Document:

Exhibit 10.2

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT,
dated as of January 28, 2016 (this “Agreement”), is among PositiveID Corporation, a Delaware corporation (the
“Company”), all of the Subsidiaries of the Company (such subsidiaries, the “Guarantors” and,
together with the Company, the “Debtors”) and the holders of the Company’s 4% Original Issue Discount
Senior Secured Convertible Promissory Note due eighteen (18) months following its issuance, in the original principal amount of
$2,100,000.00 (the “Note”) signatory hereto, their endorsees, transferees, and assigns (collectively, the “Secured
Parties”).

 

WITNESSETH:

 

WHEREAS, pursuant to
the Purchase Agreement (as defined in the Note), the Secured Parties have severally agreed to extend the loan to the Company evidenced
by the Note;

 

WHEREAS, pursuant to
a certain Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”), the Guarantors have jointly and
severally agreed to guarantee and act as surety for payment of such Note; and

 

WHEREAS, the Company
has previously entered into a Security Agreement dated December 19, 2012, by and between The Boeing Company, Microfluidic Systems,
and the Company, whereby the Company has granted certain security interests to The Boeing Company (the “Boeing Liens”);
and

 

WHEREAS, the Company
has previously entered into a Security Agreement dated November 25, 2014, in favor of the Secured Parties, whereby the Company
has previously granted certain security interests to the Secured Parties (the “Initial Secured Parties’ First Liens”);
and

 

WHEREAS, the Company
has previously entered into a Security Agreement dated August 14, 2015, in favor of the Secured Parties, whereby the Company has
previously granted certain security interests to the Secured Parties (the “Initial Secured Parties’ Second Liens”;
collectively, with the Initial Secured Parties’ First Liens, the “Initial Parties’ Liens”); and

 

WHEREAS, in order to
induce the Secured Parties to extend the loan evidenced by the Note, subject and subordinate to the Boeing Liens and the Initial
Secured Parties’ Liens, each Debtor has agreed to execute and deliver to the Secured Parties this Agreement and to grant
the Secured Parties, pari passu with each other Secured Party and through the Agent (as defined in Section 18 hereof), a
security interest in certain property of such Debtor to secure the prompt payment, performance and discharge in full of all of
the Company’s obligations under the Note and the Guarantors’ obligations under the Guarantee.

 

NOW, THEREFORE, in
consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

 

1.          Certain
Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used
but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel
paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”,
“fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”,
“investment property”, “letter-of-credit rights”, “proceeds”, and “supporting obligations”)
shall have the respective meanings given such terms in Article 9 of the UCC.

 

    	 	1	 

     

    

 

(a)          “Collateral”
means the collateral in which the Secured Parties are granted a security interest by this Agreement and that shall include the
following personal property of the Debtors, whether presently owned or existing or hereafter acquired or coming into existence,
wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products
and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance
covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity
interest or other property at any time and from time to time acquired, receivable or otherwise distributed in respect of, or in
exchange for, any or all of the Pledged Securities (as defined below):

 

(i)          All
goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and
wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in
connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;

 

(ii)         All
contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests,
stock or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses,
distribution and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed
by any Debtor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and
rights, goodwill, Intellectual Property and income tax refunds;

 

(iii)        All
accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising,
goods, equipment, motor vehicles and trucks that any of the same may represent, and all right, title, security and guaranties with
respect to each account, including any right of stoppage in transit;

 

(iv)        All
documents, letter-of-credit rights, instruments and chattel paper;

 

(v)         All
commercial tort claims;

 

(vi)        All
deposit accounts and all cash (whether or not deposited in such deposit accounts);

 

(vii)       All
investment property;

 

(viii)      All
supporting obligations;

 

(ix)         All
files, records, books of account, business papers, and computer programs; and

 

(x)          the
products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix), above.

 

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Without limiting
the generality of the foregoing, the “Collateral” shall include all investment property and general intangibles
respecting ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of capital stock
and the other equity interests listed on Schedule H hereto (as the same may be modified from time to time pursuant to the
terms hereof), and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of
any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in
each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable
or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged
Securities, including, but not limited to, all dividends, interest and cash.

 

Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any asset that, in the event of an assignment, becomes
void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent
that such applicable law is not overridden by Sections 9-406, 9-407, and/or 9-408 of the UCC or other similar applicable law);
provided, however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest
in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds
of such asset.

 

(b)          “Intellectual
Property” means the collective reference to all rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights
arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent
of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications
for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof,
(iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service
marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country
or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade secrets arising under
the laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals
or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of
the foregoing.

 

(c)          “Majority
in Interest” means, at any time of determination, the majority in interest (based on then-outstanding principal amounts
of Note at the time of such determination) of the Secured Parties.

 

(d)          “Necessary
Endorsement” means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and
such other instruments or documents as the Agent (as that term is defined below) may reasonably request.

 

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(e)          “Obligations”
means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become
due, or that are now or may be hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties, including,
without limitation, all obligations under this Agreement, the Note, the Guarantee and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary
or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly
or indirectly from any of the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the term “Obligations”
shall include, without limitation: (i) principal of, and interest on the Note and the loan extended pursuant thereto; (ii)
any and all other fees, indemnities, costs, obligations and liabilities of the Debtors from time to time under or in connection
with this Agreement, the Note, the Guarantee, and any other instruments, agreements or other documents executed and/or delivered
in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition interest) in respect of
the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization, or similar proceeding involving any Debtor.

 

(f)          “Organizational
Documents” means with respect to any Debtor, the documents by which such Debtor was organized (such as articles or certificate
of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates
of designation for preferred stock or other forms of preferred equity) and that relate to the internal governance of such Debtor
(such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

 

(g)          “Pledged
Interests” shall have the meaning ascribed to such term in Section 4(j).

 

(h)          “Pledged
Securities” shall have the meaning ascribed to such term in Section 4(i).

 

(i)          “UCC”
means the Uniform Commercial Code of the State of New York and or any other applicable law of any state or states that has jurisdiction
with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that
defined terms in the UCC should be construed in their broadest sense so that the term “Collateral” will be construed
in its broadest sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions,
they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones
shall be controlling.

 

2.          Grant
of Security Interest in Collateral. Subject to the Boeing Lien and the Initial Secured Parties’ Liens, as an inducement
for the Secured Parties to extend the loan as evidenced by the Note and to secure the complete and timely payment, performance
and discharge in full, as the case may be, of all of the Obligations, each Debtor hereby unconditionally and irrevocably pledges,
grants and hypothecates to the Secured Parties a security interest in and to, a lien upon and a right of set-off against all of
their respective right, title and interest of whatsoever kind and nature in and to, the Collateral (a “Security Interest”
and, collectively, the “Security Interests”).

 

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3.          Delivery
of Certain Collateral. Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver or cause to
be delivered to the Agent (a) any and all certificates and other instruments representing or evidencing the Pledged Securities,
and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together
with all Necessary Endorsements. The Debtors are, contemporaneously with the execution hereof, delivering to Agent, or have previously
delivered to Agent, a true and correct copy of each Organizational Document governing any of the Pledged Securities.

