Exhibit 3.1 CERTIFICATE OF
AMENDMENTOFSECOND AMENDED AND RESTATED CERTIFICATE OF
INCORPORATIONOFVERICHIP CORPORATION It is hereby certified that: 1. The name of the
corporation (hereinafter called the Corporation) is VeriChip Corporation. 2. The Certificate
of Incorporation of the Corporation is hereby amended by changing the Article
numbered I so that, as amended, said Article shall be and read as follows: ARTICLE INAME The name
of the corporation is PositiveID Corporation. 3. The Certificate
of Incorporation of the Corporation is hereby amended by changing the first
paragraph of the Article numbered IV so that, as amended, said paragraph of
said Article shall be and read as follows: ARTICLE IVCAPITALIZATION The total number of
shares of all classes of capital stock which the Corporation is authorized to
issue is 75,000,000 shares, consisting of 70,000,000 shares of common stock, par
value $0.01 per share (the Common Stock) and 5,000,000 shares of
preferred stock, par value $0.001 per shares (the Preferred
Stock). 4.  Pursuant to a
resolution of its Board of Directors, a meeting of stockholders of the
Corporation was duly called and held, on November 10, 2009 upon notice in
accordance with Section 222 of the General Corporation Law of the State of
Delaware, at which meeting the necessary number of shares as required by statute
were voted in favor of the amendments. 5.  The foregoing
amendments were duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware. NOW, THEREFORE, the
Corporation has caused this Certificate to be signed this 10th day of
November,2009. By: /s/ William J.
CaragolName:
William J. CaragolTitle: President and Chief Financial Officer


SECOND AMENDED
AND RESTATED
 CERTIFICATE OF
INCORPORATION
 OF
 VERICHIP
CORPORATION
 Corporation
  Amended and Restated Certificate of
Incorporation
 Certificate
   ARTICLE I
 NAME
  ARTICLE II
 PURPOSE
  DGCL 


ARTICLE III
 REGISTERED
AGENT
  ARTICLE IV
 CAPITALIZATION
 Authorized Capital
Stock
  Common Stock   Preferred Stock 
   2
    Preferred
Stock
 Board Preferred Stock Designation
  Common Stock
   3
    ARTICLE V
 BOARD OF
DIRECTORS
 Board Powers
 By-Laws provided, however
 Number, Election
and Term
 Whole
Board
 Section 5.5
   Newly Created
Directorships and Vacancies
 Section 5.5
 4
    Removal
 Section 5.5
 Preferred Stock 
Directors
 Article V
 ARTICLE VI
 BY-LAWS
  ARTICLE VII
 MEETINGS OF
STOCKHOLDERS
 No Action by
Written Consent
  5
    Meetings
  Advance Notice
  Location
  ARTICLE VIII
 LIMITED
LIABILITY; INDEMNIFICATION
 Limitation of
Personal Liability
 Section 8.1 Section 8.1
 6
    Indemnification
 proceeding Covered Person provided however Section 8.2
 Section 8.2
 Section 8.2 Section 8.2
 Section 8.2
  7
    ARTICLE IX
 AMENDMENT OF
CERTIFICATE OF INCORPORATION
 Article VIII provided however
 ARTICLE X
 SECTION 203 OF
THE DGCL
  8
    ARTICLE XII
 SECTION 102(B)(2)
OF THE DGCL
   VERICHIP CORPORATIONBy:
    /s/
      Scott R. SilvermanScott R. Silverman, Chief Executive
    Officer 9
    Corporation
   Preferred Stock
     Designation, Amount and Par
Value Series A Preferred
Stock Holder Holders
 Ranking and Voting
 1
    Common
Stock Junior Shares
   Dividends and Other
Distributions Issuance Date Dividends
 Section 3
  Conversion
  Exhibit A-1 Holder
Conversion Notice Exhibit A-2 Company Conversion Notice Conversion Notice Transfer
Agent
 2
    Company Conversion multiplied
by divided by
 Holder Conversion multiplied
by divided by
 3
    Section 4.c
 Section 4.c Purchase
Rights
 Definitions
 Conversion Price
 Conversion Shares
 Closing Bid Price
 4
    Trading Day
 Trading Market
 Tranche Notice Date
 Failure to Timely Deliver Conversion Shares Buy-In Price
 5
    Conversion Limitation
 Disputes
 Liquidation
 $10,000.00 Series A Liquidation Value
 6
    Redemption Redemption Price
 Transferability Transfer
 Miscellaneous
 Notices
 7
    Lost or Mutilated Preferred Stock Certificate
 Headings
  8
    By:
    
