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Exhibit 10.47

 
 
STOCK PURCHASE AGREEMENT
 
 
BY AND BETWEEN
 
 
LOCATION BASED TECHNOLOGIES, INC.
 
 
AND
 
 
AFFINITAS CORPORATION
 
 
Dated July 31, 2009
 

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TABLE OF CONTENTS
 

1. Agreement to Sell and Agreement to Purchase   1   1.1               Purchase
of Shares 1   1.2                    Closing   1 2. Consideration to be Paid by
Buyer    1   2.1               Purchase Price for Shares  1   2.2              
Payment of Purchase Price  2 3.
Representations and Warranties of the Company
2  
3.1
Organization and Good Standing
2
 
3.2
Authorization of Agreement
2
 
3.3
Capitalization
2
 
3.4
Financial Condition
2
 
3.5
Assets of the Company
3
 
3.6
Material Contracts
3
 
3.7
Labor and Employment Matters
3
 
3.8
Litigation
4
 
3.9
No Undisclosed Liabilities
4
 
3.10
Compliance with Law
4
4.
Representations and Warranties of Buyer
4  
4.1
Investment Intent
4
 
4.2
Review of SEC Filings
4
5.
Covenants
  4  
5.1
Form D
4
 
5.2
Reporting Status
4
 
5.3
Schedule 13D
5
 
5.4
Use of Proceeds
5
 
5.5
Financial Information
5
 
5.6
Disclosure of Transaction
5
 
5.7
Conduct of the Business of the Company
5
6.
Indemnification
5  
6.1
Claims for Indemnification
5
 
6.2
Manner of Indemnification
6
 
6.3
Limitations on Indemnification
6
 
6.4
Sole Basis for Recovery
6
 
6.5
Insurance
6

 
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7. Miscellaneous 6   7.1 Notices 6   7.2 Governing Law 6   7.3 Counterparts 6  
7.4 Indemnification for Brokerage 6   7.5 Complete Agreement 7   7.6
Interpretation 7   7.7 Severability 7   7.8 Knowledge; Due Diligence
Investigation 7   7.9 Expenses of Transactions 7   7.10 Amendment 7   7.11
Counterparts 7

 
 
SCHEDULES
 
Schedule 2.2
Instructions for Payment of Purchase Price
Schedule 3.3
Obligations of the Company
Schedule 3.4.1.1
Financial Statements Delivered to Buyer
Schedule 3.4.2
Changes in Financial Condition of the
Schedule 3.4.3
Company Defaults of the Company
Schedule 3.5
Liens of the Company
Schedule 3.8
Current Litigation
Schedule 3.9
Undisclosed Liabilities
Schedule 4.1
Stock Certificate Legend
Schedule 5.4
Use of Proceeds

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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.
 
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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.
 
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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 for taxes or
other liabilities relating to the ordinary course operations of the Company
since the Balance Sheet Date; (xiii) any liens claims or encumbrances placed
upon the Company's assets; or (xiv) any material transaction entered into by the
Company not in the ordinary course of business.
 
3.4.3 No Default. Except as disclosed in the Company's balance sheet as of the
Balance Sheet Date, or on Schedule 3.4.3, the Company is not in default with
respect to any liabilities or obligations, and all such liabilities or
obligations shown and reflected in such balance sheet and such liabilities
incurred or accrued subsequent to such Balance Sheet Date have been, or are
being, paid or discharged as they become due, and all such liabilities and
obligations were incurred in the ordinary course of business.
 
3.5 Assets of the Company. The Company owns, or has valid leasehold interests
in, or licenses to, all of the assets required or necessary to operate the
Business of the Company as it is now being conducted. Except for liens reflected
on the May 31, 2008 balance sheet, or on Schedule 3.5 hereof, the Company's
assets are free and clear of all liens.
 
3.6 Material Contracts. The Company's SEC Filings contain copies of all material
contracts to which the Company is a party, and the Company has made copies of
such contracts available to Buyer as requested by Buyer.
 
3.7 Labor and Employment Matters. No collective bargaining agreement exists that
is binding on the Company and no proceedings have been instituted by an employee
or group of employees seeking recognition of a bargaining representative. No
organizational effort currently is being made or threatened by or on behalf of
any labor union to organize any employees of the Company. The employment
arrangements for executive management of the Company are set forth in the
material contracts included with the Company's SEC Filings.
 
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3.8 Litigation. Except as set forth in the Company's SEC Filings or on Schedule
3.8 hereof, there are no material claims or litigation pending against the
Company.
 