 

4.          Representations,
Warranties, Covenants, and Agreements of the Debtors. Except as set forth under the corresponding section of the disclosure
schedules delivered to the Secured Parties concurrently herewith (the “Disclosure Schedules”), which Disclosure
Schedules shall be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties
as follows:

 

(a)          Each
Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement
and otherwise to carry out its obligations hereunder. The execution, delivery, and performance by each Debtor of this Agreement
and the filings contemplated therein have been duly authorized by all necessary action on the part of such Debtor and no further
action is required by such Debtor. This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal,
valid, and binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, and similar laws of general application relating to or affecting
the rights and remedies of creditors and by general principles of equity.

 

(b)          The
Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily
at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule
A attached hereto. Except as specifically set forth on Schedule A, each Debtor is the record owner of the real property
where such Collateral is located, and there exist no mortgages or other liens on any such real property except for Permitted Liens
(as defined in the Note). Except as disclosed on Schedule A, none of such Collateral is in the possession of any consignee,
bailee, warehouseman, agent, or processor.

 

(c)          Except
for Permitted Liens (as defined in the Note) and except as set forth on Schedule B attached hereto, the Debtors are the
sole owner of the Collateral (except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free
and clear of any liens, security interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interests.
Except as set forth on Schedule C attached hereto, there is not on file in any governmental or regulatory authority, agency,
or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing
(other than those that will be filed in favor of the Secured Parties pursuant to this Agreement) covering or affecting any of the
Collateral. Except as set forth on Schedule C attached hereto and except pursuant to this Agreement, as long as this Agreement
shall be in effect, the Debtors shall not execute and shall not knowingly permit to be on file in any such office or agency any
other financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Parties
pursuant to the terms of this Agreement).

 

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(d)          No
written claim has been received that any Collateral or any Debtor’s use of any Collateral violates the rights of any third
party. There has been no adverse decision to any Debtor’s claim of ownership rights in or exclusive rights to use the Collateral
in any jurisdiction or to any Debtor’s right to keep and maintain such Collateral in full force and effect, and there is
no proceeding involving said rights pending or, to the best knowledge of any Debtor, threatened before any court, judicial body,
administrative or regulatory agency, arbitrator or other governmental authority.

 

(e)          Each
Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business
and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and
records or tangible Collateral unless it delivers to the Secured Parties at least 30 days prior to such relocation (i) written
notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate
financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been taken to
perfect the Security Interests to create in favor of the Secured Parties a valid, perfected and continuing perfected first priority
lien in the Collateral.

 

(f)          This
Agreement creates in favor of the Secured Parties a valid security interest in the Collateral, subject only to Permitted Liens
(as defined in the Note) securing the payment and performance of the Obligations. Upon making the filings described in the immediately
following paragraph, all security interests created hereunder in any Collateral that may be perfected by filing Uniform Commercial
Code financing statements shall have been duly perfected. Except for the filing of the Uniform Commercial Code financing statements
referred to in the immediately following paragraph, the recordation of the Intellectual Property Security Agreement (as defined
in Section 4(p) hereof) with respect to copyrights and copyright applications in the United States Copyright Office referred to
in paragraph (m), the execution and delivery of deposit account control agreements satisfying the requirements of Section 9-104(a)(2)
of the UCC with respect to each deposit account of the Debtors, and the delivery of the certificates and other instruments provided
in Section 3, no action is necessary to create, perfect or protect the security interests created hereunder. Without limiting the
generality of the foregoing, except for the filing of said financing statements, the recordation of said Intellectual Property
Security Agreement, and the execution and delivery of said deposit account control agreements, no consent of any third parties
and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body
is required for (i) the execution, delivery and performance of this Agreement, (ii) the creation or perfection of the Security
Interests created hereunder in the Collateral or (iii) the enforcement of the rights of the Agent and the Secured Parties hereunder.

 

(g)          Each
Debtor hereby authorizes the Agent to file one or more financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper by it.

 

(h)          The
execution, delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational
Documents of any Debtor or any judgment, decree, order, or award of any court, governmental body or arbitrator or any applicable
law, rule or regulation applicable to any Debtor or (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor’s
debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound
or affected. If any, all required consents (including, without limitation, from stockholders or creditors of any Debtor) necessary
for any Debtor to enter into and perform its obligations hereunder have been obtained.

 

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(i)          The
capital stock and other equity interests listed on Schedule H hereto (the “Pledged Securities”) represent
all of the capital stock and other equity interests of the Guarantors, and represent all capital stock and other equity interests
owned, directly or indirectly, by the Company. All of the Pledged Securities are validly issued, fully paid and nonassessable,
and the Company is the legal and beneficial owner of the Pledged Securities, free and clear of any lien, security interest or other
encumbrance except for the security interests created by this Agreement and other Permitted Liens (as defined in the Note).

 

(j)          The
ownership and other equity interests in partnerships and limited liability companies (if any) included in the Collateral (the “Pledged
Interests”) by their express terms do not provide that they are securities governed by Article 8 of the UCC and are not
held in a securities account or by any financial intermediary.

 

(k)          Except
for Permitted Liens (as defined in the Note), each Debtor shall at all times maintain the liens and Security Interests provided
for hereunder as valid and perfected first priority liens and security interests in the Collateral in favor of the Secured Parties
until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 14 hereof. Each Debtor hereby
agrees to defend the same against the claims of any and all persons and entities. Each Debtor shall safeguard and protect all Collateral
for the account of the Secured Parties. At the request of the Agent, each Debtor will sign and deliver to the Agent on behalf of
the Secured Parties at any time or from time to time one or more financing statements pursuant to the UCC in form reasonably satisfactory
to the Agent and will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Agent to be,
necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing,
each Debtor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interests hereunder,
and each Debtor shall obtain and furnish to the Agent from time to time, upon demand, such releases and/or subordinations of claims
and liens that may be required to maintain the priority of the Security Interests hereunder.

 

(l)          No
Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for non-exclusive
licenses granted by a Debtor in its ordinary course of business and sales of inventory by a Debtor in its ordinary course of business)
without the prior written consent of a Majority in Interest.

 

(m)          Each
Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order and shall
not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.

 

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(n)          Each
Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established
reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances
by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover
the full replacement cost thereof. Each Debtor shall cause each insurance policy issued in connection herewith to provide, and
the insurer issuing such policy to certify to the Agent, that (a) the Agent will be named as lender loss payee and additional insured
under each such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever,
such insurer will promptly notify the Agent and such cancellation or change shall not be effective as to the Agent for at least
thirty (30) days after receipt by the Agent of such notice, unless the effect of such change is to extend or increase coverage
under the policy; and (c) the Agent will have the right (but no obligation) at its election to remedy any default in the payment
of premiums within thirty (30) days of notice from the insurer of such default. If no Event of Default (as defined in the Note)
exists and if the proceeds arising out of any claim or series of related claims do not exceed $100,000, loss payments in each instance
will be applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred
to the extent reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall
be payable to the applicable Debtor; provided, however, that payments received by any Debtor after an Event of Default
occurs and is continuing or in excess of $100,000 for any occurrence or series of related occurrences shall be paid to the Agent
on behalf of the Secured Parties and, if received by such Debtor, shall be held in trust for the Secured Parties and immediately
paid over to the Agent unless otherwise directed in writing by the Agent. Copies of such policies or the related certificates,
in each case, naming the Agent as lender loss payee and additional insured shall be delivered to the Agent at least annually and
at the time any new policy of insurance is issued.

 

(o)          Each
Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Parties promptly, in sufficient detail, of
any material adverse change in the Collateral, and of the occurrence of any event that would have a material adverse effect on
the value of the Collateral or on the Secured Parties’ security interest, through the Agent, therein.

