PROMISSORY NOTE
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$300,000
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Orange County, California
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|
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July 6, 2009
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FOR VALUE RECEIVED, the undersigned,
Location Based Technologies, Inc., a Nevada
corporation (referred to herein as the
“Borrower” or “Company”), hereby
unconditionally promises to pay to the order of Alder Capital
Partners I, L.P., its endorsees, successors and assigns (the
“Holder” or “Lender”), in lawful money of
the United States, the principal sum of Three-Hundred Thousand
Dollars ($300,000) on the Maturity Date.
1. Terms of
Repayment and Conversion . Principal of and interest
on this Note shall be due six months from date of issuance or,
if earlier, upon a minimum of five million dollars ($5,000,000) net
being received by the Borrower in any debt, equity or other
financing (provided that the Company shall provide 3 business days
prior written notice to the Holder).
a. Upon the execution
and delivery of this Note, the Holder shall disburse to the
Borrower the sum of $300,000, which is the principal amount. All
remaining amounts outstanding under this Note shall mature and
become due and payable in full on January 6, 2010 (the
"Maturity Date"), subject to any prior payment required by this
Note.
b. At any time and
from time to time this Note shall be convertible, in whole or in
part, into shares of the Company’s Common Stock
(“Conversion Shares”) at the option of the
Holder. The Holder shall effect conversions by
delivering written notice to the Company specifying therein the
principal amount of this Note to be converted. The
number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the
outstanding principal amount of this Note to be converted plus any
accrued but unpaid interest thereon, by (y) the Conversion Price,
where the “Conversion Price” shall equal $1.00 (subject
to adjustment). The Conversion Price shall be
appropriately and equitably adjusted following any stock splits,
stock dividends, spin-offs, distributions and similar
events. The Conversion Shares shall be duly and validly
issued, fully paid and non-assessable and, following the applicable
Rule 144 holding period, freely tradable. The Holder
shall receive the stock certificate(s) within three (3) business
days following the date of conversion.
2. Interest
Rate. This Note shall accrue interest on the
principal for a period of six (6) months from the date of this Note
at a rate of twelve percent (12%) per annum (the “Interest
Rate”). I
