THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE OR JURISDICTION
AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE
COMPANY RECEIVES AN OPINION, IN REASONABLY ACCEPTABLE FORM AND SCOPE, OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY, THAT REGISTRATION, QUALIFICATION OR
OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER ANY SUCH LAWS.
ALANCO TECHNOLOGIES, INC.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
(Expires September 30, 2011)
675,000 Shares of Common Stock
FOR VALUE RECEIVED, subject to the provisions set forth below, the
undersigned, Alanco Technologies, Inc., an Arizona corporation (the "Company"),
hereby certifies that ComVest Capital LLC, a Delaware limited liability company
or its registered assigns (the "Holder"), is entitled to purchase from the
Company up to six hundred seventy-five thousand (675,000) fully paid and
nonassessable shares (the "Warrant Shares") of Class A common stock of the
Company (the "Common Shares"), at a price of $0.72 per share (the "Exercise
Price") at any time and from time to time from and after the date hereof and
until 5:00 p.m. (Eastern time) on September 30, 2011 (the "Expiration Date")
upon surrender to the Company at its principal office (or at such other location
as the Company may advise the Holder in writing) of this Warrant properly
endorsed with the Notice of Exercise attached hereto duly filled in and signed
and, if applicable, upon payment in cash or by check of the aggregate Exercise
Price for the number of shares for which this Warrant is being exercised
determined in accordance with the provisions hereof. The Exercise Price and the
number of shares purchasable hereunder are subject to adjustment as provided in
Section 3 of this Warrant.
1. Exercise of Warrant.
1.1. Exercise. This Warrant shall be exercisable at any time
and from time to time from and after the date hereof until the Expiration Date,
and this Warrant shall expire on the Expiration Date. Upon exercise of this
Warrant, the Exercise Price shall be payable in cash or by check. This Warrant
may be exercised in whole or in part so long as any exercise in part hereof
would not involve the issuance of fractional Warrant Shares. If exercised in
part, the Company shall deliver to the Holder a new Warrant, identical in form
to this Warrant, in the name of the Holder, evidencing the right to purchase the
number of Warrant Shares as to which this Warrant has not been exercised, which
new Warrant shall be signed by an appropriate officer of the Company. The term
"Warrant" as used herein shall include any subsequent Warrant issued as provided
herein.
1.2. Exercise Procedures; Delivery of Certificate. Upon
surrender of this Warrant with a duly executed Notice of Exercise in the form of
Annex A attached hereto, together with payment of the Exercise Price for the
1
Warrant Shares purchased, at the Company's principal executive offices (the
"Designated Office"), the Holder shall be entitled to receive a certificate or
certificates for the Warrant Shares so purchased. The Company agrees that the
Warrant Shares shall be deemed to have been issued to the Holder as of the close
of business on the date on which this Warrant shall have been surrendered
together with the Notice of Exercise and payment for such Warrant Shares.
1.3. Cashless Exercise. In lieu of payment of the Exercise
Price, a Holder may exercise this Warrant, in whole or in part, by presentation
and surrender of this Warrant to the Company, together with a Cashless Exercise
Form in the form attached hereto as Annex B (or a reasonable facsimile thereof)
duly executed (a "Cashless Exercise"). Acceptance by the Company of such
presentation and surrender shall be deemed a waiver of the Holder's obligation
to pay all or any portion of the Exercise Price, as the case may be. In the
event of a Cashless Exercise, the Holder shall exchange this Warrant for that
number of Common Shares determined by multiplying the number of Common Shares
for which this Warrant is being exercised by a fraction, (a) the numerator of
which shall be the difference between (i) the then current market price per
Common Share, and (ii) the Exercise Price, and (b) the denominator of which
shall be the then current market price per share of the Company's common stock.