 

(p)          Each
Debtor shall promptly execute and deliver to the Agent such further deeds, mortgages, assignments, security agreements, financing
statements, or other instruments, documents, certificates, and assurances and take such further action as the Agent may from time
to time request and may in its sole discretion deem necessary to perfect, protect, or enforce the Secured Parties’ security
interest in the Collateral including, without limitation, if applicable, the execution and delivery of a separate security agreement
with respect to each Debtor’s Intellectual Property (an “Intellectual Property Security Agreement”) in
which the Secured Parties have been granted a security interest hereunder, substantially in a form reasonably acceptable to the
Agent, which Intellectual Property Security Agreement, other than as may be stated therein, shall be subject to all of the terms
and conditions hereof.

 

(q)          Each
Debtor shall permit the Agent and its representatives and agents to inspect the Collateral during normal business hours and upon
reasonable prior notice and to make copies of records pertaining to the Collateral as may be reasonably requested by the Agent
from time to time.

 

(r)          Each
Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce, and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

 

(s)          Each
Debtor shall promptly notify the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other information received by such Debtor that may materially affect
the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.

 

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(t)          All
information heretofore, herein, or hereafter supplied to the Secured Parties by or on behalf of any Debtor with respect to the
Collateral is accurate and complete in all material respects as of the date furnished.

 

(u)          The
Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any
rights and franchises material to its business.

 

(v)         No
Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if it has
one), legal or corporate structure, or identity, or add any new fictitious name unless it provides at least thirty (30) days’
prior written notice to the Secured Parties of such change and, at the time of such written notification, such Debtor provides
any financing statements or fixture filings necessary to perfect and continue the perfection of the Security Interests granted
and evidenced by this Agreement.

 

(w)          Except
in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill and hold, sale
or return, sale on approval, or other conditional terms of sale without the consent of the Agent, which shall not be unreasonably
withheld, delayed, denied, or conditioned.

 

(x)          No
Debtor may relocate its chief executive office to a new location without providing 30 days prior written notification thereof to
the Secured Parties and so long as, at the time of such written notification, such Debtor provides any financing statements or
fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.

 

(y)          Each
Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name in Schedule
D attached hereto, which Schedule D sets forth each Debtor’s organizational identification number or, if any Debtor
does not have one, states that one does not exist.

 

(z)          (i)
The actual name of each Debtor is the name set forth in Schedule D attached hereto; (ii) no Debtor has any trade names except
as set forth on Schedule E attached hereto; (iii) no Debtor has used any name other than that stated in the preamble hereto
or as set forth on Schedule E for the preceding five years; and (iv) no entity has merged into any Debtor or been acquired
by any Debtor within the past five years except as set forth on Schedule E.

 

(aa)         At
any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require
or permit possession by the secured party to perfect the security interest created hereby, the applicable Debtor shall deliver
such Collateral to the Agent.

 

(bb)         Each
Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Agent regarding the Pledged
Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by Section 8-106
(or any successor section) of the UCC. Further, each Debtor agrees that it shall not enter into a similar agreement (or one that
would confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.

 

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(cc)         Each
Debtor shall cause all tangible chattel paper constituting Collateral to be delivered to the Agent, or, if such delivery is not
possible, then to cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created
by this Agreement. To the extent that any Collateral consists of electronic chattel paper, the applicable Debtor shall cause the
underlying chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor section thereto).

 

(dd)         If
there is any investment property or deposit account included as Collateral that can be perfected by “control” through
an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each
case satisfactory to the Agent, to be entered into and delivered to the Agent for the benefit of the Secured Parties.

 

(ee)         To
the extent that any Collateral consists of letter-of-credit rights, the applicable Debtor shall cause the issuer of each underlying
letter of credit to consent to an assignment of the proceeds thereof to the Secured Parties.

 

(ff)         To
the extent that any Collateral is in the possession of any third party, the applicable Debtor shall join with the Agent in notifying
such third party of the Secured Parties’ security interest in such Collateral and shall use its best efforts to obtain an
acknowledgement and agreement from such third party with respect to the Collateral, in form and substance reasonably satisfactory
to the Agent.

 

(gg)         If
any Debtor shall at any time hold or acquire a commercial tort claim, such Debtor shall promptly notify the Secured Parties in
a writing signed by such Debtor of the particulars thereof and grant to the Secured Parties in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory
to the Agent.

 

(hh)         Each
Debtor shall immediately provide written notice to the Secured Parties of any and all accounts that arise out of contracts with
any governmental authority and, to the extent necessary to perfect or continue the perfected status of the Security Interests in
such accounts and proceeds thereof, shall execute and deliver to the Agent an assignment of claims for such accounts and cooperate
with the Agent in taking any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar federal,
state or local statute or rule to perfect or continue the perfected status of the Security Interests in such accounts and proceeds
thereof.

 

(ii)         Each
Debtor shall cause each subsidiary of such Debtor to immediately become a party hereto (an “Additional Debtor”),
by executing and delivering an Additional Debtor Joinder in substantially the form of Annex A attached hereto and comply
with the provisions hereof applicable to the Debtors. Concurrent therewith, the Additional Debtor shall deliver replacement schedules
for, or supplements to all other Schedules to (or referred to in) this Agreement, as applicable, which replacement schedules shall
supersede, or supplements shall modify, the Schedules then in effect. The Additional Debtor shall also deliver such opinions of
counsel, authorizing resolutions, good standing certificates, incumbency certificates, organizational documents, financing statements
and other information and documentation as the Agent may reasonably request. Upon delivery of the foregoing to the Agent, the Additional
Debtor shall be and become a party to this Agreement with the same rights and obligations as the Debtors, for all purposes hereof
as fully and to the same extent as if it were an original signatory hereto and shall be deemed to have made the representations,
warranties, and covenants set forth herein as of the date of execution and delivery of such Additional Debtor Joinder, and all
references herein to the “Debtors” shall be deemed to include each Additional Debtor.

 

    	 	10	 

     

    

 

(jj)         Each
Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and in the Note.

 

(kk)         Each
Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor. Each Debtor shall notify each
issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Parties on
the books of such issuer. Further, except with respect to certificated securities delivered to the Agent, the applicable Debtor
shall deliver to Agent an acknowledgement of pledge (which, where appropriate, shall comply with the requirements of the relevant
UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged Securities, which acknowledgement
shall confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by Agent during the
continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities into the name of
any designee of Agent, will take such steps as may be necessary to effect the transfer, and will comply with all other instructions
of Agent regarding such Pledged Securities without the further consent of the applicable Debtor.

 

(ll)         In
the event that, upon an occurrence of an Event of Default, Agent shall sell all or any of the Pledged Securities to another party
or parties (herein called the “Transferee”) or shall purchase or retain all or any of the Pledged Securities,
each Debtor shall, to the extent applicable: (i) deliver to Agent or the Transferee, as the case may be, the certificate of incorporation,
bylaws, minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences of indebtedness,
books of account, financial records, and all other Organizational Documents and records of the Debtors and their direct and indirect
subsidiaries; (ii) use its best efforts to obtain resignations of the persons then serving as officers and directors of the Debtors
and their direct and indirect subsidiaries, if so requested; and (iii) use its best efforts to obtain any approvals that are
required by any governmental or regulatory body in order to permit the sale of the Pledged Securities to the Transferee or the
purchase or retention of the Pledged Securities by Agent and allow the Transferee or Agent to continue the business of the Debtors
and their direct and indirect subsidiaries.

