Exhibit 10.126

 

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

 

Date of Issuance: 4/10/15

 

$39,375

 

10% CONVERTIBLE DEBENTURE

DUE 1/10/16

 

         THIS DEBENTURE is a duly authorized and issued 10% Convertible
Debenture of VeriTeQ Corp. having a principal place of business at 3333 S.
Congress Avenue Suite 401 Delray Beach, FL 33445 (“Company"), due 1/10/16 (the
"Debenture").

 

         FOR VALUE RECEIVED, the Company promises to pay to RDW Capital, LLC or
its registered assigns (the "Holder"), the principal sum of $39,375 plus
interest on 1/10/16 or such earlier date as the Debentures are required or
permitted to be repaid as provided hereunder (the "Maturity Date"), and to pay
interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Debenture at the rate of (10%) Ten percent guaranteed
interest payable regardless of how long the debenture remains outstanding,
unless the Debenture is converted to shares of common stock in accordance with
the terms and conditions herein. The Debenture shall also have an original issue
discount of five percent (5%) from the stated Principal Amount.

 

 

The Holder will pay $37,500 upon execution.

 

THE COMPANY MAY PREPAY ANY PORTION OF THE PRINCIPAL AMOUNT AT 130% OF SUCH
AMOUNT ALONG WITH ANY ACCRUED INTEREST OF THIS DEBENTURE AT ANY TIME UPON SEVEN
DAYS WRITTEN NOTICE TO THE HOLDER

 

This Debenture is subject to the following additional provisions:

 

 
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Section 1. DENOMINATIONS. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations, as
requested by the Holder surrendering the same. No service charge will be made
for such registration of transfer or exchange.

 

Section 2.TRANSFER. This Debenture may be transferred or exchanged only in
compliance with applicable federal and state securities laws and regulations.
Prior to due presentment to the Company for transfer of this Debenture, the
Company and any agent of the Company may treat the Person in whose name this
Debenture is duly registered on the Debenture Register as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes,
whether or not this Debenture is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.

 

Section 3. EVENTS OF DEFAULT.

 

(a)      "Event of Default", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

 

(i)       any default in the payment of the principal of, interest (including
Late Fees) on, or liquidated damages in respect to this Debenture, free of any
claim of subordination, as and when the same shall become due and payable
(whether on a Conversion Date or the Maturity Date or by acceleration or
otherwise) which default is not cured, if possible to cure, within 3 days of
notice of such default sent by the Holder;

 

(ii)      the Company or any of its subsidiaries shall commence, or there shall
be commenced against the Company or any such subsidiary a case under any
applicable bankruptcy or insolvency laws as now or hereafter in effect or any
successor thereto, or the Company commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or any subsidiary thereof or there
is commenced against the Company or any subsidiary thereof any such bankruptcy,
insolvency or other proceeding which remains undismissed for a period of 60
days; or the Company or any subsidiary thereof is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Company or any subsidiary thereof suffers any
appointment of any custodian or the like for it or any substantial part of its
property which continues undischarged or unstayed for a period of 60 days; or
the Company or any subsidiary thereof makes a general assignment for the benefit
of creditors; or the Company shall fail to pay, or shall state that it is unable
to pay, or shall be unable to pay, its debts generally as they become due; or
the Company or any subsidiary thereof shall call a meeting of its creditors with
a view to arranging a composition, adjustment or restructuring of its debts; or
the Company or any subsidiary thereof shall by any act or failure to act
expressly indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other action is taken by the Company or any
subsidiary thereof for the purpose of effecting any of the foregoing; or

 

 
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(iii)     the Company shall fail to timely file all reports required to be filed
by it with the SEC pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise required by
the Exchange Act. Filings made within the period of permissible extensions are
deemed “timely.”

 

            (iv) the material breach of any promise or representation in this
Agreement and or related representation or agreement made by the COMPANY and or
any of its officers, which shall include, without limitation, the failure to
deliver shares of common stock due HOLDER on a conversion within three Business
Days from the date of conversion or sooner, which delivery must be otherwise
made per reasonable specifications of the HOLDER (e.g. to brokerage firm
account).

 

If the COMPANY fails to perform hereunder by delivering Shares or paying
Principal and or Interest within 3 Business Days of said being due, then for the
first up to 30 calendar days from the due date of said performance, the COMPANY
shall also owe payable immediately an amount equal to $1,000 per day as a
reasonable "Late Fee" in addition to any other damages and reasonable attorney
fees and costs payable, to cover, on a non accountable basis, the time, expense,
efforts and or distress of the HOLDER having to focus its management, advisors,
and counselors on the matter of the COMPANY failing to honor its written
obligations, and said figure is deemed a reasonable liquidated damages provision
and is not an election of remedy and is non exclusive so the HOLDER can add and
pursue all rights otherwise.

