Schedule 13D - Amendment No. 1

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WTUPuUgJ58vDbFh2/sYtOrMA0K/1AJMLlsneo+Sc+pHQ8SPyCzQkffpoifLC87cY 5b+eyQC2lXJPCIHHtZmsmQ== 0000950123-09-014704.txt : 20090617 0000950123-09-014704.hdr.sgml : 20090617 20090617161630 ACCESSION NUMBER: 0000950123-09-014704 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20090617 DATE AS OF CHANGE: 20090617 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SILVERMAN SCOTT R CENTRAL INDEX KEY: 0001195639 FILING VALUES: FORM TYPE: SC 13D/A SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Steel Vault Corp CENTRAL INDEX KEY: 0001037417 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-CONSUMER CREDIT REPORTING, COLLECTION AGENCIES [7320] IRS NUMBER: 112889809 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-53179 FILM NUMBER: 09896749 BUSINESS ADDRESS: STREET 1: 1690 S CONGRESS AVENUE, STE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5618058000 MAIL ADDRESS: STREET 1: 1690 S CONGRESS AVENUE, STE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FORMER COMPANY: FORMER CONFORMED NAME: IFTH ACQUISITION CORP DATE OF NAME CHANGE: 20080102 FORMER COMPANY: FORMER CONFORMED NAME: INFOTECH USA INC DATE OF NAME CHANGE: 20030410 FORMER COMPANY: FORMER CONFORMED NAME: SYSCOMM INTERNATIONAL CORP DATE OF NAME CHANGE: 19970408 SC 13D/A 1 c86902sc13dza.htm SCHEDULE 13D - AMENDMENT NO. 1 Schedule 13D - Amendment No. 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 1 )*

Steel Vault Corporation

(Name of Issuer)

Common Stock - $0.01 par value

(Title of Class of Securities)

85815A 103

(CUSIP Number)

Scott R. Silverman
1690 South Congress Avenue, Suite 200
Delray Beach, Florida 33445
561-805-8000

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

May 26, 2009

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.		85815A 103


1	NAMES OF REPORTING PERSONS Scott R. Silverman


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
	(a) o
	(b) þ

3	SEC USE ONLY



4	SOURCE OF FUNDS (SEE INSTRUCTIONS)

	OO

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	United States of America

		7	SOLE VOTING POWER

NUMBER OF			7,205,135

SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			0

EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			7,205,135

WITH		10	SHARED DISPOSITIVE POWER

			0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	7,205,135

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	58.9%

14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

	IN


CUSIP No.		85815A 103

Item 1. Security and Issuer

This Amendment No. 1 to Schedule 13D relates to shares of common stock, par value $0.01 per share, of Steel Vault Corporation, a Delaware corporation (“Steel Vault”) (such shares of Steel Vault being referred to as the “Shares”), formerly known as IFTH Acquisition Corp., and is being filed by Scott R. Silverman to amend the Schedule 13D that was originally filed on November 10, 2008 with the Securities and Exchange Commission (“SEC”).

Information reported in the original filing remains in effect except to the extent that it is amended, restated, supplemented or superseded by information contained in this Amendment No. 1 to Schedule 13D.

Item 3. Source and Amount of Funds or Other Consideration

Item 3 is hereby restated as follows:

On August 1, 2008, Blue Moon Energy Partners LLC (“Blue Moon”) entered into a Purchase Agreement for the purchase of 2,570,000 shares of common stock, par value $0.01 per share (the “Shares”) from Digital Angel Corporation, which represented Digital Angel Corporation’s entire interest in Steel Vault. Blue Moon paid, in consideration for the Shares, $400,000, which amount was provided as capital contributions by the members of Blue Moon in consideration for the Shares. Mr. Silverman controls R&R Consulting Partners LLC, a member of Blue Moon, and is a manager of Blue Moon.

On October 24, 2008, Mr. Silverman was granted, in lieu of salary compensation through the end of 2009, 1,000,000 Shares, 500,000 of which was restricted and vested on December 5, 2008.

On March 20, 2009, Blue Moon and Steel Vault entered into a Secured Convertible Promissory Note (the “Blue Moon Note”) for $190,000. The unpaid principal and accrued and unpaid interest under the Blue Moon Note can be converted at any time into common stock of Steel Vault at a price of $0.44 per share. At maturity, the Blue Moon Note can be converted into 477,134 Shares. As part of the consideration for the Blue Moon Note, Steel Vault granted to Blue Moon a Common Stock Purchase Warrant, dated March 20, 2009 (the “Blue Moon Warrant”), to purchase 108,000 Shares at a price of $0.44 per share, which Blue Moon Warrant is currently exercisable. A copy of the Blue Moon Note and Blue Moon Warrant are attached hereto as Exhibit 1 and Exhibit 2, respectively. The description of certain terms of the Blue Moon Note and Blue Moon Warrant set forth herein does not purport to be complete and is qualified in its entirety by the provisions of the documents.

On July 25, 2008, Steel Vault granted Mr. Silverman a stock option to purchase 500,000 Shares, at an exercise price of $0.21 per Share, which stock option will become exercisable on July 25, 2009. As a result, Mr. Silverman acquired beneficial ownership of the Shares underlying the option on May 26, 2009, sixty days prior to the date the stock option becomes exercisable.