    /s/ Scott R. SilvermanName:
    
    Scott R. SilvermanTitle:
    
    Chief Executive OfficerBy:
    
    /s/ William J. CaragolName:
    
    William J. CaragolTitle:
    
    Acting Chief Financial Officer
 9
    Exhibit A-1
 Form of Investor
Conversion Notice
  Conversion
Shares Company
  By:Name:Title:
    Exhibit A-2
 Form of Company
Conversion Notice
 Company Conversion Shares
   By:Name:Title:
    Corporation
   Preferred Stock
     Designation, Amount and Par Value Series B Preferred Stock Holder Holders
    Ranking and Voting
 Ranking Common Stock Junior Securities Senior Securities
 Voting
 Dividends and Other Distributions Issuance Date Dividends 10.0% Section 6
 Section 3
  Protective Provision
 Deemed Liquidation Event
    Section 4(a) Section 5
 Liquidation
 Original Series B Issue
Price Series B Liquidation Value
    Redemption
 Corporations Redemption Option Corporation Redemption Price
 Early Redemption Section 6(a)
 Mandatory Redemption. Section 6(b)
 Mechanics of Redemption Notice of Redemption at Option of Corporation Section 6(b)
 Payment of Redemption Price Section 6(b)
 Transferability Transfer
    Miscellaneous
 Notices Section 8
 Lost or Mutilated Preferred Stock Certificate
 Headings
    th
 By:
    
    /s/ Scott R. SilvermanName:
    
    Scott R. SilvermanTitle:
    
    Chief Executive OfficerBy:
    
    /s/ William J. CaragolName:
    
    William J. CaragolTitle:
    
    President and Chief Financial Officer
     Certificate of Elimination  To Eliminate the Series A Preferred Stock of PositiveID Corporation  PositiveID Corporation,
a company organized and existing under the General Corporation Law of the State
of Delaware (the Company), hereby certifies:  FIRST: That the Board of Directors of the Company adopted the following
resolutions at a duly called and noticed meeting of the Board of Directors:  Elimination of
the Series A Preferred Stock WHEREAS, pursuant to authority expressly granted by the
provisions of the Certificate of Incorporation of the Company, the Board of
Directors of the Company created and authorized the issuance of a series of
preferred stock, designated Series A Preferred Stock, par value $0.001 per
share, of the Company (the Series A Preferred Stock), consisting of 2,000
shares, and thereby fixed the designation, dividend rights, voting powers,
rights on liquidation or dissolution and other preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions of the shares of such series (in addition to any
thereof set forth in the Certificate of Incorporation that are applicable to the
Companys preferred stock of all series) as set forth in a Certificate of
Designations of Preferences, Rights, and Limitations with respect to such series
filed with the Secretary of State of the State of Delaware on September 29, 2009
(as amended, the Certificate of Designations); and WHEREAS, the Company has exchanged all shares of the
authorized and previously issued shares of Series A Preferred Stock, and as a
result none of the authorized shares of Series A Preferred Stock are outstanding
and none will be issued. NOW, THEREFORE, BE IT RESOLVED,that the Board deems it
advisable and in the best interest of the Company that the Company eliminate all
authorized shares of Series A Preferred Stock and that, in connection with such
elimination of the Series A Preferred Stock, the Company eliminate in all
respects the Certificate of Designations; and further RESOLVED, that for purposes of these resolutions the term
Appropriate Officer shall mean and include the Chief Executive Officer and the
President of the Company, and each of them, and shall also mean and include the
Secretary and any Assistant Secretary, and each of them, where necessary or
convenient to attest to any act of any of the aforesaid officers by and on
behalf of the Company, whether under the seal of the Company or not; and
further RESOLVED, that the elimination of all of the authorized
shares of Series A Preferred Stock and the elimination in all respects of the
Certificate of Designations be, and hereby are, authorized and approved, and the
Appropriate Officers are, and each of them hereby is, authorized, empowered and
directed to execute and acknowledge a Certificate of Elimination reflecting the
elimination of all of the authorized shares of Series A Preferred Stock and the
elimination in all respects of the Certificate of Designations, and to file such
Certificate of Elimination with the Secretary of State of the State of
Delaware. SECOND: That the Certificate of Designations with respect to the Series A
Preferred Stock was filed in the office of the Secretary of State of the State
of Delaware on September 29, 2009.  None of the authorized shares of Series
A Preferred Stock are outstanding and none will be issued. THIRD: That in accordance with
Section 151 of the General Corporation Law of the State of Delaware, the
Certificate of Incorporation of the Company is hereby amended to eliminate all
reference to the Series A Preferred Stock.     [Signatures set forth on following
page.]   IN WITNESS
WHEREOF, the Company has caused this Certificate to be signed as of October 13,
2010.  POSITIVEID CORPORATION   /s/ William J.
Caragol William J. Caragol President and Chief Financial
Officer   ATTEST:   /s/ Allison
Tomek Allison Tomek Secretary
 POSITIVEID CORPORATION CERTIFICATE OF DESIGNATIONS OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES C PREFERRED STOCK The undersigned, Scott R. Silverman

