Document:

Prepared and filed by St Ives Financial

  
   

      WARRANT
        NO.: 2006 UNIT- [_________] 

      

      FORM
        OF WARRANT TO PURCHASE COMMON STOCK

      OF
        STELLAR TECHNOLOGIES, INC.

      

      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
        REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT,
        AND
        WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
        TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO
        THE
        ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES
        ACT OF
        1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
        SECURITIES LAWS.

       

      This
        WARRANT (“Warrant”) is to verify that, FOR VALUE RECEIVED, [_____________________________]
        (“Holder”)
        is entitled to purchase, subject to the terms and conditions hereof, from
        STELLAR TECHNOLOGIES, INC., a Colorado corporation (the “Company”), [_____________]
        shares
        of common stock, $.001 par value per share, of the Company (the “Common Stock”),
        at any time during the period commencing at 9:00 a.m., Eastern Standard Time
        on
        the date hereof (the “Commencement Date”) and ending at 5:00 p.m. Eastern
        Standard Time on the third (3rd)
        anniversary of the Commencement Date (the “Termination Date”), at an exercise
        price (the “Exercise Price”) of $.40 per share of Common Stock. The number of
        shares of Common Stock purchasable upon exercise of this Warrant and the
        Exercise Price per share shall be subject to adjustment from time to time
        upon
        the occurrence of certain events as set forth below.

       

      The
        shares of Common Stock or any other shares or other units of stock or other
        securities or property, or any combination thereof, then receivable upon
        exercise of this Warrant, as adjusted from time to time, are sometimes referred
        to hereinafter as “Exercise Shares.” The exercise price per share as from time
        to time in effect is referred to hereinafter as the “Exercise
        Price.”

       

      1. Exercise
        of Warrant; Issuance of Exercise Shares.

      

      (a)
        Exercise
        of Warrant.
        Subject
        to the terms hereof, the purchase rights represented by this Warrant are
        exercisable by the Holder in whole or in part, at any time, or from time
        to
        time, by the surrender of this Warrant and the Notice of Exercise annexed
        hereto
        duly completed and executed on behalf of the Holder, at the office of the
        Company (or such other office or agency of the Company as it may designate
        by
        notice in writing to the Holder at the address of the Holder appearing on
        the
        books of the Company) accompanied by payment of the Exercise Price in full
        either: (i) in cash or by bank or certified check for the Exercise Shares
        with
        respect to which this Warrant is exercised; (ii) by delivery to the Company
        of
        shares of the Company's Common Stock having a Fair Market Value (as defined
        below) equal to the aggregate Exercise Price of the Exercise Shares being
        purchased that Holder is the record and beneficial owner of and that have
        been
        held by the Holder for at least six (6) months; (iii) provided that the sale
        of
        the Exercise Shares are covered by an effective registration statement, by
        delivering to the Company a Notice of Exercise together with an irrevocable
        direction to a broker-dealer registered under the Securities Exchange Act
        of
        1934, as amended (the “Exchange Act”), to sell a sufficient portion of the
        Exercise Shares and deliver the sales proceeds directly to the Company to
        pay
        the Exercise Price; or (iv) by any combination of the procedures set forth
        in
        subsections (i), (ii) and (iii) of this Section 1(a). For the purposes of
        this
        Section 1(a), “Fair Market Value” shall be an amount equal to the average of the
        Current Market Value (as defined below) for the ten (10) days preceding the
        Company’s receipt of the duly executed Notice of Exercise form attached hereto
        as Appendix
        A.
        

      

      
      

      

      In
        the
        event that this Warrant shall be duly exercised in part prior to the Termination
        Date, the Company shall issue a new Warrant or Warrants of like tenor evidencing
        the rights of the Holder thereof to purchase the balance of the Exercise
        Shares
        purchasable under the Warrant so surrendered that shall not have been
        purchased.

       

      (b) Issuance
        of Exercise Shares: Delivery of Warrant Certificate.
        The
        Company shall, within ten (10) business days or as soon thereafter as is
        practicable of the exercise of this Warrant, issue in the name of and cause
        to
        be delivered to the Holder one or more certificates representing the Exercise
        Shares to which the Holder shall be entitled upon such exercise under the
        terms
        hereof. Such certificate or certificates shall be deemed to have been issued
        and
        the Holder shall be deemed to have become the record holder of the Exercise
        Shares as of the date of the due exercise of this Warrant.