On June 4, 2009, VeriChip Corporation, a Delaware corporation (“VeriChip”) used its working capital to purchase a secured convertible promissory note for $500,000 (the “VeriChip Note”) from Steel Vault. The VeriChip Note accrues interest at twelve percent per year payable on the first anniversary of the VeriChip Note and quarterly thereafter, can be prepaid in full at any time without penalty, and matures on June 4, 2011. The VeriChip


CUSIP No.		85815A 103

Note is payable on demand on or after June 4, 2010 after which Steel Vault will have ninety days to pay the principal and accrued and unpaid interest thereon. The unpaid principal and accrued and unpaid interest under the VeriChip Note can be converted at any time into common stock of Steel Vault at a price of $0.30 per share. The principal is convertible into 1,666,667 shares of Steel Vault common stock. The VeriChip Note is secured by substantially all of Steel Vault’s assets and the security interest held by VeriChip on the assets is senior to any other security interest on the assets pursuant to a Subordination and Intercreditor Agreement between VeriChip and Blue Moon Energy Partners LLC, a Florida limited liability company. The financing transaction also includes a common stock purchase warrant, dated June 4, 2009, given to VeriChip to purchase 333,334 common shares of Steel Vault at a price of $0.30 per share (the “VeriChip Warrant”). The VeriChip Warrant is currently exercisable and is void after June 4, 2014. The VeriChip Note and VeriChip Warrant were issued pursuant to a Convertible Note and Warrant Subscription Agreement, dated June 4, 2009, between VeriChip and Steel Vault (the “Subscription Agreement”), which provides that Steel Vault will file a registration statement for the public resale of the shares underlying the VeriChip Note and VeriChip Warrant upon notice that VeriChip elects to convert all or part of the VeriChip Note into common stock of Steel Vault. Mr. Silverman is a controlling stockholder of VeriChip and its executive chairman of the board.

A copy of the VeriChip Note, VeriChip Warrant and Subscription Agreement are attached hereto as Exhibit 3, Exhibit 4 and Exhibit 5, respectively. The description of certain terms of the VeriChip Note, VeriChip Warrant and Subscription Agreement set forth herein does not purport to be complete and is qualified in its entirety by the provisions of the documents.

Item 5. Interest in Securities of the Issuer

Item 5 is hereby restated as follows:

(a) and (b) As a manager of Blue Moon, Mr. Silverman is deemed to beneficially own 3,155,134 Shares beneficially owned by Blue Moon. As a controlling stockholder and executive chairman of the board of VeriChip, Mr. Silverman is deemed to beneficially own 2,000,001 Shares beneficially owned by VeriChip. Mr. Silverman also beneficially owns 1,100,000 Shares and 950,000 Shares issuable upon the exercise of stock options. Mr. Silverman beneficially owns a total of 7,205,135 Shares, representing 58.9% of the outstanding common stock of Steel Vault. Mr. Silverman has sole voting power and sole dispositive power over 7,205,135 Shares.

Blue Moon and Mr. William J. Caragol, a member and manager of Blue Moon, who, together with Mr. Silverman, may be deemed to have become members of a group, beneficially own Shares as follows:


	Potential Deemed					Total Potential			Potential Deemed
	Ownership Through					Deemed			Ownership
	Blue Moon⁽¹⁾		Other Shares held			Ownership			Percentage⁽⁵⁾
William J. Caragol		3,155,134		1,500,000	⁽²⁾		4,655,134	⁽³⁾		46.6	%
Blue Moon		3,155,134		0			3,155,134	⁽⁴⁾		34.0	%


CUSIP No.		85815A 103


(1)		Consists of 2,570,000 Shares and 585,134 Shares currently underlying the Blue Moon Note and Blue Moon Warrant.

(2)		Consists of 800,000 Shares, 500,000 Shares underlying a common stock purchase warrant and 200,000 Shares underlying stock options exercisable within sixty days of the date hereof.

(3)		Mr. Caragol has sole voting and dispositive power over all of these Shares.

(4)		Blue Moon has sole voting and dispositive power over all of these Shares.

(5)		In computing the percentage ownership, shares of common stock subject to convertible securities are deemed outstanding.

(c) On July 25, 2008, Steel Vault granted Mr. Caragol a stock option to purchase 200,000 Shares, at an exercise price of $0.21 per Share, which stock option will become exercisable on July 25, 2009. As a result, Mr. Caragol acquired beneficial ownership of the Shares underlying the option on May 26, 2009, sixty days prior to the date the stock option becomes exercisable.

On June 4, 2009, Mr. Caragol was issued a common stock purchase warrant exercisable for 500,000 Shares, with an exercise price of $0.30 per Share, in connection with a debt finance transaction between Steel Vault and VeriChip Corporation, dated June 4, 2009, in consideration for the guaranty of collection that Mr. Caragol executed in favor of VeriChip Corporation.

(d) Blue Moon and its members, William J. Caragol, Barry Edelstein, Jeffrey Cobb and R&R Consulting Partners LLC, and its controlling member, Scott R. Silverman, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any Shares deemed to be beneficially owned by Blue Moon.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

The description of the terms of the Blue Moon Note, Blue Moon Warrant, VeriChip Note, VeriChip Warrant and Subscription Agreement described in “Item 3. Source and Amount of Funds or Other Consideration” is herein incorporated by reference.


CUSIP No.		85815A 103

Item 7. Material to be Filed as Exhibits


Exhibit 1		Secured Convertible Promissory Note between Blue Moon Energy Partners LLC and Steel Vault Corporation dated March 20, 2009*

Exhibit 2		Warrant of Blue Moon Energy Partners LLC to Purchase Common Stock of Steel Vault Corporation, dated March 20, 2009*

Exhibit 3		Secured Convertible Promissory Note, dated June 4, 2009, between VeriChip Corporation and Steel Vault Corporation

Exhibit 4		Common Stock Purchase Warrant, dated June 4, 2009, between VeriChip Corporation and Steel Vault Corporation

Exhibit 5		Convertible Note and Warrant Subscription Agreement, dated June 4, 2009, between VeriChip Corporation and Steel Vault Corporation


*		Incorporated by reference to the Current Report on Form 8-K filed by Steel Vault Corporation on March 24, 2009 with the Securities and Exchange Commission.


CUSIP No.		85815A 103

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: June 17, 2009


/s/ Scott R. Silverman
Name: Scott R. Silverman

EXHIBIT INDEX


Exhibit
No.		Description
1		Secured Convertible Promissory Note between Blue Moon Energy Partners LLC and Steel Vault Corporation dated March 20, 2009*

2		Warrant of Blue Moon Energy Partners LLC to Purchase Common Stock of Steel Vault Corporation, dated March 20, 2009*

3		Secured Convertible Promissory Note, dated June 4, 2009, between VeriChip Corporation and Steel Vault Corporation

4		Common Stock Purchase Warrant, dated June 4, 2009, between VeriChip Corporation and Steel Vault Corporation

5		Convertible Note and Warrant Subscription Agreement, dated June 4, 2009, between VeriChip Corporation and Steel Vault Corporation


*		Incorporated by reference to the Current Report on Form 8-K filed by Steel Vault Corporation on March 24, 2009 with the Securities and Exchange Commission.