 

(b)      If any Event of Default occurs and is continuing, the full principal
amount of this Debenture, together with interest and other amounts owing in
respect thereof, to the date of acceleration shall become at the Holder's
election, immediately due and payable in cash.. The Holder need not provide and
the Company hereby waives any presentment, demand, protest or other notice of
any kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Such declaration may be rescinded
and annulled by Holder at any time prior to payment hereunder and the Holder
shall have all rights as a Debenture holder until such time, if any, as the full
payment under this Section shall have been received by it. No such rescission or
annulment shall affect any subsequent Event of Default or impair any right
consequent thereon.

 

(c)                Remedies Upon Event of Default. Subject to the Beneficial
Ownership Limitation as set forth in Section 3(a), if any Event of Default
occurs, then the outstanding principal amount of this Note, plus accrued but
unpaid interest, liquidated damages and other amounts owing in respect thereof
through the date of acceleration, shall become, at the Holder’s election,
immediately due and payable in cash at the Mandatory Default Amount. After the
occurrence of any Event of Default that results in the eventual acceleration of
this Note, the interest rate on this Note shall accrue at an additional interest
rate equal to the lesser of 2% per month (24% per annum) or the maximum rate
permitted under applicable law. Upon the payment in full of the Mandatory
Default Amount, the Holder shall promptly surrender this Note to or as directed
by the Company. In connection with such acceleration described herein, the
Holder need not provide, and the Company hereby waives, any presentment, demand,
protest or other notice of any kind, and the Holder may immediately and without
expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable law. Such
acceleration may be rescinded and annulled by Holder at any time prior to
payment hereunder and the Holder shall have all rights as a holder of the Note
until such time, if any, as the Holder receives full payment pursuant to this
Section 3(b). No such rescission or annulment shall affect any subsequent Event
of Default or impair any right consequent thereon.

 

 
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            (c) It is hereby agreed that in the event any Installment Payment
noted above is not paid by Bank transfer within 15 days of any Due Date, for any
reason, then at the option of the Company this agreement may be cancelled and
sent to RDW Capital LLC in writing to reflect the amount actually paid to date
of cancellation. Upon cancellation made under this agreement, the Debenture will
adjust to reflect monies actually paid. Upon cancellation holder is released
from any liability.

 

Section 4. Conversion.

 

(a) (i)      Holder's Conversion Right. At any time after the Original Issue
Date until this Debenture is no longer outstanding, this Debenture, including
interest and principal, shall be convertible into shares of Common Stock at a
price of Sixty Percent (60%) of the average of the three lowest traded prices,
determined on the then current trading market for the Company’s common stock,
for 10 trading days immediately prior to conversion (the “Set Price”) at the
option of the Holder, in whole at any time and from time to time. The Holder
shall effect conversions by delivering to the Company the form of Notice of
Conversion attached hereto as Exhibit B ("Notice of Conversion"), specifying the
date on which such conversion is to be effected (a "Conversion Date"). If no
Conversion Date is specified in a Notice of Conversion, the Conversion Date
shall be the date that such Notice of Conversion is provided hereunder. To
effect conversions hereunder, the Holder shall not be required to physically
surrender Debentures to the Company. The Company shall deliver any objection to
any Notice of Conversion within TWO (2) Business Days of receipt of such notice.
In the event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. If the Company
does not request the issuance of the shares underlying this Debenture after
receipt of a Notice of Conversion within TWO (2) Business days following the
period allowed for any objection, the Company shall be responsible for any
differential in the value of the converted shares underlying this Debenture
between the value of the closing price on the date the shares should have been
delivered and the date the shares are delivered. In addition, if the COMPANY
fails to timely (within 72 hours, 3 business days), deliver the shares per the
instructions of the HOLDER, free and clear of all legends in legal free trading
form, the COMPANY shall allow HOLDER to add two (2) days to the lookback (the
mechanism used to obtain the conversion price along with discount) for each day
the COMPANY fails to timely (within 72 hours, 3 business days)) deliver shares,
on the next conversion.

  

The Holder and any assignee, by acceptance of this Debenture, acknowledge and
agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Debenture, the unpaid and unconverted principal amount of
this Debenture may be less than the amount stated on the face hereof. Any
Opinion Letter required to effectuate the issuance of the shares pursuant to
this Paragraph 4(a) and the Notice of Conversion shall be provided and issued by
Company. The Holder may use another attorney in it’s sole discretion for the
opinion. The parties hereby agree that the company will cover all legal costs
associated with the issuance of the Opinion Letter to the Transfer Agent.

