Document:

Execution
      Copy

     

    EXHIBIT
      10.14

     

    ESCROW
      AGREEMENT

     

    THIS
      ESCROW AGREEMENT
      (this
“Agreement”)
      is
      made and entered into as of November 30, 2005 by and among IQ
      MICRO INC., a
      Colorado corporation (the “Company”);
      the
      Buyer(s) listed on the Securities Purchase Agreement, dated the date
      hereof (also referred to as the “Investor(s)”),
      and
DAVID
      GONZALEZ, ESQ.,
      as
      Escrow Agent hereunder (the “Escrow
      Agent”).

     

    BACKGROUND

     

    WHEREAS,
      the
      Company and the Investor(s) have entered into a Securities Purchase Agreement
      (the “Securities
      Purchase Agreement”),
      dated
      as of the date hereof, pursuant to which the Company proposes to sell secured
      convertible debentures (the “Convertible
      Debentures”)
      which
      shall be convertible into the Company’s Common Stock, par value $0.0001 per
      share (the “Common
      Stock”),
      for a
      total purchase price of up to Five Hundred Thousand Dollars ($500,000). The
      Securities Purchase Agreement provides that the Investor(s) shall deposit the
      purchase amount in a segregated escrow account to be held by Escrow Agent in
      order to effectuate a disbursement to the Company at a closing to be held as
      set
      forth in the Securities Purchase Agreement (the “Closing”).

     

    WHEREAS,
      the
      Company intends to sell Convertible Securities (the “Offering”).

     

    WHEREAS,
      Escrow
      Agent has agreed to accept, hold, and disburse the funds deposited with it
      in
      accordance with the terms of this Agreement.

     

    WHEREAS,
      in
      order to establish the escrow of funds and to effect the provisions of the
      Securities Purchase Agreement, the parties hereto have entered into this
      Agreement.

     

    NOW
      THEREFORE,
      in
      consideration of the foregoing, it is hereby agreed as follows:

     

    1.  Definitions.
      The
      following terms shall have the following meanings when used herein:

     

    a.  “Escrow
      Funds”
shall
      mean the funds deposited with Escrow Agent pursuant to this
      Agreement.

     

    b.  “Joint
      Written Direction” shall
      mean a written direction
      executed by the Investor(s) and the Company directing Escrow Agent to disburse
      all or a portion of the Escrow Funds or to take or refrain from taking any
      action pursuant to this Agreement.

     

    c.  “Escrow
      Period”
shall
      begin with the commencement of the Offering and shall terminate upon the earlier
      to occur of the following dates:

     

    (i)  The
      date
      upon which Escrow Agent confirms that it has received in the Escrow Account
      all
      of the proceeds of the sale of the Convertible Debentures; 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)  The
      expiration of twenty (20) days from the date of commencement of the Offering
      (unless extended by mutual written agreement between the Company and the
      Investor(s) with a copy of such extension to Escrow Agent); or

     

    (iii)  The
      date
      upon which a determination is made by the Company and the Investor(s) to
      terminate the Offering prior to the sale of all the Convertible
      Debentures.

     

    During
      the Escrow Period, the Company and the Investor(s) are aware that they are
      not
      entitled to any funds received into escrow and no amounts deposited in the
      Escrow Account shall become the property of the Company or the Investor(s)
      or
      any other entity, or be subject to the debts of the Company or the Investor(s)
      or any other entity.

     

    2.  Appointment
      of and Acceptance by Escrow Agent.
      The
      Investor(s) and the Company hereby appoint Escrow Agent to serve as Escrow
      Agent
      hereunder. Escrow Agent hereby accepts such appointment and, upon receipt by
      wire transfer of the Escrow Funds in accordance with Section 3 below, agrees
      to
      hold, invest and disburse the Escrow Funds in accordance with this
      Agreement.

     

    a.  The
      Company hereby acknowledges that the Escrow Agent is general counsel to the
      Investor(s), a partner in the general partner of the Investor(s), and counsel
      to
      the Investor(s) in connection with the transactions contemplated and referred
      herein. The Company agrees that in the event of any dispute arising in
      connection with this Escrow Agreement or otherwise in connection with any
      transaction or agreement contemplated and referred herein, the Escrow Agent
      shall be permitted to continue to represent the Investor(s) and the Company
      will
      not seek to disqualify such counsel. 

     

    3.  Creation
      of Escrow Funds.
      On or
      prior to the date of the commencement of the Offering, the parties shall
      establish an escrow account with the Escrow Agent, which escrow account shall
      be
      entitled as follows: IQ Micro Inc./Cornell Capital Partners, LP Escrow Account
      for the deposit of the Escrow Funds. The Investor(s) will instruct subscribers
      to wire funds to the account of the Escrow Agent as follows:

     

    
      	
               

              Bank:

            	
               

              Wachovia,
                N.A. of New Jersey

            
	
               

              Routing
                #:

            	
               

              031201467

            
	
               

              Account
                #:

            	
               

              2000014931134

            
	
               

              Name
                on Account:

            	
               

              David
                Gonzalez Attorney Trust Account

            
	
               

              Name
                on Sub-Account:

            	
               

              IQ
                Micro Inc./Cornell Capital Partners, LP Escrow Account

            
	 	 

    

    4.  Deposits
      into the Escrow Account.
      The
      Investor(s) agrees that they shall promptly deliver funds for the payment of
      the
      Convertible Debentures to Escrow Agent for deposit in the Escrow
      Account.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5.  Disbursements
      from the Escrow Account.

     

    a.  The
      Escrow Agent will continue to hold such funds until Cornell Capital Partners,
      LP
      on behalf of the Investor(s) and Company execute a Joint Written Direction
      directing the Escrow Agent to disburse the Escrow Funds pursuant to Joint
      Written Direction signed by the Company and the Investor(s). In disbursing
      such
      funds, Escrow Agent is authorized to rely upon such Joint Written Direction
      from
      the Company and the Investor(s) and may accept any signatory from the Company
      listed on the signature page to this Agreement and any signature from the
      Investor(s) that the Escrow Agent already has on file.

     

    b.  In
      the
      event Escrow Agent does not receive the amount of the Escrow Funds from the
      Investor(s), Escrow Agent shall notify the Company and the Investor(s). Upon
      receipt of payment instructions from the Company, Escrow Agent shall refund
      to
      each subscriber without interest the amount received from each Investor(s),
      without deduction, penalty, or expense to the subscriber. The purchase money
      returned to each subscriber shall be free and clear of any and all claims of
      the
      Company, the Investor(s) or any of their creditors.

     

    c.  In
      the
      event Escrow Agent does receive the amount of the Escrow Funds prior to
      expiration of the Escrow Period, in no event will the Escrow Funds be released
      to the Company until such amount is received by Escrow Agent in collected funds.
      For purposes of this Agreement, the term “collected funds” shall mean all funds
      received by Escrow Agent which have cleared normal banking channels and are
      in
      the form of cash.

     

    6.  Collection
      Procedure.
      Escrow
      Agent is hereby authorized to deposit the proceeds of each wire in the Escrow
      Account.

     

    7.  Suspension
      of Performance: Disbursement Into Court.
      If at
      any time, there shall exist any dispute between the Company and the Investor(s)
      with respect to holding or disposition of any portion of the Escrow Funds or
      any
      other obligations of Escrow Agent hereunder, or if at any time Escrow Agent
      is
      unable to determine, to Escrow Agent’s sole satisfaction, the proper disposition
      of any portion of the Escrow Funds or Escrow Agent’s proper actions with respect
      to its obligations hereunder, or if the parties have not within thirty (30)
      days
      of the furnishing by Escrow Agent of a notice of resignation pursuant to Section
      9 hereof, appointed a successor Escrow Agent to act hereunder, then Escrow
      Agent
      may, in its sole discretion, take either or both of the following
      actions:

     

    a.  suspend
      the performance of any of its obligations (including without limitation any
      disbursement obligations) under this Escrow Agreement until such dispute or
      uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until
      a successor Escrow Agent shall be appointed (as the case may be); provided
      however, Escrow Agent shall continue to invest the Escrow Funds in accordance
      with Section 8 hereof; and/or

     

    b.  petition
      (by means of an interpleader action or any other appropriate method) any court
      of competent jurisdiction in any venue convenient to Escrow Agent, for
      instructions with respect to such dispute or uncertainty, and to the extent
      required by law, pay into such court, for holding and disposition in accordance
      with the instructions of such court, all funds held by it in the Escrow Funds,
      after deduction and payment to Escrow Agent of all fees and expenses (including
      court costs and attorneys’ fees) payable to, incurred by, or expected to be
      incurred by Escrow Agent in connection with performance of its duties and the
      exercise of its rights hereunder.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    c.  Escrow
      Agent shall have no liability to the Company, the Investor(s), or any person
      with respect to any such suspension of performance or disbursement into court,
      specifically including any liability or claimed liability that may arise, or
      be
      alleged to have arisen, out of or as a result of any delay in the disbursement
      of funds held in the Escrow Funds or any delay in with respect to any other
      action required or requested of Escrow Agent.

