Document:

ex10.1

 

 

 Policy Purchase Agreement
 

 This Policy Purchase Agreement (“Agreement”) is made and entered into as of November 11, 2013 by and between Universal Settlements International Inc., an Ontario corporation with a place of business at 5500 North Service Road, Suite 703, Burlington, Ontario L7L 6W6 (“USI”), and Crown Alliance Capital Limited, a Nevada Corporation with a place of business at 2895 Drew Road, Suite 217, Mississauga, Ontario L4T 0A4 (“Purchaser”). (together, the “Parties”).
 

 RECITALS
 

 A.
 Whereas, USI is in the business of identifying, purchasing, and/or facilitating the purchase of existing life insurance policies.  Said life insurance policies may be held by USI. or sold and/or otherwise transferred to other entities that may further resell said life insurance policies as allowed by law, and or benefits thereunder 
 B.
 Whereas, Purchaser is in the business of purchasing existing life insurance policies.  Said life insurance policies may be held by Purchaser or sold and/or otherwise transferred to other entities that may further resell said life insurance policies as allowed by law, and or benefits thereunder.
 C.
 Whereas, USI will sell to or facilitate the sale to the purchaser of the following described life insurance policy (the “Policy”):
 

 	 	
	 POLICY
	  

	 Owner:
	 Universal Settlements International Inc.

	 Policy Number:
	 ZUA375056

	 Issuer:
	 West Coast Life Insurance Company

	 Death Benefit:
	 $ 1,000,000.00 USD

	 Insured:
	 {insured name 1} and {insured name 2}

 

 The Policy was issued as a Last Survivor Flexible Premium Adjustable Life Insurance Policy, with death benefit payable after second death prior to maturity date of policy. {insured name 1} died April 5, 2009 and a copy of the Death Certificate issued by the State of California dated April 14, 2009 is attached as Attachment B.  
 

 D.
 Whereas, USI desires to sell to or facilitate the sale of the Policy to Purchaser, and Purchaser desires to purchase all rights, title and interest in and to the Policy in accordance with the terms and conditions of this Agreement.
  
 

 

 AGREEMENT
 

  NOW THEREFORE, for and in consideration of the RECITALS, which are incorporated into this Agreement, the mutual promises and covenants set forth herein and for other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the Parties hereto agree as follows:
 

 1.
 (a) Purchase Cost 
 

 Purchaser hereby agrees to deposit the sum of: USD$57,250.00  (FIFTY SEVEN THOUSAND TWO HUNDRED AND FIFTY DOLLARS) (“Purchase Cost”) for the purpose of acquiring all rights, title and interest in and to the Policy as documented in Section C above. Said funds shall be deposited on or before November 12, 2013, and shall be held in escrow by USI.  Said funds shall be released immediately to USI upon receipt of proper recording of new Ownership and Beneficiary of the Policy to Crown Alliance Capital Limited from the West Coast Life Insurance Company.
 

 

 USI’s Initials /s/
 

 Purchaser’s Initials /s/
 

 
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 (b) Early Maturity 
   
 In the event that the remaining insured’s ({insured name 2}) date of death is before the date of the new ownership and beneficiary changes having been recorded by the Insurer, the Parties agree that the full maturity proceeds will belong to USI, and Purchaser shall only be entitled to the full Purchase cost deposited as stated in 1(a) above plus premiums paid by Purchaser before confirmation of change in Ownership and Beneficiary to Crown Alliance Capital Limited, if any.
 

 2.
 UNIVERSAL SETTLEMENTS INTERNATIONAL INC’s Duties  
 

 Universal Settlements International Inc shall perform the following duties:
 

 a.
 Obtain and provide to Purchaser verification of coverage from the issuing insurance company and premium illustration if desired by Purchaser.
 b.
 Take all steps necessary to effect a transfer of ownership of the Policy to Purchaser.
 c.
 Tracking of the insured’s status will be performed by Universal Settlements International Inc and / or Independent Agent / Service, as determined by Universal Settlements International Inc., until maturity of the policy, and charged to Purchaser in accordance with Attachment A..  Within a reasonable period of time after the Insured’s death, Universal Settlements International Inc shall use its best efforts to obtain and deliver to Purchaser a copy of the death certificate and claim form necessary to obtain the death benefit by the Purchaser.
 