 

(mm)         Without
limiting the generality of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be registered
at the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated hereby with
respect to all Intellectual Property registered at the United States Copyright Office or United States Patent and Trademark Office
to be duly recorded at the applicable office, and (iii) give the Agent notice whenever it acquires (whether absolutely or by license)
or creates any additional material Intellectual Property.

 

(nn)         Each
Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further instruments
and documents, and take all such further action as may be necessary or desirable, or as the Agent may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Parties to exercise
and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the purposes of this
Agreement.

 

    	 	11	 

     

    

 

(oo)         Schedule
F attached hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights,
and domain names owned by any of the Debtors as of the date hereof. Schedule F lists all material licenses in favor of any
Debtor for the use of any patents, trademarks, copyrights and domain names as of the date hereof. All material patents and trademarks
of the Debtors have been duly recorded at the United States Patent and Trademark Office and all material copyrights of the Debtors
have been duly recorded at the United States Copyright Office.

 

(pp)         Except
as set forth on Schedule G attached hereto, none of the account debtors or other persons or entities obligated on any of
the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state or local
statute or rule in respect of such Collateral.

 

(qq)         Until
the Obligations shall have been paid and performed in full, the Company covenants that it shall promptly direct any direct or indirect
subsidiary of the Company formed or acquired after the date hereof to enter into a Subsidiary Guarantee in favor of the Secured
Party, in the form of attached as an exhibit to the Purchase Agreement.

 

5.          Effect
of Pledge on Certain Rights. If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership interests
(regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests upon the
occurrence of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets of the
issuer), it is agreed that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement of any
of Agent’s rights hereunder shall not be deemed to be the type of event that would trigger such conversion rights notwithstanding
any provisions in the Organizational Documents or agreements to which any Debtor is subject or to which any Debtor is party.

 

6.          Defaults.
The following events shall be “Events of Default”:

 

(a)          The
occurrence of an Event of Default (as defined in the Note) under the Note;

 

(b)          Any
representation or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when made;

 

(c)          The
failure by any Debtor to observe or perform any of its obligations hereunder for five (5) days after delivery to such Debtor of
notice of such failure by or on behalf of a Secured Party unless such default is capable of cure but cannot be cured within such
time frame and such Debtor is using best efforts to cure same in a timely fashion; or

 

(d)          If
any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental authority having
jurisdiction over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that any
Debtor has any liability or obligation purported to be created under this Agreement.

 

    	 	12	 

     

    

 

7.          Duty
to Hold in Trust.

 

(a)          Upon
the occurrence of any Event of Default and at any time thereafter, each Debtor shall, upon receipt of any revenue, income, dividend,
interest or other sums subject to the Security Interests, whether payable pursuant to the Note or otherwise, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Secured
Parties and shall forthwith endorse and transfer any such sums or instruments, or both, to the Secured Parties, pro-rata in proportion
to their respective then-currently outstanding principal amount of Note for application to the satisfaction of the Obligations
(and if the Note is not outstanding, pro-rata in proportion to the initial purchases of the remaining Note).

 

(b)          If
any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares
of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants,
rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of
its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in
exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured
Parties; (ii) hold the same in trust on behalf of and for the benefit of the Secured Parties; and (iii) to deliver any and all
certificates or instruments evidencing the same to Agent on or before the close of business on the fifth business day following
the receipt thereof by such Debtor, in the exact form received together with the Necessary Endorsements, to be held by Agent subject
to the terms of this Agreement as Collateral.

 

8.          Rights
and Remedies Upon Default.

 

(a)          Upon
the occurrence of any Event of Default and at any time thereafter, the Secured Parties, acting through the Agent, shall have the
right to exercise all of the remedies conferred hereunder and under the Note, and the Secured Parties shall have all the rights
and remedies of a secured party under the UCC. Without limitation, the Agent, for the benefit of the Secured Parties, shall have
the following rights and powers:

 

(i)          The
Agent shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall
assemble the Collateral and make it available to the Agent at places that the Agent shall reasonably select, whether at such Debtor’s
premises or elsewhere, and make available to the Agent, without rent, all of such Debtor’s respective premises and facilities
for the purpose of the Agent taking possession of, removing or putting the Collateral in saleable or disposable form.

 

(ii)         Upon
notice to the Debtors by Agent, all rights of each Debtor to exercise the voting and other consensual rights that it would otherwise
be entitled to exercise and all rights of each Debtor to receive the dividends and interest that it would otherwise be authorized
to receive and retain, shall cease. Upon such notice, Agent shall have the right to receive, for the benefit of the Secured Parties,
any interest, cash dividends or other payments on the Collateral and, at the option of Agent, to exercise in such Agent’s
discretion all voting rights pertaining thereto. Without limiting the generality of the foregoing, Agent shall have the right (but
not the obligation) to exercise all rights with respect to the Collateral as it were the sole and absolute owner thereof, including,
without limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection with a merger,
reorganization, consolidation, recapitalization, or other readjustment concerning or involving the Collateral or any Debtor or
any of its direct or indirect subsidiaries.

 

    	 	13	 

     

    

 

(iii)        The
Agent shall have the right to operate the business of each Debtor using the Collateral and shall have the right to assign, sell,
lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with
or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such
time or times and at such place or places, and upon such terms and conditions as the Agent may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to any
Debtor or right of redemption of a Debtor, that are hereby expressly waived. Upon each such sale, lease, assignment or other transfer
of Collateral, the Agent, for the benefit of the Secured Parties, may, unless prohibited by applicable law that cannot be waived,
purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and
equities of any Debtor, that are hereby waived and released.

 

(iv)        The
Agent shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts
to make payments directly to the Agent, on behalf of the Secured Parties, and to enforce the Debtors’ rights against such
account debtors and obligors.

 

(v)         The
Agent, for the benefit of the Secured Parties, may (but is not obligated to) direct any financial intermediary or any other person
or entity holding any investment property to transfer the same to the Agent, on behalf of the Secured Parties, or its designee.

 

(vi)        The
Agent may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the United
States Patent and Trademark Office and/or Copyright Office into the name of the Secured Parties or any designee or any purchaser
of any Collateral.

 

(b)          The
Agent shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral. The Agent may sell the Collateral without giving
any warranties and may specifically disclaim such warranties. If the Agent sells any of the Collateral on credit, the Debtors will
only be credited with payments actually made by the purchaser. In addition, each Debtor waives any and all rights that it may have
to a judicial hearing in advance of the enforcement of any of the Agent’s rights and remedies hereunder, including, without
limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and
remedies with respect thereto.

 

(c)          For
the purpose of enabling the Agent to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement
or applicable law, each Debtor hereby grants to the Agent, for the benefit of the Agent and the Secured Parties, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense
following an Event of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever the same
may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout thereof.

 

    	 	14	 

     

    

 

9.          Applications
of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on
account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding,
storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Agent
in enforcing the Secured Parties’ rights hereunder and in connection with collecting, storing and disposing of the Collateral,
and then to satisfaction of the Obligations pro rata among the Secured Parties (based on then-outstanding principal amounts of
Note at the time of any such determination), and to the payment of any other amounts required by applicable law, after which the
Secured Parties shall pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or other disposition of the
Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Parties are legally entitled, the Debtors
will be liable for the deficiency, together with interest thereon, at the rate of twenty-four percent (24%) per annum or the lesser
amount permitted by applicable law (the “Default Rate”), and the reasonable fees of any attorneys employed by
the Secured Parties to collect such deficiency. To the extent permitted by applicable law, each Debtor waives all claims, damages
and demands against the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due
solely to the gross negligence or willful misconduct of the Secured Parties as determined by a final judgment (not subject to further
appeal) of a court of competent jurisdiction.