       

      (c) Exercise
        Shares Fully Paid and Non-assessable.
        The
        Company agrees and covenants that all Exercise Shares issuable upon the due
        exercise of the Warrant represented by this Warrant certificate (“Warrant
        Certificate”) will, upon issuance and payment therefor in accordance with the
        terms hereof, be duly authorized, validly issued, fully paid and non-assessable
        and free and clear of all taxes (other than taxes which, pursuant to Section 2
        hereof, the Company shall not be obligated to pay) or liens, charges, and
        security interests created by the Company with respect to the issuance
        thereof.

       

      (d) Reservation
        of Exercise Shares.
        The
        Company covenants that during the term that this Warrant is exercisable,
        the
        Company will reserve from its authorized and unissued Common Stock a sufficient
        number of shares to provide for the issuance of the Exercise Shares upon
        the
        exercise of this Warrant, and from time to time will take all steps necessary
        to
        amend its certificate of incorporation to provide sufficient reserves of
        shares
        of Common Stock issuable upon the exercise of the Warrant.

       

      (e) Fractional
        Shares.
        The
        Company shall not be required to issue fractional shares of capital stock
        upon
        the exercise of this Warrant or to deliver Warrant Certificates that evidence
        fractional shares of capital stock. In the event that any fraction of an
        Exercise Share would, except for the provisions of this subsection (e), be
        issuable upon the exercise of this Warrant, the Company shall pay to the
        Holder
        exercising the Warrant an amount in cash equal to such fraction multiplied
        by
        the Current Market Value of the Exercise Share on the last business day prior
        to
        the date on which this Warrant is exercised. For purposes of this subsection
        (e), the “Current Market Value” for any day shall be determined as
        follows:

       

      

      
      

    
    

     

    (i) if
      the
      Exercise Shares are traded in the over-the-counter market and not on any
      national securities exchange and not on the NASDAQ National Market System or
      NASDAQ Small Cap Market (together, the “NASDAQ Reporting System”), the average
      of the mean between the last bid and asked prices per share, as reported by
      the
      National Quotation Bureau, Inc., or an equivalent generally accepted reporting
      service, or if not so reported, the average of the closing bid and asked prices
      for an Exercise Share as furnished to the Company by any member of the National
      Association of Securities Dealers, Inc., selected by the Company for that
      purpose; or

     

    (ii) if
      the
      Exercise Shares are listed or traded on a national securities exchange or the
      NASDAQ Reporting System, the closing price on the principal national securities
      exchange on which they are so listed or traded, on the NASDAQ Reporting System,
      as the case may be, on the last business day prior to the date of the exercise
      of this Warrant. The closing price referred to in this clause (ii) shall be
      the
      last reported sales price or, in case no such reported sale takes place on
      such
      day, the average of the reported closing bid and asked prices, in either case
      on
      the national securities exchange on which the Exercise Shares are then listed
      or
      in the NASDAQ Reporting System; or

     

    (iii) if
      no
      such closing price or closing bid and asked prices are available, as determined
      in any reasonable manner as may be prescribed by the Board of Directors of
      the
      Company.

     

    2. Payment
      of Taxes.
      

     

    (a) Stamp
      Taxes. The Company will pay all documentary stamp taxes, if any, attributable
      to
      the initial issuance of Exercise Shares upon the exercise of this Warrant;
      provided, however, that the Company shall not be required to pay any tax or
      taxes which may be payable in respect of any transfer involved in the issue
      of
      any Warrant Certificates or any certificates for Exercise Shares in a name
      other
      than that of the Holder of a Warrant Certificate surrendered upon the exercise
      of a Warrant, and the Company shall not be required to issue or deliver such
      certificates unless or until the person or persons requesting the issuance
      thereof shall have paid to the Company the amount of such tax or shall have
      established to the satisfaction of the Company that such tax has been
      paid.

     

    (b) Withholding.
      The
      Holder shall pay to the Company, or make arrangements satisfactory to the
      Company regarding payment of, any federal, state, local and/or payroll taxes
      of
      any kind required by law to be withheld with respect to the grant of this
      Warrant or the issuance of the Exercise Shares. The Company may, to the extent
      permitted by law, deduct any such taxes from any payment of any kind otherwise
      due to the Holder whether or not pursuant to this Warrant. The Holder may elect,
      with the consent of the Company, to have such tax withholding obligation
      satisfied, in whole or in part, by: (i) authorizing the Company to withhold
      from
      the Exercise Shares a number of shares of Common Stock having an aggregate
      Fair
      Market Value that would satisfy the minimum withholding amount due, or (ii)
      delivering to the Company a number of shares of Common Stock of which the Holder
      is the record and beneficial owner and that have been held by the Holder for
      at
      least six (6) months with an aggregate Fair Market Value that would satisfy
      the
      minimum withholding amount due. The Company may require that any fractional
      share amount be settled in cash. For the purposes of this Section 2, Fair Market
      Value shall be determined as of the date on which the amount of tax to be
      withheld is determined.