For purposes of any computation under this Section l.3, the then current market
price per share of the Company's common stock at any date shall be deemed to be
the average of the daily trading price per share of the Company's common stock
for the ten (10) consecutive trading days immediately prior to the Cashless
Exercise. If, during such measuring period, there shall occur any event which
gives rise to any adjustment of the Exercise Price, then a corresponding
adjustment shall be made with respect to the closing prices of the Common Shares
for the days prior to the Effective Date of such adjustment event. As used
herein, the term "trading price" on any relevant date means (A) if the Company's
common stock is listed for trading on the New York Stock Exchange, the American
Stock Exchange, the NASDAQ National Market, or the NASDAQ Capital Market, the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of the common stock (regular way), or (B) if the common stock is not
so listed but quotations for the common stock are reported on the OTC Bulletin
Board, the average of the closing high bid and asked prices as reported on the
OTC Bulletin Board.
2. Transfer; Issuance of Stock Certificates; Restrictive Legends.
2.1. Transfer. Each transfer of this Warrant and all rights
hereunder, in whole or in part, shall be registered on the books of the Company
to be maintained for such purpose, upon surrender of this Warrant at the
Designated Office, together with a written assignment of this Warrant in the
form of Annex C attached hereto duly executed by the Holder or its agent or
attorney. Upon such surrender and delivery, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, if any. A Warrant may be exercised by the new Holder for the purchase
of Warrant Shares without having a new Warrant issued. Prior to due presentment
for registration of transfer thereof, the Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof (notwithstanding
any notations of ownership or writing thereon made by anyone other than a duly
2
authorized officer of the Company) for all purposes and shall not be affected by
any notice to the contrary. All Warrants issued upon any assignment of Warrants
shall be the valid obligations of the Company, evidencing the same rights and
entitled to the same benefits as the Warrants surrendered upon such registration
of transfer or exchange.
2.2. Stock Certificates. Certificates for the Warrant Shares
shall be delivered to the Holder within three (3) business days after the rights
represented by this Warrant shall have been exercised pursuant to Section 1, and
a new Warrant representing the right to purchase the Common Shares, if any, with
respect to which this Warrant shall not then have been exercised shall also be
issued to the Holder within such time. The issuance of certificates for Warrant
Shares upon the exercise of this Warrant shall be made without charge to the
Holder hereof including, without limitation, any documentary, stamp or similar
tax that may be payable in respect thereof; provided, however, that the Company
shall not be required to pay any income tax to which the Holder hereof may be
subject in connection with the issuance of this Warrant or the Warrant Shares.
2.3. Restrictive Legend. Except as otherwise provided in this
Section 2, each certificate for Warrant Shares initially issued upon the
exercise of this Warrant and each certificate for Warrant Shares issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. 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 OR AN OPINION IN FORM AND FROM
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED."
Notwithstanding the foregoing, the legend requirements of this Section 2.3 shall
terminate as to any particular Warrant Shares when (i) such Warrant Shares are
transferred pursuant to an effective resale registration statement, as
contemplated in the Registration Rights Agreement between the Company and the
Holder of even date herewith, or (ii) the Company shall have received from the
Holder thereof an opinion of counsel in form and substance reasonably acceptable
to the Company that such legend is not required in order to ensure compliance
with the Securities Act. Whenever the restrictions imposed by this Section 2.3
shall terminate, the Holder or subsequent transferee, as the case may be, shall
be entitled to receive from the Company without cost to such Holder or
transferee a certificate for the Warrant Shares without such restrictive legend.
3. Adjustment of Number of Shares; Exercise Price; Nature of Securities
Issuable Upon Exercise of Warrants.
3.1. Exercise Price; Adjustment of Number of Shares. The
Exercise Price and the number of shares purchasable hereunder shall be subject
to adjustment from time to time as hereinafter provided; provided, however,
that, notwithstanding the below, in no case shall the Exercise Price be reduced
to below the par value (if any) per share of the class of stock for which this
Warrant is exercisable at such time.
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3.2. Adjustments Upon Distribution, Subdivision or
Combination. If the Company, at any time or from time to time after the issuance
of this Warrant, shall (a) make a dividend or distribution on its common stock
payable in shares of its common stock, (b) subdivide or reclassify its
outstanding common stock into a greater number of shares, or (c) combine or
reclassify its outstanding common stock into a smaller number of shares, the
Exercise Price in effect at that time and the number of Warrant Shares into
which the Warrant is exercisable at that time shall be proportionately adjusted
effective as of the record date for the dividend or distribution or the
effective date of the subdivision, combination or reclassification.
