Document:

Exhibit
10.2

 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. LENDERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.

 

CROSSOVER
CAPITAL FUND II, LLC

COLLATERALIZED
SECURED PROMISSORY NOTE

 

$34,250.00

 

April
10, 2017

 

1.
Principal and Interest

 

FOR
VALUE RECEIVED, Crossover Capital Fund I, LLC (the “Company”) hereby absolutely and unconditionally promises to pay
to PositiveID Corp. (the “Lender”), or order, the principal amount of Thirty Four Thousand Two Hundred Fifty Dollars
($34,250.00) no later than October 10, 2017, unless the Lender does not meet the “current information requirements”
required under Rule 144 of the Securities Act of 1933, as amended, in which case the Company may declare the offsetting note issued
by the Lender on the same date herewith to be in Default (as defined in that note) and cross cancel its payment obligations under
this Note as well as the Lenders payment obligations under the offsetting note. This Full Recourse Note shall bear simple interest
at the rate of 10%.

 

2.
Repayments and Prepayments; Security.

 

a.
All principal under this Note shall be due and payable no later than October 10, 2017, unless the Lender does not meet the “current
information requirements” required under Rule 144 of the Securities Act of 1933, as amended, in which case the Company may
declare the offsetting note issued by the Lender on the same date herewith to be in Default (as defined in that note) and cross
cancel its payment obligations under this Note as well as the Lenders payment obligations under the offsetting note.

 

b.
The Company may pay this Note at any time. This note may not be assigned by the Lender, except by operation of law.

 

    	 	1	 

    	 	 	 

    

 

c.
This Note shall initially be secured by the pledge of the $38,896.00 10% convertible promissory note issued to the Company by
the Lender on even date herewith (the “Lender Note”). The Company may exchange this collateral for other collateral
with an appraised value of at least $34,250.00, by providing 3 days prior written notice to the Lender. If the Lender does
not object to the substitution of collateral in that 3 day period, such substitution of collateral shall be deemed to have been
accepted by the Lender. Notwithstanding the foregoing, an exchange of collateral for $34,250.00 in cash shall not require
the approval of the Lender. Any collateral exchange shall not constitute a waiver of any defaults under a Lender note. All
collateral shall be retained by New Venture Attorneys, P.C., which shall act as the escrow agent for the collateral for the benefit
of the Lender. The Company may not effect any conversions under the Lender Note until it has made full cash payment for the portion
of the Lender Note being converted.

 

3.
Events of Default; Acceleration.

 

a.
The principal amount of this Note is subject to prepayment in whole or in part upon the occurrence and during the continuance
of any of the following events (each, an “Event of Default”): the initiation of any bankruptcy, insolvency, moratorium,
receivership or reorganization by or against the Company, or a general assignment of assets by the Company for the benefit of
creditors. Upon the occurrence of any Event of Default, the entire unpaid principal balance of this Note and all of the unpaid
interest accrued thereon shall be immediately due and payable. The Company may offset amounts due to the Lender under this Note
by similar amounts that may be due to the Company by the Lender resulting from breaches under the Lender Note.

 

b.
No remedy herein conferred upon the Lender is intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and in addition to every other remedy hereunder, now or hereafter existing at law or in equity or otherwise. The Company
accepts and agrees that this Note is a full recourse note and that the Holder may exercise any and all remedies available to it
under law.

 

4.
Notices.

 

a.
All notices, reports and other communications required or permitted hereunder shall be in writing and may be delivered in person,
by telecopy with written confirmation, overnight delivery service or U.S. mail, in which event it may be mailed by first-class,
certified or registered, postage prepaid, addressed (i) if to a Lender, at such Lender’s address as the Lender shall have
furnished the Company in writing and (ii) if to the Company at such address as the Company shall have furnished the Lender(s)
in writing.

 

b.
Each such notice, report or other communication shall for all purposes under this Note be treated as effective or having been
given when delivered if delivered personally or, if sent by mail, at the earlier of its receipt or 72 hours after the same has
been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid,
or, if sent by electronic communication with confirmation, upon the delivery of electronic communication.

