Exhibit 10.2


 


THIS NOTE AND THE
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT”)


 


US $66,000.00         


 


POSITIVEID CORP.


8% CONVERTIBLE REDEEMABLE NOTE


DUE AUGUST 13, 2015


 


FOR VALUE RECEIVED,
PositiveID Corp. (the “Company”) promises to pay to the order of TOLEDO ADVISORS, LLC and its authorized successors
and permitted assigns ("Holder"), the aggregate principal face amount of Sixty Six Thousand Dollars exactly (U.S.
$66,000.00) on August 13, 2015 ("Maturity Date") and to pay interest on the principal amount outstanding hereunder
at the rate of 8% per annum commencing on August 13, 2014. The Company acknowledges this Note was issued with a $5,000.00 original
issue discount (OID) and as such the issuance price was $61,000.00.The interest will be paid to the Holder in whose name this Note
is registered on the records of the Company regarding registration and transfers of this Note. The principal of, and interest on,
this Note are payable at 641 5th Street, Lakewood, NJ 08701, initially, and if changed, last appearing on the records
of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and
the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or
withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records
of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and
shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire
transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.


 


This Note is subject
to the following additional provisions:


 


1.          This
Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder
shall pay any tax or other governmental charges payable in connection therewith.


 


2.          The
Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.


 


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3.          This
Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act") and
applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior
to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this
Note is duly registered on the Company's records as the owner hereof for all other purposes, whether or not this Note be overdue,
and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing
to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a),
and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being
converted ("Notice of Conversion") in the form annexed hereto as Exhibit A. The date of receipt (including
receipt by telecopy) of such Notice of Conversion shall be the Conversion Date.


 


4.          (a)          The
Holder of this Note is entitled, at its option, at any time after 180 days, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock (the "Common Stock") without restrictive
legend of any nature, at a price ("Conversion Price") for each share of Common Stock equal to the lower
of (i)  60% of the average of the three lowest closing bid prices of the Common Stock as reported on the
National Quotations Bureau OTCQB exchange which the Company’s shares are traded or any exchange upon which the Common Stock
may be traded in the future ("Exchange"), for the fifteen prior trading days including
the day upon which a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered by fax or
other electronic method of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes
to include the same day closing price) or (ii) $0.06 per share. If the shares have not been delivered within 3 business
days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common
Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Once the Holder has received
such shares of Common Stock, the Holder shall surrender this Note to the Company, executed by the Holder evidencing such Holder's
intention to convert this Note or a specified portion hereof, and accompanied by proper assignment hereof in blank. Accrued, but
unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest whole share. In the event the Company experiences
a DTC “Chill” on its shares, the conversion price shall be decreased to 50% instead of 60% while that “Chill”
is in effect. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares
of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the
Common Stock of the Company.


 


(b)          Interest
on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in
Common Stock ("Interest Shares"). The Holder may, at any time, send in a Notice of Conversion to the Company for Interest
Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a
portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.


 


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(c)          During
the first six months this Note is in effect, the Company may redeem this Note by paying to the Holder an amount as follows: (i)
if the redemption is within the first 90 days this Note is in effect, then for an amount equal to 130% of the unpaid principal
amount of this Note along with any interest that has accrued during that period, (ii) if the redemption is after the 90th
day this Note is in effect, but less than the 181st day this Note is in effect, then for an amount equal to 140% of
the unpaid principal amount of this Note along with any accrued interest. This Note may not be redeemed after 180 days. The redemption
must be closed and paid for within 3 business days of the Company sending the redemption demand or the redemption will be invalid
and the Company may not redeem this Note.


 


(d)          Upon
(i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions, (ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock,
other than a forward or reverse stock split or stock dividend, or (iii) any consolidation or merger of the Company with or into
another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change
the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares
of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale Event"),
then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 140% of the principal amount, plus
accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid
principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately
prior to such Sale Event at the Conversion Price.


 


(e)          In
case of any Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection with which
this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note
shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of
stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change,
consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the
Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions
shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash,
the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.


 


5.          No
provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.


 


6.          The
Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of
dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.


 


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7.          The
Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder
in collecting any amount due under this Note.


 


8.          If
one or more of the following described "Events of Default" shall occur:


 


(a)          The
Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company;
or


 


(b)          Any
of the representations or warranties made by the Company herein or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or
the Securities Purchase Agreement under which this note was issued shall be false or misleading in any respect; or


 


(c)          The
Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of
the Company under this Note or any other note issued to the Holder; or


 


(d)          The
Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment
for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief,
consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal
or state laws as applicable; or


 


(e)          A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or


 


(f)          Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company; or


 


(g)          Unless
previously disclosed in the Company’s filings with the Securities and Exchange Commission, one or more money judgments, writs
or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in the aggregate, shall be entered
or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed
for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale thereunder.


