Exhibit 99.1
Promissory Note
$350,000.00 January 19, 2010
FOR VALUE RECEIVED, the undersigned, Alanco Technologies, Inc., an Arizona
corporation (the "Maker"), hereby promises to pay to the order of Seaside 88,
LP, a Florida limited partnership (with any subsequent holder or holders, the
"Holder") of this Promissory Note (this "Note"), at such place as the Holder may
from time to time designate in writing, the principal sum of Three Hundred Fifty
Thousand Dollars ($350,000.00), together with interest on the principal amount
outstanding from time to time at the rate of ten percent (10.0%) per annum, in
lawful money of the United States of America, in accordance with the terms and
provisions of this Note.
1. Maturity Date; Interest. This Note shall be due and payable in full
on May 1, 2010 (the "Maturity Date"). Interest shall accrue and be payable
whenever any payment of principal is due hereunder. Interest shall be computed
on the basis of a 365 or 366-day year, as applicable, and shall be paid for the
actual number of days on which principal is outstanding.
2. Prepayment. The Maker shall have the right to prepay, in part or in
full, without penalty, the principal amount outstanding under this Note and any
unpaid accrued interest thereon at any time or times prior to the Maturity Date.
The net proceeds paid to the Maker with respect to any Subsequent Closing, as
such term is defined in that certain Common Stock Purchase Agreement, dated as
of January 18, 2010, by and between the Maker and the Holder (the "Purchase
Agreement"), occurring while any amount under this Note remains unpaid shall be
paid to Holder as a prepayment hereunder until this Note is paid in full, and
such prepayments shall be recorded on the Grid Schedule attached hereto and made
a part hereof. Any prepayment shall be applied first to the interest due and
unpaid under this Note, and thereafter to any principal owing under this Note.
3. Waiver Regarding Notice. The Maker waives presentment, demand and
presentation for payment, protest and notice of protest, and, except as
otherwise specifically provided herein, any other notices of whatever kind or
nature, bringing of suit and diligence in taking any action to collect any sums
owing hereunder. From time to time, without in any way affecting the obligation
of the Maker to pay the outstanding principal balance of this Note and fully to
observe and perform the covenants and obligations of the Maker under this Note,
without giving notice to, or obtaining the consent of, the Maker, and without
any liability whatsoever on the part of the Holder, the Holder may, at its
option, extend the time for payment of this Note, reduce the payments hereunder
or accept a renewal of this Note, join in any extension or subordination, or
exercise any right or election hereunder. No one or more of such actions shall
constitute a novation or operate to release any party liable for or under this
Note, either as the Maker or otherwise.
4. Events of Default. Each of the following shall constitute an "Event
of Default" hereunder:
(a) The Maker's failure to make any required payment of
principal or interest under this Note, or any other amount due and payable under
this Note;
(b) The Maker's failure to perform any other obligation (other
than one that can be satisfied with the payment of money or delivery of Shares
under the Purchase Agreement) required under this Note or the Purchase
Agreement, and the continuation of such failure for a period of fourteen (14)
days after the Holder gives the Maker written notice of such failure to perform;
and
(c) The Maker's insolvency, general assignment for the benefit
of creditors, or the commencement by or against the Maker of any case,
proceeding, or other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution, or composition of the Maker's debts under any law
relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or
seeking appointment of a receiver, trustee, custodian, or other similar official
for the Maker or for all or any substantial part of the Maker's assets.
5. Acceleration. Upon the occurrence of an Event of Default, the Holder
shall have the right to cause the entire unpaid principal balance and accrued
interest, together with reasonable attorneys' and all other fees, charges, costs
and expenses, if any, owed by the Maker to the Holder, to become immediately due
and payable in full by giving written notice to the Maker.