 and William J. Caragol here

by certify that: 1) They are the Chief Executive Officer and Chief Financial Officer, respectively, of PositiveID Corporation, a Delaware corporation (the Corporation). 2) The Corporation is authorized to issue 5,000,000 shares of preferred stock. 3) The following resolutions were duly adopted by the Board of Directors: WHEREAS, the Certificate of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, comprised of 5,000,000 shares, $0.001 par value per share (the Preferred Stock), issuable from time to time in one or more series, of which 1,600 shares have been previously designated as Series B Preferred Stock, with 420 shares of Series B Preferred Stock currently issued and outstanding; WHEREAS, the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of Preferred Stock and the number of shares constituting any series and the designation thereof, of any of them; and WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of Preferred Stock, which shall consist of up to 400 shares of the Preferred Stock
 which the Corporation has the authority to issue, as follows: NOW,  THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of Preferred Stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of Preferred Stock as follows: TERMS OF PREFERRED STOCK 1. Designation, Amount and Par Value.  The series of Preferred Stock
 shall be designated as the Corporations Series C Preferred Stock (the Series C Preferred Stock) and the number of shares so designated shall be 400, which shall not be subject to increase without any consent of the holders of the Series C Preferred Stock (each a Holder and collectively, the Holders) as required by applicable law.  Each share of Series C Preferred Stock shall have a par value of $0.001 per share. 2. Ranking and Voting.  The Series C Preferred Stock shall, with respect to rights upon liquidation, winding-up or dissolution, rank: a. senior to the Corporations common stock, par value

$

0.01



per share (

Common Stock

), and any other class or series of Preferred Stock of the Corporation, including the Series B Preferred Stock (collectively, together with any warrants, rights, calls or options exercisable for or convertible into such Preferred Stock, the 