3.9 No Undisclosed Liabilities. Except as and to the extent specifically
reflected or reserved against in the Company's balance sheet as of the Balance
Sheet Date or on Schedule 3.9 hereof, the Company has no liabilities or
obligations of any kind, including, without limitation, environmental,
employment, ERISA or income tax obligations, whether absolute, accrued,
contingent or otherwise.
 
3.10 Compliance with Law. To the Company's knowledge it has not violated and its
business as presently conducted does not violate, in any material respect any
Federal, state, local or foreign laws, regulations, permits, licenses,
governmental authorizations or orders, and the Company has not received any
notice of any such violation.
 
4. Representations and Warranties of Buyer. Buyer represents and warrants to the
Company that:
 
4.1 Investment Intent. Buyer is acquiring the Shares with the intention as of
the date hereof of holding the Shares for purposes of investment. Buyer
acknowledges that the Shares have not been, and will not be, registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities
laws, and Buyer has no intention as of the date hereof of selling the Shares in
a public distribution in violation of Federal securities laws or any applicable
state securities laws. Buyer is an Accredited Investor (as defined in Rule 501
promulgated under the Act) and is able to bear the risk of an investment in the
Shares including risks associated with holding the Shares for an extended period
of time. Buyer understands that the certificates representing the Shares will
bear the legend set forth on Schedule 4.1 hereof.
 
4.2 Investigation. Buyer, or its representatives, have reviewed the Company's
SEC Filings and other business records or information deemed necessary and have
had an opportunity to ask questions of, and receive answers or requested
documentation from, such officers of the Company as it deems necessary to
undertake the investment in the Company contemplated by this Agreement.
 
5. Covenants.
 
5.1 Form D. The Company shall make its best efforts to timely file a Form D to
the Shares as required under Regulation D promulgated by the Securities and
Exchange Commission ("SEC") and provide a copy thereof to Buyer. The Company
shall also make all filings and reports relating to the offer and sale of the
Shares acquired under applicable securities laws of the United States following
the Closing Date.
 
5.2 Reporting Status. The Company shall use its commercially reasonable best
efforts to timely file all reports required to be filed by the SEC pursuant to
the Securities Exchange Act of 1934, as amended ("34 Act"), and the Company
shall not terminate its status as an issuer required to file reports under the
34 Act even if the 34 Act or the rules and regulations thereunder would
otherwise permit such termination.
 
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5.3 Schedule 13D. Buyer agrees to file a Schedule 13D, if applicable, with the
SEC in a timely manner, and agrees to keep it current.
 
5.4 Use of Proceeds. The Company will use the proceeds ftom the sale of the
Shares for working capital purposes as more particularly described and in the
amounts indicated in Schedule 5.4 attached hereto and incorporated herein by
this reference.
 
5.5 Disclosure of Transaction. As soon as reasonably possible following the
Closing Date, the Company shall file a Form 8-K with the SEC describing the
terms of the transactions contemplated herein.
 
5.6 Conduct of the Business of the Company. After the Closing Date, the Company
will continue to conduct the operations of the business of the Company in the
ordinary course and will maintain the assets, properties and rights of the
Company in at least as good order and condition as exists on the date hereof,
subject to ordinary wear and tear.
 
6. Indemnification. In consideration of Buyer's execution and delivery of this
Agreement and acquiring the Shares thereunder, and in addition to all of the
Company's other obligations under the Agreement, the Company shall defend,
protect, indemnify and hold harmless Buyer from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether Buyer is
a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by Buyer as a result of or arising out of or relating to
(a) any misrepresentation or breach of any representation or warranty made by
the Company in the Agreement or any other certificate, instrument or document
contemplated hereby, (b) any breach of any covenant, agreement or obligation of
the Company contained in this Agreement or any other certificate, instrument or
document contemplated hereby, (c) any cause of action, suit or claim brought or
made against Buyer and arising out of or resulting from the execution, delivery,
performance or enforcement of the Agreement in accordance with the terms hereof
or any other certificate, instrument or document contemplated hereby, or (d) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Shares. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities that is permissible under applicable law.
 