 

 
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(ii)      If the Company, at any time while this Debenture is outstanding: (A)
shall pay a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company pursuant to this
Debenture, including as interest thereon), (B) subdivide outstanding shares of
Common Stock into a larger number of shares, (C) combine (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares, or (D) issue by reclassification of shares of the Common Stock any
shares of capital stock of the Company, then the Set Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding before such event and of
which the denominator shall be the number of shares of Common Stock outstanding
after such event. Any adjustment made pursuant to this Section shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

(iii)      Whenever the Set Price is adjusted pursuant to any of Section 4, the
Company shall promptly mail to each Holder a notice setting forth the Set Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.

 

(iv)      If (A) the Company shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of the Debentures, and shall
cause to be mailed to the Holders at their last addresses as they shall appear
upon the stock books of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided, that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. Holders are entitled to convert Debentures during the 20-day
period commencing the date of such notice to the effective date of the event
triggering such notice.

 

 
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(v)      If, at any time while this Debenture is outstanding, (A) the Company
effects any merger or consolidation of the Company with or into another Person,
(B) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a "Fundamental Transaction"),
then upon any subsequent conversion of this Debenture, the Holder shall have the
right to receive, for each Underlying Share that would have been issuable upon
such conversion absent such Fundamental Transaction, the same kind and amount of
securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of one share of Common Stock (the
"Alternate Consideration"). For purposes of any such conversion, the
determination of the Set Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Set Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate consideration
it receives upon any conversion of this Debenture following such Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new debenture consistent with the foregoing
provisions and evidencing the Holder's right to convert such debenture into
Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is affected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
and insuring that this Debenture (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. If any Fundamental Transaction constitutes or results in a Change
of Control Transaction, then at the request of the Holder delivered before the
90th day after such Fundamental Transaction, the Company (or any such successor
or surviving entity) will purchase the Debenture from the Holder for a purchase
price, payable in cash within 10 Trading Days after such request (or, if later,
on the effective date of the Fundamental Transaction), equal to the 130% of the
remaining unconverted principal amount of this Debenture on the date of such
request, plus all accrued and unpaid interest thereon, plus all other accrued
and unpaid amounts due hereunder.

 

 
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(b)      The Company covenants that it will at all times reserve and keep
available out of its authorized and unissued shares of Common Stock solely for
the purpose of issuance upon conversion of this Debenture. See attached EXHIBIT
A (Irrevocable TA Letter)

 

(c)      Any and all notices or other communications or deliveries to be
provided by the Holders hereunder, including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by facsimile, sent by
a nationally recognized overnight courier service, addressed to the Company, at
the address set forth or such other address or facsimile number as the Company
may specify for such purposes by notice to the Holders delivered in accordance
with this Section. Any and all notices or other communications or deliveries to
be provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile telephone number or address of
such Holder appearing on the books of the Company, or if no such facsimile
telephone number or address appears, at the principal place of business of the
Holder. Any notice or other communication or deliveries hereunder shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 5:30 p.m. (New York City
time), (ii) the date after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section later than 5:30 p.m. (New York City time) on any date
and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given.

 

(d)      Notwithstanding anything to the contrary herein contained, the Holder
may not convert this Debenture to the extent such conversion would result in the
Holder, together with any affiliate thereof, beneficially owning (as determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the rules promulgated thereunder) in excess of
4.99% of the then issued and outstanding shares of Common Stock, including
shares issuable upon such conversion and held by the Holder after application of
this section. The provisions of this section may be waived by the Holder (but
only as to itself and not to any other Holder) upon not less than 61 days prior
notice to the Company. Other Holders shall be unaffected by any such waiver.

 

(e)                Reservation of Shares Issuable Upon Conversion. The Company
covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock a number of shares of Common
Stock at least equal to 300% of the number of shares issuable upon conversion of
this Debenture for the sole purpose of issuance upon conversion of this
Debenture and payment of interest on this Debenture, each as herein provided,
free from preemptive rights or any other actual contingent purchase rights of
Persons other than the Holder, not less than such aggregate number of shares of
the Common Stock as shall be issuable upon the conversion of the then
outstanding principal amount of this Debenture and payment of interest
hereunder. The Company covenants that all shares of Common Stock that shall be
so issuable shall, upon issue, be duly authorized, validly issued, fully paid
and nonassessable.

 

 
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Section 5. Definitions. For the purposes hereof, in addition to the terms
defined elsewhere in this Debenture: (a) capitalized terms not otherwise defined
herein have the meanings given to such terms in the Purchase Agreement, and (b)
the following terms shall have the following meanings:

 

                  "Business Day" means any day except Saturday, Sunday and any
day which shall be a federal legal holiday in the United States or a day on
which banking institutions in the State of New York are authorized or required
by law or other government action to close.