Junior Shares

); and b. junior to all existing and future indebtedness of the Corporation. Except as required by applicable law, the holders of shares of Series C Preferred Stock will have no right to vote on any matters, questions or proceedings of this Corporation including, without limitation, the election of directors. 3. Dividends and Other Distributions.  Commencing on the first anniversary of the date of the issuance of any such shares of Series C Preferred Stock (each respectively an Issuance Date), Holders of Series C Preferred Stock shall be entitled to receive dividends on each outstanding share of Series C Preferred Stock (Dividends), which shall accrue in shares of Series C Preferred Stock at a rate equal to 10.0% per annum

 from the Issuance Date.  Accrued Dividends shall be payable annually on the anniversary of the Issuance Date.  No dividend shall be payable with respect to shares of Series C Preferred Stock that are redeemed for cash or converted into shares of Common Stock prior to the first anniversary of the Issuance Date with respect to such shares.      a. Any calculation of the amount of such Dividends payable pursuant to the provisions of this Section 3 shall be made based on a 365-day year and on the number of days actually elapsed during the applicable calendar quarter, compounded annually. b. So long as any shares of Series C Preferred Stock are outstanding, no dividends or other distributions will be paid, declared or set apart with respect to any Junior Shares.  The Common Stock shall not be redeemed while the Series C Preferred Stock is outstanding. 4. Conversion. a. Mechanics of Conversion. (i) Subject to the terms and conditions hereof, one or more of the Series C Preferred Stock may be converted into shares of Common Stock, at any time or times on or after (but not before) the six-month anniversary of the issuance date of such Series C Preferred Stock, at the option of Holder or the Company, by (i) if at the option of Holder, delivery of a written notice to the Company, in the form attached hereto as Exhibit A-1 (the Holder Conversion Notice), of the Holders election to convert the Series C Preferred Stock, or (ii) if at the option of the Company, delivery of a written notice to Holder, in the form attached hereto as Exhibit A-2 (the Company Conversion Notice and, with the Holder Conversion Notice, each a Conversion Notice), of the Companys election to convert the Series C Preferred Stock.  On the same Trading Day on which the Company has received the Holder Conversion Notice or issued the Company Conversion Notice (as the case may be) by 10:30 a.m. Eastern time, or the following Trading Day if received after such time or on a non-Trading Day, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Holder Conversion Notice or issuance of the Company Conversion Notice to the Holder and the Companys transfer agent (the Transfer Agent) and shall authorize the credit by the Transfer Agent of such aggregate number of Conversion Shares to which the Holder is entitled pursuant to such Conversion Notice to Holders or its designees balance account with The Depository Trust Company (DTC) Fast Automated Securities Transfer (FAST) Program, through its Deposit/Withdrawal at Custodian (DWAC) system, time being of the essence. (ii) No fractional shares of Common Stock are to be issued upon conversion of Series C Preferred Stock, but rather the Company shall issue to Holder scrip or warrants in registered form (certificated or uncertificated) which shall entitle Holder to receive a full share upon the surrender of such scrip or warrants aggregating a full share. (iii) The Holder shall not be required to deliver the original certificates for the Series C Preferred Stock in order to effect a conversion hereunder. (iv) The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Conversion Shares to Holder. b. Company Conversion.  In the event of a conversion of any Series C Preferred Stock pursuant to a Company Conversion Notice, the Company shall issue to the Holder of such Series C Preferred Stock a number of Conversion Shares equal to (x) the Series C Liquidation Value multiplied by (y) the number of such Series C Preferred Stock subject to the Company Conversion Notice divided by (z) the Conversion Price with respect to such Series C Preferred Stock.  