6.1 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder, Buyer shall promptly notify the Company ofthe claim
and, when known, the facts constituting the basis for such claim; provided
however, that a failure to provide such notice will not reduce the
indemnification obligation hereunder unless, and only to the extent that, such
failure to deliver notice materially prejudices the Company. In the event of any
claim for indemnification hereunder resulting from or in connection with any
claim or legal proceedings by a third party, the notice to the Company shall
specify, if known, the amount or an estimate ofthe amount of the liability
potentially arising therefrom. The Buyer shall not settle or compromise any
claim by a third party for which it is entitled to indemnification hereunder,
without the prior written consent of the Company, which will not be unreasonably
withheld.
 
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6.2 Manner of Indemnification. Any indemnification by the Company of the Buyer
shall be effected by payment of cash, wire transfer or delivery of a certified
or official bank check in immediately available funds in the amount of the
Indemnification Liability.
 
6.3 Limitations on Indemnification. All representations and warranties made by
the Company herein or in any instrument or document furnished in connection
herewith shall survive the Closing only for a period of 12 months, except for
the representations and warranties contained in Sections 3.2 and 3.3, which
shall not expire. Buyer shall not be entitled to assert a claim for
indemnification under this Section 6 unless (i) such claim is asserted in
writing prior to 12 months following the Closing Date, or (ii) such claim
relates to any of the matters set forth in the first sentence of this Section
6.3, which may be asserted at any time prior to the expiration of such
representations.
 
6.4 Sole Basis for Recovery. The parties intend Article 6 to be the exclusive
method for compensating Buyer for claims relating to the Company and the
transactions contemplated by this Agreement.
 
6.5 Insurance. With respect to any matter covered by this Article 6, the Company
shall use reasonable efforts to assert a claim under any applicable insurance
policy and any indemnification claim shall be net of any insurance proceeds
received by the Buyer.
 
7. Miscellaneous.
 
7.1 Notices. All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or sent by
fax during normal business hours of the recipient, the next business day if sent
by a national overnight delivery service, charges prepaid, or three days after
mailed by certified or registered mail, postage prepaid, return receipt
requested, to the parties, their successors in interest or their assignees at
the following addresses, or at such other addresses as the parties may designate
by written notice in the manner aforesaid.
 
7.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THAT STATE.
 
7.3 Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute but one and the same instrument.
 
7.4 Indemnification for Brokerage. Buyer and the Company each represent and
warrant that no broker or finder has acted on its behalf in connection with this
Agreement or the transactions contemplated hereby. In addition to the
indemnification obligations contained in Section 6, each party hereto agrees to
indemnify and hold harmless the others from any claim or demand for commissions
or other compensation by any broker, finder or similar agent who is or claims to
have been employed by or on behalf of such ply.
 
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7.5 Complete Agreement. This Agreement, the Schedules hereto and the documents
delivered pursuant to this Agreement form or will form the entire agreement
between the parties hereto with respect to the transactions contemplated herein
and shall supersede all previous oral and written and all contemporaneous oral
negotiations, commitments, and understandings.
 
7.6 Interpretation. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
 
7.7 Severability. Any provision of this Agreement which is invalid, illegal, or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity, illegality, or unenforceability, without
affecting in any way the remaining provisions hereof in such jurisdiction or
rendering that or any other provision of this Agreement invalid, illegal, or
unenforceable in any other jurisdiction.
 
7.8 Knowledge: Due Diligence Investigation. All representations and warranties
contained herein which are made to the knowledge of the Company shall mean to
the knowledge of David M. Morse, Joseph Scalisi and Desiree Mejia ("Executive
Officers"). The Executive Officers shall be deemed to have "knowledge" of a
matter for purposes of the warranties and representations contained herein if
such matter has come, or should reasonably be expected to have come, to the
attention of the Executive Officers of the Company after conducting a reasonable
investigation.
 
7.9 Expenses of Transactions. All fees, costs and expenses incurred by Buyer or
the Company in connection with the transactions contemplated by this Agreement
shall be borne by the party incurring the same.
 
7.10 Amendment. The terms of this Agreement can be amended only by a written
agreement of the Buyer and the Company.
 
7.11 Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to each other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
 
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IN WITNESS WHEREOF, the undersigned duly execute this Agreement as of the date
first written above.
 

          COMPANY                  
LOCATION BASED TECHNOLOGIES, INC
a Nevada corporation
                 
/s/ David M. Morse
   
 
 
David M.Morse, Chief Executive Officer
   
 
 

         
/s/Desiree Mejia
   
 
 
Desiree Mejia, Secretary
   
 
 

          BUYER                   AFFINITAS CORPORATION                  
/s/ M. David Steier
   
 
 
David Steier, CFO
   
 
 

 
 
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