    

    
    

    3. Mutilated
      or Missing Warrant Certificates.
      In case
      any Warrant shall be mutilated, lost, stolen or destroyed, the Company may
      in
      its discretion issue, in exchange and substitution for and upon cancellation
      of
      the mutilated Warrant, or in lieu of and in substitution for the Warrant lost,
      stolen or destroyed, a new Warrant or Warrants of like tenor and in the same
      aggregate denomination, but only (i) in the case of loss, theft or destruction,
      upon receipt of evidence satisfactory to the Company of such loss, theft or
      destruction of such Warrant and indemnity or bond, if requested, also
      satisfactory to them and (ii) in the case of mutilation, upon surrender of
      the
      mutilated Warrant. Applicants for such substitute Warrants shall also comply
      with such other reasonable regulations and pay such other reasonable charges
      as
      the Company or its counsel may prescribe.

    

    4. Rights
      of Holder.
      The
      Holder shall not, by virtue of anything contained in this Warrant or otherwise,
      be entitled to any right whatsoever, either in law or equity, of a stockholder
      of the Company, including without limitation, the right to receive dividends
      or
      to vote or to consent or to receive notice as a shareholder in respect of the
      meetings of shareholders or the election of directors of the Company or any
      other matter.

    

    5. Registration
      of Transfers and Exchanges.
      The
      Warrant shall be transferable, subject to the provisions of Section 7 hereof,
      only upon the books of the Company, if any, to be maintained by it for that
      purpose, upon surrender of the Warrant Certificate to the Company at its
      principal office accompanied (if so required by the Company) by a written
      instrument or instruments of transfer in form satisfactory to the Company and
      duly executed by the Holder thereof or by the duly appointed legal
      representative thereof or by a duly authorized attorney and upon payment of
      any
      necessary transfer tax or other governmental charge imposed upon such transfer.
      In all cases of transfer by an attorney, the original letter of attorney, duly
      approved, or an official copy thereof, duly certified, shall be deposited and
      remain with the Company. In case of transfer by executors, administrators,
      guardians or other legal representatives, duly authenticated evidence of their
      authority shall be produced, and may be required to be deposited and remain
      with
      the Company in its discretion. Upon any such registration of transfer, a new
      Warrant shall be issued to the transferee named in such instrument of transfer,
      and the surrendered Warrant shall be canceled by the Company.

    

    Any
      Warrant may be exchanged, at the option of the Holder thereof and without
      change, when surrendered to the Company at its principal office, or at the
      office of its transfer agent, if any, for another Warrant or other Warrants
      of
      like tenor and representing in the aggregate the right to purchase from the
      Company a like number and kind of Exercise Shares as the Warrant surrendered
      for
      exchange or transfer, and the Warrant so surrendered shall be canceled by the
      Company or transfer agent, as the case may be.

    

    
    

     

    6. Adjustment
      of Exercise Shares and Exercise Price.
      The
      Exercise Price and the number and kind of Exercise Shares purchasable upon
      the
      exercise of this Warrant shall be subject to adjustment from time to time upon
      the happening of certain events as hereinafter provided. The Exercise Price
      in
      effect at any time and the number and kind of securities purchasable upon
      exercise of each Warrant shall be subject to adjustment as follows:

    

    (a) In
      case
      of any consolidation or merger of the Company with another corporation (other
      than a merger with another corporation in which the Company is the surviving
      corporation and which does not result in any reclassification or change — other
      than a change in par value, or from par value to no par value, or from no par
      value to par value, or as a result of a subdivision or combination — of outstanding
      Common Stock issuable upon such exercise), the rights of the Holder of this
      Warrant shall be adjusted in the manner described below:

     

    (i) In
      the
      event that the Company is the surviving corporation or is merged into a wholly
      owned subsidiary for the purpose of incorporating the Company in a different
      jurisdiction, this Warrant shall, without payment of additional consideration
      therefor, be deemed modified so as to provide that the Holder of this Warrant,
      upon the exercise thereof, shall procure, in lieu of each share of Common Stock
      theretofore issuable upon such exercise, the kind and amount of shares of stock,
      other securities, money and property receivable upon such reclassification,
      change, consolidation or merger by the holder of each share of Common Stock,
      had
      exercise of this Warrant occurred immediately prior to such reclassification,
      change, consolidation or merger. This Warrant (as adjusted) shall be deemed
      to
      provide for further adjustments that shall be as nearly equivalent as may be
      practicable to the adjustments provided for in this Section 6. The provisions
      of
      this clause (i) shall similarly apply to successive reclassifications, changes,
      consolidations and mergers.