     

    8.  Investment
      of Escrow Funds.
      Escrow
      Agent shall deposit the Escrow Funds in a non-interest bearing account.

     

    If
      Escrow
      Agent has not received a Joint Written Direction at any time that an investment
      decision must be made, Escrow Agent shall maintain the Escrow Funds, or such
      portion thereof, as to which no Joint Written Direction has been received,
      in a
      non-interest bearing account. 

     

    9.  Resignation
      and Removal of Escrow Agent.
      Escrow
      Agent may resign from the performance of its duties hereunder at any time by
      giving thirty (30) days’ prior written notice to the parties or may be removed,
      with or without cause, by the parties, acting jointly, by furnishing a Joint
      Written Direction to Escrow Agent, at any time by the giving of ten (10) days’
prior written notice to Escrow Agent as provided herein below. Upon any such
      notice of resignation or removal, the representatives of the Investor(s) and
      the
      Company identified in Sections 13a.(iv) and 13b.(iv), below, jointly shall
      appoint a successor Escrow Agent hereunder, which shall be a commercial bank,
      trust company or other financial institution with a combined capital and surplus
      in excess of $10,000,000.00. Upon the acceptance in writing of any appointment
      of Escrow Agent hereunder by a successor Escrow Agent, such successor Escrow
      Agent shall thereupon succeed to and become vested with all the rights, powers,
      privileges and duties of the retiring Escrow Agent, and the retiring Escrow
      Agent shall be discharged from its duties and obligations under this Escrow
      Agreement, but shall not be discharged from any liability for actions taken
      as
      Escrow Agent hereunder prior to such succession. After any retiring Escrow
      Agent’s resignation or removal, the provisions of this Escrow Agreement shall
      inure to its benefit as to any actions taken or omitted to be taken by it while
      it was Escrow Agent under this Escrow Agreement. The retiring Escrow Agent
      shall
      transmit all records pertaining to the Escrow Funds and shall pay all funds
      held
      by it in the Escrow Funds to the successor Escrow Agent, after making copies
      of
      such records as the retiring Escrow Agent deems advisable and after deduction
      and payment to the retiring Escrow Agent of all fees and expenses (including
      court costs and attorneys’ fees) payable to, incurred by, or expected to be
      incurred by the retiring Escrow Agent in connection with the performance of
      its
      duties and the exercise of its rights hereunder.

     

    10.  Liability
      of Escrow Agent.

     

    a.  Escrow
      Agent shall have no liability or obligation with respect to the Escrow Funds
      except for Escrow Agent’s willful misconduct or gross negligence. Escrow Agent’s
      sole responsibility shall be for the safekeeping, investment, and disbursement
      of the Escrow Funds in accordance with the terms of this Agreement. Escrow
      Agent
      shall have no implied duties or obligations and shall not be charged with
      knowledge or notice or any fact or circumstance not specifically set forth
      herein. Escrow Agent may rely upon any instrument, not only as to its due
      execution, validity and effectiveness, but also as to the truth and accuracy
      of
      any information contained herein, which Escrow Agent shall in good faith believe
      to be genuine, to have been signed or presented by the person or parties
      purporting to sign the same and conform to the provisions of this Agreement.
      In
      no event shall Escrow Agent be liable for incidental, indirect, special, and
      consequential or punitive damages. Escrow Agent shall not be obligated to take
      any legal action or commence any proceeding in connection with the Escrow Funds,
      any account in which Escrow Funds are deposited, this Agreement or the Purchase
      Agreement, or to appear in, prosecute or defend any such legal action or
      proceeding. Escrow Agent may consult legal counsel selected by it in any event
      of any dispute or question as to construction of any of the provisions hereof
      or
      of any other agreement or its duties hereunder, or relating to any dispute
      involving any party hereto, and shall incur no liability and shall be fully
      indemnified from any liability whatsoever in acting in accordance with the
      opinion or instructions of such counsel. The Company and the Investor(s) jointly
      and severally shall promptly pay, upon demand, the reasonable fees and expenses
      of any such counsel.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    b.  Escrow
      Agent is hereby authorized, in its sole discretion, to comply with orders issued
      or process entered by any court with respect to the Escrow Funds, without
      determination by Escrow Agent of such court’s jurisdiction in the matter. If any
      portion of the Escrow Funds is at any time attached, garnished or levied upon
      under any court order, or in case the payment, assignment, transfer, conveyance
      or delivery of any such property shall be stayed or enjoined by any court order,
      or in any case any order judgment or decree shall be made or entered by any
      court affecting such property or any part thereof, then and in any such event,
      Escrow Agent is authorized, in its sole discretion, to rely upon and comply
      with
      any such order, writ judgment or decree which it is advised by legal counsel
      selected by it, binding upon it, without the need for appeal or other action;
      and if Escrow Agent complies with any such order, writ, judgment or decree,
      it
      shall not be liable to any of the parties hereto or to any other person or
      entity by reason of such compliance even though such order, writ judgment or
      decree may be subsequently reversed, modified, annulled, set aside or
      vacated.

     

    11.  Indemnification
      of Escrow Agent.
      From and
      at all times after the date of this Agreement, the parties jointly and
      severally, shall, to the fullest extent permitted by law and to the extent
      provided herein, indemnify and hold harmless Escrow Agent and each director,
      officer, employee, attorney, agent and affiliate of Escrow Agent (collectively,
      the “Indemnified
      Parties”)
      against any and all actions, claims (whether or not valid), losses, damages,
      liabilities, costs and expenses of any kind or nature whatsoever (including
      without limitation reasonable attorney’s fees, costs and expenses) incurred by
      or asserted against any of the Indemnified Parties from and after the date
      hereof, whether direct, indirect or consequential, as a result of or arising
      from or in any way relating to any claim, demand, suit, action, or proceeding
      (including any inquiry or investigation) by any person, including without
      limitation the parties to this Agreement, whether threatened or initiated,
      asserting a claim for any legal or equitable remedy against any person under
      any
      statute or regulation, including, but not limited to, any federal or state
      securities laws, or under any common law or equitable cause or otherwise,
      arising from or in connection with the negotiation, preparation, execution,
      performance or failure of performance of this Agreement or any transaction
      contemplated herein, whether or not any such Indemnified Party is a party to
      any
      such action or proceeding, suit or the target of any such inquiry or
      investigation; provided, however, that no Indemnified Party shall have the
      right
      to be indemnified hereunder for liability finally determined by a court of
      competent jurisdiction, subject to no further appeal, to have resulted from
      the
      gross negligence or willful misconduct of such Indemnified Party. If any such
      action or claim shall be brought or asserted against any Indemnified Party,
      such
      Indemnified Party shall promptly notify the Company and the Investor(s)
      hereunder in writing, and the Investor(s) and the Company shall assume the
      defense thereof, including the employment of counsel and the payment of all
      expenses. Such Indemnified Party shall, in its sole discretion, have the right
      to employ separate counsel (who may be selected by such Indemnified Party in
      its
      sole discretion) in any such action and to participate and to participate in
      the
      defense thereof, and the fees and expenses of such counsel shall be paid by
      such
      Indemnified Party, except that the Investor(s) and/or the Company shall be
      required to pay such fees and expense if (a) the Investor(s) or the Company
      agree to pay such fees and expenses, or (b) the Investor(s) and/or the Company
      shall fail to assume the defense of such action or proceeding or shall fail,
      in
      the sole discretion of such Indemnified Party, to employ counsel reasonably
      satisfactory to the Indemnified Party in any such action or proceeding, (c)
      the
      Investor(s) and the Company are the plaintiff in any such action or proceeding
      or (d) the named or potential parties to any such action or proceeding
      (including any potentially impleaded parties) include both the Indemnified
      Party, the Company and/or the Investor(s) and the Indemnified Party shall have
      been advised by counsel that there may be one or more legal defenses available
      to it which are different from or additional to those available to the Company
      or the Investor(s). The Investor(s) and the Company shall be jointly and
      severally liable to pay fees and expenses of counsel pursuant to the preceding
      sentence, except that any obligation to pay under clause (a) shall apply only
      to
      the party so agreeing. All such fees and expenses payable by the Company and/or
      the Investor(s) pursuant to the foregoing sentence shall be paid from time
      to
      time as incurred, both in advance of and after the final disposition of such
      action or claim. The obligations of the parties under this section shall survive
      any termination of this Agreement, and resignation or removal of the Escrow
      Agent shall be independent of any obligation of Escrow Agent.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    The
      parties agree that neither payment by the Company or the Investor(s) of any
      claim by Escrow Agent for indemnification hereunder shall impair, limit, modify,
      or affect, as between the Investor(s) and the Company, the respective rights
      and
      obligations of Investor(s), on the one hand, and the Company, on the other
      hand.