 3.
 Purchaser’s Representations and Warranties      
 

 a.
 Purchaser represents that USI has provided all requested documentation to Purchaser’s underwriting satisfaction.
 b.
 Purchaser represents that it has done its due diligence regarding the Policy and that the policy meets all of Purchaser’s criteria for purchase.  Purchaser represents that it has obtained an estimated life expectancy determination on the Insured to its own satisfaction.  Purchaser agrees that USI has made no representations and warranties about the Policy and that Purchaser has not relied on any statements made by USI and/or its agents to induce Purchaser to purchase the Policy.  Purchaser represents and agrees that USI is not the agent of Purchaser.
 c.
 Purchaser represents and warrants that if Purchaser directly or indirectly resells the Policy or any interest therein, Purchaser shall comply with any and all state, federal and/or international laws applicable to such resale.  Purchaser represents and warrants that Purchaser is borrowing, raising, or otherwise obtaining the funds to purchase the Policy in a legal manner consistent with all state, federal and/or international laws.
 

 4.
 Fees
 

 Fees and costs for all services performed by Universal Settlements International Inc. and/or incurred by Universal Settlements International Inc. in the performance of its duties hereunder are included in the Purchase Cost, except for tracking and death claim costs as outlined in Attachment A.  Purchaser will incur costs beyond the amount tendered as the Purchase Cost for the cost of  premiums due following the date of this Agreement, Purchaser’s underwriting, Purchaser’s escrow costs, Purchaser’s attorney and accountant fees, on-going insurance premium payments, conversion costs, additional policy loans, outside tracking services, updated medical record costs and/or life expectancy estimations and any and all other costs related to the Policy after the ownership of the Policy has been transferred to Purchaser.
 

 After the transaction contemplated by this agreement is complete, USI shall have no further specific duties to Purchaser and Purchaser shall have no further specific duties to USI other than those set forth in the following Section headed “Confidentiality and Non-Solicitation.”       
 

 USI’s Initials /s/
 

 Purchaser’s Initials /s/
 

 
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 5.
 Confidentiality and non-solicitation
 

 a.
 USI understands that Purchaser’s funding source(s) provide Purchaser with the prospect of additional and repeat business.  USI, its officers, employees, directors, shareholders, affiliates and agents agree not to directly or indirectly use, sell, distribute or otherwise communicate any information to third parties identifying Purchaser’s funding source(s).  In addition, USI, its officers, employees, directors, shareholders, affiliates and agents will not directly or indirectly contact, do business with, or attempt to sell insurance policies to Purchaser’s funding source(s) learned as a result of this Agreement.
 b.
 Purchaser agrees that Universal Settlements International Inc. sourcing contacts provide Universal Settlements International Inc. with the prospect of additional and repeat business.  Purchaser, its officers, employees, directors, shareholders, affiliates and agents agree not to directly or indirectly use, sell, distribute or otherwise communicate any information to third parties identifying Universal Settlements International Inc.’s sourcing contacts.  In addition, Purchaser’s officers, employees, directors, shareholders, affiliates and agents will not directly or indirectly contact, do business with or attempt to purchase life insurance policies from Universal Settlements International Inc.’s sourcing contacts learned as a result of this Agreement from the owner of the Policies, or the Insured, without the prior written consent of Universal Settlements International Inc..
 

 6.
 Indemnification 
 

 Purchaser shall indemnify and hold harmless USI against any and all claims, costs, attorneys’ and accountants’ fees related to Purchaser’s purchase of the Policy, including but not limited to, any claim made by Purchaser’s funding source(s).
 

 7.
 Binding Effect  
 

 This Agreement is irrevocably binding upon and shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, executors, administrators, and heirs.
 

 8.
 Severability
 

  If any provision of this agreement shall be held invalid in a court of law, the remaining provisions shall be construed as if the invalid provision were not included in this Agreement.
 

 9.
 Amendments and Final Integration
 

 This Agreement may only be amended or modified through a written, duly executed instrument by the Parties hereto.  Any attempted oral amendment or modification is ineffective and therefore null and void.  This Agreement constitutes and contains the complete and final integrated Agreement between the parties regarding the subject matter herein.  All prior negotiations, discussions and representations are merged into the Agreement.  Each Party acknowledges that, except as expressly set forth herein, no representations of any kind or character have been made to it by any other Party, or by any Parties’ agents, representatives or attorneys, to induce the execution of this Agreement.
 

 10.
 Notices
 

 Any and all notices, requests, consents, notifications, and other communications given to any Party to this Agreement shall be given in writing and will be as elected by the party giving said notice, hand-delivered by messenger or courier service, telecopied, electronically communicated, or sent via registered or certified mail, return receipt requested, postage prepaid, to the below address and deemed given when received by Party being served such notice.
 