 

10.         Securities
Law Provision. Each Debtor recognizes that Agent may be limited in its ability to effect a sale to the public of all or part
of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or state
securities laws (collectively, the “Securities Laws”), and may be compelled to resort to one or more sales to
a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account, for investment
and not with a view to the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices and on terms
less favorable than if the Pledged Securities were sold to the public, and that Agent has no obligation to delay the sale of any
Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the public under the Securities
Laws. Each Debtor shall cooperate with Agent in its attempt to satisfy any requirements under the Securities Laws (including, without
limitation, registration thereunder if requested by Agent) applicable to the sale of the Pledged Securities by Agent.

 

11.         Costs
and Expenses. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with any
filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements,
partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Agent.
The Debtors shall also pay all other claims and charges that in the reasonable opinion of the Agent are reasonably likely to prejudice,
imperil, or otherwise affect the Collateral or the Security Interests therein. The Debtors will also, upon demand, pay to the Agent
the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and
agents, that the Agent, for the benefit of the Secured Parties, may incur in connection with the creation, perfection, protection,
satisfaction, foreclosure, collection or enforcement of the Security Interest and the preparation, administration, continuance,
amendment or enforcement of this Agreement and pay to the Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that the Agent, for the benefit of the Secured Parties, and the
Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of any of the
rights of the Secured Parties under the Note. Until so paid, any fees payable hereunder shall be added to the principal amount
of the Note and shall bear interest at the Default Rate.

 

    	 	15	 

     

    

 

12.         Responsibility
for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations
shall in no way be affected or diminished by reason of the loss, destruction, damage, or theft of any of the Collateral or its
unavailability for any reason. Without limiting the generality of the foregoing, (a) neither the Agent nor any Secured Party (i)
has any duty (either before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any
rights relating to the Collateral or (ii) has any obligation to clean-up or otherwise prepare the Collateral for sale and (b) each
Debtor shall remain obligated and liable under each contract or agreement included in the Collateral to be observed or performed
by such Debtor thereunder. Neither the Agent nor any Secured Party shall have any obligation or liability under any such contract
or agreement by reason of or arising out of this Agreement or the receipt by the Agent or any Secured Party of any payment relating
to any of the Collateral, nor shall the Agent or any Secured Party be obligated in any manner to perform any of the obligations
of any Debtor under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment
received by the Agent or any Secured Party in respect of the Collateral or as to the sufficiency of any performance by any party
under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts that may have been assigned to the Agent or to which the Agent or any Secured Party may be entitled
at any time or times.

 

13.         Security
Interests Absolute. All rights of the Secured Parties and all obligations of the Debtors hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement, the Note or any agreement entered into in connection
with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of,
or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from
the Note or any other agreement entered into in connection with the foregoing; (c) any exchange, release, or nonperfection of any
of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guarantee,
or any other security, for all or any of the Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and cancel
in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance
that might otherwise constitute any legal or equitable defense available to a Debtor, or a discharge of all or any part of the
Security Interests granted hereby. Until the Obligations shall have been paid and performed in full, the rights of the Secured
Parties shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute
of limitations or bankruptcy. Each Debtor expressly waives presentment, protest, notice of protest, demand, notice of nonpayment
and demand for performance. In the event that at any time any transfer of any Collateral or any payment received by the Secured
Parties hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent
conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party other
than the Secured Parties, then, in any such event, each Debtor’s obligations hereunder shall survive cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall
remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof. Each Debtor waives all right
to require the Secured Parties to proceed against any other person or entity or to apply any Collateral that the Secured Parties
may hold at any time, or to marshal assets, or to pursue any other remedy. Each Debtor waives any defense arising by reason of
the application of the statute of limitations to any obligation secured hereby.

 

    	 	16	 

     

    

 

14.         Term
of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Note have
been indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however, that all
indemnities of the Debtors contained in this Agreement (including, without limitation, Annex B hereto) shall survive and remain
operative and in full force and effect regardless of the termination of this Agreement.

 

15.         Power
of Attorney; Further Assurances.

 

(a)          Each
Debtor authorizes the Agent, and does hereby make, constitute and appoint the Agent and its officers, agents, successors or assigns
with full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name of the Agent
or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts,
money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect
of the Collateral that may come into possession of the Agent; (ii) to sign and endorse any financing statement pursuant to the
UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv)
to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual
Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option of the Agent, and at the expense
of the Debtors, at any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts
and things that the Agent deems necessary to protect, preserve and realize upon the Collateral and the Security Interests granted
therein in order to effect the intent of this Agreement and the Note all as fully and effectually as the Debtors might or could
do; and each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding. The designation set forth herein shall be deemed to amend and supersede any inconsistent provision
in the Organizational Documents or other documents or agreements to which any Debtor is subject or to which any Debtor is a party.
Without limiting the generality of the foregoing, after the occurrence and during the continuance of an Event of Default, each
Secured Party is specifically authorized to execute and file any applications for or instruments of transfer and assignment of
any patents, trademarks, copyrights or other Intellectual Property with the United States Patent and Trademark Office and the United
States Copyright Office.

 

(b)          On
a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper
filing and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule C
attached hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably
requested by the Agent, to perfect the Security Interests granted hereunder and otherwise to carry out the intent and purposes
of this Agreement, or for assuring and confirming to the Agent the grant or perfection of a perfected security interest in all
the Collateral under the UCC.

 

    	 	17	 

     

    

 

(c)          Each
Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact, with full authority in the place and instead
of such Debtor and in the name of such Debtor, from time to time in the Agent’s discretion, to take any action and to execute
any instrument that the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including the filing,
in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral
without the signature of such Debtor where permitted by law, which financing statements may (but need not) describe the Collateral
as “all assets” or “all personal property” or words of like import, and ratifies all such actions taken
by the Agent. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter
as long as any of the Obligations shall be outstanding.

 

16.         Notices.
All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase Agreement
(as such term is defined in the Note).

 

17.         Other
Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity, then the Agent shall have the right, in its sole
discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying
or affecting any of the Secured Parties’ rights and remedies hereunder.

 

18.         Appointment
of Agent. The Secured Parties hereby appoint Dominion Capital LLC to act as their agent (“Dominion” or “Agent”)
for purposes of exercising any and all rights and remedies of the Secured Parties hereunder. Such appointment shall continue until
revoked in writing by a Majority-in-Interest, at which time a Majority-in-Interest shall appoint a new Agent, provided that Dominion
may not be removed as Agent unless Dominion shall then hold less than $100,000 in principal amount of Note; provided, further,
that such removal may occur only if each of the other Secured Parties shall then hold not less than an aggregate of $250,000 in
principal amount of Note. The Agent shall have the rights, responsibilities and immunities set forth in Annex B hereto.

 

19.         Miscellaneous.

 

(a)          No
course of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising, on the
part of the Secured Parties, any right, power or privilege hereunder or under the Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

 

(b)          All
of the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Note or
by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.

 

(c)          This
Agreement, together with the exhibits and schedules hereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into this Agreement and the exhibits and schedules hereto. No provision of this Agreement
may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Debtors
and the Secured Parties holding two-thirds (2/3) or more of the principal amount of Note then outstanding, or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is sought.