     

    12.  Expenses
      of Escrow Agent.
      Except
      as set forth in Section 11 the Company shall reimburse Escrow Agent for all
      of
      its reasonable out-of-pocket expenses, including attorneys’ fees, travel
      expenses, telephone and facsimile transmission costs, postage (including express
      mail and overnight delivery charges), copying charges and the like. All of
      the
      compensation and reimbursement obligations set forth in this Section shall
      be
      payable by the Company, upon demand by Escrow Agent. The obligations of the
      Company under this Section shall survive any termination of this Agreement
      and
      the resignation or removal of Escrow Agent.

     

    13.  Warranties.

     

    a.  The
      Investor(s) makes the following representations and warranties to Escrow
      Agent:

     

    (i)  The
      Investor(s) has full power and authority to execute and deliver this Agreement
      and to perform its obligations hereunder.

     

    (ii)  This
      Agreement has been duly approved by all necessary action of the Investor(s),
      including any necessary approval of the limited partner of the Investor(s)
      or
      necessary corporate approval, as applicable, has been executed by duly
      authorized officers of the Investor(s), enforceable in accordance with its
      terms.

     

    (iii)  The
      execution, delivery, and performance of the Investor(s) of this Agreement will
      not violate, conflict with, or cause a default under any agreement of limited
      partnership of Investor(s) or the articles of incorporation or bylaws of the
      Investor(s) (as applicable), any applicable law or regulation, any court
      order or administrative ruling or degree to which the Investor(s) is a party
      or
      any of its property is subject, or any agreement, contract, indenture, or other
      binding arrangement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (iv)  Mark
      Angelo has been duly appointed to act as the representative of the Investor(s)
      hereunder and has full power and authority to execute, deliver, and perform
      this
      Escrow Agreement, to execute and deliver any Joint Written Direction, to amend,
      modify, or waive any provision of this Agreement, and to take any and all other
      actions as the Investor(s)’s representative under this Agreement, all without
      further consent or direction form, or notice to, the Investor(s) or any other
      party.

     

    (v)  No
      party
      other than the parties hereto and the Investor(s)s have, or shall have, any
      lien, claim or security interest in the Escrow Funds or any part thereof. No
      financing statement under the Uniform Commercial Code is on file in any
      jurisdiction claiming a security interest in or describing (whether specifically
      or generally) the Escrow Funds or any part thereof.

     

    (vi)  All
      of
      the representations and warranties of the Investor(s) contained herein are
      true
      and complete as of the date hereof and will be true and complete at the time
      of
      any disbursement from the Escrow Funds.

     

    b.  The
      Company makes the following representations and warranties to the Escrow
      Agent:

     

    (i)  The
      Company is
      a
      corporation duly organized, validly existing, and in good standing under the
      laws of the State of Colorado and has full power and authority to execute and
      deliver this Agreement and to perform its obligations hereunder.

     

    (ii)  This
      Agreement has been duly approved by all necessary corporate action of the
      Company, including any necessary shareholder approval, has been executed by
      duly
      authorized officers of the Company, enforceable in accordance with its
      terms.

     

    (iii)  The
      execution, delivery, and performance by the Company of this Agreement is in
      accordance with the Securities Purchase Agreement and will not violate, conflict
      with, or cause a default under the certificate of incorporation or bylaws of
      the
      Company, any applicable law or regulation, any court order or administrative
      ruling or decree to which the Company is a party or any of its property is
      subject, or any agreement, contract, indenture, or other binding arrangement,
      including without limitation to the Securities Purchase Agreement, to which
      the
      Company is a party.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (iv)  Robert
      V.
      Rudman has been duly appointed to act as the representative of the Company
      hereunder and has full power and authority to execute, deliver, and perform
      this
      Agreement, to execute and deliver any Joint Written Direction, to amend, modify
      or waive any provision of this Agreement and to take all other actions as the
      Company’s Representative under this Agreement, all without further consent or
      direction from, or notice to, the Company or any other party.

     

    (v)  No
      party
      other than the parties hereto and the Investor(s)s have, or shall have, any
      lien, claim or security interest in the Escrow Funds or any part thereof. No
      financing statement under the Uniform Commercial Code is on file in any
      jurisdiction claiming a security interest in or describing (whether specifically
      or generally) the Escrow Funds or any part thereof.

     

    (vi)  All
      of
      the representations and warranties of the Company contained herein are true
      and
      complete as of the date hereof and will be true and complete at the time of
      any
      disbursement from the Escrow Funds.

     

    14.  Consent
      to Jurisdiction and Venue.
      In the
      event that any party hereto commences a lawsuit or other proceeding relating
      to
      or arising from this Agreement, the parties hereto agree that the United States
      District Court for the District of New Jersey shall have the sole and exclusive
      jurisdiction over any such proceeding. If all such courts lack federal subject
      matter jurisdiction, the parties agree that the Superior Court Division of
      New
      Jersey, Chancery Division of Hudson County shall have sole and exclusive
      jurisdiction. Any of these courts shall be proper venue for any such lawsuit
      or
      judicial proceeding and the parties hereto waive any objection to such venue.
      The parties hereto consent to and agree to submit to the jurisdiction of any
      of
      the courts specified herein and agree to accept the service of process to vest
      personal jurisdiction over them in any of these courts.

     

    15.  Notice.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been validly served, given or delivered five (5) days after
      deposit in the United States mails, by certified mail with return receipt
      requested and postage prepaid, when delivered personally, one (1) day delivered
      to any overnight courier, or when transmitted by facsimile transmission and
      upon
      confirmation of receipt and addressed to the party to be notified as
      follows:

     

    
      	
              If
                to Investor(s), to:

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Attention: Mark
                Angelo

            
	 	
              Portfolio
                Manager

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile:
                 (201)
                985-8266

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	 	 
	
              If
                to Escrow Agent, to:

            	
              Troy
                Rillo, Esq.

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 
	
              If
                to the Company, to:

            	
              IQ
                Micro Inc.

            
	 	
              500
                Australian Avenue South - Suite 700

            
	 	
              West
                Palm Beach, Florida 33401

            
	 	
              Attention: Robert
                V. Rudman

            
	 	
              Telephone: (561)
                514-0018

            
	 	
              Facsimile: (561)
                514-0195

            
	 	 
	
              With
                a copy to:

            	
              Gunster
                Yoakley & Stewart, P.A.

            
	 	
              Broward
                Financial Centre - Suite 1400

              500
                East Broward Blvd.

            
	 	
              Fort
                Lauderdale, Florida 33394

            
	 	
              Attention: Robert
                C. White, Jr. Esq.

            
	 	
              Telephone: (954)
                468-1360

            
	 	
              Facsimile: (954)
                888-2037

            
	 	 

    

    Or
      to
      such other address as each party may designate for itself by like
      notice.

     

    16.  Amendments
      or Waiver.
      This
      Agreement may be changed, waived, discharged or terminated only by a writing
      signed by the parties hereto. No delay or omission by any party in exercising
      any right with respect hereto shall operate as waiver. A waiver on any one
      occasion shall not be construed as a bar to, or waiver of, any right or remedy
      on any future occasion.