 

 USI’s Initials /s/
 

 Purchaser’s Initials /s/
 

 
 Page 4 of 6
 

 

 

 	 	
	 To USI:
	 To Purchaser:

	  
	  

	 Universal Settlements International Inc.
	 Crown Alliance Capital Limited

	 5500 North Service Road, Suite 703
	 2985 Drew Road, Suite 217

	 Burlington
	 Mississauga

	 Ontario L7L 6W6
	 Ontario, L4T 0A4

 

 11.
 Waiver
 

 Either Party’s failure to insist in any one or more instances upon strict performance by the other Party of any of the terms of this Agreement shall not be construed as a waiver of any continuing or subsequent failure to perform or delay in performance of any term hereof.
 

 12.
 Assignment
 

 Neither Party shall assign any of its rights to delegate any of its obligations under this Agreement without prior written consent of the other Party.
 

 13.
 Choice of law
 

 The Parties hereby agree and confirm that the law of the Province of Ontario, Canada shall control this Agreement.
 

 14.
 Counterparts and Facsimile
 

 This Agreement may be signed in one or more counterparts, each of which is deemed an original, but all of which together constitute one and the same instrument.  A facsimile copy of this executed Agreement shall be deemed valid as if it were the original.
 

 15.
 Headings
 

 The headings and subheadings contained in this Agreement are for convenience of reference only and are not to be considered part of this Agreement and will not limit or otherwise affect in any way the meaning or interpretation of this agreement.
 

 16.
 Arbitration and Enforcement Costs
 

 USI and Purchaser agree that any disputes regarding this Agreement shall be submitted to arbitration in Burlington County, Ontario and shall be resolved and adjudicated according to the rules of the Canadian Arbitration Association.  The decision rendered in said arbitration shall be binding.  The substantially prevailing party shall recover from the substantially non-prevailing Party its reasonable expenses, costs and reasonable attorney’s fees, whether action is brought or not.  As used herein, expenses, costs and attorney’s fees also include arbitrator fees, arbitration costs, court costs, attorneys’ and accountants fees and any cost associated with an appellate arbitrator or court.  It is requested by the Parties to award actual costs of attorney and accountants fees incurred by the substantially prevailing party, it being the intention of the Parties that the substantially prevailing party is completely reimbursed for all such costs and fees. 
 

 17.
 Time
 

 Time is of the essence in this Agreement.
 

 

 

 USI’s Initials /s/
 

 Purchaser’s Initials /s/
 

 
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 18.
 Representation by Counsel
 

 The Parties acknowledge that they have been or have had the opportunity to have been represented by their own counsel throughout the negotiations and at the signing of this Agreement and all other documents signed incidental to this Agreement and, therefore, neither Party shall claim or assert that any provision of this Agreement or any ancillary documents should be constructed against their drafter.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 USI’s Initials /s/
 

 Purchaser’s Initials /s/
 

 
 Page 6 of 6
 

 

 

 In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day, month and year first above written.
 

 

 

 

 	 	
	 USI:
	 By: /s/ Jeffrey Panos

	  
	 Jeffrey Panos, President

	  
	 Universal Settlements International Inc

	  
	 5500 North Service Road, Suite 703

	  
	 Burlington

	  
	 Ontario, L7L 6W6

	  
	  

	  
	  

	  
	  

	  
	  

	  
	  

	 Purchaser:
	 By: /s/ Lorraine A. Fusco

	  
	 Lorraine A. Fusco, President

	  
	 Crown Alliance Capital Limited

	  
	 2895 Drew Road, Suite 217

	  
	 Mississauga

	  
	 Ontario L4T 0A4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 USI’s Initials /s/
 

 Purchaser’s Initials /s/
 

 
 

 

 

 

 ATTACHMENT   A
 

  

 POLICY SERVICE CONTRACT
 

 Date: November 11, 2013
 

 

 As of the executed date, Universal Settlements International Inc. (USI) and Crown Alliance Capital Limited (Client) agree on the conditions set forth in the following contract:
 

 1.
 That USI will diligently and reasonably attempt to perform the Services, and USI will provide Insured information to Client on a quarterly basis.
 

 2.
 That the Client will provide to USI the Insured information to reasonably carry out the Tracking Services. This information is to include: (Contact Sheet is included)
 

 3.
 That USI will not, nor is expected to perform, any investigative Services.
 

 4.
 Should USI find that the performance of Services for any individual Insured is not possible or unreasonably difficult, USI shall be permitted to terminate services for any such Insured with no penalty or fee attached, other than the loss of fees for that Insured alone.
 

 5.
 That the term of this contract is for a renewable one (1) year from the date of execution, but may be cancelled with a 30-day written notice by either party.
 

 6.
 The Service fees are set out in Schedule A, “Fee Schedule for Services”, constituting an inseparable attachment of this contract. 
 

 7.
 USI will invoice for its services on a quarterly basis. The Client shall remit to USI upon receipt of the respective invoice issued by USI.
 

 8.
 That at its sole discretion, USI might offer further services to the Client on a separate fee basis. These services might include the subcontracting of third party companies.
 

