Exhibit 10.2


 


8% CONVERTIBLE PROMISSORY
NOTE 


 


	Effective Date: October 24, 2014	U.S. $161,000.00


 


FOR VALUE RECEIVED,
PositiveID Corp., a Delaware corporation (“Company”), promises to pay to Blue Citi,
llc, or its successors or assigns (“Investor”), $161,000 and any interest, fees, charges and penalties
in accordance with the terms set forth herein. This Convertible Promissory Note (this “Note”) is issued and
made effective as of October 24, 2014 (the “Effective Date”). For purposes hereof, the “Outstanding
Balance” (as defined below) means the Purchase Price (as defined below), as reduced or increased, as the case may be,
pursuant to the terms hereof for redemption, conversion or otherwise, plus any original issue discount (“OID”),
accrued but unpaid interest, collection and enforcements costs, and any other fees or charges (including without limitation late
charges) incurred under the Note. This Note is issued pursuant to that certain Securities Purchase Agreement dated October 24,
2014 as the same may be amended from time to time (the “Agreement”), by and between Company and Investor.


 


The purchase price
for this Note is $150,000 (the “Purchase Price”) payable by wire transfer. The original principal amount of
this Note shall include the Purchase Price, and an $11,000.00 OID to cover due diligence fees to Brighton Capital, Ltd. and Investor’s
legal fees incurred in connection with the purchase and sale of the Notes. Company agrees that the Note is fully paid for as of
the Effective Date.


 


This Note shall have
a maturity date, which shall be the date that is twelve (12) months from the date the Purchase Price is paid (the “Purchase
Price Date”) for the Note (the “Maturity Date”). The Purchase Price Date for the Note shall be the
Effective Date. On the Maturity Date, the Outstanding Balance shall be due and payable.


 


1.            Interest.
Company may repay this Note at any time on or before 90 days from the Purchase Price Date (the “Prepayment Opportunity
Date”) by wiring 130% of all outstanding principal and interest(s) to the Investor. Company may repay this Note at any
time on or before 90 days from the Prepayment Opportunity Date (the “Final Prepayment Date”) by wiring 140%
of all outstanding principal and interest(s) to the Investor. The Note shall accrue an interest charge of 8%, per annum (the “Interest
Charge”) from the Effective Date. Any interest payable is in addition to any applicable OID. Any OID remains payable
regardless of the time and manner of payment by Company. Company may not prepay any balance remaining following the Final Prepayment
Date.


 


2.           Conversion.
Following the 179th day after the date hereof, Investor has the right, at its election, to convert (each instance of
conversion is referred to herein as a “Conversion”) all or any part of the Outstanding Balance of such Note
into shares (“Conversion Shares”) of fully paid and non-assessable common stock of Company (“Common
Stock”) as per the following conversion formula: the number of Conversion Shares equals the Conversion amount divided
by 60% of the average of the three (3) lowest closing bid prices in the fifteen (15) trading days immediately preceding the Conversion
Notice (as defined below) (the “Conversion Price”). Conversion notices (each, a “Conversion Notice”)
under the Note may be effectively delivered to Company by any method of Investor’s choice (including but not limited to facsimile,
email, mail, overnight courier, or personal delivery), and all Conversions shall be cashless and not require further payment from
Investor. If no objection is delivered from Company to Investor regarding any calculation of the Conversion Notice within 24 hours
of delivery of the Conversion Notice, Company shall have been thereafter deemed to have irrevocably confirmed and irrevocably ratified
such Conversion Notice and waived any objection thereto. Company shall deliver the Conversion Shares from any Conversion to Investor
within three (3) business days of Investor’s delivery of the Conversion Notice to Company.


 




    	 



    	 



    

  


3.            Conversion
Delays. If Company fails to deliver Conversion Shares in accordance with the timeframes stated in Section 2, Investor, at any
time prior to selling all of those Conversion Shares, may rescind in whole or in part that particular Conversion attributable to
the unsold Conversion Shares, with a corresponding increase to the applicable Outstanding Balance (any returned Conversion amount
will tack back to the Purchase Price Date of the applicable Note). In addition, for each Conversion, in the event that Conversion
Shares are not delivered by the fourth business day (inclusive of the day of the Conversion), a penalty of $2,000 per day will
be assessed for each day after the third business day (inclusive of the day of the Conversion) until Conversion Share delivery
is made; and such penalty will be added to the Note being converted (under Investor’s and Company’s expectations that
any penalty amounts will tack back to the applicable Purchase Price Date). Terms


 


4.            Default.
The following are events of default under this Note: (i) Company shall fail to pay any principal under this Note, pursuant to the
terms of this Note, on or before the Maturity Date; or (ii) Company shall fail to deliver or threaten to withhold any Conversion
Shares in accordance with the terms hereof; or (iii) Company shall fail to pay any interest or any other amount under this Note,
pursuant to the terms of this Note, on or before the Maturity Date; or (iv) a receiver, trustee or other similar official shall
be appointed over Company or a material part of its assets and such appointment shall remain uncontested for ten (10) days or shall
not be dismissed or discharged within thirty (30) days; or (v) Company shall become insolvent or generally fails to pay, or admits
in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or (vi) Company shall
make a general assignment for the benefit of creditors; or (vii) Company shall file a petition for relief under any bankruptcy,
insolvency or similar law (domestic or foreign); or (viii) an involuntary proceeding shall be commenced or filed against Company;
or (ix) Company shall become delinquent in its filing requirements as a fully-reporting issuer registered with the SEC or shall
fail to maintain the listing of its Common Stock on at least one of the OTC tiers or an equivalent replacement exchange, the Nasdaq
National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange; or (x) Company
shall fail to observe or perform any covenant, obligation, condition or agreement of Company contained herein or in the Agreement,
including without limitation all covenants to timely file all required quarterly and annual reports and any other filings related
to Rule 144 and to keep the Share Reserve (as defined in the Agreement); or (xi) any representation, warranty or other statement
made or furnished by or on behalf of Company to Investor herein or in connection with the issuance of the Notes shall be false,
incorrect, incomplete or misleading in any material respect when made or furnished; or (xii) the
Company effectuates a reverse split of its Common Stock without at least twenty (20) days prior written notice to the Investor;
or (xiii) the Company proposes to replace its transfer agent, and fails to provide, prior to the effective date of such replacement,
fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including
but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor
transfer agent and the Company. 