     

    (ii) In
      the
      event that the Company is not the surviving corporation (except in the case
      of a
      merger of the Company into a wholly owned subsidiary for the purpose of
      incorporating the Company in a different jurisdiction), Holder shall be given
      at
      least fifteen (15) days prior written notice of such transaction and shall
      be
      permitted to exercise this Warrant, to the extent it is exercisable as of the
      date of such notice, during this fifteen (15) day period. Upon expiration of
      such fifteen (15) day period, this Warrant and all of Holder's rights hereunder
      shall terminate.

     

    (b) If
      the
      Company, at any time while this Warrant, or any portion thereof, remains
      outstanding and unexpired, by reclassification of securities or otherwise,
      shall
      change any of the securities as to which purchase rights under this Warrant
      exist into the same or a different number of securities of any other class
      or
      classes, this Warrant shall thereafter represent the right to acquire such
      number and kind of securities as would have been issuable as the result of
      such
      change with respect to the securities that were subject to the purchase rights
      under this Warrant immediately prior to such reclassification or other change
      and the Exercise Price therefor shall be appropriately adjusted, all subject
      to
      further adjustment as provided in this Section 6.

     

    (c) In
      case
      the Company shall (i) pay a dividend or make a distribution on its shares of
      Common Stock in shares of Common Stock, (ii) subdivide or classify its
      outstanding Common Stock into a greater number of shares, or (iii) combine
      or
      reclassify its outstanding Common Stock into a smaller number of shares, the
      Exercise Price in effect at the time of the record date for such dividend or
      distribution or of the effective date of such subdivision, combination or
      reclassification, shall be proportionally adjusted so that the Holder of this
      Warrant exercised after such date shall be entitled to receive the aggregate
      number and kind of shares that, if this Warrant had been exercised by such
      Holder immediately prior to such date, he would have owned upon such exercise
      and been entitled to receive upon such dividend, subdivision, combination or
      reclassification. For example, if the Company declares a 2 for 1 stock dividend
      or stock split and the Exercise Price immediately prior to such event was $2.00
      per share, the adjusted Exercise Price immediately after such event would be
      $1.00 per share. Such adjustment shall be made successively whenever any event
      listed above shall occur. Whenever the Exercise Price payable upon exercise
      of
      each Warrant is adjusted pursuant to this subsection (c), the number of Exercise
      Shares purchasable upon exercise of this Warrant shall simultaneously be
      adjusted by multiplying the number of Exercise Shares initially issuable upon
      exercise of this Warrant by the Exercise Price in effect on the date hereof
      and
      dividing the product so obtained by the Exercise Price, as adjusted.

    

    
    

     

     

    (d) In
      the
      event that at any time, as a result of an adjustment made pursuant to subsection
      (a), (b) or (c) above, the Holder of this Warrant thereafter shall become
      entitled to receive any Exercise Shares of the Company, other than Common Stock,
      thereafter the number of such other shares so receivable upon exercise of this
      Warrant shall be subject to adjustment from time to time in a manner and on
      terms as nearly equivalent as practicable to the provisions with respect to
      the
      Common Stock contained in subsections (a), (b) or (c) above.

     

    (e) Irrespective
      of any adjustments in the Exercise Price or the number or kind of Exercise
      Shares purchasable upon exercise of this Warrant, Warrants theretofore or
      thereafter issued may continue to express the same price and number and kind
      of
      shares as are stated in the similar Warrants initially issuable pursuant to
      this
      Warrant.

     

    (f)
       Whenever
      the Exercise Price shall be adjusted as required by the provisions of the
      foregoing Section 6, the Company shall forthwith file in the custody of its
      Secretary or an Assistant Secretary at its principal office and with its stock
      transfer agent, if any, an officer's certificate showing the adjusted Exercise
      Price determined as herein provided, setting forth in reasonable detail the
      facts requiring such adjustment, including a statement of the number of
      additional shares of Common Stock, if any, and such other facts as shall be
      necessary to show the reason for and the manner of computing such adjustment.
      Each such officer's certificate shall be made available at all reasonable times
      for inspection by the holder and the Company shall, forthwith after each such
      adjustment, mail a copy by certified mail of such certificate to the
      Holder.

     

    (g) All
      calculations under this Section 6 shall be made to the nearest cent or to the
      nearest one one-hundredth (1/100th) of a share, as the case may be.