 

                  "Common Stock" means the common stock of the Company and stock
of any other class into which such shares may hereafter have been reclassified
or changed.

 

                  "Person" means a corporation, an association, a partnership,
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.

 

 "Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

 

                  "Set Price" shall have the meaning set forth in Section 4.

 

Section 6. Except as expressly provided herein, no provision of this Debenture
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, interest and liquidated damages (if any)
on, this Debenture at the time, place, and rate, and in the coin or currency,
herein prescribed. This Debenture is a direct debt obligation of the Company. As
long as this Debenture is outstanding, the Company shall not and shall cause it
subsidiaries not to, without the consent of the Holder, (a) amend its
certificate of incorporation, bylaws or other charter documents so as to
adversely affect any rights of the Holder; (b) repay, repurchase or offer to
repay, repurchase or otherwise acquire more than a de minimis number of shares
of its Common Stock or other equity securities other than as to the Underlying
Shares to the extent permitted or required under the Transaction Documents or as
otherwise permitted by the Transaction Documents; or (c) enter into any
agreement with respect to any of the foregoing. The amendment of a certificate
of incorporation to effect a stock spilt or reverse stock split shall not be
deemed to “adversely affect” any rights of CLAIMANT.

 

Section 7. If this Debenture shall be mutilated, lost, stolen or destroyed, the
Company shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Debenture, or in lieu of or in substitution for a
lost, stolen or destroyed Debenture, a new Debenture for the principal amount of
this Debenture so mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Debenture, and of the
ownership hereof, and indemnity, if requested, all reasonably satisfactory to
the Company.

 

Section 8. So long as any portion of this Debenture is outstanding, the Company
will not and will not permit any of its subsidiaries to, directly or indirectly,
enter into, create, incur, assume or suffer to exist any indebtedness 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 that is
senior in any respect to the Company's obligations under the Debentures without
the prior consent of the Holder, which consent shall not be unreasonably
withheld.

 

 
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Section 9. All questions concerning the construction, validity, enforcement and
interpretation of this Debenture shall be governed by and construed and enforced
in accordance with the internal laws of the State of Florida, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal
courts sitting in Broward County (the "Florida Courts"). Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the Florida Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or such
Florida Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or 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
Debenture 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 Debenture or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any
provisions of this Debenture, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys fees and
other costs and expenses incurred

with the investigation, preparation and prosecution of such action or
proceeding.

 

Section 10. Any waiver by the Company or the Holder of a breach of any provision
of this Debenture shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Debenture. The failure of the Company or the Holder to insist upon strict
adherence to any term of this Debenture on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Debenture. Any waiver
must be in writing.

 

Section 11. If any provision of this Debenture is invalid, illegal or
unenforceable, the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder violates
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
The Company covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on the Debentures as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted.

 

 
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Section 12. Whenever any payment or other obligation hereunder shall be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day.

 

 

         IN WITNESS WHEREOF, the Company has caused this Convertible Debenture
to be duly executed by a duly authorized officer as of the date first above
indicated.

 

                                           _______________________

 

 

 

By:

/s/ Scott Silverman

 

 

 

Scott Silverman

 

 

 

CEO

 

                                

 
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Exhibit B

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal under the 10% Convertible
Debenture of VeriTeQ Corp. (the "Company"), due on 1/10/16, into ____________
shares of common stock, $.001 par value per share (the "Common Stock"), of the
Company according to the conditions hereof, as of the date written below. If
shares are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates and opinions as reasonably requested by
the Company in accordance therewith. No fee will be charged to the holder for
any conversion, except for such transfer taxes, if any.

 

By the delivery of this Notice of Conversion the undersigned represents and
warrants to the Company that its ownership of the Company's Common Stock does
not exceed the amounts determined in accordance with Section 13(d) of the
Exchange Act, specified under Section 4 of this Debenture.

 

Conversion calculations:

 

                    Date to Effect Conversion: ____________________

 

60% of the average of the three lowest traded prices for the 10 trading days
prior to conversion or:

Adjusted as per agreement for delayed delivery of previous conversion (lookback
only)

 

_____________________________________

 

                        Principal Amount of Debentures to be Converted:

 

_______________________________________

 

                        Interest Amount of Debentures to be Converted

 

_______________________________________

 

                        Number of shares of Common Stock to be issued:

 

_______________________________________

 

 

                        Signature: _____________________Manager

 

                                        RDW Capital LLC

                                  16850 Collins Ave #112-341

                               Sunny Isles Beach Florida 33160

 

 

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