 

    	 	18	 

     

    

 

(d)          If
any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

(e)          No
waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition, or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

(f)          This
Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company
and the Guarantors may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each
Secured Party (other than by merger). Any Secured Party may assign any or all of its rights under this Agreement to any Person
(as defined in the Purchase Agreement) to whom such Secured Party assigns or transfers any Obligations, provided such transferee
agrees in writing to be bound, with respect to the transferred Obligations, by the provisions of this Agreement that apply to the
“Secured Parties.”

 

(g)          Each
party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.

 

(h)          Except
to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, all questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Except to the extent mandatorily
governed by the jurisdiction or situs where the Collateral is located, each Debtor agrees that all proceedings concerning the interpretations,
enforcement, and defense of the transactions contemplated by this Agreement and the Note (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York, Borough of Manhattan. Except to the extent mandatorily governed
by the jurisdiction or situs where the Collateral is located, each Debtor hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such proceeding
is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any
such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.

 

    	 	19	 

     

    

 

(i)          This
Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and,
all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature
is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

 

(j)          All
Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties hereunder.

 

(k)          Each
Debtor shall indemnify, reimburse and hold harmless the Agent and the Secured Parties and their respective partners, members, shareholders,
officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively,
the “Indemnitees”) from and against any and all losses, claims, liabilities, damages, penalties, suits, costs
and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing)
imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from this
Agreement or the Collateral, except any such losses, claims, liabilities, damages, penalties, suits, costs, and expenses that result
from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court of
competent jurisdiction. This indemnification provision is in addition to, and not in limitation of, any other indemnification provision
in the Note, the Purchase Agreement (as such term is defined in the Note) or any other agreement, instrument or other document
executed or delivered in connection herewith or therewith.

 

(l)          Nothing
in this Agreement shall be construed to subject Agent or any Secured Party to liability as a partner in any Debtor or any if its
direct or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries
that is a limited liability company, nor shall Agent or any Secured Party be deemed to have assumed any obligations under any partnership
agreement or limited liability company agreement, as applicable, of any such Debtor or any of its direct or indirect subsidiaries
or otherwise, unless and until any such Secured Party exercises its right to be substituted for such Debtor as a partner or member,
as applicable, pursuant hereto.

 

(m)          To
the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or
compliance with any provisions of any of the Organizational Documents, the Debtors hereby grant such consent and approval and waive
any such noncompliance with the terms of said documents.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 	20	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Security Agreement to be duly executed on the day and year first above written.

 

	POSITIVEID CORPORATION
	 	 	 

	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

	MICROFLUIDIC SYSTEMS

 

	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

	IFTH NY SUB, INC.
	(FORMERLYINFORMATION TECHNOLOGY SERVICES, INC.
	(D/B/A INFOTECH))

 

	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

	IFTH NJ SUB, INC.
	(FORMERLY INFOTECH USA, INC.
	(D/B/A INFOTECH))

 

	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

	POSITIVEID MEDICAL DEVICES LTD.

 

	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

	E-N-G MOBILE SYSTEMS, INC.

 

	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	 	21	 

     

    

 

	DOMINION CAPITAL, LLC

 

	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	 	22Exhibit 10.3

 

SUBSIDIARY GUARANTEE

 

SUBSIDIARY GUARANTEE,
dated as of January 28, 2016 (this “Guarantee”), made by each of the signatories hereto (together with any other
entity that may become a party hereto as provided herein, the “Guarantors”), in favor of the Purchaser signatory
(together with their permitted assigns, the “Purchaser”) to that certain Securities Purchase Agreement, dated
as of the date hereof, between PositiveID Corporation, a Delaware corporation (the “Company”) and the Purchaser.

 

WITNESSETH:

 

WHEREAS, pursuant to
that certain Securities Purchase Agreement, dated of even date herewith, by and between the Company and the Purchaser (the “Purchase
Agreement”), the Company has agreed to sell and issue to the Purchaser, and the Purchaser has agreed to purchase from
the Company the Note, subject to the terms and conditions set forth therein; and

 

WHEREAS, each Guarantor
will directly benefit from the extension of credit to the Company represented by the issuance of the Note;

 

NOW, THEREFORE, in
consideration of the premises and to induce the Purchaser to enter into the Purchase Agreement and to carry out the transactions
contemplated thereby, each Guarantor hereby agrees with the Purchaser as follows:

 

1.            Definitions.
Unless otherwise defined herein, terms defined in the Purchase Agreement and used herein shall have the meanings given to them
in the Purchase Agreement. The words “hereof,” “herein,” “hereto” and “hereunder”
and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision
of this Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified. The meanings given to
terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The following terms shall
have the following meanings:

 

“Guarantee”
means this Subsidiary Guarantee, as the same may be amended, supplemented, or otherwise modified from time to time.

 

“Obligations”
means, in addition to all other costs and expenses of collection incurred by the Purchaser in enforcing any of such Obligations
and/or this Guarantee, all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint, or several)
due or to become due, or that are now or may be hereafter contracted or acquired, or owing to, of the Company or any Guarantor
to the Purchaser, including, without limitation, all obligations under this Guarantee, the Note, and any other instruments, agreements
or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Purchaser as a preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the term “Obligations”
shall include, without limitation: (i) principal of, and interest on the Note and the loans extended pursuant thereto; (ii) any
and all other fees, indemnities, costs, obligations and liabilities of the Company or any Guarantor from time to time under or
in connection with this Guarantee, the Note and any other instruments, agreements or other documents executed and/or delivered
in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition interest) in respect of
the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company or any Guarantor.

 

    	 	1	 

     

    

 

2.            Guarantee.

 

(a)          Guarantee.

 

(i)          The
Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantee to the Purchaser and its respective successors,
indorsees, transferees, and assigns, the prompt and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations.

 

(ii)         Anything
herein or in any other Transaction Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Transaction Documents shall in no event exceed the amount that can be guaranteed by such Guarantor under applicable
federal and state laws, including laws relating to the insolvency of debtors, fraudulent conveyance or transfer or laws affecting
the rights of creditors generally (after giving effect to the right of contribution established in Section 2(b)).

 

(iii)        Each
Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Purchaser hereunder.

 

(iv)        The
guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been satisfied by indefeasible payment in full.

 

(v)         No
payment made by the Company, any of the Guarantors, any other guarantor or any other Person or received or collected by the Purchaser
from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off
or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder, which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from
such Guarantor in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are indefeasibly paid in full.

 

(vi)        Notwithstanding
anything to the contrary in this Guarantee, with respect to any defaulted non-monetary Obligations the specific performance of
which by the Guarantors is not reasonably possible (e.g. the issuance of the Company’s Common Stock), the Guarantors shall
only be liable for making the Purchaser whole on a monetary basis for the Company’s failure to perform such Obligations in
accordance with the Transaction Documents.

 

    	 	2	 

     

    

 

(b)          Right
of Contribution. Subject to Section 2(c), each Guarantor hereby agrees that, to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder that has not paid its proportionate share of such payment. Each Guarantor’s
right of contribution shall be subject to the terms and conditions of Section 2(c). The provisions of this Section 2(b) shall in
no respect limit the obligations and liabilities of any Guarantor to the Purchaser and each Guarantor shall remain liable to the
Purchaser for the full amount guaranteed by such Guarantor hereunder.