 

    	 	2	 

    	 	 	 

    

 

5.
Miscellaneous.

 

a.
Neither this Note nor any provisions hereof may be changed, waived, discharged or terminated orally, but only by a signed statement
in writing.

 

b.
No failure or delay by the Lender to exercise any right hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other right, power or privilege. The provisions of this Note are severable
and if any one provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, such invalidity
or unenforceability shall affect only such provision in such jurisdiction. This Note expresses the entire understanding of the
parties with respect to the transactions contemplated hereby. The Company and every endorser and guarantor of this Note regardless
of the time, order or place of signing hereby waives presentment, demand, protest and notice of every kind, and assents to any
extension or postponement of the time for payment or any other indulgence, to any substitution, exchange or release of collateral,
and to the addition or release of any other party or person primarily or secondarily liable.

 

c.
If Lender retains an attorney for collection of this Note, or if any suit or proceeding is brought for the recovery of all, or
any part of, or for protection of the indebtedness respected by this Note, then the Company agrees to pay all costs and expenses
of the suit or proceeding, or any appeal thereof, incurred by the Lender, including without limitation, reasonable attorneys’
fees.

 

d.
This Note shall for all purposes be governed by, and construed in accordance with the laws of the State of New York (without reference
to conflict of laws).

 

e.
This Note shall be binding upon the Company’s successors and assigns, and shall inure to the benefit of the Lender’s
successors and assigns.

 

    	 	3	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Note to be executed by its duly authorized officer to take effect as of the date
first hereinabove written.

 

	 	CROSSOVER
    CAPITAL FUND II, LLC
	 	 
	 	By:	                       
	 	Title:	 

 

	 	APPROVED:
	 	 
	 	POSITIVEID
    CORP.

 

	 	By:	                        
	 	Title:	 

 

	 	By:	                 
	 	Title:	 

 

    	 	4Exhibit 10.1

 

April 7th, 2017

To

Mr. Avner Gal

Agreement

 

Reference is hereby made to that certain Employment Agreement executed between you (the "Employee" or "you") and A.D. Integrity Applications Ltd. (the "Company") in October 2010, (together with all exhibits and amendments thereto, the “Employment Agreement”). All of the terms used in this Agreement have the same meanings as set out in the Employment Agreement, unless specifically stated otherwise.

 

The Company and you have reached a mutual agreement that you voluntarily separate from your employment with the Company and from your directorship in the Company and in Integrity Applications Inc. ("Parent") (the Company and the Parent shall be referred herein collectively as "Integrity") and transition to a consulting arrangement with the Company pursuant to this Agreement without having an employer-employee relationship.

 

In accordance with your Employment Agreement you are entitled to a notice of 180 days prior to the effective separation of the Employment Agreement (the “Notice Period”). Notwithstanding the aforesaid, your effective separation will be April 7, 2017 (the "Separation Date") and the Company will pay you an amount equal to your Salary and the financial value of the other benefits you are entitled to receive under the Employment Agreement, that would have been paid to you during the Notice Period, in lieu of such prior notice.

 

You shall continue to be entitled to any and all rights and benefits owing and payable to you in connection with your Employment Agreement until the Separation Date.

 

In addition, in consideration for your execution of this Agreement, the Company and the Parent agree to provide you the following payments and benefits:

 

		(i)	
The Adjustment Period pursuant to section 19 of your Employment Agreement, shall be extended to 24 Salaries, including all the benefits mentioned in your Employment Agreement, paid to you in monthly installments subsequent to the Separation Date (the "Adjustment Period"), provided you will not work and/or provide services to any entity directly competing with the Company. In consideration for the aforesaid increased Adjustment Period, you shall provide the Company with consulting services during the Notice Period and the Adjustment Period as you and the CEO of the Parent agree provided that you shall not be required to provide more than 150 hours during the Adjustment Period, without such additional compensation as agreed to by you and the CEO of the Parent. 