3.3. Adjustment Upon Other Distributions. If the Company, at
any time or from time to time after the issuance of this Warrant, makes a
distribution to the holders of its common stock which is payable in securities
of the Company other than common stock, then, in each such event, provision
shall be made so that the Holder shall receive upon exercise of this Warrant, in
addition to the number of Warrant Shares, the amount of such securities of the
Company which would have been received if the portion of the Warrant so
exercised had been exercised for Warrant Shares on the date of such event,
subject to adjustments subsequent to the date of such event with respect to such
distributed securities which shall be on terms as nearly equivalent as
practicable to the adjustments provided in this Section 3 and all other
adjustments under this Section 3, provided that, in the event of any Cashless
Exercise, the additional securities issuable by reason of this Section 3.3 shall
only be with respect to the Common Shares actually issued, and not with respect
to the Common Shares surrendered by reason of such Cashless Exercise.
3.4. Adjustment Upon Merger, Consolidation or Exchange. If at
any time or from time to time after the issuance of this Warrant there is any
merger, consolidation, arrangement or statutory share exchange of the Company
with or into any other person or company, then, in each such event, provision
shall be made so that the Holder shall receive upon exercise of this Warrant the
kind and amount of shares and other securities and property (including cash)
which would have been received upon such merger, consolidation, arrangement or
statutory share exchange by the Holder if the portion of this Warrant so
exercised had been exercised for Warrant Shares immediately prior to such
merger, consolidation, arrangement or statutory share exchange, subject to
adjustments for events subsequent to the effective date of such merger,
consolidation, arrangement or statutory share exchange with respect to such
shares and other securities which shall be on terms as nearly equivalent as
practicable to the adjustments provided in this Section 3 and all other
adjustments under this Section 3, and subject to appropriate adjustment (in a
manner consistent with Section 1.3 above) in the event of any Cashless Exercise.
3.5. Adjustments for Recapitalization or Reclassification. If,
at any time or from time to time after the issuance of this Warrant, the Warrant
Shares issuable upon exercise of this Warrant are changed into the same or a
different number of securities of any class of the Company, whether by
recapitalization, reclassification or otherwise (other than a merger,
consolidation, arrangement or statutory share exchange provided for elsewhere in
this Section 3), then, in each such event, provision shall be made so that the
Holder shall receive upon exercise of this Warrant the kind and amount of
securities or other property which would have been received in connection with
such recapitalization, reclassification or other change by the Holder if the
portion of this Warrant so exercised had been exercised immediately prior to
such recapitalization, reclassification or change, subject to adjustments for
4
events subsequent to the effective date of such recapitalization,
reclassification or other change with respect to such securities which shall be
on terms as nearly equivalent as practicable to the adjustments provided in this
Section 3 and all other adjustments under this Section 3, and subject to
appropriate adjustment (in a manner consistent with Section 1.3 above) in the
event of any Cashless Exercise.
3.6. Extraordinary Dividends or Distributions. If, at any time
or from time to time after the issuance of this Warrant, the Company shall
declare a dividend or any other distribution upon its common stock in
liquidation or payable otherwise than out of current earnings, retained earnings
or earned surplus and otherwise than in shares of the Company's common stock,
then the Exercise Price in effect immediately prior to such declaration shall be
reduced by an amount equal, in the case of a dividend or distribution in cash,
to the amount thereof payable per common share or, in the case of any other
dividend or distribution, to the value thereof per common share at the time such
dividend or distribution was declared, as determined by the Board of Directors
of the Company in good faith. Such reductions shall take effect as of the date
on which a record is taken for the purposes of the subject dividend or
distribution, or, if a record is not taken, the date as of which the holders of
record of common stock entitled to such dividend or distribution are to be
determined.