 Indemnification of USI
 The Client expressly indemnifies USI from any and all liability arising directly or indirectly from the aforementioned Services. That any information provided to the Client by USI is for its internal use only and may not be distributed to any other individuals or companies without the written permission of USI. Any business or credit decision made by the Client based wholly or in part on information provided by USI is strictly at its own risk without any recourse against USI. That the above Contract is governed by the laws of the Province of Ontario and that any disputes will be venued in the Province of Ontario.
 

 

 	 	 	
	 By: /s/ Jeffrey Panos
	  
	 By: /s/ Lorraine A. Fusco

	 Universal Settlements International Inc.
	  
	 Crown Alliance Capital Limited

	  
	  
	  

	 November 11, 2013
	  
	 November 11, 2013

	 Date of signature
	  
	 Date of signature

 

 

 

 

 
 

 

 SCHEDULE A:
 Fee Schedule for Services
 

 Policy Management 
 ·
 Set-up for servicing of Portfolios of policies
 ·
 Electronic Storage of Policy Documentation
 ·
 Periodic Standardized and/or Customized Portfolio Reporting
 

 Premium Management
 ·
 Optimize premiums to mitigate against overfunding/underfunding of premiums
 ·
 Notification of premium due at least thirty (30) days prior to premium due date
 ·
 Verify the insurer has received corresponding premium paid by client
 ·
 Review and Analysis of Annual Reports
 ·
 Annual Request for Verification
 ·
 Requirements;
 §
 Full Name
 §
 Date of Birth
 §
 Social Insurance Number of the Insured
 §
 Tax ID Number or EID#
 §
 Copy of Policy
 §
 Annual Statements
 §
 Premium Notices
 §
 Verification of Coverage’s
 §
 Illustrations from the last 2 years
 

 Tracking Services
 ·
 Annual Contact with the Insured or Insured Representative
 ·
 Weekly Electronic Demise Verification
 ·
 Quarterly Servicing Activity Reports
 ·
 USI shall provide a notice to the Client at the death of each Insured covered by this Contract
 ·
 Requirements; (Attached is the ‘Insured Contact Sheet’)
 §
 Full Name
 §
 Date of Birth
 §
 Social Insurance Number
 §
 Current Address
 §
 Current Phone Numbers
 §
 Email Contact
 	 	
	  
	 Total: $45.00/per month per Policy

	  
	  

	 Policy Maturity Servicing
	 $250.00 for all services per policy

	 ·
 Obtain Death Certificate
	  

	 ·
 Coordination of Claim Documentation
	  

	 ·
 Submit death claim to the insurer and follow up 
 to ensure timely payment
	  

	  
	  

	  
	  

	 Life Expectancy Review
	 $25.00/per hour of work + Expenses

	 ·
 Request for Executed HIPAA’s from Insured
	  

	 ·
 Request and receipt of Medical Records once annually
	  

	 ·
 Order one or more updated Life Expectancy of the insured (as client requests)
	  

	 ·
 Performance review of policy based on updated Life Expectancy Information
	  

  
 
 

 
  
 CONTACT SHEET
 For: Universal Settlements International Inc.
 

 PERSONAL INFORMATION
 

 	 	 	 	
	 Name:
	  

	 DOB:
	  
	 SSN:
	  

	 Address:
	  

	 City, State, ZIP:
	  

	 Home Phone:
	  
	 Work Phone:
	  

	 Email:
	  

 

 Preference of Contact:             MAIL         PHONE         EMAIL         CONTACT
 (Please Circle One)
 	 	
	 Notes:
	  

	  
	  

	  
	  

 

 CONTACTS
 

 	 	 	 	 	
	 Name:
	  
	  
	 Name:
	  

	 Address:
	  
	  
	 Address:
	  

	 City, State, ZIP:
	  
	  
	 City, State, ZIP:
	  

	 Home Phone:
	  
	  
	 Home Phone:
	  

	 Work Phone:
	  
	  
	 Work Phone:
	  

	 Email:
	  
	  
	 Email:
	  

	 Relationship:
	  
	  
	 Relationship:
	  

 

 PRIMARY CARE PHYSICIAN(S)/ Specialists
 

 	 	 	 	
	 Name:
	  

	 DOB:
	  
	 SSN:
	  

	 Address:
	  

	 City, State, ZIP:
	  

	 Home Phone:
	  
	 Work Phone:
	  

	 Email:
	  

 

 	 	 	 	
	 Name:
	  

	 DOB:
	  
	 SSN:
	  

	 Address:
	  

	 City, State, ZIP:
	  

	 Home Phone:
	  
	 Work Phone:
	  

	 Email:
	  

 

 Signature: _________________________________________     Date: __________________
 

 Signed by: ________________________________________Exhibit 10.1

Exhibit 10.1

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into effective as of this 13th day of November, 2013, by and between Positive ID Corporation (“Seller”) and the purchasers listed on the Schedule of Purchasers attached hereto (each “Purchaser”, and collectively, (“Purchasers”).