     

    7. Investment
      Intent, Exercise Restrictions and Transfer Restrictions.
      

     

    (a) Neither
      this Warrant nor any Exercise Share may be offered for sale or sold, or
      otherwise transferred or sold in any transaction which would constitute a sale
      thereof within the meaning of the Securities Act of 1933, as amended (the "1933
      Act"), unless (i) such security has been registered for sale under the 1933
      Act
      and registered or qualified under applicable state securities laws relating
      to
      the offer and sale of securities, or (ii) exemptions from the registration
      requirements of the 1933 Act and the registration or qualification requirements
      of all such state securities laws are available and the Company shall have
      received an opinion of counsel satisfactory to the Company that the proposed
      sale or other disposition of such securities may be effected without
      registration under the 1933 Act and would not result in any violation of any
      applicable state securities laws relating to the registration or qualification
      of securities for sale, such counsel and such opinion to be satisfactory to
      the
      Company.

    

    
    

     

    The
      Holder agrees to indemnify and hold harmless the Company against any loss,
      damage, claim or liability arising from the disposition of this Warrant or
      any
      Exercise Share held by such holder or any interest therein in violation of
      the
      provisions of this Section 7.

     

    (b) The
      certificates evidencing any Exercise Shares issued upon the exercise of this
      Warrant shall have endorsed thereon (except to the extent that the restrictions
      described in any such legend are no longer applicable) the following legend,
      appropriate notations thereof will be made in the Company's stock transfer
      books, and
      stop
      transfer instructions reflecting these restrictions on transfer will be placed
      with the transfer agent of the Exercise Shares.

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
      REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT,
      AND
      WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
      TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
      ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT
      OF
      1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
      SECURITIES LAWS.

    

     

    8. Indemnification.
      Holder
      agrees to indemnify, defend and hold harmless the Company and its respective
      affiliates and agents from and against any and all demands, claims, actions
      or
      causes of action, judgments, assessments, losses, liabilities, damages or
      penalties and reasonable attorneys' fees and related disbursements incurred
      by
      the Company that arise out of or result from a breach of any representations,
      warranties, covenants or agreements made by Holder herein, and Holder agrees
      that in the event of any breach of any representations, warranties, covenants
      or
      agreements made by Holder herein, the Company may, at its option, forthwith
      rescind the issuance of this Warrant to Holder.

     

    9. Registration
      Rights.
      The
      Holder shall be entitled to the rights and subject to the obligations set forth
      in Section 6 of that certain Securities Purchase Agreement dated on or about
      the
      date hereof 
      by and
      between the Company and the Holder. 

     

    10. Notices.
      All
      notices or other communications under this Warrant shall be in writing and
      shall
      be deemed to have been given on the day of delivery if delivered by hand, on
      the
      fifth day after deposit in the mail if mailed by certified mail, postage
      prepaid, return receipt requested, or on the next business day after mailing
      if
      sent by a nationally recognized overnight courier such as federal express,
      addressed as follows:

    

    
    

    

    If
      to
      the Company:

    

    Stellar
      Technologies, Inc.

    7935
      Airport Pulling Road

    Suite
      210

    Naples,
      FL 34109

    Attention:
      Chief Executive Officer

    

    with
      a
      copy to:

     

    Fox
      Rothschild LLP

    997
      Lenox
      Drive, Building 3

    Lawrenceville,
      NJ 08646

    Attention:
      Vincent A. Vietti, Esquire

    

    and
      to
      the Holder at the address of the Holder appearing on the books of the Company
      or
      the Company's transfer agent, if any.

    

    Either
      of
      the Company or the Holder may from time to time change the address to which
      notices to it are to be mailed hereunder by notice in accordance with the
      provisions of this Section 10.

     

    11. Supplements
      and Amendments.
      The
      Company may from time to time supplement or amend this Warrant without the
      approval of any holders of Warrants in order to cure any ambiguity or to correct
      or supplement any provision contained herein which may be defective or
      inconsistent with any other provision, or to make any other provisions in regard
      to matters or questions herein arising hereunder which the Company may deem
      necessary or desirable and which shall not materially adversely affect the
      interests of the Holder.

    

    12. Successors
      and Assigns.
      This
      Warrant shall inure to the benefit of and be binding on the respective
      successors, assigns and legal representatives of the Holder and the
      Company.

    

    13. Severability.
      If for
      any reason any provision, paragraph or terms of this Warrant is held to be
      invalid or unenforceable, all other valid provisions herein shall remain in
      full
      force and effect and all terms, provisions and paragraphs of this Warrant shall
      be deemed to be severable.

    

    14. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Florida, without regard to the laws that might otherwise govern under
      applicable principles of conflicts of laws thereof, except to the extent that
      the General Corporation Law of the State of Colorado shall apply to the internal
      corporate governance of the Company.