     

    17.  Severability.
      To the
      extent any provision of this Agreement is prohibited by or invalid under
      applicable law, such provision shall be ineffective to the extent of such
      prohibition, or invalidity, without invalidating the remainder of such provision
      or the remaining provisions of this Agreement.

     

    18.  Governing
      Law.
      This
      Agreement shall be construed and interpreted in accordance with the internal
      laws of the State of New Jersey without giving effect to the conflict of laws
      principles thereof.

     

    19.  Entire
      Agreement.
      This
      Agreement constitutes the entire Agreement between the parties relating to
      the
      holding, investment, and disbursement of the Escrow Funds and sets forth in
      their entirety the obligations and duties of the Escrow Agent with respect
      to
      the Escrow Funds.

     

    20.  Binding
      Effect.
      All of
      the terms of this Agreement, as amended from time to time, shall be binding
      upon, inure to the benefit of and be enforceable by the respective heirs,
      successors and assigns of the Investor(s), the Company, or the Escrow
      Agent.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    21.  Execution
      of Counterparts.
      This
      Agreement and any Joint Written Direction may be executed in counter parts,
      which when so executed shall constitute one and same agreement or
      direction.

     

    22.  Termination.
      Upon the
      first to occur of the disbursement of all amounts in the Escrow Funds pursuant
      to Joint Written Directions or the disbursement of all amounts in the Escrow
      Funds into court pursuant to Section 7 hereof, this Agreement shall terminate
      and Escrow Agent shall have no further obligation or liability whatsoever with
      respect to this Agreement or the Escrow Funds.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF
      the
      parties have hereunto set their hands and seals the day and year above set
      forth.

     

    
      	 	
              IQ
                Micro Inc.

            
	 	 
	 	
              By:
                /s/
                Robert V. Rudman 

            
	 	
              Name: Robert
                V. Rudman

            
	 	
              Title: CFO

            
	 	 
	 	 
	 	
              Cornell
                Capital Partners, LP

            
	 	 
	 	
              By: Yorkville
                Advisors, LLC

            
	 	
              Its: General
                Partner

            
	 	 
	 	
              By: /s/
                Mark Angelo   

            
	 	
              Name: Mark
                Angelo

            
	 	
              Title: Portfolio
                Manager

            
	 	 
	 	 
	 	
              Escrow
                Agent

            
	 	 
	 	
              By: /s/
                David Gonzalez   

            
	 	
              Name: David
                Gonzalez, Esq.

            
	 	 

    

    

     

    
      
        
        

      

        11EXHIBIT
      10.15

    
 

    Dated:
      November 30, 2005

     

    NEITHER
      THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS 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.

     

    
      	No. CCP-2 	
               $250,000

            

    

     

           

    IQ
      MICRO INC.

     

    Secured
      Convertible Debenture

     

    

     

    Due
      November 30, 2007

     

    This
      Secured Convertible Debenture (the “Debenture”)
      is
      issued by IQ
      MICRO INC., a
      Colorado corporation (the “Obligor”),
      to
CORNELL
      CAPITAL PARTNERS, LP
      (the
“Holder”),
      pursuant to that certain Securities Purchase Agreement (the “Securities
      Purchase Agreement”)
      of
      even date herewith. 

     

    FOR
      VALUE RECEIVED,
      the
      Obligor hereby promises to pay to the Holder or its successors and assigns
      the
      principal sum of Two Hundred Fifty Thousand Dollars ($250,000) together with
      accrued but unpaid interest on or before November 30, 2007 (the “Maturity
      Date”)
      in
      accordance with the following terms:

     

    Interest.
      Interest shall accrue on the outstanding principal balance hereof at an annual
      rate equal to eight percent (8%). Interest shall be calculated on the basis
      of a
      360-day year and the actual number of days elapsed, to the extent permitted
      by
      applicable law. Interest hereunder will be paid to the Holder or its assignee
      (as defined in Section
      4)
      in
      whose name this Debenture is registered on the records of the Obligor regarding
      registration and transfers of Debentures (the “Debenture
      Register”).

     

    Right
      of Redemption.
      The
      Obligor at its option shall have the right, with three (3) business days advance
      written notice, to redeem a portion or all amounts outstanding under this
      Debenture prior to the Maturity Date. The Obligor shall pay a redemption premium
      of twenty percent (20%) (“Redemption
      Premium”)
      of the
      amount redeemed in addition to such redemption, plus accrued interest.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Security
      Agreements.
      This
      Debenture is secured by an Amended and Restated Security Agreement (the
“Security
      Agreement”)
      of
      even date herewith between the Obligor and the Holder.

     

    Consent
      of Holder to Sell Capital Stock or Grant Security Interests.
      Except
      for any issuances of Common Stock to Cornell Capital Partners, LP under the
      convertible debenture under the Securities Purchase Agreement dated August
      12,
      2005 and any issuances of Common Stock to be issued upon exercise of the Warrant
      dated August 12, 2005, so
      long as
      any of the principal amount or interest on this Debenture remains unpaid and
      unconverted, the Obligor shall not, without the prior consent of the Holder,
      (i) issue or sell any common stock or preferred stock with or without
      consideration, (ii) issue or sell any preferred stock, warrant, option,
      right, contract, call, or other security or instrument granting the holder
      thereof the right to acquire common stock with or without consideration,
(iii)
      enter into any security instrument granting the holder a security interest
      in
      any of the assets of the Obligor, or
      (iv)
      file any
      registration statements on Form S-8.
      The
      foregoing restrictions shall not apply to the issuance of shares of Common
      Stock
      pursuant to a bona fide Employee Stock Option Plan of no more than 15% of the
      Obligor’s outstanding shares of Common Stock as of the date hereof provided,
      however, such options are issued not less than the Closing Bid price at the
      date
      of issuance.

     

    This
      Debenture is subject to the following additional provisions:

     

    Section
      1. 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. Events
      of Default.

     

    (a) An
      “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 on or other charges in
      respect of this Debenture or the convertible debenture dated August 12, 2005
      by
      the Obligor to the Holder, 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);

     

    (ii) The
      Obligor shall fail to observe or perform any other covenant, agreement or
      warranty contained in, or otherwise commit any breach or default of any
      provision of this Debenture (except as may be covered by Section
      2(a)(i)
      hereof),
      any Transaction Document (as defined in Section
      4),
      or the
      Securities Purchase Agreement dated August 12, 2005 or any and all related
      instruments, agreements or documents thereto, which is not cured with in the
      time prescribed;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (iii) The
      Obligor or any subsidiary of the Obligor shall commence, or there shall be
      commenced against the Obligor or any subsidiary of the Obligor under any
      applicable bankruptcy or insolvency laws as now or hereafter in effect or any
      successor thereto, or the Obligor or any subsidiary of the Obligor 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 Obligor or
      any
      subsidiary of the Obligor or there is commenced against the Obligor or any
      subsidiary of the Obligor any such bankruptcy, insolvency or other proceeding
      which remains undismissed for a period of 61 days; or the Obligor or any
      subsidiary of the Obligor is adjudicated insolvent or bankrupt; or any order
      of
      relief or other order approving any such case or proceeding is entered; or
      the
      Obligor or any subsidiary of the Obligor suffers any appointment of any
      custodian, private or court appointed receiver or the like for it or any
      substantial part of its property which continues undischarged or unstayed for
      a
      period of sixty one (61) days; or the Obligor or any subsidiary of the Obligor
      makes a general assignment for the benefit of creditors; or the Obligor or
      any
      subsidiary of the Obligor 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
      Obligor or any subsidiary of the Obligor shall call a meeting of its creditors
      with a view to arranging a composition, adjustment or restructuring of its
      debts; or the Obligor or any subsidiary of the Obligor 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 Obligor
      or any subsidiary of the Obligor for the purpose of effecting any of the
      foregoing;

     

    (iv) The
      Obligor or any subsidiary of the Obligor shall default in any of its obligations
      under any other debenture or any mortgage, credit agreement or other facility,
      indenture agreement, factoring agreement or other instrument under which there
      may be issued, or by which there may be secured or evidenced any indebtedness
      for borrowed money or money due under any long term leasing or factoring
      arrangement of the Obligor or any subsidiary of the Obligor in an amount
      exceeding $100,000, whether such indebtedness now exists or shall hereafter
      be
      created and such default shall result in such indebtedness becoming or being
      declared due and payable prior to the date on which it would otherwise become
      due and payable;