 

		(ii)	
Effective as of the date of this Agreement (the "Effective Date"), the Parent, shall accelerate the vesting of 88,259 outstanding unvested options to purchase common stock of the Parent at an exercise price per share equal to US$6.25 held by you as of the Effective Date. Additionally, the term of all your outstanding options (vested and unvested) shall be extended and be exercisable for five years from the Effective Date.

 

 

		(iii)	
On the Effective Date, the Parent shall grant you an option to purchase up to 300,000 shares of common stock of the Parent having an exercise price per share equal to US$4.50 and an option to purchase up to additional 50,000 shares of common stock of the Parent having an exercise price per share equal to US$7.75 (collectively the "Options"). The Options shall be exercisable for no more than seven years from the Effective Date, vest monthly over a 24 months period following the grant date and shall be subject to the terms and conditions set forth in the stock option agreement to be provided to you and pursuant to Parent's 2010 Incentive Compensation Plan, including the right to a cashless exercise. The Options shall be granted pursuant to Section 3(i) of the Israeli Income Tax Ordinance [new version]-1961.

 

Your undertakings pursuant to this Agreement are in addition to, and without derogation from, your undertakings towards the Company pursuant to the Employment Agreement or under any applicable law.

 

As part of the separation of your employment with the Company, the following actions will take place:

 

		(i)	
In the framework of the final account, the Company shall make the final payments due to you in connection with your employment and separation of employment with the Company as described under Annex A attached hereto;

 

		(ii)	
Upon the Separation Date, you will be provided with: (i) letters confirming the transfer to your name of the funds managed on your behalf, including your manager's insurance plan and pension funds (the "Funds Transfer Letters"); (ii) a letter confirming your period of employment with the Company; (iii) a letter of recommendation (the “Additional Letters”);

 

		(iii)	
On the Effective Date, you shall resign from the board of directors of both the Company and Parent, effective as of the Effective Date;

 

		(iv)	
You will serve as Chairman Emeritus of the Parent and member of its scientific advisory board.

 

Within 5 days of the Effective Date, you have offered to deliver and will deliver to the Company all documents and materials of any nature pertaining to your work with the Company and Integrity, and you will not take with you any documents or materials or copies thereof containing any information with respect to the Company and Integrity, including without limitation any such information contained on a laptop computer or mobile phone, except as necessary or requested by the CEO of the Parent in connection with your consulting duties. You may keep to yourself your laptop computer, mobile phone and your mobile phone number provided that any and all of Integrity’s documents, information and materials that are stored on the laptop and mobile phone, will be returned to the Company or destroyed (at Company’s option) and all copies thereof.

 

All entitlements under this Agreement are gross and shall be made after deduction of applicable taxes.

 

- 2 -

 

At the end of the Adjustment Period, you will be entitled to purchase the Car at its book value. If you decide not to purchase the Car, you shall return the Car to the Company on the last day of the Adjustment Period. You agree and declare that you will pay all parking/police tickets regarding the Car, in accordance with the period it was and will be held by you, and that the Company is entitled to set-off these amounts with other amounts you are entitled to receive from the Company.

 

You hereby confirm, declare and agree that notwithstanding the Separation of your employment with the Company, you will continue to comply with all your obligations concerning proprietary information and disclosure, as detailed in Exhibit B of the Employment Agreement.

 

You hereby agree not to make any direct or indirect derogatory statements regarding, or disparage in any way, the business or reputation of the Company or the Parent, or any of their directors, officers, shareholders, managers or employees or any statements that would damage the Company or any of the foregoing. The Company and the Parent agrees that its officers and directors shall not intentionally make any direct or indirect derogatory statements regarding, or disparage in any way your reputation.

 

Nothing in this Agreement is intended to be or shall be construed as an admission by you, the Company or the Parent that you or they violated any law, interfered with any right, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to the other or otherwise, the parties hereto expressly deny any such improper or illegal conduct.