 


(h)          The
Company shall have defaulted on or breached any term of any other note of similar debt instrument into which the Company has entered
and failed to cure such default within the appropriate grace period; or


 


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(i)            The
Company shall have its Common Stock delisted from an exchange (including the OTCBB exchange) or, if the Common Stock trades on
an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days;


 


(j)            If
a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;


 


(k)           The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business
days of its receipt of a Notice of Conversion; or


 


(l)           The Company shall not replenish
the reserve set forth in Section 12, within 3 business days of the request of the Holder; or


 


(m)          The
Company shall not be “current” in its filings with the Securities and Exchange Commission; or


 


(n)         The Company shall lose the
“bid” price for its stock in a market (including the OTCQB marketplace or other exchange).


 


Then, or at any time thereafter, unless
cured, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion,
the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any
kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce
any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event
of Default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by
current law, then at the highest rate of interest permitted by law. In the event of a breach of Section 8(k) the penalty shall
be $250 per day the shares are not issued beginning on the 4th day after the conversion notice was delivered to the
Company. This penalty shall increase to $500 per day beginning on the 10th day. The penalty for a breach of Section
8(n) shall be an increase of the outstanding principal amounts by 20%. In case of a breach of Section 8(i), the outstanding principal
due under this Note shall increase by 50%. If this Note is not paid at maturity, the outstanding principal due under this Note
shall increase by 10%.


 


If the Holder shall commence an action
or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails
in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.


 


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9.          In
case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.


 


10.         Neither
this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the
Company and the Holder.


 


11.         The
Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell issuer. Further. The Company will instruct its counsel to either (i) write a 144- 3(a)
(9) opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.


 


12.         The
Company shall issue irrevocable transfer agent instructions reserving 8,301,000 shares of its Common Stock for conversions under
this Note (the “Share Reserve”). The reserve shall be replenished as needed to allow for conversions of this Note.
The Holder will initially submit a conversion notice/request for a tranche of shares to be issued with an agreed to conversion
price equal to $1000 (an “Initial Tranche Request”).  The shares that are the subject to the Initial Trance Request
may be subsequently reconverted and repriced as follows: (i) the Holder shall immediately reduce the outstanding balance of the
Note by $1,000 and simultaneously send to the Company a live” or “repriced” conversion notice for the $1,000
priced using the conversion formula set forth in Section 4(a) of this Note,  (ii) As the balance of the shares in the Initial
Tranche Request are converted via the delivery of the “live” or “repriced” conversion notice,  the
balance of the Note shall be reduced using the formula set forth in Section 4(a) of this Note, as if such shares had originally
been converted as set forth in Section 4(a).  By way of example, if the Tranche Conversion Request was for 1,000,000 shares
and the face amount of the Note was $25,000 the Holder would initially reduce $1,000 from the face amount leaving a balance of
$24,000 and send the Company a repriced conversion notice deducting that number of shares from the Initial Tranche Request necessary
to equal $1,000 using the formula set forth in Section 4(a).  Additionally, if, the following day, the Holder sent a “live”
or “repriced” conversion notice to the Company for 25,000 shares and, using the formula set forth in Section 4(a) the
true conversion price would have been $6,000, then the Holder shall make an additional reduction of $6,000 on the Note and shall
indicate both the Note balance and the share reserve balance on the “live” conversion notice.  This process shall
be repeated until there is no balance remaining outstanding on the Note.  Upon full conversion of this Note, the any shares
remaining in the Share Reserve shall be cancelled. The company should at all times reserve a minimum of three times the amount
of shares required if the note would be fully converted. The Holder may reasonably request increases from time to time to reserve
such amounts.


 


13.         The
Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law.


 


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14.         This
Note shall be governed by and construed in accordance with the laws of Nevada applicable to contracts made and wholly to be performed
within the State of Nevada and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company
hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This
Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be
effective as an original.


 


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IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed by an officer thereunto duly authorized.


 


	Dated:  	August 18, 2014	 


 


	 	POSITIVEID CORP.
	 	 
	 	By:	William Caragol
	 	 	 
	 	Title: 	CEO


 


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EXHIBIT A


 


NOTICE OF CONVERSION


 


(To be Executed by the
Registered Holder in order to Convert the Note)


 


The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of PositiveID Corp. (“Shares”)
according to the conditions set forth in such Note, as of the date written below.


 


If Shares are to be
issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable
with respect thereto.


 


	Date of Conversion:    	 





	Applicable Conversion Price:  	 





	Signature:  	 
	 	[Print Name of Holder and Title of Signer]





	 	 






	Address:  	 





	 	 



 


	SSN or EIN: __________________________
	Shares are to be registered in the following name:  	 


 


	Name:  	 





	Address:  	 





	Tel:  	 





	Fax:  	 





	SSN or EIN:  	 
	 	 
	Shares are to be sent or delivered to the following account:


 


	Account Name:  	 





	Address:  	 


 


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