EX-99.3 2 c86902exv99w3.htm EXHIBIT 3 Exhibit 3

Exhibit 3

NEITHER THIS NOTE NOR THE STOCK INTO WHICH THIS NOTE IS CONVERTIBLE (COLLECTIVELY, THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

SECURED CONVERTIBLE PROMISSORY NOTE



$500,000.00		June 4, 2009

FOR VALUE RECEIVED, Steel Vault Corporation, a Delaware corporation located at 1690 South Congress Avenue, Suite 200, Delray Beach, Florida 33445 (the “Borrower”), promises to pay to VeriChip Corporation, a Delaware Corporation, or any subsequent holder upon a permitted assignment of this Note (the “Lender”), located at 1690 South Congress Avenue, Suite 200, Delray Beach, Florida 33445, or at such other location designated by the Lender, the principal amount of FIVE HUNDRED THOUSAND U.S. DOLLARS (U.S.$500,000.00) (the “Principal Amount”), upon the terms and conditions specified below. Notwithstanding the foregoing, no payment of principal or interest shall be required to the extent that such principal and interest has been converted into equity securities of the Borrower pursuant to the terms hereof.

1. Repayment or Conversion.

(a) Repayment. Unless the Principal Amount and all accrued but unpaid interest thereon is converted pursuant to the provisions of Section 1(b) below, the entire unpaid Principal Amount under this Note and all accrued and unpaid interest thereon shall be due and payable on the earlier to occur of the following (the “Maturity Date”):

(i) on or before June 4, 2011;

(ii) ON DEMAND of the Lender, which demand may be made at any time on or after June 4, 2010, in which case Borrower will have ninety days to pay the unpaid Principal Amount and all accrued and unpaid interest thereon; or

(iii) within ten days after a Change in Control of Borrower (as defined in Borrower’s 2009 Stock Incentive Plan).

(b) Conversion.

(i) By Lender. Lender shall have the right, at any time, in its sole discretion to convert all of the unpaid Principal Amount and accrued and unpaid interest thereon into that number of shares of the Borrower’s common stock (the “Conversion Shares”) determined as follows (the “Conversion Formula”):

The unpaid Principal Amount and accrued and unpaid interest on the date of conversion divided by the Price (as defined below) rounded upward to the nearest whole share, subject to equitable adjustment for any stock split, combination, recapitalization, reorganization or other similar event. For example, if Lender elects to convert this Note into shares of Borrower’s common stock on July 1, 2009 and the unpaid Principal Amount and accrued and unpaid interest on such date is $50,000, Borrower shall issue 166,667 Conversion Shares to Lender.

(ii) By Borrower. Borrower shall not have the right to convert any of the unpaid Principal Amount or accrued and unpaid interest thereon at any time or otherwise effect a conversion hereunder.

(iii) In the event that Lender elects to effect a conversion hereunder, Lender shall deliver to Borrower the original of this Note, and Borrower shall deliver to Lender a certificate representing the Conversion Shares into which this Note was converted.

(iv) For purposes herein, “Price” means $0.30.

2. Prepayment. This Note may be prepaid in whole (the entire unpaid Principal Amount under this Note and all accrued and unpaid interest) without penalty at any time, provided that Borrower provides Lender with at least ten days prior written notice during which time the Lender may elect to effect a conversion under Section 1(b).

3. Interest. This Note shall accrue interest at a rate equal to twelve percent (12%) per annum, payable on the first anniversary of the Note and thereafter payable on September 4, 2010, December 4, 2010, March 4, 2011 and June 4, 2011.

4. Events of Default. The entire unpaid Principal Amount and all accrued and unpaid interest shall become immediately due and payable upon (i) admission by the Borrower of its inability to pay its debts generally as they become due or otherwise acknowledges its insolvency, (ii) the filing of a petition in bankruptcy by the Borrower, (iii) the execution by the Borrower of a general assignment for the benefit of creditors, (iv) the filing against the Borrower of a petition in bankruptcy or a petition for relief under the provisions of the federal bankruptcy code or another state or federal law for the relief of debtors and the continuation of such petition without dismissal for a period of ninety (90) days or more, or (v) in the event that the Principal Amount and all accrued and unpaid interest thereon shall not have been paid in full on or before the Maturity Date.

5. Collection. If action is instituted to collect this Note, the Borrower promises to pay to the Lender all reasonable costs and expenses (including reasonable attorneys’ fees) incurred in connection with such action.

6. Security. This Note and the obligations hereunder are secured by that certain security agreement of even date herewith in the form attached hereto as Exhibit A, between Lender and Borrower, which encumbers Borrower’s real and personal property as more particularly described therein, and that certain security agreement of even date herewith in the form attached hereto as Exhibit B, between Lender and National Credit Report.com, LLC, which encumbers National Credit Report.com, LLC’s real and personal property as more particularly described therein.

7. Waivers. No delay on the part of the Lender in exercising any right or remedy hereunder shall operate as a waiver of such right or remedy. No single or partial exercise of a right or remedy shall preclude other or further exercise of that or any other right or remedy. The failure of the Lender to insist upon the strict performance of any term of this Note, or to exercise any right or remedy hereunder, shall not be construed as a waiver or relinquishment by the Lender for the future of that term, right or remedy. No waiver of any right of the Lender hereunder shall be effective unless in writing executed by the Lender.

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8. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable.

9. Warrant. The Borrower shall, simultaneous with the execution of this Note, execute and deliver to Lender a common stock purchase warrant in the form attached hereto as Exhibit B (the “Warrant”) for 333,334 shares (the “Warrant Shares”).