 

You acknowledge that Integrity may use the image, likeness, voice, or other characteristics of you in the services, materials, computer programs, marketing and advertising and other deliverables created or used or distributed by or on behalf of Integrity in the course of its business.  You hereby consent to the use of such characteristics by Integrity and release Integrity, its directors, officers, employees, agents, contractors, licensees and assigns from any claims which you has or may have for invasion of privacy, right of publicity, defamation, copyright infringement, or any other causes of action arising out of the use, adaptation, reproduction, distribution, broadcast, or exhibition of such characteristics.

 

You hereby confirm, declare and agree, on your behalf and on behalf of all your heirs, successors and assigns (the “Waiving Parties”), that upon the payment of all the amounts and entitlements set forth hereinabove and under Annex A and the receipt of the Letters, you will receive the complete and full compensation due to you from Integrity, in connection with your employment and Separation of employment with Integrity. Subject to the receipt of all the amounts and entitlements set forth hereinabove and under Annex A and the receipt of the Letters, you, on your behalf and on behalf of the Waiving Parties, forever and irrevocably waive, release and discharge the Company, the Parent, and their officers, directors, shareholders, agents, servants, employees, affiliated entities and successors and assigns, past and present (the "Indemnitees"), from any and all claims, demands, causes of actions, fees, liabilities and expenses of any kind whatsoever, whether known or unknown, against any of the Indemnitees by reason of any actual or alleged act, omission, practice, conduct, occurrence, or other matter, with respect to your employment with the Company and/or directorship in Integrity until the Separation Date and the termination thereof, including, without limitation, salary, bonuses, payment for notice periods, entitlement to stock options, contributions to  managers insurance (ביטוח מנהלים), pension fund (קרן פנסיה), education funds ((קרן השתלמות, severance pay, annual vacation and/or payment for accrual of unutilized vacation days, overtime pay (if and to the extent payable), car allowance, recreation (Convalescence) pay (דמי הבראה) sick pay, the conduct of a hearing process, and any other payment, entitlement, benefit or right. By countersigning this agreement you acknowledge that this agreement constitutes a waiver and release which applies to severance pay according to Section 29 of the Israeli Severance Pay Act, 5723-1963. For the avoidance of doubt it is clarified that the waiver referred to hereinabove does not derogate from the D&O insurance coverage.

 

- 3 -

 

You acknowledge that the restrictions contained in the two previous paragraphs are fair, reasonable, and necessary for the protection of the legitimate business interests of Integrity and that Integrity will suffer irreparable harm in the event of an actual or threatened breach of any such provision by you. 

 

Subject to your fulfillment of your undertakings pursuant to this Agreement and your undertakings towards the Company pursuant to the Employment Agreement or under applicable law, the Company, the Parent and anyone on their behalf hereby forever and irrevocably waive, release, and discharge you from any and all claims, demands, causes of actions, fees, liabilities and expenses of any kind whatsoever, whether known or unknown, against you by reason of any actual or alleged act, omission, practice, conduct, occurrence, or other matter with respect to your employment with the Company until the Separation Date.

All the terms of this agreement are highly confidential and cannot be disclosed to any person or entity without Company's prior written consent, which shall not be unreasonably withheld. This undertaking is in addition to and shall not derogate from any confidentiality undertaking previously signed by you.

 

If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by law.  If the final judgment of a court of competent jurisdiction declares that any provision of this Agreement is invalid or unenforceable, you agree that the court making the determination of invalidity or unenforceability shall have the power, and is hereby directed, to reduce the scope, duration or area of the provision, to delete specific words or phrases and to replace any invalid or unenforceable provision with a provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable provision, and this Agreement shall be enforced as so modified.

 

The provisions of this Agreement which by their terms call for performance subsequent to Separation Date or termination of this Agreement, shall so survive such termination.

This Agreement shall take effect only upon the approval of the board of directors of both the Company and Parent.

We thank you for your contribution to the Company and the Parent and wish you success in your future.

              Sincerely yours,

                                 A.D. Integrity Applications Ltd.

   Integrity Applications Inc.

