Exhibit 99.1
AMENDMENT NO. 7 TO LOAN AGREEMENT
AGREEMENT (this "Agreement"), made as of the 1st day of June, 2010, by and
between COMVEST CAPITAL LLC, a Delaware limited liability company (the
"Lender"), and ALANCO TECHNOLOGIES, INC., an Arizona corporation (the
"Borrower");
W I T N E S S E T H:
WHEREAS, the Lender and the Borrower are parties to a Loan Agreement dated
as of September 28, 2006 (as heretofore amended by Amendment No. 1 dated as of
May 4, 2007 ("Amendment No. 1"), Amendment No. 2 dated as of July 20, 2007
("Amendment No. 2"), Amendment No. 3 dated as of December 27, 2007 ("Amendment
No. 3"), Amendment No. 4 dated February 5, 2008 ("Amendment No. 4"), Amendment
No. 5 dated as of August 21, 2008 ("Amendment No. 5"), and Amendment No. 6 dated
as of December 30, 2009 ("Amendment No. 6"), the "Loan Agreement"), the terms
and conditions of which are hereby incorporated herein by reference); and
WHEREAS, the Borrower has requested an extension of the maturity of the
existing Note; and
WHEREAS, the Lender is willing to make such modification on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree, subject to and effective on and as
of the date of the Equity Closing, as follows:
1. Definitions.
(a) Except as otherwise defined herein, all capitalized terms used in this
Agreement have the respective meanings ascribed to them in the Loan Agreement.
(b) The definitions of "Maturity Date" and "Note" contained in the Loan
Agreement are hereby amended so as to read in full as follows:
"Maturity Date" shall mean December 1, 2010.
"Note" shall mean the Third Amended and Restated Convertible Term Note of
the Borrower in the principal amount of $500,000 issued to the Lender pursuant
to Amendment No. 7.
(c) The following new definition is hereby added to Section 1.01 of the
Loan Agreement in the appropriate alphabetical location:
"Amendment No. 7" shall mean the Amendment No. 7 to Loan Agreement dated as
of June 1, 2010 by and between the Lender and the Borrower.
2. Partial Payment and Amendment and Restatement of Note.
(a) The Lender and the Borrower hereby confirm that, on the date of this
Agreement, the outstanding principal balance of the existing Note is $502,180.
Simultaneously with the execution and delivery of this Agreement, the Borrower
is repaying $2,180 of such principal, leaving a remaining principal balance of
$500,000.
(b) Simultaneously with the payment described in Section 2(a) above, the
Borrower shall issue to the Lender the Third Amended and Restated Convertible
Term Note (including the reduced "Conversion Price" thereunder) in substantially
the form annexed hereto.
(c) Consistent with the terms of the new Note, the last sentence of Section
2.02 of the Loan Agreement (prohibiting voluntary prepayments under the Note
without the Lender's prior written consent) is hereby deleted in its entirety.
3. Amendment of Warrant . Simultaneously with the payment described in
Section 2(a) above and the issuance of the new Note pursuant to Section 2(b)
above, the Borrower shall execute and deliver to the Lender an amended and
restated Warrant (to replace the existing Warrant) in substantially the form
annexed hereto, providing for the continuation of the remaining unexercised
portion of the existing Warrant at the reduced exercise price set forth in the
new Warrant. Such new Warrant shall henceforth be the "Warrant" under and
pursuant to the Loan Agreement.
4. Amendment Fee. In consideration of the amendments hereunder, the
Borrower is, simultaneously with the execution and delivery of this Agreement,
paying to the Lender an amendment fee in the amount of $6,000.
5. No Novation. The Borrower hereby acknowledges, confirms and agrees that
none of the amendments effected by this Agreement constitutes or shall
constitute a novation of any of the Obligations.
6. Ongoing Force and Effect. Except as and to the extent expressly provided
in this Agreement, all covenants, terms and conditions of the Loan Documents
shall remain unchanged and in full force and effect. From and after the
effectiveness of this Agreement, all references to the Loan Agreement contained
in the Loan Documents shall mean and refer to the Loan Agreement as amended by
this Agreement, and all references to the Note contained in the Loan Documents
shall mean and refer to the Third Amended and Restated Convertible Term Note
described in Section 2(b) above.
7. Expenses. The Borrower shall pay or reimburse the Lender on demand for
all out-of-pocket costs, charges and expenses of the Lender (including
reasonable attorneys' fees) in connection with the preparation, execution and
delivery of this Agreement, the new Note, and the new Warrant.
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8. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except by means of a written agreement signed by the party to be
charged therewith, and then only in the specific instance and for the specific
purpose stated therein.
(c) This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower shall have no right to assign any of its rights or obligations
hereunder or any interest herein without the prior written consent of the
Lender.
(d) The paragraph headings in this Agreement are included for convenience
of reference only, and shall not affect the construction or interpretation of
any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first set forth above.
COMVEST CAPITAL LLC
By: _________________________________
Name: Xxxx Xxxxxxx
Title: Managing Director
ALANCO TECHNOLOGIES, INC.
By: _________________________________
Name:
Title:
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