10. Registration. If at any time Borrower proposes to register shares of its common stock under the Securities Act, in connection with the public offering of such shares for cash (a “Proposed Registration”) other than a registration statement on Form S-8 or Form S-4 or any successor or other forms promulgated for similar purposes, Borrower shall, at such time, promptly give Lender written notice of such Proposed Registration. Lender shall have ten (10) days from its receipt of such notice to deliver to Borrower a written request specifying the amount of Registrable Securities that Lender intends to sell and Lenders’ intended method of distribution. Upon receipt of such request, Borrower shall use its commercially reasonable efforts to cause all Registrable Securities which Borower has been requested to register to be registered under the Securities Act to the extent necessary to permit their sale or other disposition in accordance with the intended methods of distribution specified in the request of Lender; provided, however, that the Company shall have the right to postpone or withdraw any registration effected pursuant to this Section 10 without obligation to Lender. If, in connection with any underwritten public offering for the account of Borrower or for stockholders of Borrower that have contractual rights to require Borrower to register shares of common stock, the managing underwriter(s) thereof shall impose a limitation on the number of shares of common stock which may be included in a registration statement because, in the judgment of such underwriter(s), marketing or other factors dictate such limitation is necessary to facilitate such offering, then Borrower shall be obligated to include in the registration statement only such limited portion of the Registrable Securities with respect to which Lender has requested inclusion hereunder as such underwriter(s) shall permit. For purposes herein, “Registrable Securities” means the Conversion Shares and the Warrant Shares and any other shares of common stock issuable pursuant to the exercise of the Warrants (without regard to any limitation on such exercise), and any shares of capital stock issued or issuable from time to time (with any adjustments) in replacement of, in exchange for or otherwise in respect of the Conversion Shares or the Warrant Shares; provided, however, that “Registrable Securities” shall not include any such shares that have been sold pursuant to Rule 144 of the Securities Act.

11. Amendment. This Note and the Warrant shall not be amended without the express written consent of Borrower and Lender.

12. No Impairment. The Borrower will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of capital stock or assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms set forth herein or in the Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of Lender hereunder.

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13. Interest Savings Clause. If any interest payment (or other payment which is deemed by law to be interest) due hereunder is determined to be in excess of the then legal maximum rate, then that portion of each interest payment representing an amount in excess of the then legal maximum rate shall instead be deemed a payment of principal and applied against the principal of the obligations evidenced by this Note.

14. Assignment. This Note may not be assigned, by operation of law or otherwise, as a whole or in part, by the Lender without the prior written consent of the Borrower, such consent not to be unreasonably withheld. Any assignment purported to be made without such consent shall be null and void. The rights and obligations of the Borrower and the Lender of this Note shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

15. Notices. All notices, demands and requests of any kind to be delivered to any party in connection with this Note shall be in writing and shall be deemed to have been duly given if personally delivered, sent by facsimile or if sent by nationally-recognized overnight courier or by registered or certified mail, return receipt requested and postage prepaid, to the address set forth herein or to such other address as the party to whom notice is to be given may have furnished to the other parties hereto in writing in accordance with the provisions of this Section 15. Any such notice or communication shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of facsimile, when receipt is confirmed, (iii) in the case of nationally-recognized overnight courier, on the next business day after the date when sent and (iv) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted.

16. Legal Matters. The validity, construction, enforcement, and interpretation of this Note are governed by the laws of the State of Florida and the federal laws of the United States of America, excluding the laws of those jurisdictions pertaining to resolution of conflicts with laws of other jurisdictions. The parties hereby expressly waive presentment, demand for payment, dishonor, notice of dishonor, protest, notice of protest, and any other formality. The Borrower and the Lender (a) consent to the personal jurisdiction of the state and federal courts having jurisdiction in Palm Beach County, Florida, (b) stipulate that the proper, exclusive, and convenient venue for any legal proceeding arising out of this Note is Palm Beach County, Florida, for state court proceedings, and the Southern District of Florida, for federal district court proceedings, and (c) waive any defense, whether asserted by a motion or pleading, that Palm Beach County, Florida, or the Southern District of Florida, is an improper or inconvenient venue.

17. Further Assurances. From time to time, the Lender, at the Borrower’s reasonable request, shall execute and deliver such other instruments and do and perform such other acts and things in connection with the exercise of this Note.

[Remainder of page intentionally left blank; signature page follows]

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IN WITNESS WHEREOF, this Note has been executed by the Borrower and delivered to the Lender as of the date first above written.


BORROWER: STEEL VAULT CORPORATION
By:	/s/ William J. Caragol
	Name:	William J. Caragol
	Title:	CEO

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EX-99.4 3 c86902exv99w4.htm EXHIBIT 4 Exhibit 4

Exhibit 4

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAW. NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933 AND ALL STATE SECURITIES LAWS AND THE TERMS AND CONDITIONS HEREOF.

COMMON STOCK PURCHASE WARRANT

Void After June 4, 2014



No. 002		Date of Issuance: June 4, 2009

This is to certify that, for value received, VeriChip Corporation, a Delaware corporation, or registered assigns thereof (the “Holder”), is entitled to purchase from Steel Vault Corporation, a Delaware corporation (the “Corporation”), at a price of $0.30 per share (the “Warrant Price”) at any time on or before June 4, 2014, all or any part of 333,334 shares of common stock, par value $0.01 per share, of the Corporation (“Common Stock”), on the terms and subject to the conditions hereinafter set forth.

The Corporation is issuing, selling and delivering this Warrant to the Holder in connection with the private placement of securities offered pursuant to that certain Convertible Note and Warrant Subscription Agreement, Secured Convertible Promissory Note and this Warrant (collectively, the “Transaction Documents”). The Holder takes this Warrant subject to the terms and restrictions set forth in the Transaction Documents and shall be entitled to certain rights and privileges set forth in the Transaction Documents.

