EXHIBIT 99.1
STOCK AND WARRANT PURCHASE AGREEMENT
THIS STOCK AND WARRANT PURCHASE AGREEMENT is made as of the 26th day of
April, 2006 by and between Alanco Technologies, Inc., an Arizona corporation
(the "Company"), and Xxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxxx, Trustees of the
Xxxxxxxx Family Trust, UTA dated December 20, 1993 (hereinafter referred to as
the "Purchaser") for shares of Class A Common Stock and Warrants of the Company.
RECITALS
The Company desires to sell, and the Purchaser desires to purchase
820,000 shares of the Company's authorized but unissued Class A Common Stock
("Common Stock") and a Warrant to purchase up to 820,000 shares of the Company's
Common Stock, all in accordance with the terms and provisions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. Purchase and Sale of Common Stock. Subject to the terms and
conditions of this Agreement, Purchaser agrees to purchase from the Company, and
the Company agrees to sell and issue to Purchaser 820,000 shares of Common Stock
upon the date hereof.
2. Purchase and Sale of Warrant. Subject to the terms and conditions of
this Agreement, Purchaser agrees to purchase from the Company, and the Company
agrees to sell and issue to Purchaser a Warrant to purchase up to 820,000 shares
of the Company's Common Stock upon the date hereof. The Warrant shall be in the
form of Exhibit "A" attached hereto (hereinafter referred to as the "Warrant").
3. Piggy-Back Registration Rights. The Company covenants and agrees
that in the event the Company proposes to file a registration statement under
the Act with respect to the Company's Common Stock (other than in connection
with an exchange offer or a registration statement on Form S-4 or S-8 or other
similar registration statements not available to register te Purchaser's
securities), the Company shall include in such registration statement the shares
of the Company's Common Stock purchased hereunder as well as the shares of the
Company's Common Stock issuable upon exercise of the Warrant (collectively, the
"Piggy-Back Securities"). All additional expenses of registering the Piggy-Back
Securities shall be borne by the Company, excluding underwriting commissions, if
any.
4. Purchase Price. The purchase price to be paid by Purchaser to the
Company for the Common Stock and the Warrant shall be the sum of Five Hundred
Thousand Two Hundred and No/100ths Dollars ($500,200.00) (the "Purchase Price"),
which sum shall be paid in immediately available funds upon the date hereof.
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5. Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser as follows
5.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Arizona and has all
requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on its business or
properties.
5.2 Capitalization. All issued and outstanding shares of
capital stock of Alanco have been validly authorized and issued and are fully
paid and nonassessable. At Closing, the authorized capital of Alanco will
consist solely of (i) seventy-five million (75,000,000) shares of Class A Common
Stock, of which, as of March31, 2006, 30,395,200 shares were validly issued and
outstanding, fully paid and nonassessable, (ii) twenty-five million (25,000,000)
shares of Class B Common Stock, which has 1/100th of one vote per share, of
which none are presently issued and outstanding, and (iii) twenty-five million
(25,000,000) shares of Preferred Stock, which is issuable in Series as
established by Alanco's Board of Directors. Alanco's Board of Directors has
established two such Series of Preferred Stock, namely the Series A Convertible
Preferred Stock and the Series B Convertible Preferred Stock. Alanco's public
reports filed with the SEC contain a full description of the relative rights,
privileges and restrictions with respect to such series. As of Marche 31, 2006,
3,122,900 shares of Series A Convertible Preferred Stock and 73,200 shares of
Series B Convertible Preferred Stock were validly issued and outstanding, fully
paid and nonassessable.
5.3 Subsidiaries. All subsidiaries of the Company are duly
organized, validly existing, and in good standing under the laws of the state of
their incorporation. The subsidiaries have all the requisite corporate power,
authority, licenses and permits that are necessary to own, operate and lease its
properties, and to carry on its business as now being conducted.
5.4 Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder and the authorization, issuance and
delivery of the Common Stock and Warrant has been taken taken, and this
Agreement constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms.
5.5 Valid Issuance of Securities. The Common Stock being
issued to the Purchaser hereunder, when issued, sold and delivered in accordance
with the terms hereof for the consideration expressed herein, will be duly and
validly issued, fully paid and non-assessable. Based in part upon the
representations of the Purchaser in this Agreement, the Common Stock will be
issued in compliance with all applicable federal and state securities laws. The
Common Stock issuable upon exercise of the Warrant has been duly and validly
reserved for issuance and upon issuance in accordance with the terms of the
Company's Articles of Incorporation, as amended, shall be duly and validly
issued, fully paid and non-assessable and will be issued in compliance with all
applicable federal and state securities laws.