WITNESSETH:

WHEREAS, Seller is the beneficial and record owner of 871,754 shares of common stock, $.00001 par value per share (“Common Stock”), of VeriTeQ Corporation, a Delaware corporation (the “Company”); and

WHEREAS, Seller holds a convertible note (the “Note”), convertible into 135,793 shares of Common Stock, of the Company, such shares being convertible at the demand of the Seller; and

WHEREAS, Seller desires to sell the Note and its 871,754 shares of Common Stock of the Company to Purchaser as more particularly set forth herein and Purchasers desire to purchase such shares and rights upon the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.

Purchase and Sale; Closing; Purchase Price.

(a)

Purchase and Sale.   Upon the terms and subject to the conditions set forth in this Agreement, Seller and Purchaser hereby agree that, on the Closing Date (as defined in Section 2, below), Seller shall sell, assign, transfer, convey and deliver to Purchasers an aggregate of 871,754 shares of Common Stock of the Company (the “Shares”) (a copy of the certificate with respect thereto is attached as Schedule I hereto) and the Note (a copy of which is attached as Schedule II hereto), which is convertible into 135,793 shares of Common Stock of the Company as of the date hereof, and Purchasers hereby agree to purchase, obtain and acquire from Seller, all of Seller's right, title and interest in and to the Shares and the Note, in each case, in accordance with the Schedule of Purchasers attached hereto.

(b)

Delivery of Certificates and Note.  At the Closing (as hereinafter defined) and as a condition thereto, Seller shall deliver to the Company or the Transfer Agent, as applicable, (with a copy to each Purchaser) the Note and each certificate (“Certificates”) representing the Shares issued along with irrevocable instructions (the “Irrevocable Instructions”) to transfer the Note and the Shares to each Purchaser, in accordance with the Schedule of Purchasers attached hereto, registered in such name(s) as each Purchaser shall request on or prior to the Closing Date (such transferred Note and Shares, collectively, the “New Securities”) and to deliver the certificates evidencing the New Securities to each Purchaser at its address set forth in the Schedule of Purchasers attached hereto (or such other address as directed by such Purchaser to Seller on or prior to the Closing Date):

(c)

Purchase Price.   Subject to the terms and conditions of this Agreement, in consideration of and in exchange for Seller’s sale, assignment, transfer, conveyance and delivery of the Shares and the Note to Purchasers, at closing, each Purchaser agrees to deliver to a bank account designated in writing by Seller a wire transfer in immediately available United States’ funds in an amount equal to the purchase price set forth opposite the name of such Purchaser on the Schedule of Purchasers attached hereto.

(d)

Letter Agreement.   On or prior to the Closing Date, Seller shall have delivered to each Purchaser a copy of the Letter Agreement, in the form attached hereto as Exhibit A, duly executed by Seller and the Company.

(e)

Lock-Up Agreement.  On or prior to the Closing Date, Seller shall have delivered to each Purchaser a copy of the Lock-Up Agreement, in the form attached hereto as Exhibit B, duly executed by Seller and the Company.

2.

Closing; Closing Date.   Subject to satisfaction of the conditions set forth in this Agreement and compliance with the other provisions hereof, the closing of the transactions contemplated by this Agreement (the "Closing") shall take place contemporaneously with the execution of this Agreement at the offices of Seller or at such other time and place as the parties shall mutually agree (the "Closing Date").

3.

Representation and Warranties of Seller.   Seller represents and warrants to each Purchaser effective as of the date hereof and the Closing Date as follows:

(a)

Seller is duly organized, validly existing and in good standing under the laws of the state of its formation, with the requisite power and authority to enter into this Agreement and perform its obligations hereunder and each other document contemplated hereby to which Seller is or will be a party and to consummate the transactions contemplated hereby and thereby.

(b)

Seller has the ability to consummate the transactions contemplated hereby; that this Agreement has been duly authorized, duly executed and validly delivered by the Seller and that this Agreement is the valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect, or by legal or equitable principles, relating to or limiting creditors' rights generally and except that the remedy of specific performance and injunctive and other  forms of equitable relief are subject to certain equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(c)

Seller is not and has not at any time been an “Affiliate”, as that term is defined in the Securities Act of 1933, as amended, of the Company.  

