Exhibit 10.1


 


This
instrument and the rights and obligations evidenced hereby are subordinate in the manner and to the extent set forth in that certain
Letter Agreement re Subordination of Seller Payments dated as of July 25, 2016 (the "subordination agreement"),
by and among Logicmark Investment Partners, LLC, a Delaware limited liability company, Gottlieb Family, LLC, a Virginia limited
liability company, Ben Cornett, Kevin O'Connor and Generation3 Partners I, LLC, a Delaware limited liability company, Logicmark,
LLC, a Delaware limited liability company, NXT-ID, Inc., a Delaware corporation, and ExWorks Capital Fund I, L.P., in its capacity
as agent for the Lenders (in such capacity, "senior lender"), to the indebtedness (including interest) owed by
borrower (as defined below) and certain of its affiliates pursuant to that certain Loan and Security Agreement dated as of July
25, 2016 between borrower the other "Loan Party Obligors" from time to time party thereto, Agent and the "Lenders"
from time to time party thereto, as such Loan and Security Agreement has been and hereafter may be amended, supplemented or otherwise
modified from time to time; subordinated lender, by its acceptance hereof, shall be bound by the provisions of the Subordination
Agreement.


 


SECURED
SUBORDINATED PROMISSORY NOTE


 


	$2,500,000	July 25, 2016




 


FOR
VALUE RECEIVED, NXT-ID, INC., a Delaware corporation (“Borrower”), hereby promises to pay to the order of LOGICMARK
INVESTMENT PARTNERS, LLC, a Delaware limited liability company, in its capacity as Seller Representative on behalf of the Sellers
(as defined below) (the “Subordinated Lender”), the principal sum of Two Million Five Hundred Thousand Dollars
($2,500,000) together with interest thereon as hereinafter described, in immediately available funds, at such times as set forth
below and in accordance with the terms set forth herein.


 


1.            Reference to Interest Purchase Agreement. This Secured Subordinated Promissory Note (this “Note”) is
executed and delivered pursuant to that certain Interest Purchase Agreement, dated as of May 17, 2016, by and among (a) Borrower,
(b) Seller Representative, and (c) LOGICMARK INVESTMENT PARTNERS, LLC, a Delaware limited liability company, GOTTLIEB FAMILY,
LLC, a Virginia limited liability company, BEN CORNETT, KEVIN O’CONNOR and GENERATION3 PARTNERS I, LLC, a Delaware limited
liability company (collectively, the “Sellers”), as amended by that certain First Amendment to Interest Purchase
Agreement, dated as of July 7, 2016, by and between Borrower and Seller Representative (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its terms, the “Purchase Agreement”).
Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.


 






     

     


    

 


2.            Payment of Principal. Subject to the restrictions and limitations provided herein and in the Intercreditor Agreement, all
outstanding principal and accrued interest shall be due and payable in full on the sixtieth (60th) day following the date hereof
(the “Maturity Date”).


 


3.            Payment of Interest.


 


(a)              
Except as otherwise provided herein, interest shall accrue from the original date of issuance of this Note on the unpaid principal
amount of this Note (the “Principal Balance”) at the rate of fifteen percent (15.0%) per annum (the “Interest
Rate”). Accrued interest shall be paid on the Maturity Date in cash by wire transfer of immediately available funds.
Interest on the unpaid principal balance due under this Note shall be calculated on the basis of a 365-day year and the actual
number of days elapsed in any portion of a month for which interest may be due.


 


(b)              
From and after an Event of Default (as defined herein), interest shall accrue on the amount of the Principal Balance hereunder
at a rate equal to the Interest Rate plus five percent (5.0%) per annum.


 


4.            Equity Raise Obligations.


 


(a)               In order to fund the repayment in full of the amounts due under this Note (including principal and all accrued and unpaid interest
thereunder), Borrower shall use best efforts to expeditiously (but by no later than the sixtieth (60th) day following the Closing
Date) raise capital sufficient for such purposes, including, without limitation, by immediately seeking and obtaining stockholder
approval required by Borrower to consummate a private placement, and/or registered public offering, of the equity securities of
Borrower, in compliance with all applicable laws and regulations, including applicable stock exchange rules and regulations, which
best efforts shall be maintained by Buyer on an ongoing basis until the Seller Note is has been fully satisfied. In connection
therewith, Borrower shall keep Subordinated Lender currently apprised of all material actions and developments in connection therewith
on an ongoing basis, including by delivery to Subordinated Lender of all relevant documents and information as requested by or
on behalf of Subordinated Lender.