    

    
    

    

    15. Headings.
      Section
      and subsection headings used herein are included herein for convenience of
      reference only and shall not affect the construction of this Warrant nor
      constitute a part of this Warrant for any other purpose.

     

    IN
      WITNESS WHEREOF, the Company has caused these presents to be duly executed
      as of
      the ___ day of ______________, 2006.

     

    
      	 	
              STELLAR
                TECHNOLOGIES, INC.

               

               

               

              By:    

          

              

              Name:

              Title:

            

    

    

    

    
    

    APPENDIX
      A

    NOTICE
      OF EXERCISE

    

    To:  
        Stellar
      Technologies, Inc.

    7935
      Airport Pulling Road

    Suite
      210

    Naples,
      FL 34109

     

                  
      Attention:
      Chief Executive Officer

    

    (1) The
      undersigned hereby elects to purchase ____________ shares of Common Stock of
      Stellar Technologies, Inc., a Colorado corporation, pursuant to the terms of
      the
      attached Warrant, and tenders herewith payment of the Exercise Price for such
      shares in full in accordance with the terms of the Warrant in the following
      manner (please check one or more of the following choices):

     

    
      	 		In cash;
	 	 	 
	 		Cashless exercise through a broker;
              or
	 	 	 
	 		
              Delivery
                of previously owned shares of Common
                Stock.

            

    

     

    (2) In
      exercising this Warrant, the undersigned hereby confirms and acknowledges that
      the shares of Common Stock to be issued upon conversion hereof are being
      acquired solely for the account of the undersigned, not as a nominee for any
      other party, and for investment purposes only (unless such shares are subject
      to
      resale pursuant to an effective prospectus), and that the undersigned will
      not
      offer, sell or otherwise dispose of any such shares of Common Stock except
      under
      circumstances that will not result in a violation of the Securities Act of
      1933,
      as amended, or any state securities laws. 

     

    (3) Terms
      not
      otherwise defined in this Notice of Exercise shall have the meanings ascribed
      to
      such terms in the attached Warrant

     

    (4) Please
      issue a certificate or certificates representing said shares of Common Stock
      in
      the name of the undersigned.

     

    
      	 	 	 
	 	 
	 
 	 
 	HOLDER
 
	
               

            	 	 
	

        

        (Date)	

        

        (Signature)Prepared and filed by St Ives Financial

Exhibit 10.1

CONSULTING/SEPARATION AGREEMENT AND FULL MUTUAL RELEASE

     This Separation Agreement and Full Mutual Release (“Agreement”) is made by and between Barry R. Edwards (“Edwards”) and Impax Laboratories, Inc. (“Employer” or “the Company”).  Edwards and the Company are both parties to this Agreement and are collectively referred to herein as the “Parties.”  Both Edwards and the Company desire to enter into this Agreement to fully resolve all questions of compensation, entitlement to benefits, and any and all other claims, whether known or unknown, which the Parties may have relating to Edwards’ employment with, and separation from, the Company.

     NOW, THEREFORE, in consideration of the mutual promises, agreements and representations contained herein, and intending to be legally bound hereby, the Parties agree as follows:

	
       1.     Definitions.  As used in this Agreement, any reference to Edwards shall include himself, and in their capacities as such, his attorneys, heirs, administrators, representatives, executors, legatees, successors, agents and assigns.  As used in this Agreement, any reference to the Company shall include itself, its predecessors, successors, controlling or related entities, affiliates, divisions, subsidiaries, managing agents, and joint ventures, and, in their capacities as such, all of their past, present and future representatives, agents, assigns, attorneys, directors, officers, partners, shareholders and employees (except Edwards).

		 
	
       2.     Release.  Except as to the promises made in this Agreement, the Parties hereby fully, forever, irrevocably and unconditionally release, remise, settle and discharge each other from any and all manner of claims, charges, complaints, debts, liabilities, demands, actions, causes of action, suits, rights, covenants, contracts, controversies, agreements, promises, omissions, damages, obligations and expenses of any kind, including attorneys’ fees, whether known or unknown, which they had, now have, or hereafter may have against each other arising from, or relating in any way to, Edwards’ employment relationship with the Company, including, but not limited to, Title VII, the Age
Discrimination In Employment Act, the Older Worker Benefit Protection Act, the Pennsylvania Human Relations Act, and any other federal, state or local statutes, or common law.  It is expressly agreed and understood that this is a GENERAL RELEASE.  

		 
	
       3.     Company's Obligations.  In consideration for this Agreement, and in addition to the Release set forth in Paragraph 2 above, the Company agrees that:

		 	 
		
(a)	
it shall, pay Edwards a lump sum severance of $649,080 in 3 equal installments on October 6, 2006, January 6, 2007 and April 6, 2007. 