     

    (v) The
      Obligor shall fail to obtain listing for its Common Stock for trading on either
      the NASD OTC Bulletin Board (“OTC”),
      Nasdaq SmallCap Market, New York Stock Exchange, American Stock Exchange or
      the
      Nasdaq National Market (each, a “Subsequent
      Market”)
      in
      accordance with Section 4(f) of the Securities Purchase Agreement of even date
      herewith; 

     

    (vi)
       Upon
      obtaining the listing in accordance with Section 4(f) of the Securities Purchase
      Agreement of even date herewith, the Common Stock shall cease to be quoted
      for
      trading or listed for trading on either the NASD OTC Bulletin Board
      (“OTC”),
      Nasdaq SmallCap Market, New York Stock Exchange, American Stock Exchange or
      the
      Nasdaq National Market (each, a “Subsequent
      Market”)
      and
      shall not again be quoted or listed for trading thereon within five (5) Trading
      Days of such delisting;

     

    (vi) The
      Obligor or any subsidiary of the Obligor shall be a party to any Change of
      Control Transaction (as defined in Section
      4);
      

     

    (vii) The
      Obligor shall fail to file the Underlying Shares Registration Statement (as
      defined in Section
      4)
      with
      the Commission (as defined in Section
      4),
      or the
      Underlying Shares Registration Statement shall not have been declared effective
      by the Commission, in each case within the time periods set forth in the
      Registration Rights Agreement of even date herewith between the Obligor and
      the
      Holder;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (viii) If
      the
      effectiveness of the Underlying Shares Registration Statement lapses for any
      reason or the Holder shall not be permitted to resell the shares of Common
      Stock
      underlying this Debenture under the Underlying Shares Registration Statement,
      in
      either case, for more than five (5) consecutive Trading Days or an aggregate
      of
      eight Trading Days (which need not be consecutive Trading Days);

     

    (ix) The
      Obligor shall fail for any reason to deliver Common Stock certificates to a
      Holder prior to the fifth (5th)
      Trading
      Day after a Conversion Date or the Obligor shall provide notice to the Holder,
      including by way of public announcement, at any time, of its intention not
      to
      comply with requests for conversions of this Debenture in accordance with the
      terms hereof; 

     

    (x) The
      Obligor shall fail for any reason to deliver the payment in cash pursuant to
      a
      Buy-In (as defined herein) within three (3) days after notice is claimed
      delivered hereunder; 

     

    (b) During
      the time that any portion of this Debenture is outstanding, if any Event of
      Default has occurred, 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,
      provided
      however,
      the
      Holder may request (but shall have no obligation to request) payment of such
      amounts in Common Stock of the Obligor. If an Event of Default occurs and
      remains uncured, the Conversion Price shall be reduced to 20% of the Conversion
      Price. In addition to any other remedies, the Holder shall have the right (but
      not the obligation) to convert this Debenture at any time after (x) an Event
      of
      Default or (y) the Maturity Date at the Conversion Price then in-effect. The
      Holder need not provide and the Obligor 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. No such rescission or annulment shall affect any subsequent Event
      of
      Default or impair any right consequent thereon. Upon an Event of Default,
      notwithstanding any other provision of this Debenture or any Transaction
      Document, the Holder shall have no obligation to comply with or adhere to any
      limitations, if any, on the conversion of this Debenture or the sale of the
      Underlying Shares. 

     

    Section
      3. Conversion.

     

    (a) (i) Conversion
      at Option of Holder.

     

    (A) This
      Debenture shall be convertible into shares of Common Stock at the option of
      the
      Holder, in whole or in part at any time and from time to time, after the
      Original Issue Date (as defined in Section 4) (subject to the limitations on
      conversion set forth in Section
      3(a)(ii)
      hereof).
      The number of shares of Common Stock issuable upon a conversion hereunder equals
      the quotient obtained by dividing (x) the outstanding amount of this Debenture
      to be converted by (y) the Conversion Price (as defined in Section
      3(c)(i)).
      The
      Obligor shall deliver Common Stock certificates to the Holder prior to the
      Fifth
      (5th)
      Trading
      Day after a Conversion Date.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (B) Notwithstanding
      anything to the contrary contained herein, if on any Conversion Date: (1) the
      number of shares of Common Stock at the time authorized, unissued and unreserved
      for all purposes, or held as treasury stock, is insufficient to pay principal
      and interest hereunder in shares of Common Stock; (2) the Common Stock is not
      listed or quoted for trading on the OTC, the “Pink Sheets” or on a Subsequent
      Market; (3) the Obligor has failed to timely satisfy its conversion; or (4)
      the
      issuance of such shares of Common Stock would result in a violation of
Section
      3(a)(ii),
      then,
      at the option of the Holder, the Obligor, in lieu of delivering shares of Common
      Stock pursuant to Section
      3(a)(i)(A),
      shall
      deliver, within three (3) Trading Days of each applicable Conversion Date,
      an
      amount in cash equal to the product of the outstanding principal amount to
      be
      converted plus any interest due therein divided by the Conversion Price and
      multiplied by the highest closing price of the stock from date of the conversion
      notice till the date that such cash payment is made.

     

    Further,
      if the Obligor shall not have delivered any cash due in respect of conversion
      of
      this Debenture or as payment of interest thereon by the fifth (5th)
      Trading
      Day after the Conversion Date, the Holder may, by notice to the Obligor, require
      the Obligor to issue shares of Common Stock pursuant to Section
      3(c),
      except
      that for such purpose the Conversion Price applicable thereto shall be the
      lesser of the Conversion Price on the Conversion Date and the Conversion Price
      on the date of such Holder demand. Any such shares will be subject to the
      provisions of this Section.

     

    (C) The
      Holder shall effect conversions by delivering to the Obligor a completed notice
      in the form attached hereto as Exhibit A (a “Conversion
      Notice”).
      The
      date on which a Conversion Notice is delivered is the “Conversion
      Date.”
Unless
      the Holder is converting the entire principal amount outstanding under this
      Debenture, the Holder is not required to physically surrender this Debenture
      to
      the Obligor in order to effect conversions. Conversions hereunder shall have
      the
      effect of lowering the outstanding principal amount of this Debenture plus
      all
      accrued and unpaid interest thereon in an amount equal to the applicable
      conversion. The Holder and the Obligor shall maintain records showing the
      principal amount converted and the date of such conversions. In the event of
      any
      dispute or discrepancy, the records of the Holder shall be controlling and
      determinative in the absence of manifest error.

     

    (ii) Certain
      Conversion Restrictions.

     

    (A) A
      Holder
      may not convert this Debenture or receive shares of Common Stock as payment
      of
      interest hereunder to the extent such conversion or receipt of such interest
      payment would result in the Holder, together with any affiliate thereof,
      beneficially owning (as determined in accordance with Section 13(d) of the
      Exchange Act and the rules promulgated thereunder) in excess of 4.9% of the
      then
      issued and outstanding shares of Common Stock, including shares issuable upon
      conversion of, and payment of interest on, this Debenture held by such Holder
      after application of this Section. Since the Holder will not be obligated to
      report to the Obligor the number of shares of Common Stock it may hold at the
      time of a conversion hereunder, unless the conversion at issue would result
      in
      the issuance of shares of Common Stock in excess of 4.9% of the then outstanding
      shares of Common Stock without regard to any other shares which may be
      beneficially owned by the Holder or an affiliate thereof, the Holder shall
      have
      the authority and obligation to determine whether the restriction contained
      in
      this Section will limit any particular conversion hereunder and to the extent
      that the Holder determines that the limitation contained in this Section
      applies, the determination of which portion of the principal amount of this
      Debenture is convertible shall be the responsibility and obligation of the
      Holder. If the Holder has delivered a Conversion Notice for a principal amount
      of this Debenture that, without regard to any other shares that the Holder
      or
      its affiliates may beneficially own, would result in the issuance in excess
      of
      the permitted amount hereunder, the Obligor shall notify the Holder of this
      fact
      and shall honor the conversion for the maximum principal amount permitted to
      be
      converted on such Conversion Date in accordance with the periods described
      in
Section
      3(a)(i)(A)
      and, at
      the option of the Holder, either retain any principal amount tendered for
      conversion in excess of the permitted amount hereunder for future conversions
      or
      return such excess principal amount to the Holder. The provisions of this
      Section may be waived by a Holder (but only as to itself and not to any other
      Holder) upon not less than 65 days prior notice to the Obligor. Other Holders
      shall be unaffected by any such waiver.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b) (i) Nothing
      herein shall limit a Holder's right to pursue actual damages or declare an
      Event
      of Default pursuant to Section
      2
      herein
      for the Obligor 's failure to deliver certificates representing shares of Common
      Stock upon conversion within the period specified herein and such Holder shall
      have the right to pursue all remedies available to it at law or in equity
      including, without limitation, a decree of specific performance and/or
      injunctive relief, in each case without the need to post a bond or provide
      other
      security. The exercise of any such rights shall not prohibit the Holder from
      seeking to enforce damages pursuant to any other Section hereof or under
      applicable law. 

