STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this
"Agreement") is made and entered into as of this 31st day of July,
2009 by and between the Location Based Technologies, Inc., a
Nevada corporation (the "Company") and Affinitas Corporation, a
Nebraska Corporation, 1015 No. 98th Street, Suite 100, Omaha, NE
68114 ("Buyer").
RECITALS
A. The Company is in
the business of developing, marketing and selling high quality
personal location devices through its Anaheim, California facility
(the "Business").
B. The Company
desires to sell to Buyer 387,397 shares of its common
restricted stock (the "Shares"), and Buyer desires to acquire the
Shares on the terms and conditions hereinafter set
forth.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants, agreements, representations and warranties
and subject to the conditions contained herein, the parties hereto
covenant and agree as follows:
1. Agreement to Sell and Agreement to
Purchase.
1.1 Purchase of Shares.
Simultaneously with the execution of this Agreement,on the terms
and subject to the conditions set forth herein, the Company shall
issue and sell to Buyer and Buyer shall purchase, acquire and
accept from the Company, all the Shares. The Company shall deliver
to Buyer certificates representing the Shares against receipt of
the Purchase Price (hereafter defined).
1.2 Closing. The closing of
the transactions herein contemplated (the "Closing") shall take
place at the offices of the Company in Anaheim, California, and be
effective as of 5:00 p.m., local time, on the date hereof (the
"Closing Date"). All actions taken and all documents delivered at
the Closing shall be deemed to have occurred
simultaneously.
2. Consideration to be Paid by
Buyer.
2.1 Purchase Price for Shares. The
purchase price for the Shares ("Purchase Price") shall be $
.7749 per share for an aggregate of $ 300,000.00 .
Warrant coverage will cover 25% of the aggregate value of the
Purchase Price based on the closing day's value of the market on
the day good funds are received ($ per share) with a three (3) year
term.
2.2 Payment of Purchase
Price. At the Closing, Buyer shall pay to the Company in
immediately available funds by wire transfer (pursuant to the
instructions set forth on Schedule 2.2) the Purchase Price against
receipt of the Shares.
3. Representations and Warranties
of the Company. The Company represents and warrants to Buyer
that:
3.1 Organization and Good
Standing. The Company is duly organized, validly existing and
in good standing under the laws of Nevada (the jurisdiction in
which it was formed) with full power to carry on its business as it
is now and has since its organization been conducted, and to own,
lease or operate its assets. The Company is duly authorized to do
business and is in good standing in such other jurisdictions in
which the Company is required to be so authorized.
3.2 Authorization of
Agreement. The Company has all requisite power and authority to
enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement and all other agreements and
instruments to be executed by the Company has been duly executed
and delivered by the Company, has been effectively authorized by
all necessary action, corporate or otherwise, and constitutes the
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
3.3 Capitalization. The
authorized capital stock of the Company consists solely of (i)
300,000,000 shares of voting common stock, $0.001 par value, of
which ________ shares are issued and outstanding and (ii)
30,000,000 shares of preferred stock, $0.001 par value, none of
which shares are issued and outstanding. All of the outstanding
shares have been duly authorized, validly issued (free of all
preemptive rights), are fully paid and nonassessable. Any
outstanding or authorized options, warrants, subscriptions, calls,
puts, conversion or other rights, contracts, agreements,
commitments or understandings of any kind obligating the Company to
issue, sell, purchase, return, redeem or pay any distribution or
dividend with respect to any shares of capital stock of the Company
or any other securities convertible into, exchangeable for or
evidencing the right to subscribe for any shares of capital stock
of or other ownership interest in the Company are listed on
Schedule 3.3 hereof.
3.4 Financial
Condition.
3.4.1 Financial Statements.
3.4.1.1 The Company has made
available (see www.sec.gov) to Buyer the financial
statements (collectively, the "Financial Statements") listed on
Schedule 3.4.1.1, together with the report thereon of the Company's
independent certified public accountants where
applicable.
3.4.1.2 To the Company's best
knowledge, the Financial Statements fairly present in all respects
the financial condition and the results of operations of the
Company as at the respective dates of and for the periods referred
to in such financial statements and reflect the consistent
application of accounting principles throughout the periods
involved in accordance with generally accepted accounting
principles.
3.4.2 Absence of Certain
Changes. Except as disclosed on Schedule 3.4.2, since November
30, 2008 (the "Balance Sheet Date") there has not been (i) any
change in the financial condition, results ofoperations, assets,
business, or prospects of the Company as described in its filings
with the Securities and Exchange Commission ("SEC Filings") or
otherwise that could have a material adverse effect on the assets,
results (financial or otherwise), business or prospects of the
Company (a "Material Adverse Effect"); (ii) any damage, destruction
or loss, whether or not covered by insurance, that could have a
Material Adverse Effect; (iii) any sale or transfer of any ofthe
assets of the Company, except sales in the ordinary course of the
business of inventory or immaterial amounts of other tangible
personal property; (iv) any commitment by the Company to any
capital expenditure to be paid after the Closing in excess of
S100,000 for any individual commitment or $500,000 in the
aggregate; (v) any incurrence of additional indebtedness for
borrowed money or entering into long term contracts or commitments
by the Company to be performed after the Closing Date; (vi) any
alteration in any respect of the Company's practices and policies
relating to the payment and collection of accounts receivable;
(vii) any failure to operate the Company in the ordinary course of
business consistent with past practice; (viii) any increase in, or
commitment to increase, the compensation payable or to become
payable to any of the Company's executive employees or any bonus
payment (other than as included as an accrued liability on the
Company's balance sheet) or similar arrangement made to or with any
of the Company's executive employees; (ix) any adoption of a plan
or agreement or amendment to any plan or agreement providing any
new or additional fringe benefits; (x) any material alteration in
the manner of keeping the Company's books, accounts or records,
(xi) any transaction with any affiliate of the Company; (xii) any
material tax election or establishment or increase in a reserve for
taxes or other liabilities on its books or otherwise provided
therefore, except f