 

(c)          No
Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Purchaser, no Guarantor shall be entitled to be subrogated to any of the rights of the Purchaser against the Company or
any other Guarantor or any collateral security or guarantee or right of offset held by the Purchaser for the payment of the Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to the Purchaser by the Company on account of the
Obligations are indefeasibly paid in full. If any amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for
the Purchaser, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Purchaser in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Purchaser, if required),
to be applied against the Obligations, whether matured or unmatured, in such order as the Purchaser may determine.

 

(d)          Amendments,
Etc. with respect to the Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Purchaser may be rescinded by the Purchaser and any of the Obligations continued, and the Obligations,
or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Purchaser, and the Purchase Agreement and the other Transaction Documents and
any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole
or in part, as the Purchaser may deem advisable from time to time, and any collateral security, guarantee or right of offset at
any time held by the Purchaser for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. The
Purchaser shall have no obligation to protect, secure, perfect, or insure any Lien at any time held by them as security for the
Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

 

    	 	3	 

     

    

 

(e)          Guarantee
Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Purchaser upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and
all dealings between the Company and any of the Guarantors, on the one hand, and the Purchaser, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor
waives to the extent permitted by law diligence, presentment, protest, demand for payment, and notice of default or nonpayment
to or upon the Company or any of the Guarantors with respect to the Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and performance
without regard to (a) the validity or enforceability of the Purchase Agreement or any other Transaction Document, any of the Obligations
or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time
held by the Purchaser, (b) any defense, set-off or counterclaim (other than a defense of payment or performance or fraud by Purchaser)
that may at any time be available to or be asserted by the Company or any other Person against the Purchaser, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Company or such Guarantor) that constitutes, or might be
construed to constitute, an equitable or legal discharge of the Company for the Obligations, or of such Guarantor under the guarantee
contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Purchaser may, but shall be under no obligation to, make a similar demand
on or otherwise pursue such rights and remedies as they may have against the Company, any other Guarantor or any other Person or
against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by
the Purchaser to make any such demand, to pursue such other rights or remedies or to collect any payments from the Company, any
other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right
of offset, or any release of the Company, any other Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the Purchaser against any Guarantor. For the purposes
hereof, “demand” shall include the commencement and continuance of any legal proceedings.

 

(f)          Reinstatement.
The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Purchaser
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or any Guarantor, or upon or as a result
of the appointment of a receiver, intervener or conservator of, or trustee or similar officer for, the Company or any Guarantor
or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

(g)          Payments.
Each Guarantor hereby guarantees that payments hereunder will be paid to the Purchaser without set-off or counterclaim in U.S.
dollars at the address set forth or referred to in the Signature Pages to the Purchase Agreement.

 

3.            Representations
and Warranties. Each Guarantor hereby makes the following representations and warranties to Purchaser as of the date hereof:

 

(a)          Organization
and Qualification. The Guarantor is a corporation, duly incorporated, validly existing and in good standing under the laws
of the applicable jurisdiction set forth on Schedule 1, with the requisite corporate power and authority to own and use its properties
and assets and to carry on its business as currently conducted. The Guarantor has no subsidiaries other than those identified as
such on the Disclosure Schedules to the Purchase Agreement. The Guarantor is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually
or in the aggregate, (x) adversely affect the legality, validity or enforceability of any of this Guaranty in any material respect,
(y) have a material adverse effect on the results of operations, assets, prospects, or financial condition of the Guarantor or
(z) adversely impair in any material respect the Guarantor’s ability to perform fully on a timely basis its obligations under
this Guaranty (a “Material Adverse Effect”).

 

    	 	4	 

     

    

 

(b)          Authorization;
Enforcement. The Guarantor has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Guaranty, and otherwise to carry out its obligations hereunder. The execution and delivery of this Guaranty
by the Guarantor and the consummation by it of the transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of the Guarantor. This Guaranty has been duly executed and delivered by the Guarantor and constitutes
the valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general
application.

 

(c)          No
Conflicts. The execution, delivery and performance of this Guaranty by the Guarantor and the consummation by the Guarantor
of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of its Certificate of Incorporation
or By-laws or (ii) conflict with, constitute a default (or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Guarantor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Guarantor is subject (including Federal and State securities
laws and regulations), or by which any material property or asset of the Guarantor is bound or affected, except in the case of
each of clauses (ii) and (iii), such conflicts, defaults, terminations, amendments, accelerations, cancellations, and violations
as could not, individually or in the aggregate, have or result in a Material Adverse Effect. The business of the Guarantor is not
being conducted in violation of any law, ordinance, or regulation of any governmental authority, except for violations that, individually
or in the aggregate, do not have a Material Adverse Effect.

 

(d)          Consents
and Approvals. The Guarantor is not required to obtain any consent, waiver, authorization, or order of, or make any filing
or registration with, any court or other federal, state, local, foreign, or other governmental authority or other person in connection
with the execution, delivery, and performance by the Guarantor of this Guaranty.

 

(e)          Purchase
Agreement. The representations and warranties of the Company set forth in the Purchase Agreement as they relate to such Guarantor,
each of which is hereby incorporated herein by reference, are true and correct as of each time such representations are deemed
to be made pursuant to such Purchase Agreement, and the Purchaser shall be entitled to rely on each of them as if they were fully
set forth herein, provided that each reference in each such representation and warranty to the Company’s knowledge shall,
for the purposes of this Section 3, be deemed to be a reference to such Guarantor’s knowledge.

 

(f)          Foreign
Law. Each Guarantor has consulted with appropriate foreign legal counsel with respect to any of the above representations for
which non-U.S. law is applicable. Such foreign counsel have advised each applicable Guarantor that such counsel knows of no reason
why any of the above representations would not be true and accurate. Such foreign counsel were provided with copies of this Subsidiary
Guarantee and the Transaction Documents prior to rendering their advice.

 

    	 	5	 

     

    

 

4.            Covenants.

 

(a)          Each
Guarantor covenants and agrees with the Purchaser that, from and after the date of this Guarantee until the Obligations shall have
been indefeasibly paid in full, such Guarantor shall take, and/or shall refrain from taking, as the case may be, each commercially
reasonable action that is necessary to be taken or not taken, as the case may be, so that no Event of Default (as defined in the
Note) is caused by the failure to take such action or to refrain from taking such action by such Guarantor.

 

(b)          So
long as any of the Obligations are outstanding, unless Purchaser holding at least two-thirds (2/3) of the aggregate principal amount
of the then-outstanding Note shall otherwise consent in writing, each Guarantor will not directly or indirectly on or after the
date of this Guarantee:

 

i.            enter
into, create, incur, assume or suffer to exist any indebtedness for borrowed money of any kind, including but not limited to, a
guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income
or profits therefrom;

 

ii.         enter
into, create, incur, assume or suffer to exist any liens of any kind, on or with respect to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or profits therefrom;

 

iii.         amend
its articles of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Purchaser;

 

iv.         repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its securities
or debt obligations;

 

v.           pay
cash dividends on any equity securities of the Company;

 

vi.         enter
into any transaction with any Affiliate of the Guarantor that would be required to be disclosed in any public filing of the Company
with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the
disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

 

vii.         enter
into any agreement with respect to any of the foregoing.

 

5.            Miscellaneous.

 

(a)          Amendments
in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented, or otherwise modified except
in writing by the Purchaser.

 

(b)          Notices.
All notices, requests, and demands to or upon the Purchaser or any Guarantor hereunder shall be effected in the manner provided
for in the Purchase Agreement, provided that any such notice, request, or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 5(b).