     

    (ii) In
      addition to any other rights available to the Holder, if the Obligor fails
      to
      deliver to the Holder such certificate or certificates pursuant to Section
      3(a)(i)(A)
      by the
      fifth (5th)
      Trading
      Day after the Conversion Date, and if after such fifth (5th)
      Trading
      Day the Holder purchases (in an open market transaction or otherwise) Common
      Stock to deliver in satisfaction of a sale by such Holder of the Underlying
      Shares which the Holder anticipated receiving upon such conversion (a
“Buy-In”),
      then
      the Obligor shall (A) pay in cash to the Holder (in addition to any remedies
      available to or elected by the Holder) the amount by which (x) the Holder's
      total purchase price (including brokerage commissions, if any) for the Common
      Stock so purchased exceeds (y) the product of (1) the aggregate number of shares
      of Common Stock that such Holder anticipated receiving from the conversion
      at
      issue multiplied by (2) the market price of the Common Stock at the time of
      the
      sale giving rise to such purchase obligation and (B) at the option of the
      Holder, either reissue a Debenture in the principal amount equal to the
      principal amount of the attempted conversion or deliver to the Holder the number
      of shares of Common Stock that would have been issued had the Obligor timely
      complied with its delivery requirements under Section
      3(a)(i)(A).
      For
      example, if the Holder purchases Common Stock having a total purchase price
      of
      $11,000 to cover a Buy-In with respect to an attempted conversion of Debentures
      with respect to which the market price of the Underlying Shares on the date
      of
      conversion was a total of $10,000 under clause (A) of the immediately preceding
      sentence, the Obligor shall be required to pay the Holder $1,000. The Holder
      shall provide the Obligor written notice indicating the amounts payable to
      the
      Holder in respect of the Buy-In. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (c) (i) The
      conversion price in effect on any Conversion Date shall be equal to the lesser
      of (a) an amount equal to one hundred twenty percent (120%) of the average
      closing bid price of the Common Stock, as quoted by Bloomberg L.P., for the
      five
      (5) Trading Days immediately preceding the date hereof, or (b) an amount
      equal to eighty percent (80%) of the lowest Closing Bid Price of the Common
      Stock (on the OTC or on the exchange which the Common Stock is then listed,
      including the “Pink Sheets”), as quoted by Bloomberg, LP (the “VWAP”),
      for
      five (5) Trading Days immediately preceding the Conversion Date (as defined
      herein) (the lesser price of either subparagraph (a) or (b) shall be referred
      to
      as the “Conversion
      Price”).

     

    (ii) If
      the
      Obligor, at any time while this Debenture is outstanding, shall (a) 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, (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 Obligor, then the Conversion 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) If
      the
      Obligor, at any time while this Debenture is outstanding, shall issue rights,
      options or warrants to all holders of Common Stock (and not to the Holder)
      entitling them to subscribe for or purchase shares of Common Stock at a price
      per share less than the Closing Bid Price at the record date mentioned below,
      then the Conversion Price shall be multiplied by a fraction, of which the
      denominator shall be the number of shares of the Common Stock (excluding
      treasury shares, if any) outstanding on the date of issuance of such rights
      or
      warrants (plus the number of additional shares of Common Stock offered for
      subscription or purchase), and of which the numerator shall be the number of
      shares of the Common Stock (excluding treasury shares, if any) outstanding
      on
      the date of issuance of such rights or warrants, plus the number of shares
      which
      the aggregate offering price of the total number of shares so offered would
      purchase at such Closing Bid Price. Such adjustment shall be made whenever
      such
      rights or warrants are issued, and shall become effective immediately after
      the
      record date for the determination of stockholders entitled to receive such
      rights, options or warrants. However, upon the expiration of any such right,
      option or warrant to purchase shares of the Common Stock the issuance of which
      resulted in an adjustment in the Conversion Price pursuant to this Section,
      if
      any such right, option or warrant shall expire and shall not have been
      exercised, the Conversion Price shall immediately upon such expiration be
      recomputed and effective immediately upon such expiration be increased to the
      price which it would have been (but reflecting any other adjustments in the
      Conversion Price made pursuant to the provisions of this Section after the
      issuance of such rights or warrants) had the adjustment of the Conversion Price
      made upon the issuance of such rights, options or warrants been made on the
      basis of offering for subscription or purchase only that number of shares of
      the
      Common Stock actually purchased upon the exercise of such rights, options or
      warrants actually exercised.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (iv) If
      the
      Obligor or any subsidiary thereof, as applicable, with respect to Common Stock
      Equivalents (as defined below), at any time while this Debenture is outstanding,
      shall issue shares of Common Stock or rights, warrants, options or other
      securities or debt that are convertible into or exchangeable for shares of
      Common Stock (“Common
      Stock Equivalents”)
      entitling any Person to acquire shares of Common Stock, at a price per share
      less than the Conversion Price (if the holder of the Common Stock or Common
      Stock Equivalent so issued shall at any time, whether by operation of purchase
      price adjustments, reset provisions, floating conversion, exercise or exchange
      prices or otherwise, or due to warrants, options or rights per share which
      is
      issued in connection with such issuance, be entitled to receive shares of Common
      Stock at a price per share which is less than the Conversion Price, such
      issuance shall be deemed to have occurred for less than the Conversion Price),
      then, at the sole option of the Holder, the Conversion Price shall be adjusted
      to mirror the conversion, exchange or purchase price for such Common Stock
      or
      Common Stock Equivalents (including any reset provisions thereof) at issue.
      Such
      adjustment shall be made whenever such Common Stock or Common Stock Equivalents
      are issued. The Obligor shall notify the Holder in writing, no later than one
      (1) business day following the issuance of any Common Stock or Common Stock
      Equivalent subject to this Section, indicating therein the applicable issuance
      price, or of applicable reset price, exchange price, conversion price and other
      pricing terms. No adjustment under this Section shall be made as a result of
      issuances and exercises of options to purchase shares of Common Stock issued
      for
      compensatory purposes pursuant to any of the Obligor's stock option or stock
      purchase plans.

     

    (v) If
      the
      Obligor, at any time while this Debenture is outstanding, shall distribute
      to
      all holders of Common Stock (and not to the Holder) evidences of its
      indebtedness or assets or rights or warrants to subscribe for or purchase any
      security, then in each such case the Conversion Price at which this Debenture
      shall thereafter be convertible shall be determined by multiplying the
      Conversion Price in effect immediately prior to the record date fixed for
      determination of stockholders entitled to receive such distribution by a
      fraction of which the denominator shall be the Closing Bid Price determined
      as
      of the record date mentioned above, and of which the numerator shall be such
      Closing Bid Price on such record date less the then fair market value at such
      record date of the portion of such assets or evidence of indebtedness so
      distributed applicable to one outstanding share of the Common Stock as
      determined by the Board of Directors in good faith. In either case the
      adjustments shall be described in a statement provided to the Holder of the
      portion of assets or evidences of indebtedness so distributed or such
      subscription rights applicable to one share of Common Stock. Such adjustment
      shall be made whenever any such distribution is made and shall become effective
      immediately after the record date mentioned above.