6. Remedies. Upon the occurrence of an Event of Default, the Holder may
avail itself of any legal or equitable rights which the Holder may have at law
or in equity or under this Note, including, but not limited to, the right to
accelerate the indebtedness due under this Note as described in the preceding
Section 5. The remedies of the Holder as provided herein shall be distinct and
cumulative, and may be pursued singly, successively or together, at the sole
discretion of the Holder, and may be exercised as often as occasion therefor
shall arise. Failure to exercise any of the foregoing options upon the
occurrence of an Event of Default shall not constitute a waiver of the right to
exercise the same or any other option at any subsequent time in respect to the
same or any other Event of Default, and no single or partial exercise of any
right or remedy shall preclude other or further exercise of the same or any
other right or remedy. The Holder shall have no duty to exercise any or all of
the rights and remedies herein provided or contemplated. The acceptance by the
Holder of any payment hereunder that is less than payment in full of all amounts
due and payable at the time of such payment shall not constitute a waiver of the
right to exercise any of the foregoing rights or remedies at that time, or
nullify any prior exercise of any such rights or remedies without the express
written consent of the Holder.
7. Expenses of Collection. If this Note is referred to an attorney for
collection, whether or not suit has been filed or any other action instituted or
taken to enforce or collect under this Note, the Maker shall pay all of the
Holder's costs, fees (including reasonable attorneys' fees) and expenses in
connection with such referral.
8. Governing Law. The provisions of this Note shall be governed and
construed according to the laws of the State of New York, without giving effect
to its conflicts of laws provisions.
9. No Waiver. Neither any course of dealing by the Holder nor any
failure or delay on its part to exercise any right, power or privilege hereunder
shall operate as a waiver of any right or remedy of the Holder hereunder unless
said waiver is in writing and signed by the Holder, and then only to the extent
specifically set forth in said writing. A waiver as to one event shall not be
construed as a continuing waiver by the Holder or as a bar to or waiver of any
right or remedy by the Holder as to any subsequent event.
10. Notices.
(a) Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via electronic mail or facsimile at
the facsimile number set forth on the signature pages to the Purchase Agreement
prior to 5:30 p.m. (Eastern time) on a Trading Day, (ii) the next Trading Day
after the date of transmission, if such notice or communication is delivered via
electronic mail or facsimile at the facsimile number set forth on the signature
pages to the Purchase Agreement on a day that is not a Trading Day or later than
5:30 p.m. (Eastern time) on any Trading Day, (iii) the second Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as set forth on the signature pages to the Purchase Agreement.
(b) Any party may change the address to which notices are to be
delivered to it hereunder by giving written notice to the other party as
provided in this Section 10.
11. Severability. In the event that any one or more of the provisions of
this Note shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Note, and this Note shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
12. Limitations of Applicable Law. In the event the operation of any
provision of this Note results in an effective rate of interest transcending the
limit of the usury or any other law applicable to the loan evidenced hereby, all
sums in excess of those lawfully collectible as interest for the period in
question shall, without further agreement or notice by any party to this Note,
be applied to the unpaid principal balance of this Note immediately upon receipt
of such monies by the Holder, with the same force and effect as though the Maker
had specifically designated such extra sums to be so applied to the unpaid
principal balance and the Holder had agreed to accept such extra payment(s) as a
prepayment.
13. Captions. The captions herein are for convenience of reference only
and in no way define or limit the scope or content of this Note or in any way
affect its provisions.
14. Debtor-Creditor Relationship. The Holder shall in no event be
construed for any purpose to be a partner, joint venturer or associate of the
Maker, it being the sole intention of the parties to establish a relationship of
debtor and creditor.
15. Time of the Essence. It is expressly agreed that time is of the
essence in the performance of the obligations set forth in this Note.
[Signature Follows on Next Page]
IN WITNESS WHEREOF, the Maker has executed this Note under seal as of
the date set forth above.
MAKER:
Alanco Technologies, Inc.
By:
Name:
Title:
GRID SCHEDULE
TO
PROMISSORY NOTE
From: Alanco Technologies, Inc., as Maker
To: Seaside 88, LP, as Holder
Dated: January 19, 2010
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