3.7 Adjustment Upon Certain Issuances of Common Stock.
(a) If the Company, at any time or from time to time,
issues or sells any Additional Shares of Common Stock (as defined below), other
than as provided in the foregoing subsections of this Section 3, for a price per
share (which, in the case of options, warrants, convertible securities or other
rights, includes the amounts paid therefor plus the exercise price, conversion
price or other such amounts payable thereunder) that is less than $--- per share
(such number to be subject to adjustment from time to time upon the occurrence
of any of the events described in Section 3.2 above), then and in each such
case, the then applicable Exercise Price shall automatically be reduced as of
the opening of business on the date of such issue or sale, to a price determined
by multiplying the Exercise Price then in effect by a fraction (i) the numerator
of which shall be (A) the number of shares of common stock of the Company deemed
outstanding (as determined below) immediately prior to such issue or sale, plus
(B) the number of shares of Class A common stock of the Company which the
aggregate consideration received by the Company for the total number of
Additional Shares of Common Stock so issued would purchase at such Exercise
Price, and (ii) the denominator of which shall be the number of shares of common
stock of the Company deemed outstanding (as defined below) immediately prior to
such issue or sale plus the total number of Additional Shares of Common Stock so
5
issued; provided, however, that upon the expiration or other termination of
options, warrants or other rights to purchase or acquire common stock which
triggered any adjustment under this Section 3.7, and upon the expiration or
termination of the right to convert or exchange convertible or exchangeable
securities (whether by reason of redemption or otherwise) which triggered any
adjustment under this Section 3.7, if any thereof shall not have been exercised,
converted or exchanged, as applicable, the number of shares of common stock of
the Company deemed to be outstanding pursuant to this Section 3.7(a) shall be
reduced by the number of shares as to which options, warrants, and rights to
purchase or acquire common stock shall have expired or terminated unexercised,
and as to which conversion or exchange rights shall have expired or terminated
unexercised, and such number of shares shall no longer be deemed to be
outstanding; and the Exercise Price then in effect shall forthwith be readjusted
and thereafter be the price that it would have been had adjustment been made on
the basis of the issuance only of the common shares actually issued. For
purposes of the preceding sentence, the number of shares of common stock of the
Company deemed to be outstanding as of a given date shall be the sum of (x) the
number of common shares of all Classes actually outstanding, (y) the number of
Common Shares for which this Warrant could be exercised on the day immediately
preceding the given date, and (z) the number of shares of common stock of the
Company of any Class which could be obtained through the exercise or conversion
of all other rights, options and convertible securities outstanding on the day
immediately preceding the given date. "Additional Shares of Common Stock" shall
mean all shares of common stock of the Company of any Class, and all options,
warrants, convertible securities or other rights to purchase or acquire shares
of common stock of the Company of any Class, issued by the Company, other than
common stock issued pursuant to the exercise of options, warrants or convertible
securities outstanding on the date hereof, or hereafter issued from time to time
pursuant to and in accordance with stock purchase or stock option plans as in
effect on the date hereof, provided that such options, warrants or other rights
are issued with exercise prices per share of common stock equal to or greater
than the then-current fair market value of a share of common stock of the
Company, as determined in good faith by the Board of Directors of the Company or
the Compensation Committee thereof.
(b) In the event that the exercise price, conversion
price, purchase price or other price at which common stock of the Company is
purchasable pursuant to any options, warrants, convertible securities or other
rights to purchase or acquire common stock is reduced at any time or from time
to time (other than under or by reason of provisions designed to protect against
dilution), then, upon such reduction becoming effective, the Exercise Price then
in effect hereunder shall forthwith be decreased to such Exercise Price as would
have been obtained had the adjustments made and required under this Section 3.7
upon the issuance of such options, warrants, convertible securities or other
rights been made upon the basis of (and the total consideration received
therefor) (i) the issuance of the number of common stock theretofore actually
delivered upon the exercise, conversion or exchange of such options, warrants,
convertible securities or other rights, (ii) the issuance of all of the shares
of common stock of the Company and all other options, warrants, convertible
securities and other rights to purchase or acquire common stock of the Company
issued after the issuance of the modified options, warrants, convertible
securities or other rights, and (iii) the original issuance at the time of the
reduction of any such options, warrants, convertible securities or other rights
then still outstanding.
(c) In no event shall an adjustment under this
Section 3.7 be made if it would result in an increase in the then applicable
Exercise Price.