If the Company exercises this conversion option with respect to any Series C Preferred Stock (other than Series C Preferred Stock issued as a dividend with respect to Series C Preferred Stock) prior to the fourth anniversary of the issuance of such shares, then in addition to the Conversion Shares to be issued in accordance with the preceding sentence, the Company shall pay to such Holder an additional number of Conversion Shares equal to the following with respect to such converted Series C Preferred Stock (other than Series C Preferred Stock issued as a dividend with respect to Series C Preferred Stock): (i) 35% of the Conversion Shares issuable in respect of such Series C Preferred Stock (other than Series C Preferred Stock issued as a dividend with respect to Series C Preferred Stock) if converted after the six-month anniversary of the Issuance Date but prior to the first anniversary of the Issuance Date, (ii) 27% of the Conversion Shares issuable in respect of such Series C Preferred Stock (other than Series C Preferred Stock issued as a dividend with respect to Series C Preferred Stock) if converted on or after the first anniversary but prior to the second anniversary of the Issuance Date, (iii) 18% of the Conversion Shares issuable in respect of such Series C Preferred Stock (other than Series C Preferred Stock issued as a dividend with respect to Series C Preferred Stock) if converted on or after the second anniversary but prior to the third anniversary of the Issuance Date, and (iv) 9% of the Conversion Shares issuable in respect of such Series C Preferred Stock (other than Series C Preferred Stock issued as a dividend with respect to Series C Preferred Stock) if converted on or after the third anniversary but prior to the fourth anniversary of the Issuance Date.  2      c. Holder Conversion.  In the event of a conversion of any Series C Preferred Stock pursuant to an Holder Conversion Notice, the Company shall issue to the Holder of such Series C Preferred Stock a number of Conversion Shares equal to (x) the Series C Liquidation Value multiplied by (y) the number of such Series C Preferred Stock subject to the Company Conversion Notice divided by (z) the Conversion Price with respect to such Series C Preferred Stock. d. If the Company at any time on or after the date of issuance of any Preferred Stock subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Conversion Shares will be proportionately increased.  If the Company at any time on or after such issuance date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased and the number of Conversion Shares will be proportionately decreased.  Any adjustment under this Section 4.c shall become effective at the close of business on the date the subdivision or combination becomes effective. e. In addition to any adjustments pursuant to Section 4.cif at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the Purchase Rights), then Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which Holder could have acquired if Holder had held the number of shares of Common Stock acquirable upon conversion of all Preferred Stock held by Holder immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. f. Definitions.  For purposes of this Section 4, the following terms shall have the following meanings: (i) The Conversion Price means a price per share equal to the Closing Bid Price of a share of Common Stock on the Trading Day immediately preceding the date of the applicable Tranche Notice Date, subject to adjustment herein. (ii) Conversion Shares means the shares of Common Stock issuable upon conversion of Series C Preferred Stock. (iii) The Closing Bid Price means, for any security as of any date, the last closing bid price for such security on the Trading Market, as reported by Bloomberg, or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security prior to 4:00 p.m., Eastern time, as reported by Bloomberg, or, if the Trading Market is not the principal securities exchange or trading market for such security, the last closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security as reported in the pink sheets by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the holder. (iv) A Trading Day means any day on which the Common Stock is traded on the Trading Market; provided that it shall not include any day on which the Common Stock is (a) scheduled to trade for less than 5 hours, or (b) suspended from trading. (v) The Trading Market means the OTC Bulletin Board, the NASDAQ Capital Market, the NASDAQ Global Market,