(d)

Seller is the sole legal and beneficial owner of the Shares and the Note and has the sole and unrestricted right to sell and/or transfer the Shares and the Note.  Seller hereby represents and warrants that Seller owns the free of preemptive rights and free and clear of all adverse claims, liens, mortgages, charges, security interests, encumbrances and other restrictions or limitations of any kind whatsoever including but not limited to communal or marital property rights or distribution rights under applicable law (collectively, “Liens”).  The Shares and Note are fully paid and have been validly issued to Seller in accordance with Federal or state securities laws (including any rules or regulations promulgated thereunder) and the securities laws of any other jurisdiction (including any rules or regulations promulgated thereunder).  There are no options, warrants, calls, convertible securities or commitments of any kind whatsoever relating to the Shares or Note, and there are no voting trusts, voting agreements, stockholder agreements or other agreements or understandings of any kind whatsoever which relate to the voting or disposition, sale, transfer or assignment of the Shares or Note.  Neither the Notes nor the Shares been sold, transferred, assigned, exchanged, pledged, hypothecated or encumbered in any way, whether by Seller or other person.  Delivery of the Note and the Shares to the Company and/or the Transfer Agent, as applicable, with the Irrevocable Instructions in accordance herewith will pass to Purchaser good and valid title to the Note and the Shares being purchased by such Purchaser hereunder, free and clear of Liens other than those of such  Purchaser or under securities laws.

(e)

Neither the execution and delivery of this Agreement by Seller, nor the consummation of the transactions contemplated hereby, does or will:  (i)  violate or, with the passage of time, result in the violation of any provision of, or result in the acceleration of or entitle any party to accelerate any obligation under, or result in the creation or imposition of any lien, charge, pledge, security interest or other encumbrance upon any of the property or assets of Seller, pursuant to any provision of any mortgage, lien, lease, agreement, permit, indenture, license, instrument, law, order, arbitration award, judgment or decree to which Seller is a party or by which it or any of such property or assets are bound; (ii) contravene the terms of Seller’s organizational documents, or any amendment thereof or (iii) violate or conflict with any other restriction of any kind whatsoever to which Seller is subject, or by which any of its material properties or assets may be bound.

(f)

There is no action, suit, proceeding or investigation pending or, to the best knowledge of the Seller, threatened against Company or Seller, which could restrict Seller's ability to perform its obligations hereunder.  To the best knowledge of Seller, there are no grounds for or facts, events or circumstances which could form the basis of any such action that could cause or result in any such action, suit, proceeding or investigation or which is probable of assertion.  Seller is not in default in respect of any judgment, order, writ, injunction or decree of any court or any Federal, state, local or other governmental agency, authority, body, board, bureau, commission, department or instrumentality.

(g)

All government and other consents that are required to have been obtained by Seller with respect to this Agreement have been obtained and are in full force and effect and all conditions of any such consents have been complied with.  Seller has complied and will comply with all applicable disclosure or reporting requirements in respect of the transaction contemplated hereby.

(h)

The execution and delivery by Seller of this Agreement, the sale by Seller of the Note and the Shares and the performance by Seller of its obligations under this Agreement do not and will not violate or conflict with any law applicable to Seller, any order or judgment of any court or other agency of government applicable to Seller or any of Seller’s assets or any contractual restriction binding on or affecting Seller or any of Seller’s assets.

(i)

Seller is acting solely for Seller’s own account, and has made Seller’s own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for Seller based upon Seller’s own judgment and upon advice of such advisors as Seller deems necessary.  Seller acknowledges and agrees that Seller is not relying, and has not relied, upon any communication (written or oral) of any Purchaser or any affiliate, employee or agent of any Purchaser with respect to the legal, accounting, tax or other implications of this Agreement and that Seller has conducted Seller’s own analyses of the legal, accounting, tax and other implications hereof and thereof; it being understood that information and explanations related to the terms and conditions of this Agreement shall not be considered investment advice or a recommendation to enter into this Agreement.  Seller acknowledges that neither any Purchaser nor any affiliate, employee or agent of any Purchaser is acting as a fiduciary for or an advisor to Seller in respect of this Agreement.

2

(j)

Seller is not selling the Note and the Shares “on the basis of” (as defined in Rule 10b5-1 of the Exchange Act) any material, non-public information about the Note or the Shares or the Company and Seller is aware that certain Purchasers have engaged in negotiation with respect to a proposed financing with the Company and, consequently, the Purchasers may have material, non-public information about the Note and/or the Shares and/or the Company.

4.

Representations and Warranties of Seller and Purchasers. Each party hereto represents and warrants to the other party that there has been no act or omission by such party which would give rise to any valid claim against such party for a brokerage commission, finder’s fee or other like payment in connection with the transactions contemplated hereby.

5.

Miscellaneous.