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5.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement. Based in part upon the representations of the
Purchaser in this Agreement the sale and issuance of the Common Stock and
Warrant in conformity with the terms of this Agreement are exempt from the
registration requirements of the Securities Act of 1933 (the "Act"), as amended,
and as in effect on the date hereof.
6. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company that:
6.1 Authorization. This Agreement constitutes the
Purchaser's valid and legally binding obligation, enforceable in accordance
with its terms.
6.2 Purchase Entirely for Own Account. This Agreement is made
with Purchaser in reliance upon such Purchaser's representation to the Company,
which by such Purchaser's execution of this Agreement such Purchaser hereby
confirms, that the Common Stock and Warrant will be acquired for investment for
such Purchaser's own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, except as described herein, and
that Purchaser has no present intention of selling, granting any participation
in, or otherwise distributing the same. By executing this Agreement, Purchaser
further represents that, except as set forth herein, Purchaser does not
presently have any contract, undertaking, Agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Common Stock or Warrant. Purchaser represents
that he has full power and authority to enter into this Agreement.
6.3 Disclosure of Information. Purchaser believes that he has
received all the information he considers necessary or appropriate for deciding
whether to acquire the Common Stock and Warrant. Purchaser further represents
that he has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of the Common Stock
and Warrant. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 of this Agreement or
the right of Purchaser to rely thereon.
6.4 Restricted Securities. Purchaser understands that the
shares of Common Stock and Warrant are characterized as "restricted securities"
under the federal securities laws in as much as they are being acquired from the
Company in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without
registration under the Securities Act of 1933, as amended (the "Act"), only in
certain limited circumstances.
6.5 Legends. It is understood that the Common Stock, Warrant
and the shares of Common Stock issuable upon exercise of the Warrant may bear
the following legends until or unless the same are registered.
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"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER
SUCH ACT AND QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
AND QUALIFICATION IS NOT REQUIRED."
6.6 Accredited Purchaser Status. Purchaser is an
"Accredited Purchaser" within the meaning of Rule 501(a) of Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act
of 1933 (the "Act").
7. Miscellaneous.
7.1 Survival of Warranties. The warranties, representations
and covenants of the Company and the Purchaser contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Purchaser or the Company.
7.2 Transfer; Successors and Assigns. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties. This Agreement shall
not be assigned by either party without the prior written consent of the other
party. Nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
7.3 Governing Law. This Agreement shall be governed by
and construed under the laws of the State of Arizona.
7.4 Notice. All notices required or permitted hereunder
shall be in writing and shall be served on the parties at the following
addresses:
If to the Purchaser: c/o Xxxxxx X. Xxxxxxxx
00000 X. Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
If to the Company: Alanco Technologies, Inc.
00000 X. 00xx Xxx, Xxxxx 0
Xxxxxxxxxx, Xxxxxxx 00000
Attn: President
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Any such notices shall be either (a) sent by certified mail, return receipt
requested, in such case notice shall be deemed delivered three (3) business days
after deposit, postage prepaid in the U.S. mail, or (b) sent by personal
delivery or by a nationally recognized overnight courier, in which case it shall
be deemed delivered upon receipt if personally delivered or one (1) business day
after deposit with an overnight courier. The above addresses may be changed by
written notice to the other party; provided, however, that no notice of a change
of address shall be effective until actual receipt of such notice.
7.5 Counterparts. This Agreement may be executed in two or
more counterparts of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.6 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not be considered in
construing or interpreting this Agreement.
7.7 Finder's Fees. Each party represents that it neither is
nor will be obligated for any finder's fee or commission in connection with this
transaction except that which such party is exclusively obligated to pay.
7.8 Amendments and Waivers. Any term of this Agreement may be
amended and compliance with or performance of any term of this Agreement may be
waived with the written consent of the parties hereto.
7.9 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.10 Entire Agreement. This Agreement constitutes the entire
Agreement between the parties hereto pertaining to the subject matter hereof,
and any and all other written or oral agreements existing between the parties
hereto are expressly canceled.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first indicated above.
The Purchaser:
/s/Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
/s/Xxxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX
Co-Trustees of the Xxxxxxxx Family Trust
UTA dated December 20, 1993
The Company:
ALANCO TECHNOLOGIES, INC.
an Arizona corporation
By: /s/Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, President