the NASDAQ Global Select Market,

the NYSE Amex, or the New York Stock Exchange, whichever is at the time the principal trading exchange or market for the Common Stock, but does not include the Pink Sheets inter-dealer electronic quotation and trading system. (vi) A "Tranche Notice Date" with respect to a Series C Preferred Share shall mean the Tranche Notice Date established for the issuance of such Series C Preferred Stock under the stock purchase agreement pursuant to which such Series C Preferred Share was issued to the Holder thereof.  3      g. Failure to Timely Deliver Conversion Shares. If the Company shall fail (through no fault of Holder) to timely authorize the credit of the Holders balance account with DTC for such number of Conversion Shares to which the Holder is entitled pursuant to a Conversion Notice, then, in addition to all other remedies available to Holder, the Company shall, subject to the availability of lawful funds therefor, pay in cash to Holder on each day that the issuance of such Conversion Shares is not timely effected an amount equal to 1.5% of the product of (A) the sum of the number of Conversion Shares not issued to Holder on a timely basis and to which Holder is entitled and (B) the Closing Bid Price of the shares of Common Stock on the Trading Day immediately preceding the last possible date which the Company could have issued such Conversion Shares to Holder without violating any other restrictions on the issuance of Conversion Shares to the Holder, including the foregoing clause (h) below.  In addition to the foregoing, if after the Companys receipt of the applicable conversion delivery documents the Company shall fail (through no fault of Holder) to timely authorize the credit of the Holders balance account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holders exercise hereunder, and the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Conversion Shares issuable upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within one Trading Day after the Holders request and in the Holders discretion, either (i) pay cash, subject to the availability of lawful funds therefor, to the Holder in an amount equal to the Holders total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the Buy-In Price), at which point the Companys obligation to credit such Holders balance account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holders exercise hereunder and to issue such Conversion Shares shall terminate, or (ii) promptly honor its obligation to credit such Holders balance account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holders exercise hereunder and pay cash, subject to the availability of lawful funds therefor, to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock sold by Holder in satisfaction of its obligations, times (B) the Closing Bid Price on the date of exercise. h. Conversion Limitation. i. Notwithstanding any other provision in this Agreement, at no time may the Company or Holder deliver a Conversion Notice if the number of Conversion Shares to be received pursuant to such Conversion Notice, aggregated with all other shares of Common Stock then beneficially (or deemed beneficially) owned by Holder, would result in Holder owning, on the date of delivery of the Conversion Notice, more than 9.99% of all Common Stock outstanding as determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  In addition, as of any date, the aggregate number of shares of Common Stock into which the Preferred Stock are convertible within 61 days, together with all other shares of Common Stock then beneficially (or deemed beneficially) owned (as determined pursuant to Rule 13d-3 under the Exchange Act) by Holder and its affiliates (as such term is defined in Rule 12b-2 under the Exchange Act), shall not exceed 9.99% of the total outstanding shares of Common Stock as of such date. ii. Until Stockholder Approval (as defined below) is obtained, or the Holder obtains an opinion of counsel reasonably satisfactory to the Company and its counsel that such approval is not required, both the Holder and the Company shall be prohibited from delivering a Conversion Notice if, as a result of such exercise, the aggregate number of Conversion Shares issued hereunder, when aggregated with any shares of Common Stock issued to Holder or any affiliate of Holder under any other agreements or arrangements between the Company and the Holder or any applicable affiliate of the Holder, such aggregate number would, under Nasdaq Marketplace rules (or the rules of any other exchange where the shares of Common Stock are listed), exceed the Cap Amount (as defined below). If delivery of a Conversion Notice is prohibited by the preceding sentence because the Cap Amount would be exceeded, the Company shall, upon the written request of the Holder, hold a meeting of its stockholders within sixty (60) days following such request, and use its best efforts to obtain the approval of its stockholders for the transactions described herein and the other Transaction Documents (Stockholder Approval). For purposes hereof, Cap Amount means 19.99% of the Common Stock outstanding as calculated and determined in accordance with the Nasdaq Marketplace rules (subject to adjustment upon a stock split, stock dividend or similar event). i. Disputes. In the case of a dispute as to the determination of the Conversion Price or the arithmetic calculation of the number of Conversion Shares issued or issuable hereunder, the Company shall promptly issue to Holder the number of Conversion Shares that are not disputed and resolve such dispute as follows.  The Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Trading Days of delivery of the Conversion Notice giving rise to such dispute, as the case may be, to Holder.  If Holder and the Company are unable to agree upon such determination or calculation of the Conversion Price or the number of Conversion Shares within three (3) Trading Days of such disputed determination or arithmetic calculation being submitted to Holder, then the Company shall, within two (2) Trading Days, submit via facsimile or electronic mail  4     (a) the disputed determination of the Conversion Price or arithmetic calculation to an independent, reputable investment bank or independent registered public accounting firm selected by Holder subject to the Companys approval, which may not be unreasonably withheld or delayed, or (b) the disputed arithmetic calculation to the Companys independent registered public accounting firm.  The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and Holder of the results no later than three (3) Trading Days from the time it receives the disputed determinations or calculations.  Such investment banks or accountants determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. 5. Liquidation. a. Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for payment of debts and other liabilities of the Corporation, before any distribution or payment shall be made to the holders of any Junior Shares by reason of their ownership thereof, the Holders of Series C Preferred Stock shall first be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders an amount with respect to each share of Series C Preferred Stock equal to $10,000.00 (the Series C