 


(b)              
In furtherance of Section 4(a) above, Borrower shall prepare a registration statement on Form S-1 (the “Registration
Statement”) to register a number of shares of capital stock of Borrower such that Borrower will obtain cash proceeds
from the sale of such capital stock sufficient to repay the unpaid Principal Balance together with any unpaid, accrued interest
thereon (the “Shares”). Borrower shall file the Registration Statement with the Securities and Exchange Commission
(the “SEC”) as soon as reasonably practicable after the date on which Borrower reasonably believes that it
will be unable to repay the indebtedness under this Note in full (but in no event later than the day following the Maturity Date)
and Borrower shall use its commercially reasonable best efforts to cause the Registration Statement to be declared effective as
promptly as possible after the filing thereof. Borrower shall keep the Registration Statement
continuously effective until the Shares have been sold by the Borrower. Borrower shall take all action necessary to reserve
and keep available out of its authorized and unissued Common Stock a number of shares of Common Stock sufficient permit Borrower
to issue the Shares. Borrower shall provide Subordinated Lender with a reasonable opportunity to review and be consulted on the
Registration Statement and any related SEC filings prior to making such filings with the SEC and on any SEC comments and Borrower
responses thereto. Borrower agrees that it shall promptly pay to the Subordinated Lender the unpaid Principal Balance together
with any unpaid, accrued interest thereon from the proceeds from the sale of the Shares but in no event later than 3 business
days after Borrower’s receipt of such proceeds.


 






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5.            Funding of Escrow Account. The Escrow Amount shall not be funded at Closing and instead shall be funded by the Subordinated
Lender from amounts paid by Borrower under this Note after the repayment to the order of the Subordinated Lender of $1,000,000
of principal due under this Note plus all accrued and unpaid interest on the entire principal amount of this Note.


 


6.            Prepayment. Subject to the limitations contained herein, Borrower may, at its option at any time, prepay, in whole but
not in part, without premium or penalty, the Principal Balance, together with accrued but unpaid interest on such Principal Balance
to the date of prepayment.


 


7.            Mandatory Prepayment. Notwithstanding Section 2 above, and subject to the Intercreditor Agreement, the total unpaid Principal
Balance due Subordinated Lender under this Note, together with all accrued and unpaid interest thereon, shall immediately be due
and payable, upon the consummation of a Capital Event. As used herein, the term “Capital Event” shall mean
(a) the consummation of a transaction, whether in a single transaction or in a series of related transactions that are consummated
contemporaneously (or consummated pursuant to contemporaneous agreements), with any other Person or group of related Persons on
an arm’s-length basis, pursuant to which such party or parties (i) acquire (whether by merger, stock purchase, recapitalization,
reorganization, redemption, issuance of capital stock or otherwise) directly or indirectly substantially all of the outstanding
capital stock of the Borrower or (ii) acquire assets constituting all or substantially all of the assets of the Borrower and its
subsidiaries on a consolidated basis or (b) the consummation of a private or public offering of debt or equity of Borrower or
any subsidiary following the date hereof.


 


8.            Defaults. The occurrence of any one or more of the following events shall constitute a default by Borrower under this Note
and shall be referred to as an “Event of Default”:


 


(a)               If Borrower fails to pay any amount due and payable hereunder within five (5) business days of the date when due;


 


(b)              
If Borrower otherwise fails to perform, keep or observe any term, provision, condition, covenant, warranty or representation contained
in this Note or the Purchase Agreement which is required to be performed, kept or observed by Borrower and such failure continues
for fifteen (15) days after delivery of written notice thereof;


 


(c)               If an Event of Default shall have occurred under the Security Agreement (as defined below);


 


(d)              
If Borrower (i) becomes insolvent or generally fails to pay, or admits in writing its inability to pay debts as they become due;
(ii) applies for, consents to, or acquiesces in, the appointment of a trustee, receiver, sequestrator or other custodian for it
or any of its property, or make a general assignment for the benefit of its creditors; (iii) in the absence of such application,
consents or acquiescences, permits or suffers to exist the appointment of a trustee, receiver, sequestrator or other custodian
for it or for all of its property thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged
within 90 days, provided that it hereby expressly authorizes the Subordinated Lender to appear in any court conducting any relevant
proceeding during such 90-day period to preserve, protect and defend Subordinated Lender’s rights under this Note; or (iv)
files for or permits or suffers to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law (including, without limitation, Title 11, United States Code, as amended from
time to time), or any dissolution, winding up or liquidation proceeding, in respect of it, and, if any such case or proceeding
is not commenced by it, such case or proceeding shall be consented to or acquiesced in by it or shall result in the entry of an
order for relief or shall remain for 90 days undismissed.