     

    (vi) In
      case
      of any reclassification of the Common Stock or any compulsory share exchange
      pursuant to which the Common Stock is converted into other securities, cash
      or
      property, the Holder shall have the right thereafter to, at its option, (A)
      convert the then outstanding principal amount, together with all accrued but
      unpaid interest and any other amounts then owing hereunder in respect of this
      Debenture into the shares of stock and other securities, cash and property
      receivable upon or deemed to be held by holders of the Common Stock following
      such reclassification or share exchange, and the Holder of this Debenture shall
      be entitled upon such event to receive such amount of securities, cash or
      property as the shares of the Common Stock of the Obligor into which the then
      outstanding principal amount, together with all accrued but unpaid interest
      and
      any other amounts then owing hereunder in respect of this Debenture could have
      been converted immediately prior to such reclassification or share exchange
      would have been entitled, or (B) require the Obligor to prepay the outstanding
      principal amount of this Debenture, plus all interest and other amounts due
      and
      payable thereon. The entire prepayment price shall be paid in cash. This
      provision shall similarly apply to successive reclassifications or share
      exchanges.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (vii) The
      Obligor shall maintain a share reserve of not less than 100% of the shares
      of
      Common Stock issuable upon conversion of this Debenture; and within three (3)
      Business Days following the receipt by the Obligor of a Holder's notice that
      such minimum number of Underlying Shares is not so reserved, the Obligor shall
      promptly reserve a sufficient number of shares of Common Stock to comply with
      such requirement.

     

    (viii) All
      calculations under this Section
      3
      shall be
      rounded up to the nearest $0.001 of a share.

     

    (ix) Whenever
      the Conversion Price is adjusted pursuant to Section
      3
      hereof,
      the Obligor shall promptly mail to the Holder a notice setting forth the
      Conversion Price after such adjustment and setting forth a brief statement
      of
      the facts requiring such adjustment.

     

    (x) If
      (A)
      the Obligor shall declare a dividend (or any other distribution) on the Common
      Stock; (B) the Obligor shall declare a special nonrecurring cash dividend on
      or
      a redemption of the Common Stock; (C) the Obligor 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 Obligor shall be required in connection
      with
      any reclassification of the Common Stock, any consolidation or merger to which
      the Obligor is a party, any sale or transfer of all or substantially all of
      the
      assets of the Obligor, of any compulsory share exchange whereby the Common
      Stock
      is converted into other securities, cash or property; or (E) the Obligor shall
      authorize the voluntary or involuntary dissolution, liquidation or winding
      up of
      the affairs of the Obligor; then, in each case, the Obligor shall cause to
      be
      filed at each office or agency maintained for the purpose of conversion of
      this
      Debenture, and shall cause to be mailed to the Holder at its last address as
      it
      shall appear upon the stock books of the Obligor, at least twenty (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. The Holder is entitled to convert this Debenture
      during the 20-day calendar period commencing the date of such notice to the
      effective date of the event triggering such notice.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (xi) In
      case
      of any (1) merger or consolidation of the Obligor or any subsidiary of the
      Obligor with or into another Person, or (2) sale by the Obligor or any
      subsidiary of the Obligor of more than one-half of the assets of the Obligor
      in
      one or a series of related transactions, a Holder shall have the right to (A)
      exercise any rights under Section
      2(b),
      (B)
      convert the aggregate amount of this Debenture then outstanding into the shares
      of stock and other securities, cash and property receivable upon or deemed
      to be
      held by holders of Common Stock following such merger, consolidation or sale,
      and such Holder shall be entitled upon such event or series of related events
      to
      receive such amount of securities, cash and property as the shares of Common
      Stock into which such aggregate principal amount of this Debenture could have
      been converted immediately prior to such merger, consolidation or sales would
      have been entitled, or (C) in the case of a merger or consolidation, require
      the
      surviving entity to issue to the Holder a convertible Debenture with a principal
      amount equal to the aggregate principal amount of this Debenture then held
      by
      such Holder, plus all accrued and unpaid interest and other amounts owing
      thereon, which such newly issued convertible Debenture shall have terms
      identical (including with respect to conversion) to the terms of this Debenture,
      and shall be entitled to all of the rights and privileges of the Holder of
      this
      Debenture set forth herein and the agreements pursuant to which this Debentures
      were issued. In the case of clause (C), the conversion price applicable for
      the
      newly issued shares of convertible preferred stock or convertible Debentures
      shall be based upon the amount of securities, cash and property that each share
      of Common Stock would receive in such transaction and the Conversion Price
      in
      effect immediately prior to the effectiveness or closing date for such
      transaction. The terms of any such merger, sale or consolidation shall include
      such terms so as to continue to give the Holder the right to receive the
      securities, cash and property set forth in this Section upon any conversion
      or
      redemption following such event. This provision shall similarly apply to
      successive such events.

     

    (d) The
      Obligor 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 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 number of shares of the Common Stock as shall (subject to any
      additional requirements of the Obligor as to reservation of such shares set
      forth in this Debenture) be issuable (taking into account the adjustments and
      restrictions of Sections
      2(b) and 3(c))
      upon
      the conversion of the outstanding principal amount of this Debenture and payment
      of interest hereunder. The Obligor covenants that all shares of Common Stock
      that shall be so issuable shall, upon issue, be duly and validly authorized,
      issued and fully paid, nonassessable and, if the Underlying Shares Registration
      Statement has been declared effective under the Securities Act, registered
      for
      public sale in accordance with such Underlying Shares Registration
      Statement.

     

    (e) Upon
      a
      conversion hereunder the Obligor shall not be required to issue stock
      certificates representing fractions of shares of the Common Stock, but may
      if
      otherwise permitted, make a cash payment in respect of any final fraction of
      a
      share based on the Closing Bid Price at such time. If the Obligor elects not,
      or
      is unable, to make such a cash payment, the Holder shall be entitled to receive,
      in lieu of the final fraction of a share, one whole share of Common
      Stock.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (f) The
      issuance of certificates for shares of the Common Stock on conversion of this
      Debenture shall be made without charge to the Holder thereof for any documentary
      stamp or similar taxes that may be payable in respect of the issue or delivery
      of such certificate, provided that the Obligor shall not be required to pay
      any
      tax that may be payable in respect of any transfer involved in the issuance
      and
      delivery of any such certificate upon conversion in a name other than that
      of
      the Holder of such Debenture so converted and the Obligor shall not be required
      to issue or deliver such certificates unless or until the person or persons
      requesting the issuance thereof shall have paid to the Obligor the amount of
      such tax or shall have established to the satisfaction of the Obligor that
      such
      tax has been paid.

     

    (g) Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms hereof must be in writing and will be deemed to have
      been
      delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
      when
      sent by facsimile (provided confirmation of transmission is mechanically or
      electronically generated and kept on file by the sending party); or (iii) one
      (1) trading day after deposit with a nationally recognized overnight delivery
      service, in each case properly addressed to the party to receive the same.
      The
      addresses and facsimile numbers for such communications shall be:

    

    

    
      	
              If
                to the Company, to:

            	
              IQ
                Micro Inc.

            
	 	
              500
                Australian Avenue South - Suite 700

            
	 	
              West
                Palm Beach, Florida 33401

            
	 	
              Attention: Robert
                V. Rudman

            
	 	
              Telephone: (561)
                514-0018

            
	 	
              Facsimile: (561)
                514-0195

            
	 	 
	
              With
                a copy to: 

            	
              Gunster
                Yoakley & Stewart, P.A.

            
	 	
              Broward
                Financial Centre - Suite 1400

              500
                East Broward Blvd.

            
	 	
              Fort
                Lauderdale, Florida 33394

            
	 	
              Attention: Robert
                C. White, Jr. Esq.

            
	 	
              Telephone: (954)
                468-1360

            
	 	
              Facsimile: (954)
                888-2037

            
	 	 
	
              If
                to the Holder:

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07303

            
	 	
              Attention: Mark
                Angelo

            
	 	
              Telephone: (201)
                985-8300

            
	 	 
	
              With
                a copy to:

            	
              Troy
                Rillo, Esq. 

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    or
      at
      such other address and/or facsimile number and/or to the attention of such
      other
      person as the recipient party has specified by written notice given to each
      other party three (3) business days prior to the effectiveness of such change.
      Written confirmation of receipt (i) given by the recipient of such notice,
      consent, waiver or other communication, (ii) mechanically or electronically
      generated by the sender's facsimile machine containing the time, date, recipient
      facsimile number and an image of the first page of such transmission or (iii)
      provided by a nationally recognized overnight delivery service, shall be
      rebuttable evidence of personal service, receipt by facsimile or receipt from
      a
      nationally recognized overnight delivery service in accordance with clause
      (i),
      (ii) or (iii) above, respectively.