 




    	2



    	 



    

  


5.            Remedies.
In addition to the rights of the Investor described in Section 2 above, in the event of any default under the Note, Investor may
at any time thereafter accelerate the Note, with the Outstanding Balance of the Note becoming immediately due and payable in cash
at the Mandatory Default Amount (as defined hereafter). Notwithstanding the foregoing, upon the occurrence of any event of default
described in clauses (iv), (v), (vi), (vii) or (viii) of Section 0, the Outstanding Balance as of the date of acceleration shall
become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice required
by Investor. The “Mandatory Default Amount” means the greater of (i) the applicable Outstanding Balance divided
by the Conversion Price on the date the Mandatory Default Amount is either demanded or paid in full, whichever has a lower Conversion
Price, multiplied by the VWAP on the date the Mandatory Default Amount is either demanded or paid in full, whichever has a higher
VWAP, or (ii) 140% multiplied by the applicable Outstanding Balance (the “Default Effect”), provided that the
Default Effect may only be applied with respect to the first two (2) events of default that occur. Commencing five (5) days after
the occurrence of any event of default, interest shall accrue on the Outstanding Balance of each Note at an interest rate equal
to the lesser of 22% per annum or the maximum rate permitted under applicable law. In connection with such acceleration described
herein, Investor need not provide, and Company hereby waives, any presentment, demand, protest or other notice of any kind, and
Investor may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Investor at any time
prior to payment hereunder and Investor shall have all rights as a holder of the Note until such time, if any, as Investor receives
full payment pursuant to this Section 0. No such rescission or annulment shall affect any subsequent event of default or impair
any right consequent thereon. Nothing herein shall limit Investor’s right to pursue any other remedies available to it at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to Company’s
failure to timely deliver certificates representing Conversion Shares upon Conversion of the Note as required pursuant to the terms
hereof.


 


6.            No Offset.
Company acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of Company not subject to offset,
deduction or counterclaim of any kind. Company hereby waives any rights of offset it now has or may have hereafter against Investor,
its successors and assigns, and agrees to make the payments or conversions called for herein in accordance with the terms of the
Notes.


 


7.            Ownership
Limited to 4.99% of Common Stock Outstanding. Notwithstanding anything to the contrary contained in the Note (except as set
forth below in this Section), the Note shall not be convertible by Investor, and Company shall not effect any conversion of the
Note or otherwise issue any shares of Common Stock pursuant to Section 2 hereof, to the extent (but only to the extent) that Investor
together with any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of
the Common Stock outstanding. To the extent the foregoing limitation applies, the determination of whether a Note shall be
convertible (vis-à-vis other convertible, exercisable or exchangeable securities owned by Investor or any of its affiliates)
and of which such securities shall be convertible, exercisable or exchangeable (as among all such securities owned by Investor
and its affiliates) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to
Company for conversion, exercise or exchange (as the case may be). No prior inability to convert a Note, or to issue shares of
Common Stock, pursuant to this Section shall have any effect on the applicability of the provisions of this Section with respect
to any subsequent determination of convertibility. For purposes of this Section, beneficial ownership and all determinations and
calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance
with Section 13(e) of the 1934 Act (as defined below) and the rules and regulations promulgated thereunder. The provisions of this
Section shall be implemented in a manner otherwise than in strict conformity with the terms of this Section to correct this Section
(or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation.
The limitations contained in this Section shall apply to a successor holder of this Note and shall be unconditional, irrevocable
and non-waivable. For any reason at any time, upon the written or oral request of Investor, Company shall within one (1) business
day confirm orally and in writing to Investor the number of shares of Common Stock then outstanding, including by virtue of any
prior conversion or exercise of convertible or exercisable securities into Common Stock, including, without limitation, pursuant
to this Note.


 




    	3



    	 



    

  


8.            Opinion
of Counsel. In the event that an opinion of counsel is needed for any matter related to any Note, Investor has the right to
have any such opinion provided by its counsel and Company agrees that it shall not unreasonably withhold acceptance of any such
opinion. Investor acknowledges that Company requires an opinion of counsel independent of Company for all sales of its restricted
common stock.


 


(REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK)


 




    	4



    	 



    

  


IN WITNESS WHEREOF,
Company has caused this Note to be duly executed as of the Effective Date set out above.


 





	 	COMPANY:
	 	 
	 	PositiveID Corp.
	 	 
	 	By:	/s/ William Caragol





	 	Printed Name:	William Caragol





	 	Title:	CEO


 


 







 


ACKNOWLEDGED, ACCEPTED AND AGREED:


 


INVESTOR:


 


By: BLUE CITI, LLC


 


	By:	/s/ Robert Malin	 
	Name:	Robert Malin	 
	Title:	Managing Member