(a)

Entire Agreement. This Agreement (including any written amendments to this Agreement executed by the parties) constitutes the entire Agreement between the parties and supersedes all prior agreements and understandings, oral and written, between the parties.

(b)

Notices.  All notices, requests, demands and other communications hereunder shall be given in writing and shall be:  (a) personally delivered; (b) sent by telecopier, facsimile transmission or other electronic means of transmitting written documents; or (c) sent to the party at his or its respective addresses indicated herein by registered or certified U.S. mail, return receipt requested and postage prepaid, or by private overnight mail courier service.  The respective addresses to be used for all such notices, demands or requests are as follows:

		
	If to Seller, to:

	Mr. William Caragol

Chief Executive Officer

Positive ID Corp.

1690 South Congress Ave., Suite 201

Delray Beach, FL 33445

Email: bcaragol@positiveIDcorp.com

Telephone: (561) 805-8009   

Cell: (561) 504- 5647 

If to a Purchaser, to the address set forth opposite the name of such Purchaser on the Schedule of Purchasers attached hereto.

or to such other persons or addresses as may be designated in writing by the party to receive such notice.  If personally delivered, such communication shall be deemed delivered upon actual receipt; if electronically transmitted pursuant to this Section, such communication shall be deemed delivered the next business day after transmission (and sender shall bear the burden of proof of delivery), unless sender confirms receipt through personal contact, in which case such communication shall be deemed delivered upon such confirmation; if sent by overnight courier pursuant to this Section, such communication shall be deemed delivered upon receipt; and if sent by U.S. mail pursuant to this Section, such communication shall be deemed delivered as of the date of delivery indicated on the receipt issued by the relevant postal service, or, if the addressee fails or refuses to accept delivery, as of the date of such failure or refusal.  Any party to this Agreement may change its address for the purposes of this Agreement by giving notice thereof in accordance with this Section.

(c)

Sections and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(d)

Assignment.  This Agreement shall not be assignable by either party without the prior written consent of the other party hereto.

(e)

Fees and Expenses.  The parties shall pay their own respective expenses incident to the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby.

3

(f)

Modification, Amendments and Waiver.  The parties hereto may amend, modify or otherwise waive any provision of this Agreement by mutual consent, provided that such consent and any amendment, modification or waiver is in writing and is signed by each of the parties hereto.  No failure or delay on the part of a party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a party hereto at law, in equity or otherwise.

(g)

Governing Law; Construction. This Agreement and all transactions contemplated in this Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York. The parties herein waive trial by jury and agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in the New York, New York. In the event litigation results from or arises out of this Agreement or the performance thereof, the parties agree to reimburse the prevailing party’s reasonable attorney’s fees, court costs and all other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party shall be entitled. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise this Agreement and the related transaction documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement and the related transaction documents or any amendments hereto.

(h)

Survival.  All of the representations and warranties made herein shall survive the execution and delivery of this Agreement for the maximum time allowable by applicable law.

(i)

8-K Filing; Confidentiality.  On or before 9:30 a.m., New York time, on the fourth (4th) business day following the Closing Date, the Seller shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by this Agreement in the form required by the Securities Exchange Act of 1934, as amended, and attaching all the material agreements (including, without limitation, this Agreement) (including all attachments, the “8-K Filing”).  After the 8-K Filing has been filed with the Securities and Exchange Commission, the Seller shall have disclosed all material, non-public information (if any) delivered to any of the Purchasers by the Seller or any of its subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by this Agreement.  Except with respect to the 8-K Filing, the parties shall not make any public announcement concerning this Agreement, their discussions or any other documents or communications concerning the transactions contemplated hereby unless advised by counsel that such disclosure is required by law (in which case the party so advised will promptly notify the other party and provide accept any reasonable comments with respect thereto).

(j)

No Third-Party Beneficiary.  Nothing in this Agreement, express or implied, is intended to confer upon any other person any rights, remedies, obligations or liabilities of any nature whatsoever.

(k)

Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which shall constitute but one agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that the parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

(l)

Severability of Provisions.  The provisions of this Agreement shall be considered severable in the event that any of such provisions are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable.  Such invalid, void or otherwise unenforceable provisions shall be automatically replaced by other provisions which are valid and enforceable and which are as similar as possible in term and intent to those provisions deemed to be invalid, void or otherwise unenforceable.  Notwithstanding the foregoing, the remaining provisions hereof shall remain enforceable to the fullest extent permitted by law.

[THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.]

4

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	SELLER:

	 

	POSITIVEID CORPORATION

	 
	 

	By:

	/s/ William J. Caragol

	 
	 

	Its:

	Chief Executive Officer

	 
	 

	Name:

	William J. Caragol

5

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	PURCHASER:

	 

	HUDSON BAY MASTER FUND LTD.