     

    Section
      4. Definitions.
      For the
      purposes hereof, 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 are
      authorized or required by law or other government action to close.

     

    “Change
      of Control Transaction”
means
      the occurrence of (a) an acquisition after the date hereof by an individual
      or
      legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the
      Exchange Act) of effective control (whether through legal or beneficial
      ownership of capital stock of the Obligor, by contract or otherwise) of in
      excess of fifty percent (50%) of the voting securities of the Obligor (except
      that the acquisition of voting securities by the Holder shall not constitute
      a
      Change of Control Transaction for purposes hereof), (b) a replacement at one
      time or over time of more than one-half of the members of the board of directors
      of the Obligor which is not approved by a majority of those individuals who
      are
      members of the board of directors on the date hereof (or by those individuals
      who are serving as members of the board of directors on any date whose
      nomination to the board of directors was approved by a majority of the members
      of the board of directors who are members on the date hereof), (c) the merger,
      consolidation or sale of fifty percent (50%) or more of the assets of the
      Obligor or any subsidiary of the Obligor in one or a series of related
      transactions with or into another entity, or (d) the execution by the Obligor
      of
      an agreement to which the Obligor is a party or by which it is bound, providing
      for any of the events set forth above in (a), (b) or (c).

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
means
      the common stock, par value $0.0001, of the Obligor and stock of any other
      class
      into which such shares may hereafter be changed or reclassified.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “Original
      Issue Date”
shall
      mean the date of the first issuance of this Debenture regardless of the number
      of transfers and regardless of the number of instruments, which may be issued
      to
      evidence such Debenture.

     

    “Closing
      Bid Price”
means
      the price per share in the last reported trade of the Common Stock on the OTC
      or
      on the exchange which the Common Stock is then listed as quoted by Bloomberg,
      LP.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    “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.

     

    “Trading
      Day”
means
      a
      day on which the shares of Common Stock are quoted on the OTC or quoted or
      traded on such Subsequent Market on which the shares of Common Stock are then
      quoted or listed; provided, that in the event that the shares of Common Stock
      are not listed or quoted, then Trading Day shall mean a Business
      Day.

     

    “Transaction
      Documents”
means
      the Securities Purchase Agreement of even date herewith or any other agreement
      delivered in connection with the Securities Purchase Agreement, including,
      without limitation, the Amended and Restated Security Agreement, the Irrevocable
      Transfer Agent Instructions, and the Amended and Restated Investor Registration
      Rights Agreement, all of even date herewith.

     

    “Underlying
      Shares”
means
      the shares of Common Stock issuable upon conversion of this Debenture or as
      payment of interest in accordance with the terms hereof.

     

    “Underlying
      Shares Registration Statement”
means
      a
      registration statement meeting the requirements set forth in the Registration
      Rights Agreement, covering among other things the resale of the Underlying
      Shares and naming the Holder as a “selling stockholder” thereunder.

     

    Section
      5. Except
      as
      expressly provided herein, no provision of this Debenture shall alter or impair
      the obligations of the Obligor, which are absolute and unconditional, to pay
      the
      principal of, interest and other charges (if any) on, this Debenture at the
      time, place, and rate, and in the coin or currency, herein prescribed. This
      Debenture is a direct obligation of the Obligor. This Debenture ranks pari
      passu
      with all other Debentures now or hereafter issued under the terms set forth
      herein. As long as this Debenture is outstanding, the Obligor shall not and
      shall cause their subsidiaries not to, without the consent of the Holder, (i)
      amend its certificate of incorporation, bylaws or other charter documents so
      as
      to adversely affect any rights of the Holder; (ii) repay, repurchase or offer
      to
      repay, repurchase or otherwise acquire 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 (iii) enter into any agreement
      with respect to any of the foregoing. 

     

    Section
      6. This
      Debenture shall not entitle the Holder to any of the rights of a stockholder
      of
      the Obligor, including without limitation, the right to vote, to receive
      dividends and other distributions, or to receive any notice of, or to attend,
      meetings of stockholders or any other proceedings of the Obligor, unless and
      to
      the extent converted into shares of Common Stock in accordance with the terms
      hereof.

     

    Section
      7. If
      this
      Debenture is mutilated, lost, stolen or destroyed, the Obligor shall execute
      and
      deliver, in exchange and substitution for and upon cancellation of the 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
      Obligor.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section
      8. No
      indebtedness of the Obligor is senior to this Debenture in right of payment,
      whether with respect to interest, damages or upon liquidation or dissolution
      or
      otherwise. Without the Holder’s consent, the Obligor will not and will not
      permit any of their 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 there from that is senior in any
      respect to the obligations of the Obligor under this Debenture.

     

    Section
      9. This
      Debenture shall be governed by and construed in accordance with the laws of
      the
      State of New Jersey, without giving effect to conflicts of laws thereof. Each
      of
      the parties consents to the jurisdiction of the Superior Courts of the State
      of
      New Jersey sitting in Hudson County, New Jersey and the U.S. District Court
      for the District of New Jersey sitting in Newark, New Jersey in connection
      with
      any dispute arising under this Debenture and hereby waives, to the maximum
      extent permitted by law, any objection, including any objection based on
forum non conveniens
      to the
      bringing of any such proceeding in such jurisdictions. 

     

    Section
      10. If
      the
      Obligor fails to strictly comply with the terms of this Debenture, then the
      Obligor shall reimburse the Holder promptly for all fees, costs and expenses,
      including, without limitation, attorneys’ fees and expenses incurred by the
      Holder in any action in connection with this Debenture, including, without
      limitation, those incurred: (i) during any workout, attempted workout, and/or
      in
      connection with the rendering of legal advice as to the Holder’s rights,
      remedies and obligations, (ii) collecting any sums which become due to the
      Holder, (iii) defending or prosecuting any proceeding or any counterclaim to
      any
      proceeding or appeal; or (iv) the protection, preservation or enforcement of
      any
      rights or remedies of the Holder.

     

    Section
      11. Any
      waiver by 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
      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
      12. 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 shall violate applicable laws governing
      usury, the applicable rate of interest due hereunder shall automatically be
      lowered to equal the maximum permitted rate of interest. The Obligor 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 Obligor from paying all or any portion of the principal of or
      interest on this Debenture 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 Obligor (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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      13. 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.

     

    Section
      14. THE
      PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
      OF
      THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
      OR
      ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
      DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
      OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
      FOR
      THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

     

    [REMAINDER
      OF PAGE INTENTIONLLY LEFT BLANK]

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Obligor has caused this Secured Convertible Debenture to be duly executed by
      a
      duly authorized officer as of the date set forth above.

     

    
      	 	
              IQ
                MICRO INC. 

            
	 	 
	 	
              By:
                /s/
                Robert V. Rudman

            
	 	
              Name: Robert
                V. Rudman

            
	 	
              Title: CFO

            

    

    

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

     

    EXHIBIT
      “A”

     

     

    NOTICE
      OF CONVERSION

     

     

    (To
      be executed by the Holder in order to convert the
      Debenture)

     

    

    
      	
               

              TO:

               

            	 

    

    

    The
      undersigned hereby irrevocably elects to convert $     
      of the
      principal amount of the above Debenture into Shares of Common Stock of IQ Micro
      Inc., according to the conditions stated therein, as of the Conversion Date
      written below.

     

    
      	
               

              Conversion
                Date:

            	 
	
               

              Applicable
                Conversion Price:

            	 
	
               

              Signature:

            	 
	
               

              Name:

            	 
	
               

              Address:

            	 
	
               

              Amount
                to be converted:

            	
               

              $          

            
	
               

              Amount
                of Debenture unconverted:

            	
               

              $          

            
	
               

              Conversion
                Price per share: 

            	
               

              $          

            
	
               

              Number
                of shares of Common Stock to be issued:

            	 
	
               

              Please
                issue the shares of Common Stock in the following name and to the
                following address:

            	 
	
               

              Issue
                to:

            	 
	
               

              Authorized
                Signature:

            	 
	
               

              Name:

            	 
	
               

              Title:

            	 
	
               

              Phone
                Number:

            	 
	
               

              Broker
                DTC Participant Code:

            	 
	
               

              Account
                Number:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]