Exhibit 10.5
 
FIRST AMENDMENT TO PREFERRED STOCK PURCHASE AGREEMENT

This First Amendment to Preferred Stock Purchase Agreement (the “First
Amendment”), dated September 16, 2011, is entered into between PositiveID
Corporation, a Delaware corporation (the “Company”) and Ironridge Global III,
LLC, a Delaware limited liability company ("Ironridge").
 
Background

WHEREAS, on July 27, 2011, the Company entered into a Preferred Stock Purchase
Agreement (the “Agreement”) with Ironridge under which Ironridge is committed to
purchase for cash up to $1.5 million in shares of the Company’s redeemable,
convertible Series F Preferred Stock (the “Series F Preferred Stock”) at $1,000
per share of Series F Preferred Stock.
 
WHEREAS, on August 12, 2011, Section II.C.2 of the Agreement was amended
pursuant to that certain Waiver between the parties.
 
WHEREAS, Ironridge's obligation to purchase the second two installments under
the Agreement is subject to satisfaction of a closing condition in Section
II.C.5.(f) of the Agreement.
 
WHEREAS, on July 28, 2011, the Company presented Ironridge with a notice to
purchase $1.5 million of Series F Preferred Stock in cash.

WHEREAS, on August 15, 2011, Ironridge funded the first $500,000 installment.

WHEREAS, the condition in Section II.C.5.(f) of the Agreement was not met.

WHEREAS, in order to effect a Purchase Closing under the Agreement, the parties
desire to amend the Purchase Closing terms set forth in Section 2 of the
Agreement.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties, intending to be legally bound,
hereby agree as follows:
 
1.             Amendment.  Section II.C.2 shall be amended in its entirety and
replaced with the following:
 
2.           Purchase Closings.
 
a.           Purchaser will purchase and make payment for the Preferred Shares,
in cash by wire transfer of immediately available funds to an account designated
by Company, as follows:
 

 
i.
130 Preferred Shares on the Trading Day (“First Closing”) following the later of
(i) 10 Trading Days after September 7, 2011; and (ii) the Trading Day that
aggregate trading volume of the Common Stock on the Trading Market after
September 7, 2011, as reported by Bloomberg, equals or exceeds $500,000.00;

 
 
 

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ii.
290 Preferred Shares on the Trading Day (“Second Closing”) following the earlier
of (i) 10 Trading Days after the First Closing; and (ii) the Trading Day that
aggregate trading volume of the Common Stock on the Trading Market after the
First Closing, as reported by Bloomberg, equals or exceeds $1 Million;

 

 
iii.
290 Preferred Shares on the Trading Day (“Third Closing”) following the earlier
of (i) 10 Trading Days after the Second Closing; and (ii) the Trading Day that
aggregate trading volume of the Common Stock on the Trading Market after the
Second Closing, as reported by Bloomberg, equals or exceeds $1 Million; and

 

 
iv.
290 Preferred Shares on the Trading Day (“Fourth Closing”) following the earlier
of (i) 10 Trading Days after the Third Closing; and (ii) the Trading Day that
aggregate trading volume of the Common Stock on the Trading Market after the
Third Closing, as reported by Bloomberg, equals or exceeds $1 Million.

 
Company will deliver the Preferred Shares to Purchaser by reputable overnight
courier immediately upon each date of receipt of funds as set forth above (each
of the First, Second, Third and Fourth Closings, a “Purchase Closing”).  Each of
the respective time periods between each Purchase Closing and the prior Purchase
Closing shall be the respective “Calculation Period” for purposes of (b) and (c)
below.
 
b.           First Closing.  Notwithstanding any other provision, the price per
Preferred Share with respect to the First Closing will be equal to the lesser
of:  (a) $1,000; and (b) an amount, not below zero, equal to (i) $1,000,
multiplied by (ii) 85% of the average of the daily VWAPs during the period
between September 7, 2011 through the First Closing minus the Floor Price
(defined below), divided by (iii) $0.057.
 
c.           Company Election.  In the event that the sole condition precedent
to a Purchase Closing that is not satisfied is that set forth in Section
II.C.5.(f) of the Agreement, the Company may, at its sole option, elect at any
time to proceed with an alternate Purchase Closing in accordance with this
section, in which case, with respect to such Purchase Closing:
 

 
i.
The condition precedent set forth in Section II.C.5.(f) of the Agreement will
not apply with respect to that Purchase Closing;

 

 
ii.
The Calculation Period will (i) commence on the Trading Day after the Purchaser
receives written notice of Company’s election, and (ii) exclude any Trading Day
on which the Common Stock trades below $0.20 per share (the “Floor Price”); and

 

 
iii.
The price per Preferred Share will be equal to the lesser of (a) $1,000, and (b)
an amount equal to (i) $1,000, multiplied by (ii) 85% of the average of the
VWAPs during the Calculation Period, divided by (iii) $0.257.

 
 
 

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2.           Effect on Agreement; Capitalized Terms.  Except as set forth in
this First Amendment, the terms and provisions of the Agreement are hereby
confirmed and ratified in all respects and shall remain in full force and
effect.  Capitalized terms used but not defined herein shall have the meanings
set forth in the Agreement.
 
3.           Counterparts; Execution by Electronic Delivery.  This First
Amendment may be executed in two or more counterparts, all of which when taken
together will be considered one and the same agreement and will become effective
when counterparts have been signed by each party and delivered to the other
party, it being understood that both parties need not sign the same counterpart.
In the event that any signature is delivered by portable document format,
facsimile or electronic transmission, such signature will create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such signature page were an
original thereof.
 
 
[Signatures on Following Page.]
 
 
 

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This First Amendment has been signed and delivered by the undersigned as of the
date set forth above.

COMPANY:

POSITIVEID CORPORATION

 

By:/s/ William J. Caragol       Name:  William J. Caragol       Title: Chief
Executive Officer      

 
IRONRIDGE GLOBAL III, LLC

 

By: /s/ Richard H. Kreger       Name: Richard H. Kreger       Title: Managing
Director