1. This Warrant will become void, and all rights of the Holder will expire, at 5:00 P.M., EST, on June 4, 2014.

2. This Warrant may be exercised by the Holder as to all or any portion of the shares of Common Stock covered hereby, by surrender of this Warrant to the Corporation at its principal office, with the form of Election to Purchase attached hereto duly executed and accompanied by the Warrant Price for the shares so purchased in cash or by certified check or bank draft. The Election to Purchase shall state the name of the person or entity exercising the Warrant (with address and such further information as may be required by the Corporation) and the certificate or certificates for shares of Common Stock shall be issued in this name. Thereupon this Warrant shall be deemed to have been exercised and the person or entity exercising the Warrant shall be deemed to have become a holder of record of shares of Common Stock purchased hereunder for all purposes and thereafter the Holder may exercise all rights and be entitled to all benefits of a shareholder of record of the Corporation, and a certificate or certificates for such shares so purchased shall be delivered to the person or entity exercising the Warrant within a reasonable time after this Warrant shall have been exercised as set forth hereinabove. In the event that, prior to the exercise of this Warrant and issuance of the underlying shares, there shall be an increase or decrease in the number of issued shares of Common Stock of the Corporation as a result of a subdivision or consolidation of shares or other capital adjustment, or the payment of a stock dividend or other increase or decrease in such shares, effected without receipt of consideration by the Corporation, the remaining number of shares shall be adjusted so that the adjusted number of shares subject to this Warrant and the adjusted Warrant Price shall be the substantial equivalent of the remaining number of shares still subject to the Warrant and the Warrant Price thereof prior to such change.

3. This Warrant is exchangeable by the Holder, upon the surrender of the Warrant at the principal office of the Corporation, for new Warrants of like tenor and date representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder.

4. The Corporation covenants and agrees that all shares of Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof except for any taxes required in connection with the transfer thereof. The Corporation further covenants and agrees that, during the period within which the rights represented by this Warrant may be exercised, the Corporation will at all times have authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant.

5. The Holder of this Warrant, by acceptance hereof, agrees that such holder will not sell, hypothecate or otherwise transfer or dispose of this Warrant or the shares of Common Stock issuable on the exercise hereof without giving prior written notice to the Corporation of such holder’s intention to do so, describing briefly the manner of any such proposed transfer. Upon the request of the Corporation, the Holder shall be required to also deliver to the Corporation an opinion of to counsel for the Holder stating that the proposed transfer described in the notice given by the Holder may be effected without registration of this Warrant or the shares of Common Stock issuable on the exercise hereof under the Securities Act of 1933, as then in effect, or any similar federal statute (the “Securities Act”).

6. The restrictions in Section 5 hereof shall be binding upon any transferee who has received this Warrant or shares of Common Stock issuable on exercise hereof. A legend in substantially the following form shall be typed, printed or stamped on the face and back of all certificates issued on exercise of this Warrant and on the face and back of all certificates issued in substitution or exchange thereof:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IT HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

7. The issue of any stock or other certificate upon the exercise of this Warrant shall be made without charge to the registered holder hereof for any tax in respect of the issue of such certificate.

8. This Warrant and all rights hereunder are transferable on the books of the Corporation (subject, however, to the provisions of Sections 5 and 6 hereof), upon surrender of this Warrant, with the form of Transfer of Warrant attached hereto duly executed by the registered holder hereof or by his attorney duly authorized in writing, to the Corporation at its principal office, and thereupon there shall be issued in the name of the transferee or transferees, in exchange for this Warrant, a new Warrant or Warrants of like tenor and date, representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder.

9. The Corporation may deem and treat the registered holder of this Warrant as the absolute owner of this Warrant for all purposes and shall not be affected by any notice to the contrary.

10. This Warrant shall not entitle the Holder to any rights of a stockholder of the Corporation, either at law or in equity, including, without limitation, the right to vote, to receive dividends and other distributions, to exercise any preemptive rights or to receive any notice of meetings of stockholders or of any other proceedings of the Corporation.

11. The validity, construction, enforcement, and interpretation of this Warrant are governed by the laws of the State of Florida and the federal laws of the United States of America, excluding the laws of those jurisdictions pertaining to resolution of conflicts with laws of other jurisdictions. The Corporation and the Holder (a) consent to the personal jurisdiction of the state and federal courts having jurisdiction in Palm Beach County, Florida, (b) stipulate that the proper, exclusive, and convenient venue for any legal proceeding arising out of this Warrant is Palm Beach County, Florida, for state court proceedings, and the Southern District of Florida, for federal district court proceedings, and (c) waive any defense, whether asserted by a motion or pleading, that Palm Beach County, Florida, or the Southern District of Florida, is an improper or inconvenient venue.

(Remainder of page intentionally left blank; signature page follows)

Dated: June 4, 2009


STEEL VAULT CORPORATION
By:	/s/ William J. Caragol
	Name:	William J. Caragol
	Title:	CEO

TRANSFER OF WARRANT

For value received hereby sells, assigns and transfers unto the right to purchase shares of Common Stock, par value $ _____ per share, of , which rights are represented by the attached Warrant, and does hereby irrevocably constitute and appoint attorney to transfer said rights on the books of such Corporation.

Dated: , _____

In the Presence of

ELECTION TO PURCHASE

Date: , _____

TO:

The undersigned hereby subscribes for shares of the Common Stock of the Corporation covered by the attached Warrant and tenders payment herewith in the amount of $ in accordance with the terms hereof.


Issue Certificate(s) for said stock to				Deliver certificate(s) by mail _____ against counter receipt to


(Name)				(Name)


(Street and Number)				(Street and Number)


City State				City State


Social Security or Tax Identification Number				Social Security or Tax Identification Number

The undersigned registered holder of this Warrant hereby represents and warrants to and agrees with the Corporation that, if the shares of Common Stock which the undersigned hereby subscribes for have not been effectively registered under the Securities Act of 1933, or any similar Federal Statute in effect at the date of this Election to Purchase, the undersigned is purchasing said shares of Common Stock for his or its own account for investment, and not with a view to, or for sale in connection with, any distribution of such shares and without any present intention of distributing or selling such shares and that a legend to such extent may be placed on all certificates for shares of such Common Stock.