3.8. Notice of Adjustment. Whenever the Exercise Price and/or
the number of Warrant Shares receivable upon exercise of this Warrant is
adjusted, the Company shall promptly deliver to the Holder a certificate of
adjustment, setting forth the Exercise Price and/or Warrant Shares issuable
after adjustment, a brief statement of the facts requiring the adjustment and
the computation by which the adjustment was made. The certificate of adjustment
shall be prima facie evidence of the correctness of the adjustment.
6
3.9. Successive Adjustments. The provisions of this Section 3
shall be applicable successively to each event described herein which may occur
subsequent to the issuance of this Warrant and prior to the exercise in full of
this Warrant.
4. Registration; Exchange and Replacement of Warrant; Reservation of
Shares. The Company shall keep at the Designated Office a register in which the
Company shall provide for the registration, transfer and exchange of this
Warrant. The Company shall not at any time, except upon the dissolution,
liquidation or winding-up of the Company, close such register so as to result in
preventing or delaying the exercise or transfer of this Warrant.
The Company may deem and treat the person in whose name this Warrant is
registered as the Holder and owner hereof for all purposes and shall not be
affected by any notice to the contrary, until presentation of this Warrant for
registration or transfer as provided in this Section 4.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant and (in case of
loss, theft or destruction) of indemnity satisfactory to it, and (in the case of
mutilation) upon surrender and cancellation of this Warrant, the Company will
(in the absence of notice to the Company that the Warrant has been acquired by a
bona fide purchaser) make and deliver a new Warrant of like tenor in lieu of
this Warrant, without requiring the posting of any bond or the giving of any
security, other than the indemnity of the Holder.
The Company shall at all times reserve and keep available out of its
authorized shares of capital stock, solely for the purpose of issuance upon the
exercise of this Warrant, such number of Common Shares as shall be issuable upon
the exercise hereof. The Company covenants and agrees that, upon exercise of
this Warrant and payment of the Exercise Price therefor, if applicable, all
Warrant Shares issuable upon such exercise shall be duly and validly authorized
and issued, fully paid and non-assessable.
5. Investment Representations. The Holder, by accepting this Warrant,
covenants and agrees that, at the time of exercise of this Warrant, if the
Warrant Shares shall not then be the subject of an effective registration
statement under the Act, the securities acquired by the Holder upon exercise
hereof are for the account of the Holder or are being acquired for its own
account for investment and are not acquired with a view to, or for sale in
connection with, any distribution thereof (or any portion thereof) and with no
present intention (at such time) of offering and distributing such securities
(or any portion thereof), except in compliance with applicable federal and state
securities laws.
6. Registration Rights. The Holder is entitled to the benefits of that
certain Registration Rights Agreement dated September 28, 2006 executed and
delivered by the Company.
7. Fractional Warrants and Fractional Shares. If the number of Warrant
Shares purchasable upon the exercise of this Warrant is adjusted pursuant to
Section 3 hereof, the Company shall nevertheless not be required to issue
fractions of shares upon exercise of this Warrant or otherwise, or to distribute
7
certificates that evidence fractional shares. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall pay to the Holder
an amount in cash equal to such fraction multiplied by the current market value
of a Common Share (determined in accordance with the last sentence of Section
1.3).
8. Warrant Holders Not Deemed Stockholders. No Holder of this Warrant
shall, as such, be entitled to vote or to receive dividends or be deemed the
holder of Warrant Shares that may at any time be issuable upon exercise of this
Warrant, nor shall anything contained herein be construed to confer upon the
Holder of this Warrant, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issue or
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger or conveyance or otherwise), or to receive notice
of meetings, or subscription rights, until such Holder shall have exercised this
Warrant and been issued Warrant Shares or deemed to have been issued Warrant
Shares in accordance with the provisions hereof.