 






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(e)               If a default shall have occurred under any agreement between Borrower and any other third party lender to the Borrower, in each
case if such default results in the acceleration of the maturity of the underlying indebtedness.


 


9.            Consequences of Default. Subject to the Intercreditor Agreement, upon the occurrence of an Event of Default then, at Subordinated
Lender’s option, and without notice by Subordinated Lender to Borrower except as otherwise expressly required herein:


 


(a)               The total unpaid principal balance due Subordinated Lender under this Note, together with all accrued and unpaid interest thereon,
shall immediately be due and payable;


 


(b)               Subordinated Lender may exercise any one or more of the rights and remedies arising under the Security Agreement; and


 


(c)               Subordinated Lender shall have the right to exercise any and all other remedies available to it at law or in equity.


 


10.          Security Agreement. The payment of this Note is secured by a subordinated security agreement by and between Subordinated
Lender and Borrower (the “Security Agreement”), the form of which is attached to this Note as Exhibit A,
of even date herewith.


 


11.          Subordination. Notwithstanding anything herein to the contrary, as of the date hereof, the indebtedness evidenced by this
Note is expressly subordinated pursuant to that certain letter agreement dated as of even date herewith by and between Senior
Lender and the Subordinated Lender on behalf of the Sellers (the “Intercreditor Agreement”). Nothing herein
shall be construed or interpreted to conflict with the terms of the Intercreditor Agreement. To the extent of any conflict between
the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall control.


 






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12.          Miscellaneous.


 


(a)               Subordinated Lender’s remedies under this Note and the Security Agreement shall be cumulative and concurrent and may be
pursued against Borrower, the collateral described in the Security Agreement or any portion or combination of such collateral
and other security, and Subordinated Lender may resort to every other right or remedy available at law or in equity without first
exhausting the rights and remedies contained herein, all in Subordinated Lender’s sole discretion.


 


(b)              
Failure of Subordinated Lender, for a period of time or on more than one occasion, to exercise its option to accelerate the Maturity
Date shall not constitute a waiver of the right to exercise the same at any time during the continued existence of the Event of
Default or in the event of any subsequent Event of Default. Subordinated Lender shall not by any other omission or act be deemed
to waive any of its rights or remedies hereunder unless such waiver be in writing and signed by Subordinated Lender, and then
only to the extent specifically set forth therein. A waiver in connection with one event shall not be construed as continuing
or as a bar to or waiver of any right or remedy in connection with a subsequent event.


 


(c)              
Borrower hereby: (i) waives and renounces any and all exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness evidenced by this Note or by any extension or renewal hereof; (ii) waives presentment and demand for
payment, notices of nonpayment and of dishonor, protest of dishonor, and notice of protest; (iii) consents to any and all extensions
of time, renewals, waivers, or modifications that may be granted by Subordinated Lender with respect to the payment or other provisions
hereof, and to the release of any security at any time given for the payment hereof, or any part thereof, with or without substitution,
and to the release of any person or entity liable for the payment hereof; and (iv) consents to the addition of any and all other
makers, endorsers, guarantors, and other obligors for the payment hereof, and to the acceptance of any and all other security
for the payment hereof, and agrees that the addition of any such obligors or security shall not affect the liability of Borrower,
any guarantor and all others now liable for all or any part of the obligations evidenced hereby.


 


(d)             
All payments made on account of the indebtedness evidenced by this Note shall be made in currency and coin of the United States
of America which shall be legal tender for public and private debts at the time of payment. Said payments and prepayments are
to be made via wire transfer pursuant to Subordinated Lender’s instructions, or at such place as Subordinated Lender may,
from time to time, in writing appoint.


 


(e)              
Subject to the restrictions against set-off set forth in the Intercreditor Agreement, Subordinated Lender may elect to offset
amounts payable to the Borrower by Sellers against amounts payable under this Note, including, without limitation, as a result
of an adjustment of the Unadjusted Purchase Price pursuant to Section 2(f) of the Purchase Agreement.


 


(f)               
Time is of the essence hereof.


 


(g)             
Following an Event of Default, Borrower shall permit Subordinated Lender, its representatives and agents, upon reasonable notice
and during normal business hours, to (i) visit and inspect any of the properties of Borrower, (ii) examine the corporate and financial
records of Borrower and make copies thereof or extracts therefrom and (iii) discuss the affairs, finances and accounts of any
such corporations with the directors, officers, managers, key employees, consultants and independent accountants of Borrower.