 Liquidation Value

).  If, upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the amounts payable with respect to the shares of Series C Preferred Stock are not paid in full, the holders of shares of Series C Preferred Stock shall share equally and ratably in any distribution of assets of the Corporation in proportion to the liquidation preference to which each such holder is entitled. b. After payment has been made to the Holders of the Series C Preferred Stock of the full amount of the Series C Liquidation Value, any remaining assets of the Corporation shall be distributed among the holders of the Junior Shares in accordance with the Corporations Certificates of Designations and Certificate of Incorporation. c. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation shall be insufficient to make payment in full to all Holders, then such assets shall be distributed among the Holders at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled. 6. Redemption.  The Company may redeem, for cash, any or all of the Series C Preferred Stock at any time at the redemption price per share equal to the Series C Liquidation Value, plus any accrued but unpaid dividends with respect to such shares of Series C Preferred Stock (the "Redemption Price").  If the Company exercises this redemption option with respect to any Series C Preferred Stock (other than shares of Series C Preferred Stock issued as a dividend with respect to shares of Series C Preferred Stock) prior to the fourth anniversary of the issuance of such shares, then in addition to the Redemption Price, the Company shall pay to holder a make-whole price per share equal to the following with respect to such redeemed shares (other than shares of Series C Preferred Stock issued as a dividend with respect to shares of Series C Preferred Stock): (i) 35% of the Series C Liquidation Value if redeemed prior to the first anniversary of the Issuance Date, (ii) 27% of the Series C Liquidation Value if redeemed on or after the first anniversary but prior to the second anniversary of the Issuance Date, (iii) 18% of the Series C Liquidation Value if redeemed on or after the second anniversary but prior to the third anniversary of the Issuance Date, and (iv) 9% of the Series C Liquidation Value if redeemed on or after the third anniversary but prior to the fourth anniversary of the Issuance Date. 7. Transferability. The Series C Preferred Stock may only be sold, transferred, assigned, pledged or otherwise disposed of (Transfer) in accordance with state and federal securities laws.  The Corporation shall keep at its principal office

, or at the offices of the Transfer Agent,

 a register of the Series C Preferred Stock.  Upon the surrender of any certificate representing Series C Preferred Stock at such place, the Corporation, at the request of the record Holder of such certificate, shall execute and deliver (at the Corporation



s expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of shares represented by the surrendered certificate.  Each such new certificate shall be registered in such name and shall represent such number of shares as is requested by the Holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate. 8. Miscellaneous. a. Notices.  Any and all notices to the Corporation shall be addressed to the Corporation



s Chief Executive Officer or Chief Financial Officer at the Corporation



s principal place of business on file with the Secretary of State of the State of Delaware.  Any and all notices or other communications or deliveries to be provided by the Corporation to any Holder hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this section prior to 5:30 p.m. Eastern time, (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this section later than 5:30 p.m. but prior to 11:59 p.m. Eastern time on such date, (iii) the second business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.  5      b. Lost or Mutilated Preferred Stock Certificate.  Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered Holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing shares of Series C Preferred Stock, and in the case of any such loss, theft or destruction upon receipt of indemnity reasonably satisfactory to the Corporation

(provided that if the Holder is a financial institution or other institutional investor its own agreement shall be satisfactory)

or in the case of any such mutilation upon surrender of such certificate, the Corporation shall, at its expense, execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such series represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate. c. Headings.  The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof. RESOLVED, FURTHER, that the chairman, chief executive officer,

president, chief financial officer, or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file a Certificate of Designations of Preferences, Rights and Limitations of Series C Preferred Stock in accordance with the foregoing resolution and the provisions of Delaware law.  6     IN WITNESS WHEREOF, the undersigned

have

 executed this Certificate this 14th day of March, 2011.  By: /s/ Scott R. Silverman Name: Scott R. Silverman Title: Chief Executive Officer    By: /s/ William J. Caragol Name: William J. Caragol Title: President and Chief Financial Officer