 

    	 	6	 

     

    

 

(c)          No
Waiver by Course of Conduct; Cumulative Remedies. The Purchaser shall not by any act (except by a written instrument pursuant
to Section 5(a)), delay, indulgence, omission, or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced
in any default under the Transaction Documents or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Purchaser, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power, or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right,
power, or privilege. A waiver by the Purchaser of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy that the Purchaser would otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

(d)          Enforcement
Expenses; Indemnification.

 

i.            Each
Guarantor agrees to pay, or reimburse the Purchaser for, all its costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Guarantee and the other Transaction
Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to
the Purchaser.

 

ii.         Each
Guarantor agrees to pay, and to save the Purchaser harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes that may be payable or determined to be payable in connection
with any of the transactions contemplated by this Guarantee.

 

iii.         Each
Guarantor agrees to pay, and to save the Purchaser harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Guarantee to the extent the Company would be required to do so pursuant to
the Purchase Agreement.

 

iv.         The
agreements in this Section shall survive repayment of the Obligations and all other amounts payable under the Purchase Agreement
and the other Transaction Documents.

 

(e)          Successor
and Assigns. This Guarantee shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit
of the Purchaser and their respective successors and assigns; provided that no Guarantor may assign, transfer, or delegate any
of its rights or obligations under this Guarantee without the prior written consent of the Purchaser.

 

    	 	7	 

     

    

 

(f)          Set-Off.
Each Guarantor hereby irrevocably authorizes the Purchaser at any time and from time to time while an Event of Default under any
of the Transaction Documents shall have occurred and be continuing, without notice to such Guarantor or any other Guarantor, any
such notice being expressly waived by each Guarantor, to set-off and appropriate and apply any and all deposits, credits, indebtedness
or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Purchaser to or for the credit or the account of such Guarantor, or any part thereof in such amounts as the
Purchaser may elect, against and on account of the obligations and liabilities of such Guarantor to the Purchaser hereunder and
claims of every nature and description of the Purchaser against such Guarantor, in any currency, whether arising hereunder, under
the Purchase Agreement, any other Transaction Document or otherwise, as the Purchaser may elect, whether or not the Purchaser have
made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The Purchaser
shall notify such Guarantor promptly of any such set-off and the application made by the Purchaser of the proceeds thereof, provided
that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Purchaser
under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that the
Purchaser may have.

 

(g)          Counterparts.
This Guarantee may be executed by one or more of the parties to this Guarantee on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

(h)          Severability.
Any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(i)          Section
Headings. The Section headings used in this Guarantee are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

 

(j)          Integration.
This Guarantee and the other Transaction Documents represent the agreement of the Guarantors and the Purchaser with respect to
the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Purchaser
relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Transaction Documents.

 

(k)          Governing
Laws. All questions concerning the construction, validity, enforcement and interpretation of this Guarantee shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each of the Company and the Guarantors agree that all proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Guarantee (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York, Borough of Manhattan. Each of the Company and the Guarantors hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Guarantee and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating
to this Guarantee or the transactions contemplated hereby.

 

    	 	8	 

     

    

 

(l)          Acknowledgements.
Each Guarantor hereby acknowledges that:

 

i.            it
has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Transaction Documents to
which it is a party;

 

ii.         the
Purchaser have no fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Guarantee or any
of the other Transaction Documents, and the relationship between the Guarantors, on the one hand, and the Purchaser, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

iii.         no
joint venture is created hereby or by the other Transaction Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Guarantors and the Purchaser.

 

(m)          Additional
Guarantors. The Company shall cause each of its subsidiaries formed or acquired on or subsequent to the date hereof to become
a Guarantor for all purposes of this Guarantee by executing and delivering an Assumption Agreement in the form of Annex 1 hereto.

 

(n)          Release
of Guarantors. Each Guarantor will be released from all liability hereunder concurrently with the indefeasible repayment in
full of all amounts owed under the Purchase Agreement, the Note, and the other Transaction Documents.

 

(o)          Seniority.
The Obligations of each of the Guarantors hereunder rank senior in priority to any other Indebtedness (as defined in the Purchase
Agreement) of such Guarantor.

 

(p)          WAIVER
OF JURY TRIAL.  EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASER, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.

 

*********************

 

(Signature
Page Follows)

 

    	 	9	 

     

    

 

 

IN WITNESS WHEREOF,
each of the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.

 

POSITIVEID CORPORATION

 

	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	 	10	 

     

    

 

SCHEDULE 1

 

GUARANTORS

 

The following are the
names, notice addresses, and jurisdiction of organization of each Guarantor.

 

	 	 	JURISDICTION OF	 	 	 	 
	COMPANY	 	INCORPORATION	 	OWNED BY	 	PERCENTAGE
	 	 	 	 	 	 	 
	MicroFluidic Systems	 	California	 	PositiveID Corporation	 	100%
	 	 	 	 	 	 	 
	IFTH NY Sub, Inc. (formerly Information Technology Services, Inc. (D/B/A InfoTech))	 	New York	 	PositiveID Corporation	 	100%
	 	 	 	 	 	 	 
	IFTH NJ Sub, Inc. (formerly InfoTech USA, Inc. (D/B/A InfoTech))	 	New Jersey	 	PositiveID Corporation	 	100%
	 	 	 	 	 	 	 
	PositiveID Medical Devices Ltd.	 	Israel	 	PositiveID Corporation	 	100%
	 	 	 	 	 	 	 
	E-N-G Mobile Systems, Inc.	 	California	 	PositiveID Corporation	 	100%

 

 

    	 	11	 

     

    

 

Annex 1 to

 

SUBSIDIARY GUARANTEE

 

ASSUMPTION AGREEMENT,
dated as of _____________ __, 201__, made by ______________________________, a ______________ corporation (the “Additional
Guarantor”), in favor of the Purchaser pursuant to the Purchase Agreement referred to below. All capitalized terms not
defined herein shall have the meaning ascribed to them in such Purchase Agreement.

 

WITNESSETH:

 

WHEREAS, PositiveID
Corporation, a Delaware corporation (the “Company”) and the Purchaser has entered into a Securities Purchase
Agreement, dated as of January 28, 2016 (as amended, supplemented, or otherwise modified from time to time, the “Purchase
Agreement”);

 

WHEREAS, in connection
with the Purchase Agreement, the Subsidiaries of the Company (other than the Additional Guarantor) have entered into the Subsidiary
Guarantee, dated as of January 28, 2016 (as amended, supplemented, or otherwise modified from time to time, the “Guarantee”)
in favor of the Purchaser;

 

WHEREAS, the Purchase
Agreement requires the Additional Guarantor to become a party to the Guarantee; and

 

WHEREAS, the Additional
Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee;

 

NOW, THEREFORE, IT IS AGREED:

 

1.          Guarantee.
By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 5(m) of the Guarantee,
hereby becomes a party to the Guarantee as a Guarantor thereunder with the same force and effect as if originally named therein
as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities
of a Guarantor thereunder. The information set forth in Annex 1 hereto is hereby added to the information set forth in Schedule
1 to the Guarantee. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained
in Section 3 of the Guarantee is true and correct on and as the date hereof as to such Additional Guarantor (after giving effect
to this Assumption Agreement) as if made on and as of such date.

 

2.          Governing
Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.

 

    	 	12	 

     

    

 

IN WITNESS WHEREOF,
the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

[ADDITIONAL GUARANTOR]

 

	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	 	13

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