		 	 
		
(b)	
it shall, starting October 1, 2006 through September 30, 2008, pay Edwards compensation as a special consultant of $18,750 per month, payable weekly in the gross amount of $4327, although Edwards’ services to the Company as CEO and Director shall cease effective October 1, 2006 upon his retirement; 

 

		 	 
		
(c)	
it shall, reimburse Edwards for reasonable expenses incurred in conjunction with his consulting, subject to the expense reporting and policies of the Company

		 	 
		
(d)	
it shall, through the earlier of September 30, 2008, or such time as Edwards finds replacement health care and dental coverage, pay the COBRA premiums for Edwards to continue the health and dental coverage that he had while actively employed by the Company, after which time, Edwards can continue the COBRA coverage under the terms of COBRA if he desires to do so.  All other benefits Edwards enjoyed as an employee shall cease on October 2, 2006, and Edwards shall not be eligible for any bonus awarded by the Company under any 2006 bonus plan or for any stock options issued for 2005 or 2006;

		 	 
		
(e)	
Edwards’ Executive Life Plan shall continue two years beyond the current term, which expires on July 7, 2007 until July 7, 2009;

		 	 
		
(f)	
Edwards’ Executive Long Term Disability Plan shall expire on July 1, 2007;

		 	 
		
(g)	
effective immediately prior to September 30, 2006, all stock options held by Edwards shall automatically become exercisable; 

		 	 
		
(h)	
the Compensation Committee of the Board of Directors has determined that, as a result of becoming a consultant to the company, Edwards will remain in the “Continuous Service” of the Company during the Consulting Term referenced in ¶ 4 below and, accordingly, all of Edwards’ outstanding stock options will continue to be exercisable throughout the Consulting Term and thereafter for a period ending on the earlier of (i) 180 days after the end of the Consulting Term or (ii) the Expiration Date of the option; 

		 	 
		
(i)	
Edwards will be eligible to participate in the Impax Laboratories, Inc. Executive Non-Qualified Deferred Compensation Plan (“the Plan”) pursuant to the terms of the Plan and subject to the approval of the Compensation Committee of the Board of Directors; and that he shall be entitled to matching contributions through September 30, 2007 as provided in the Plan; and that such contributions shall be forfeited in the event Edwards does not comply with the terms of this Agreement; and

		 	 
		
(j)	
recognizing that the payments for those benefits described in (d), (e) and (f) above will result in taxable income to Edwards, it shall, at the end of the 2006, 2007 and 2008 tax years, pay Edwards an amount equal to the state and federal tax he will owe as a result of the Company’s payment for those benefits.   

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       4.     Edwards’ Obligation.  In consideration of this Agreement, and in addition to the                release set forth in paragraph 2 above, Edwards agrees that he shall:

		 	 
		
(a)	
make himself available to the Company as a consultant but in no event shall he be obligated to act as a consultant beyond September 30, 2008 (“the Consulting Term”);

		 	 
		
(b)	
not solicit, on behalf of himself or any other person or entity, any current employees of the Company during the term of his consulting period; 

		 	 
		
(c)	
keep confidential the terms of this Agreement, and not disclose or publish same, except in response to a subpoena, or except to his immediate family members, his financial advisor, his attorney, or to his accountant for the purpose of filing government tax returns;

		 	 
		
(d)	
make no negative or disparaging comments of any kind about the Company to any person or entity; 

		 	 
		
(e)	
with the exception of the laptop computer setups and certain office furniture that Edwards was provided by the Company, return to the Company any equipment or documents that have not already been returned; and

		 	 
		
(f)	
maintain the confidentiality of all proprietary information Edwards obtained about the Company, whether during his time as an employee or as a Consultant.

		 
	
       5.     Acknowledgment.  Edwards acknowledges that if he materially breaches any of the provisions of paragraph 4 of this Agreement, in addition to any other of the Company's rights and remedies, the Company shall immediately cease all payments or benefits described in paragraph 3 above.  Edwards further acknowledges that the consideration being provided by the Company is more than the Employer is required to provide under its normal policies, practices or Edwards benefit plans and represents benefits to which Edwards is not otherwise entitled.

		 
	
       6.     Covenant Not To Sue.  Edwards warrants that he has not filed any complaints, charges or claims for relief against the Company with any local, state or federal court or administrative agency that are currently outstanding.  Edwards further agrees and covenants not to sue the Company with respect to any matter arising before the effective date of this Agreement or covered by the release set forth in paragraph 2 above, and not to assert against the Company in any action, suit, litigation or proceeding any matter arising before the effective date of this Agreement or covered by the release set forth in paragraph 2 above.