		Very truly yours,

		(Signature of Subscriber or Agent)

EX-99.5 4 c86902exv99w5.htm EXHIBIT 5 Exhibit 5

Exhibit 5

STEEL VAULT CORPORATION

CONVERTIBLE NOTE AND WARRANT SUBSCRIPTION AGREEMENT

This Convertible Note and Warrant Subscription Agreement (this “Agreement”), dated as of June 4, 2009 (the “Effective Date”), is made and entered into between Steel Vault Corporation, a Delaware corporation (the “Company”), and VeriChip Corporation, a Delaware corporation (the “Investor”).

This Agreement sets forth the terms under which the Investor will purchase from the Company (i) a Secured Convertible Promissory Note in the principal amount of five hundred thousand dollars ($500,000.00) in the form attached hereto as Appendix A (the “Note”), and (ii) a Warrant to purchase common stock, par value $0.01 per share, of the Company (the “Common Stock”), in the form attached hereto as Appendix B (the “Warrant,” and together with the Note hereafter collectively referred to as, the “Securities”), for a purchase price of five hundred thousand dollars ($500,000.00) (the “Purchase Price”) as set forth below.

The Securities are part of an offering of securities made by the Company to various investors, pursuant to which the Company will issue and sell to the investors and the investors will purchase, for a minimum of $500,000 and a maximum of $700,000 in the aggregate, Secured Convertible Promissory Notes (the “Offering Notes”) and Warrants to purchase Common Stock (the “Offering”).

NOTICE TO INVESTOR: THE SECURITIES PURCHASED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES MAY BE NOT OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTION THEREFROM. FURTHER RESTRICTIONS ON TRANSFERABILITY OF THE SECURITIES ARE CONTAINED IN THIS AGREEMENT.

1. Subscription. Subject to the terms of this Agreement, the Investor hereby subscribes for the Securities, and the Investor’s delivery of this Agreement will be accompanied by payment of the Purchase Price for the Securities subscribed for hereunder, payable in United States Dollars, as set forth in the instructions attached hereto as Exhibit A. This Agreement is not enforceable by the Investor unless it has been accepted by the Company, and the Investor acknowledges and agrees that the Company reserves the right to reject any subscription for any reason.

2. Representations and Warranties of Investor. The Investor is making the following representations, warranties and agreements with the intent that they be relied upon in determining the Investor’s suitability to purchase the Securities, and the Investor agrees that such representations, warranties and agreements shall survive the date of this Agreement and the Investor’s purchase of the Securities. The Investor hereby represents and warrants to, and agrees with, the Company, and each of its officers, directors, persons who control the Company and affiliates of the foregoing, as follows:

2.1 The Investor is (i) if a natural person, at least twenty-one (21) years of age, and (ii) a bona fide permanent resident of and is domiciled in the state shown in the address line of the Investor’s signature page to this Agreement, and has no present intention of becoming a resident of any other state or jurisdiction. The Investor is, and on each date on which the Investor continues to own restricted securities from the Offering will be, an “Accredited Investor” as defined in Rule 501(a) under the Securities Act. In general, an “Accredited Investor” is deemed to be an institution with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.

2.2 The Investor acknowledges careful review of this Agreement and all exhibits and appendices hereto and hereby represents that: (i) the Company has provided the Investor during the course of this transaction with all information regarding the Company that the Investor has requested and (ii) the Investor has been afforded access to and the opportunity to ask questions of and receive answers from duly authorized officers of the Company concerning the Company, the terms and conditions of the Offering of the Securities, and any additional information that the Investor has requested. The Investor acknowledges that it has access to the periodic reports, proxy statements and other information that the Company has filed, or will in the future file with the SEC until the termination of the Offering (the “SEC Filings”), without charge at the Public Reference Room of the SEC, 100 F Street, N.E., Washington, D.C. 20549 or on the Internet at http://www.sec.gov. The Investor acknowledges that it has read the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on December 24, 2008.

2.3 The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of an investment in the Securities and of making an informed investment decision, and is not utilizing any other person to be the Investor’s representative in connection with evaluating such merits and risks. The Investor’s overall commitment to investments that are not readily marketable is not disproportionate to the Investor’s net worth, and an investment in the Securities will not cause such overall commitment to become excessive.

2.4 The Investor is acquiring the Securities for the Investor’s own account, for investment purposes only, and not with a view toward the resale, resyndication, distribution, subdivision or fractionalization thereof, and has no present intention of selling or transferring or otherwise distributing the same. The Investor at the present time and in the foreseeable future (i) has no need for liquidity in this investment, (ii) has the ability to bear the economic risk of this investment, (iii) can afford a complete loss of this investment, (iv) can hold the Securities for an indefinite period of time, and (v) this investment constitutes an appropriate investment for and is not in violation of any investment restrictions (whether by statute, contract or otherwise) binding upon the Investor.

2.5 In making an investment in the Securities, the Investor acknowledges that no oral representations or warranties have been made to the Investor. In making the decision to invest in the Securities, the Investor has relied solely on the information in the SEC Filings. The Investor has been advised that no person is authorized to give any information or make any statement not contained in the SEC Filings, and that any information or statement not contained therein must not be relied upon as having been authorized by the Company, its officers, directors, affiliates or persons who control the Company.

2.6 The Investor is not relying on the Company or any of its employees, agents, or advisors with respect to the legal, tax, economic and related considerations of an investment in the Securities. The Investor has consulted such legal, financial and tax advisers as have been necessary to evaluate the merits and risks of this investment.

2.7 The Investor agrees that the Securities (including any interest therein) will not be sold or otherwise disposed of by the Investor unless either (i) the sale or other disposition will be pursuant to a registration statement under the 1933 Act, and any applicable securities laws of any state or other jurisdiction or (ii) the Investor shall have notified the Company in writing of any desire on the part of the Investor to sell or dispose of all or part of the such Securities and of the manner and terms of the proposed transaction, and the Company shall have been advised in writing by counsel acceptable to it that no registration of such Securities under the 1933 Act, or the rules and regulations then in effect thereunder, or any applicable state securities laws, is required in connection with the proposed sale or other disposition. Except as provided in Section 5 hereof, the Investor acknowledges that the Company is under no obligation whatsoever in connection with any such registration or exemption.