 

[Signature Page to Follow]

  

- 4 -

 

IN WITNESS WHEREOF, the undersigned has signed this Agreement on the date first mentioned above

 

___________________________________

Signature

	
Name:  ____________

 

Address:______________

 

Email: _________________

- 5 -

 

Annex A

The pay slip for the payment in lieu of the Notice Period (180 days), and the Company's contribution to study fund up to the Effective Date ("Keren Hishtalmut") to be paid as follows: 20% subsequent to the Separation Date and remaining over 9 months in 5 equal payments (NIS 17,862 each), are attached.

 

	
Deduction File

951298223

No. of Company 513151878

	
Paycheck 03/2017

	
Company Name 

A.D. Integrity Applications Ltd.

19 Ha'Yahalomim st. Ashdod

	
Starting Date

01/01/04

	
Seniority

	
Rank

	
Sub Dept.

	
I.D. Number

 

	
Employee Name

Avner Gal

	 	 	
Department  1

	
Employee #

1

	
Monthly Compensations:                23,854.00

Compensation Exempt:                     2,667.00

Compensation:                                   0.00

Salary for compensation:                 286,372.00

Provident Fund:                                19,809.00

Salary for Provident Fund:              286,372.00 

Monthly Employer Study Fund:    0.00

Salary for study fund:                      0.00

	
Payment Description

	
Quantity

	
Fee

	
%

	
Net To reflect

	
Total Payments

	
Base Pay 

Convalescence pay 

Car allowance

Accumulated Vacation 

Early Notice base pay 

Car Allowed gross up tax 

Taxable Study Fund

Value of use of vehicle 

Value of annuity 

Disability insurance value

Mobile phone value 

Value of severance pay

	
1.23

28.00

6.00

87.75

6.00

 

1.00

1.00

1.00

1.00

1.00

1.00

	
40,000.00

378.00

6,000.00

1,818.00

40,000.00

 

151,612.00

4,190.00

16,671.00

996.00

105.00

21,187.00

	 	
 

 

 

 

 

 

 

4,190.00

	
49,332.00

10,854.00

36,000.00

159,530.00

240,000.00

4,190.00

151,612.00

	
Credits

2.25

	
Space working

Yes

	
Family status

M

	 
	
Personal Credit

483

	
% Fixed Tax

	
מס שולי

50.00

	
Shits Except

	
Provident Fund

Credit 211

	
Additional credit

	
Income tax for 

coordination

	
Salary for Coordination

	
Tax Coordination

	 

 

	
Compulsory Deductions

	
Sum

	
Optional Deductions

	
Balance

	
Qty

	
Total

	
Income Tax

	
336,589.00

	
Expenses Reimbursement

	
509.00

	
‐1

	
‐509.00

	
Social Security

	
2,403.00

	
Non Taxable Study Fund

	
98,078.00

	
‐1

	
‐98,078.00

	
Convalescence fee

	
1,716.00

	 	 
	
Convalescence allowance

	
516.00

	 	 
	
Pension Allowance

	
16,666.00

	 	 
	
Total

	
357,890.00

	
Total

	
‐98,587.00

 

 

	
Taxable Income

	 	
542,785.00

	 
	
Salary for National Security

	 	
43,240.00

	 
	
Total Payments

	 	
651,248.00

	 
	
Total Deductions

	 	
357,890.00

	 
	
Net Salary

	 	
293,358.00

	 
	
Payment amount

	 	
391,945.00

	 

Vacation days

	 	
Current

balance

	
 

Use

	
 

New Balance

	
Vacation

Sick days

	
69.5

90.0

	
72.0

0.0

	
0.0

90.0

	
Days Per month

	
2.5

 

	
Cumulative Data

	
Payments

	
738,681.0

	 	 	
 

1,451

	
 

Total social security

	
 

129,720

	
Total Salary

	
56,087.0

	
Taxable Salary

	
643,156.0

	 	
Employer Provident Fund

	
27,015

	
Income tax

	
366,216.0

	
632

	 	
            ‐

	
Social Security

	
12,357.0

	
Employer Compensations

	
30,024

	
Study fund

	
21,626.0

	
151,612

 

 

 

 

- 6 -

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