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       7.     No Admission of Liability.  It is expressly understood and agreed that this Agreement, and any acts undertaken hereunder, shall not be construed as an admission of liability or wrongdoing on the part of either Party under any law, regulation or ordinance.

		 
	
       8.     Controlling Law.  This Agreement and all matters arising out of, or relating to it, shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania.  

		 
	
       9.     Jurisdiction.  Any action arising out of, or relating to, any of the provisions of this Agreement may, at the election of the Company, be brought and prosecuted only in the courts of, or located in, the Commonwealth of Pennsylvania, and in the event of such election, the Parties consent to the jurisdiction and venue of said courts.

		 
	
       10.     Entire Agreement.   The Parties understand that no promise, inducement, or other agreement not expressly contained herein has been made conferring any benefit upon them; that the Agreement contains the entire Agreement between the Parties; and that the terms of the Agreement are contractual and not recitals only.

		 
	
       11.     Severability.  If any provision of this Agreement is construed to be invalid, illegal or unenforceable, then the remaining provisions hereof shall not be affected thereby and shall be enforceable without regard thereto, except that, if the release set forth in Paragraph 2 above is held for any reason to be invalid or unenforceable, Edwards acknowledges and agrees that he shall be obligated to return any consideration already provided by the Company in exchange for said Release, and that the Company shall have no obligation to provide any further consideration.

		 
	
       12.     Section Headings.  Section and subsection headings in this Agreement are for convenience of reference only and shall neither constitute a part of this Agreement nor affect its interpretation. 

		 
	
       13.     Amendment.  The Parties agree that this Agreement may not be altered, amended, or modified, in any respect, except by a writing duly executed by both Parties

		 
	
       14.     EDWARDS ACKNOWLEDGES THAT HE WAS GIVEN A PERIOD OF 21 DAYS, COMMENCING ON AUGUST 14, 2006 IN WHICH TO CONSIDER THIS AGREEMENT BEFORE SIGNING IT; THAT HE MAY USE AS MUCH OF THIS 21-DAY PERIOD AS HE WISHES PRIOR TO SIGNING; THAT HE MAY REVOKE THIS AGREEMENT WITHIN SEVEN (7) DAYS OF SIGNING IT; AND THAT FOR SUCH REVOCATION TO BE EFFECTIVE, WRITTEN NOTICE MUST BE RECEIVED IN WRITING BY LARRY HSU, IMPAX LABORATORIES, INC., 121 NEW BRITAIN BOULEVARD, CHALFONT, PA 18914, NO LATER THAN THE CLOSE OF BUSINESS ON THE SEVENTH DAY AFTER EDWARDS HAS SIGNED THIS AGREEMENT.  IF EDWARDS REVOKES THIS AGREEMENT, IT SHALL NOT BE EFFECTIVE OR ENFORCEABLE, AND EDWARDS WILL NOT RECEIVE THE CONSIDERATION DESCRIBED IN
PARAGRAPH 3 ABOVE.  IF EDWARDS MATERIALLY BREACHES ANY PROVISION OF THIS AGREEMENT AFTER IT HAS BECOME EFFECTIVE, EDWARDS SHALL NOT RECEIVE ANY REMAINING CONSIDERATION THAT HAS NOT YET BEEN PAID AT THE TIME OF THE BREACH.

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     EDWARDS REPRESENTS THAT HE HAS READ THE TERMS OF THIS AGREEMENT; THAT HE HAS HAD AN OPPORTUNITY TO FULLY DISCUSS AND REVIEW THE TERMS OF THIS AGREEMENT WITH HIS ATTORNEY; THAT HE UNDERSTANDS THE CONTENTS HEREOF; AND THAT HE FREELY AND VOLUNTARILY ASSENTS TO ALL THE TERMS AND CONDITIONS HEREOF, AND SIGNS THE SAME AS HIS OWN FREE ACT, AND WITH THE INTENTION OF RELEASING THE COMPANY FROM EACH AND EVERY CLAIM RELATING IN ANY WAY TO HIS EMPLOYMENT WITH THE COMPANY.

     IN WITNESS WHEREOF, and intending to be legally bound, the Parties agree to the terms of this Agreement.

For  Impax Laboratories, Inc.   

	Date:	8/14/06	By:	/s/ Larry Hsu
	 	

    	 	

    
	 	 	 	Larry Hsu, Ph.D.

      President
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Date:	8/14/06	/s/ Barry R. Edwards
	 	
	

    
	 	 	Barry R. Edwards

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