2.8 The Investor understands and agrees that all certificates evidencing ownership of the Securities, or any replacement thereof, shall bear an appropriate legend to the effect that the securities evidenced by such certificate or instruments have not been registered under the 1933 Act and setting forth or referring to the restrictions on transferability and sale of the securities.

2.9 All information provided by the Investor to the Company is true and correct in all respects as of the date hereof, and if there should be any material change in such information either prior to the Company accepting the Investor’s subscription or thereafter, the Investor will immediately furnish such revised or corrected information to the Company.

2.10 The Investor understands that no federal or state agency has passed on or made any recommendation or endorsement of the Securities and that the Company is relying on the truth and accuracy of the representations warranties and agreements made by the Investor in Offering the Securities for sale to the Investor without having first registered the same under the 1933 Act.

2.11 The Investor acknowledges that there have been no representations, guarantees or warranties made to the Investor by the Company, its officers, directors, controlling persons, agents or employees or any other person, expressly or by implication, with respect to the amount of or type of consideration, profit or loss (including tax benefits) to be realized, if any, as a result of the Investor’s investment.

2.12 The Investor is unaware of, is in no way relying on, and did not become aware of the Offering of the Securities through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic mail over the Internet, and is not subscribing for Securities and did not become aware of the Offering of the Securities through or as a result of any seminar or meeting to which the Investor was invited by, or any solicitation of a subscription by, a person not previously known to the Investor in connection with investments in securities generally.

2.13 The Investor acknowledges that the purchase of the Securities involves a high degree of risk in that (i) the Company may need additional capital but has no assurance of additional necessary capital, (ii) an investment in the Company is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Company and the Securities, (iii) an investor may not be able to liquidate its investment, (iv) transferability of the Securities is extremely limited, (v) an investor could sustain the loss of its entire investment, and (vi) the Company is and will be subject to numerous other risks and uncertainties, including without limitation, significant and material risks relating to the business and operations of the Company, and the industries and markets in which the Company competes, all as more fully set forth in the SEC Filings.

2.14 The Investor agrees that:

(i) the subscription hereunder is irrevocable, and that this Agreement and any agreements of the Investor hereunder shall survive the death or disability of the Investor and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns. If the Investor is more than one person, the obligations of the Investor hereunder shall be joint and several and the agreements, representations, warranties and acknowledgments herein contained shall be deemed to be made by and be binding upon each such Investor and the Investor’s heirs, executors, administrators, successors, legal representatives and assigns;

(ii) this subscription may be accepted or rejected, in whole or in part, by the Company, without giving any reason therefore; and

(iii) in the event the Offering of Securities is oversubscribed, the Company may, in its sole discretion, reject certain subscriptions or allocate Securities among subscribers, or a combination thereof based upon the number shares owned by such subscriber in relation to the total number of shares owned by all subscribers whose subscriptions have been accepted by the Company (as determined prior to the purchase of any Securities).

2.15 If the Investor is a partnership, corporation, trust or other entity, such partnership, corporation, trust or other entity further represents and warrants that: (i) it was not formed for the purpose of investing in the Company, (ii) it is authorized and otherwise duly qualified to purchase and hold the Securities, (iii) this Agreement has been duly and validly authorized, executed and delivered and constitutes the legal, binding and enforceable obligation of the undersigned, and (iv) the execution and delivery of this Agreement will not result in any violation of, or be in conflict with, or constitute default under, the organizational documents of such entity, any agreement or instrument to which such entity is a party or by which such entity or its respective properties are bound, or any judgment, decree, order or, to its knowledge, any statute, rule or regulation applicable to such entity.

2.16 If the Investor is not a United States person, the Investor hereby represents and warrants that it or he has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities. The Investor’s subscription and payment for, and its or his continued beneficial ownership of the Securities, will not violate any applicable securities or other laws of the Investor’s jurisdiction.

3. Indemnification. The Investor agrees to indemnify and hold harmless the Company and its directors and officers, their affiliates or anyone acting on behalf of the Company from and against any and all damages, losses, costs and expenses (including reasonable attorneys’ fees) that they may incur by reason of the failure of Investor to fulfill any of the terms or conditions of this Agreement, or by reason of any breach of the representations and warranties made by the Investor herein, or in any document provided by the Investor to the Company.

4. Transferability. The Investor agrees that the Investor shall not transfer or assign this Agreement or any interest herein, and any such transfer or assignment purported to be made shall be null and void and of no effect.

5. Registration Rights.

5.1 The Company agrees to file a registration statement (the “Registration Statement”) covering the public resale of all the shares of Common Stock issuable (i) pursuant to conversion of the Note (the “Conversion Shares”) and (ii) pursuant to exercise of the Warrant (together with the Conversion Shares, the “Registrable Shares”) not later than the ninetieth (90) day following the day the Company has received written notice that the holder or holders of 50% or more of the Common Stock issuable pursuant to the conversion of the Offering Notes elect to convert all or part of the Offering Notes issued to such investors in the Offering, and the Company agrees to use commercially reasonable efforts to cause the Registration Statement to be declared effective by the United States Securities and Exchange Commission (the “SEC”) as soon as practicable thereafter. The Company will use commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act of 1933, as amended (the “1933 Act”), (x) for an Investor who is not an affiliate, as defined in Rule 144 promulgated by the SEC pursuant to the 1933 Act (an “Affiliate”), of the Company, until the date that is one year after the date that the Registration Statement is declared effective by the SEC or such earlier date when all Registrable Shares may be sold pursuant to an exemption from registration pursuant to Rule 144 promulgated by the SEC pursuant to the 1933 Act, and (y) for an Investor who is an Affiliate of the Company, until the date that the Investor has ceased to be an Affiliate of the Company for three months and can sell all Registrable Shares pursuant to Rule 144(b)(1) promulgated by the SEC pursuant to the 1933 Act.