	 
	 

	By:

	/s/ Yoav Roth

	 
	 

	Its:

	Senior Managing Director

	 
	 

	Name:

	Yoav Roth

6

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	PURCHASER:

	 

	MELECHDAVID INC. RETIREMENT PLAN

	 
	 

	By:

	/s/ Mark Groussman

	 
	 

	Its:

	 

	 
	 

	Name:

	Mark Groussman

7

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	PURCHASER:

	 

	ALPHA CAPITAL ANSALT

	 
	 

	By:

	/s/ Ari Rabinowitz

	 
	 

	Its:

	 

	 
	 

	Name:

	Ari Rabinowitz

8

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	PURCHASER:

	 

	EDWARD KARR

	 
	 

	By:

	/s/ Edward Karr

	 
	 

	Its:

	 

	 
	 

	Name:

	Edward Karr

9

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	PURCHASER:

	 

	BARRY HONIG

	 
	 

	By:

	/s/ Barry Honig

	 
	 

	Its:

	 

	 
	 

	Name:

	Barry Honig

10

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	PURCHASER:

	 

	HS CONTRARIAN INVESTMENT

	 
	 

	By:

	/s/ John Stetson

	 
	 

	Its:

	 

	 
	 

	Name:

	John Stetson

11

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	PURCHASER:

	 

	SANDOR CAPITAL MASTER FUND

	 
	 

	By:

	/s/ John Lemak

	 
	 

	Its:

	 

	 
	 

	Name:

	John Lemak

12

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date and year first above written.

		
	PURCHASER:

	 

	JOHN FORD

	 
	 

	By:

	/s/ John Ford

	 
	 

	Its:

	 

	 
	 

	Name:

	John Ford

13

SCHEDULE OF PURCHASERS

						
	(1)

	(2)

	(3)

	(4)

	(5)

	(6)

	Buyer

	Address and Facsimile Number

	Original

Principal

Amount of

Note to be

Purchased

	Aggregate

Number of

Shares to be

Purchased

	Purchase

Price

	Legal

Representative’s

Address and

Facsimile Number

	 
	 
	 
	 
	 
	 

	Hudson Bay
Master Fund Ltd.

	Please deliver any notices other than Pre-Notices to:

777 Third Avenue, 30th Floor

New York, NY 10017

Attention:  Yoav Roth

Facsimile:  (212) 571-1279

E-mail:  investments@hudsonbaycapital.com

Residence:  Cayman Islands

	$68,997.24

	300,743

	$258,739.67

	N/A

	 
	 
	 
	 
	 
	 

	Melechdavid Inc. Retirement Plan

	100 South Pointe Drive #1405

Miami Beach, FL 33139

E-mail: mgman@bullhunterllc.com

Attention: Mark Groussman

	$13,247.46

	57,743

	$49,678

	N/A

	 
	 
	 
	 
	 
	 

	Alpha Capital Ansalt

	510 Madison Ave, 14th Floor

New York, NY 10022

E-mail: Arabin@lhfin.com

Attention: Ari Rabinowitz

	$27,598.90

	120,297

	$103,495.86

	N/A

	 
	 
	 
	 
	 
	 

	Edward Karr

	c/o RAMPartners 

SA 19 Blvd 

Georges-Favon

Ch-1204 Geneva, Switzerland

E-mail: ek@rampartners.ch

Attention: Edward Karr

	$5,519.78

	24,059

	$20,699.17

	N/A

	 
	 
	 
	 
	 
	 

	Barry Honig

	555 S. Federal Hwy #450

Boca Raton, FL 33432

E-mail: brhonig@aol.com

Attention: Barry Honig

	$36,798.53

	160,396

	$137,994.48

	N/A

	 
	 
	 
	 
	 
	 

	HS Contrarian Investments

	347 N. New River Dr. East #804

Fort Lauderdale, FL 33301

Facsimile:

E-mail: John Stetson

Attention: John Stetson

	$22,999.08

	100,248

	$86,246.55

	N/A

	 
	 
	 
	 
	 
	 

	Sandor Capital Master Fund

	2828 Routh Street, Suite 500

Dallas, TX 75201

E-mail: john@lemak.net

Attention: John Lemak

	$20,239.19

	88,218

	$75,896.96

	N/A

	 
	 
	 
	 
	 
	 

	John Ford

	90 Horseshoe Hill Rd

Bolinas, CA, 94924

E-mail: bajarest@gmail.com

Attention: John Ford

	$4,599.82

	20,050

	$17,249.31

	N/A

	 
	 
	 
	 
	 
	 

	TOTAL:

	 
	$200,000
	871,754
	$750,000
	 

14

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