party
Claim. If the indemnified party defends any Third Party Claim, then the
indemnifying party shall reimburse the indemnified party for the expenses of
defending such Third Party Claim upon submission of periodic bills. If the
indemnifying party shall assume the defense of any Third Party Claim, the
indemnified party may participate, at its own expense, in the defense of such
Third Party Claim; provided, however, that such indemnified party shall be
entitled to participate in any such defense with separate counsel at the expense
of the indemnifying party if (i) so requested by the indemnifying party to
participate or (ii) in the reasonable opinion of counsel to the indemnified
party, a conflict or potential conflict exists between the indemnified party and
the indemnifying party that would make such separate representation advisable;
and provided, further, that the indemnifying party shall not be required to pay
for more than one such counsel for all indemnified parties in connection with
any Third Party Claim. The parties hereto agree to provide reasonable access to
the other to such documents and information as may be reasonably requested in
connection with the defense, negotiation or settlement of any such Third Party
Claim. Notwithstanding anything in this Section 7.3 to the contrary, neither the
indemnifying party nor the indemnified party shall, without the written consent
of the other party, settle or compromise any Third Party Claim or permit a
default or consent to entry of any judgment unless the claimant or claimants and
such party provide to such other party an unqualified release from all liability
in respect of the Third Party Claim.

 

(c)      After any final decision, judgment or award shall have been rendered by
a governmental entity of competent jurisdiction and the expiration of the time
in which to appeal therefrom, or a settlement shall have been consummated, or
the indemnified party and the indemnifying party shall have reached an
agreement, in each case with respect to an indemnifiable claim hereunder, the
indemnified party shall forward to the indemnifying party notice of any sums due
and owing by the indemnifying party pursuant to this Agreement with respect to
such matter and the indemnifying party shall pay all of such remaining sums so
due and owing to the indemnified party.

 

8.      Survival of Representations, Warranties, Etc. All representations,
warranties, covenants, and indemnification obligations of the parties shall
survive the execution and delivery hereof and the Closing hereunder.

 

9.      Miscellaneous.

 

9.1    Transfer; Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by any of the parties hereto without the
prior written consent of the other party.

 

9.2    Governing Law; Jurisdiction and Venue. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Florida
applicable to contracts executed in and to be performed in that state. The
parties acknowledge that all of the negotiations, anticipated performance and
execution of this Agreement occurred or shall occur in the State of Florida, and
that, therefore, without limiting the jurisdiction or venue of any other federal
or state courts, each of the parties irrevocably and unconditionally (a) agrees
that any suit, action or legal proceeding arising out of or relating to this
Agreement may be brought in the state or federal courts of record of the State
of Florida in Palm Beach County; (b) consents to the jurisdiction of each such
court in any suit, action or proceeding; (c) waives any objection which it may
have to the laying of venue of any such suit, action or proceeding in any of
such courts; and (d) agrees that service of any court paper may be effected on
such party by mail, as provided in this Agreement, or in such other manner as
may be provided under applicable laws or court rules in said state.

 

9.3    Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument. Delivery of an executed counterpart of this Agreement
via facsimile or portable document format shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

9.4    Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

 

9.5    Notices. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon delivery, when delivered personally
or by overnight courier or sent by facsimile (upon customary confirmation of
receipt), or 48 hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, addressed to the party to be notified at
such party’s address as set forth on the signature page, or as subsequently
modified by written notice.

  

 
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9.6    Finder’s Fee. Each party represents that it neither is nor will be
obligated for any finder’s fee or commission in connection with this
transaction.

 

9.7    Fees and Expenses. Each party shall pay all of its own fees and expenses
of experts, consultants and the like and other expenses incurred in connection
with performing due diligence with respect to this Agreement, the documents
referred to herein and the transactions contemplated hereby.

 

9.8    Attorney’s Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorney’s fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.

 

9.9    Amendments and Waivers. Any term of this Agreement may be amended or
waived only with the written consent of the Seller and the Buyer. Any amendment
or waiver effected in accordance with this Section 9.9 shall be binding upon the
Buyer and the Seller and each transferee of the Acquisition Shares, and each
future holder of all such securities.

 

9.10   Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.

 

9.11   Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any party under this Agreement, upon any breach or default of
any other party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.

 

9.12   Entire Agreement. This Agreement and the Transaction Documents referred
to herein constitute the entire agreement between the parties hereto pertaining
to the subject matter hereof, and any and all other written or oral agreements
relating to the subject matter hereof existing between the parties hereto are
expressly canceled.

 

9.13   Confidentiality. The Buyer and the Seller each agree that, except with
the prior written permission of the other party, it shall at all times hold in
confidence and trust and not use or disclose the terms of this Agreement.
Notwithstanding the foregoing, the Buyer or the Seller each may disclose the
terms of this Agreement: (a) as required by any court or other governmental
body, provided that the Buyer or the Seller provides the other party with prompt
notice of such court order or requirement to enable the other party to seek a
protective order or otherwise to prevent or restrict such disclosure; (b) to
legal counsel or the financial advisor of the Buyer or the Seller; (c) in
connection with the enforcement of this Agreement or rights under this
Agreement; or (d) to comply with applicable law. Notwithstanding anything herein
to the contrary, the Seller has the right, as required by law and the rules and
regulations of the Securities and Exchange Commission, to publicly disclose this
Agreement and the transactions contemplated hereby without the prior written
approval of the Buyer. The provisions of this Section 9.13 shall survive the
termination of this Agreement.

 

9.14   Consents. Notwithstanding anything herein to the contrary, if any consent
or other right set forth on Schedule 5.5 is not capable of being assigned or
transferred to the Buyer prior to the Closing as a result of an inability to
obtain the required approval of any third person, this Agreement will not
constitute an assignment, transfer or sublease thereof. With respect to each
such consent or other right that cannot be so assigned at Closing, the Seller
shall (i) from and after the Closing, promptly assign each such consent or other
right to the Buyer if and when such consent or other right may be assigned, (ii)
from and after Closing until the assignment of such consent or other right
pursuant to clause (i), and provide the Buyer with all of the rights and
benefits of such consent or other right accruing after Closing to the extent
that the Seller may provide the Buyer with such rights and benefits without
violating applicable law or the applicable contract.

 

[Signature pages follow.]

 

 
-7- 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

 

 

BUYER:

     

VERITEQ ACQUISITION CORPORATION

     

By:

/s/ Scott R. Silverman

     

Print Name:

Scott R. Silverman

     

Title:

Chief Executive Officer

               

Address:

1690 S. Congress Avenue, Suite 200

   

Delray Beach, Florida 33445

 

Facsimile:

561-805-8001

       

SELLER:

     

POSITIVEID CORPORATION

     

By:

/s/ William J. Caragol

     

Print Name:

William J. Caragol

     

Title:

Chief Executive Officer

               

Address:

1690 S. Congress Avenue, Suite 200

   

Delray Beach, Florida 33445

 

Facsimile:

561-805-8001