5.2 The Investor agrees to:

(i) timely furnish to the Company in writing such information regarding itself and the intended method of disposition of the Registrable Shares as the Company shall reasonably request in order to effect the registration thereof or to comply with applicable law;

(ii) to the extent required by applicable law, deliver a preliminary and definitive prospectus to the purchaser of the Registrable Shares sold under any Registration Statement;

(iii) notify the Company when it has sold all of the Registrable Shares held by it;

(iv) notify the Company promptly in the event that any information supplied by the Investor in writing for inclusion in such Registration Statement or related prospectus is untrue or omits to state a material fact required to be stated therein or necessary to make such information not misleading in light of the circumstances then existing; immediately discontinue any sale or other disposition of the Registrable Shares pursuant to such Registration Statement until the filing of an amendment or supplement to such prospectus as may be necessary so that such prospectus does not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and provide the Company with updates on such information as may be appropriate to make such amendment or supplement effective for such purpose;

(v) otherwise use commercially reasonable efforts to assist the Company and the underwriters, if any, in the preparation of documentation reasonably necessary or desirable to effectuate the resale of the Registrable Shares pursuant to any Registration Statement filed in accordance herewith;

(vi) upon receipt of a notice from the Company of the occurrence of a Discontinuation Event (as defined below), the Investor will and the Investor agrees to discontinue forthwith any disposition of such Registrable Shares under the applicable Registration Statement until the Investor’s receipt of the copies of the supplemented prospectus and/or amended Registration Statement or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

(vii) For purposes of this Agreement, a “Discontinuation Event” shall mean (a) when the SEC notifies the Company whether there will be a “review” of such Registration Statement and whenever the SEC comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to the Investor); (b) any request by the SEC or any other Federal or state governmental authority for amendments or supplements to such Registration Statement or prospectus or for additional information; (c) the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Shares or the initiation of any proceedings for that purpose; (d) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Shares for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and/or (e) the occurrence of any event or passage of time that makes the financial statements included in such Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, prospectus or other documents so that, in the case of such Registration Statement or prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

6. General Provisions.

6.1 Other than the Mutual Non-Disclosure Agreement entered into between the Company and the Investor, this Agreement and the exhibits and appendices attached hereto constitute the entire agreement between the parties and supersede and cancel any other agreements, or representations or communications, whether oral or written, between the parties relating to the transactions contemplated herein or the subject matter hereof.

6.2 This Agreement may be executed in more than one counterpart which shall, in the aggregate, be deemed to be the original instrument and agreement between the parties, and copies signed and transmitted electronically in a form readable by the recipient or by facsimile are as binding as if the original was signed in person.

6.3 Any and all notices or other communications required or permitted by this Agreement or by law to be served on or given to any party hereto by any other party hereto shall be, unless otherwise required by law, in writing and deemed duly served and given when actually received either when delivered by facsimile or when delivered by hand, by recognized express delivery services or via the United States mail, certified or registered, return, receipt requested, postage prepaid, addressed to the Company at its principal offices at 1690 South Congress Avenue, Suite 200, Delray Beach, Florida 33445, and to the Investor at its address as set forth on the signature page to this Agreement or otherwise transmitted to the Company from time to time.

6.4 No term hereof may be changed, waived, discharged or terminate orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

6.5 The headings in this Agreement are for the purposes and convenience of reference only and shall not be deemed to constitute a part hereof.

6.6 The validity, construction, enforcement, and interpretation of this Agreement are governed by the laws of the State of Florida and the federal laws of the United States of America, excluding the laws of those jurisdictions pertaining to resolution of conflicts with laws of other jurisdictions. The Company and Investor (a) consent to the personal jurisdiction of the state and federal courts having jurisdiction in Palm Beach County, Florida, (b) stipulate that the proper, exclusive, and convenient venue for any legal proceeding arising out of this Agreement is Palm Beach County, Florida, for state court proceedings, and the Southern District of Florida, for federal district court proceedings, and (c) waive any defense, whether asserted by a motion or pleading, that Palm Beach County, Florida, or the Southern District of Florida, is an improper or inconvenient venue.

6.7 The benefits of this Agreement shall inure, and the obligations of this Agreement shall be binding upon, the personal representatives, heirs, legatees, permitted successors and assigns of the parties hereto.

6.8 The Investor agrees that the Investor may not cancel, terminate, or revoke this Agreement or any agreement of the Investor made hereunder.

6.9 Except as otherwise provided in this Agreement, each party to this Agreement shall pay any and all fees and expenses that such party may incur in connection with the negotiation, execution and closing of the transactions contemplated by this Agreement.

(Signatures start on next page)

STEEL VAULT CORPORATION
CONVERTIBLE NOTE AND WARRANT SUBSCRIPTION AGREEMENT
SIGNATURE PAGE

IN WITNESS WHEREOF, the Investor has executed this Agreement on the date indicated below.


VERICHIP CORPORATION

By:	/s/ Scott R. Silverman

	Name:	Scott R. Silverman
	Title:	Chairman

Date Signed: June 4, 2009

1690 South Congress Avenue, Suite 200

Address

Delray Beach, Florida 33445

City		State Zip

(561) 805-8008

Business Telephone

(561) 805-8001

Business Fax

06-1637809

Employer Identification Number


*		If the Investor is a corporation, partnership, trust or other entity, or is otherwise acting as a fiduciary, the name and capacity (title) of the individual executing this Agreement on the Investor’s behalf should be printed or typed below the signature.

PLEASE SUPPLY THE FOLLOWING INFORMATION:

Manner in which title is to be held; (Check one)


	Individual Ownership		Partnership*


	Individual Retirement Account		Trust *


	Qualified Retirement Plan	X	Corporation*

	Other:		Limited Liability Company*



(Please indicate)


*		In the case of a partnership, state names of all partners and attach a copy of the partnership agreement. In the case of a corporation, attach a copy of the articles of incorporation together with the resolution of the board of directors authorizing this investment. In the case of a limited liability company, attach a copy of the articles of organization and operating agreement and a copy of any required member or manager resolutions authorizing this investment. In the case of a trust, attach a copy of the trust agreement.

ACCEPTANCE

Steel Vault Corporation hereby accepts and agrees to be bound by the foregoing subscription subject to the terms and conditions hereof as of the date indicated below.


STEEL VAULT CORPORATION
By:	/s/ William J. Caragol
	Name:	William J. Caragol
	Title:	CEO
	Date Signed: June 4, 2009

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