 






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(h)             
This Note and the rights and obligations of all parties hereunder shall be governed, construed and enforced in accordance with
the internal laws of the State of Delaware, excluding any choice of law rules which may direct the application of the laws of
another jurisdiction.


 


(i)              
The parties hereto intend and believe that each provision in this Note comports with all applicable law. However, if any provision
of this Note is found by a court of law to be in violation of any applicable law, and if such court should declare such provision
of this Note to be unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such provisions
shall be given full force and effect to the fullest possible extent that it is legal, valid and enforceable, then the remainder
of this Note shall be construed as if such unlawful, void or unenforceable provision were not contained therein, and that the
rights, obligations and interests of Borrower and Subordinated Lender under the remainder of this Note shall continue in full
force and effect.


 


(j)               
To induce Subordinated Lender to accept this Note, Borrower irrevocably agrees that, subject to Subordinated Lender’s sole
and absolute discretion, all actions or proceedings in any way, manner or respect, arising out of, from or related to this Note
or the Security Agreement shall be litigated in courts having situs within Cook County, Illinois. Borrower hereby consents and
submits to the jurisdiction of any local, state or federal court located within said county. Borrower hereby waives any right
it may have to transfer or change the venue of any litigation brought against Borrower by Subordinated Lender in accordance with
this paragraph.


 


(k)            
Borrower irrevocably, unconditionally and voluntarily waiveS any right to trial by jury
in any action or proceeding (I) to enforce or defend any rights under or in connection with THis Note or any amendment, instrument,
document or agreement delivered or which may in the future be delivered in connection THEREWITH OR herewith or (II) arising from
any dispute or controversy in connection with or related to this Note OR the Security Agreement or any such amendment, instrument,
document or agreement and agrees that such action or proceeding shall be tried before a court and not before a jury.


 


(l)              
The term “Subordinated Lender” as used herein, shall mean such endorsee, assignee, or other transferee or successor
to Subordinated Lender then becoming the holder of this Note. This Note shall inure to the benefit of Subordinated Lender and
its successors and assigns and shall be binding upon the undersigned and its successors and assigns. The term “Borrower”
as used herein, shall include Borrower’s successors, assigns, legal and personal representatives, executors, administrators,
devisees, legatees and heirs.


 






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(m)           
All notices, requests, demands and other communications between the parties required or permitted to be given hereunder shall
be given in the manner set forth in the Purchase Agreement.


 


(n)             
The non-prevailing party shall pay to the prevailing party the reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees) incurred by the prevailing party in any litigation, contest, dispute, suit, proceeding or action in any
way relating to this Note or any attempt by Subordinated Lender to enforce its rights against Borrower by virtue of this Note.


 


(o)             
It is the intention of the Borrower and the Subordinated Lender to conform strictly to all applicable usury laws now or hereafter
in force, and any interest payable under this Note shall be subject to reduction to the amount not in excess of the maximum legal
amount allowed under the applicable usury laws as now or hereafter construed by the courts having jurisdiction over such matters.
If the maturity of this Note is accelerated by reason of an election by the Subordinated Lender hereof resulting from an Event
of Default, voluntary prepayment by the Borrower or otherwise, then earned interest may never include more than the maximum amount
permitted by law, computed from the date hereof until payment, and any interest in excess of the maximum amount permitted by law
shall be canceled automatically and, if theretofore paid, shall at the option of the Subordinated Lender hereof either be rebated
to the Borrower or credited on the outstanding principal amount of this Note, or if this Note has been paid, then the excess shall
be rebated to the Borrower. The aggregate of all interest (whether designated as interest, service charges, points or otherwise)
contracted for, chargeable, or receivable under this Note shall under no circumstances exceed the maximum legal rate upon the
unpaid principal balance of this Note remaining unpaid from time to time. If such interest does exceed the maximum legal rate,
it shall be deemed a mistake and such excess shall be canceled automatically and, if theretofore paid, rebated to the Borrower
or credited on the outstanding principal amount of this Note, or if this Note has been repaid, then such excess shall be rebated
to the Borrower.


 


[Signature
Page Follows]








 






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IN
WITNESS WHEREOF, the undersigned has caused this Secured Subordinated Promissory Note to be signed and executed as of the date
first written above.


 


	 	BORROWER:
	 	 	 
	 	NXT-ID, INC.
	 	 
	 	By:  	                  
	 	Name:	 
	 	Title:	 


 






     

     


    

 





Exhibit
A


 


Security
Agreement


 


(see
attached)