9. Notices. Any notice which is required to be given by this Warrant
must be in writing, and shall be given or served, unless otherwise expressly
provided herein, by depositing the same in the United States Mail, postpaid and
certified and addressed to the party to be notified, with return receipt
requested, or by delivering the same by courier or in person to such party (or,
if the party or parties to be notified be incorporated, to an officer of such
party). Notice deposited in the mail, postpaid and certified with return receipt
requested, shall be deemed received and effective upon the deposit in a proper
United States depository. Notice given in any other manner shall be effective
only if and when received by the party to be notified. For the purposes of
notice, the addresses of the parties for the receipt of notice hereunder are:
If to the Company:
-----------------
Alanco Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Tel No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Holder:
-----------------
ComVest Capital LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
e-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Any party shall have the right from time to time, and at any time, to
change its address for the receipt of notice by giving at least five (5) days'
prior written notice of the change of its address to the other parties in the
manner specified herein.
8
10. Successors. All the covenants, agreements, representations and
warranties contained in this Warrant shall bind the parties hereto and their
respective heirs, executors, administrators, distributees, successors, assigns
and transferees.
11. Law Governing. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ARIZONA WITHOUT REGARD TO THE CONFLICTS
OF LAW PRINCIPLES THEREOF.
12. Entire Agreement; Amendments and Waivers. This Warrant, together
with the Registration Rights Agreement, sets forth the entire understanding of
the parties with respect to the subject matter hereof. The failure of any party
to seek redress for the violation or to insist upon the strict performance of
any term of this Warrant shall not constitute a waiver of such term and such
party shall be entitled to enforce such term without regard to such forbearance.
This Warrant may be amended, and any breach of or compliance with any covenant,
agreement, warranty or representation may be waived, only if the Company has
obtained the written consent or written waiver of the Holder, and then such
consent or waiver shall be effective only in the specific instance and for the
specific purpose for which given.
13. Severability; Headings. If any term of this Warrant as applied to
any person or to any circumstance is prohibited, void, invalid or unenforceable
in any jurisdiction, such term shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or invalidity without in any way affecting any
other term of this Warrant or affecting the validity or enforceability of this
Warrant or of such provision in any other jurisdiction. The Section headings in
this Warrant have been inserted for purposes of convenience only and shall have
no substantive effect.
[The remainder of this page is intentionally blank]
9
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the 28th day of September, 2006.
ALANCO TECHNOLOGIES, INC.
By:
----------------------------
Name:
Title:
10
ANNEX A
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the within Warrant)
The undersigned hereby irrevocably elects to exercise the
right to purchase --------- shares of Common Stock of Alanco Technologies,
Inc. covered by the within Warrant according to the conditions hereof and
herewith makes payment of the Exercise Price of such shares in full in the
amount of $--------------.
By:
---------------------------
(Signature of Registered Holder)
Dated:
--------------------------------------
11
ANNEX B
CASHLESS EXERCISE FORM
(To be executed upon partial or full
exercise of Warrants pursuant to Section 1.3 of the Warrant)
The undersigned hereby irrevocably elects to surrender
------------ shares of Common Stock of Alanco Technologies, Inc. purchasable
under the Warrants for such shares of Common Stock issuable in exchange therefor
pursuant to the Cashless Exercise provisions of the within Warrants, as provided
for in Section 1.3 of such Warrant.
Please issue a certificate or certificates for such Common
Stock in the name of, and pay cash for fractional shares in the name of:
(Please print name, address, and social security
number/tax identification number:)
and, if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable thereunder, that a new Warrant for the balance
remaining of the shares of Common Stock purchasable under the within Warrants be
registered in the name of the undersigned Holder or its transferee as below
indicated and delivered to the address stated below.
Dated:
--------------------------------
Name of Warrant Holder
or transferee:
---------------------------------------------------------------
(Please print)
Address:
---------------------------------------------------------------------
Signature:
---------------------------------------------------------------------
NOTICE: The signature on this form must correspond with the name as
written upon the face of this Warrant in every particular,
without alteration or enlargement or any change whatsoever.
12
ANNEX C
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of
----------------------------
Common Stock
and does hereby irrevocably constitute and appoint -----------------------
attorney-in-fact to register such transfer onto the books of Alanco
Technologies, Inc. maintained for the purpose, with full power of substitution
in the premises.
Dated: Print Name:
--------------------- ---------------------------------------
Signature:
---------------------------------------
Witness:
---------------------------------------
NOTICE: The signature on this assignment must correspond with the name
as written upon the face of this Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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