ex10-46.htm


    EXHIBIT
10.46

     

    
      


      SENIOR
CONVERTIBLE PROMISSORY NOTE

      


      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    $250,000

                                  	
                                     Orange
      County, California

                                  
	 
      	
                                    July
      24,
2009

                                  


                          

                        

                      

                    

                  

                

              

            

          

        

      

      


      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 CGM Custodian for the IRA of
David S. Nagelberg, its endorsees, successors and assigns (the “Holder” or
“Lender”), in lawful money of the United States, the principal sum of
Two-Hundred Fifty Thousand Dollars ($250,000) 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 at the option of the holder,
upon a minimum of two million five hundred thousand dollars ($2,500,000) net
being received by the Borrower in any debt, equity or other financing from the
date of this Note.

       

      a.           Upon
the execution and delivery of this Note, the Holder shall disburse to the
Borrower the sum of $250,000, which is the principal amount. All remaining
amounts outstanding under this Note shall mature and become due and payable in
full on January 24, 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.  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
ten (10) 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”).  Interest shall be calculated
on the basis of a 365-day year for the actual number of days
elapsed.  All payments hereunder shall be paid in cash and to be
applied first to the payment of accrued interest, and the remaining balance to
the payment of principal.

      


      3.              Shares of Common
Stock.  The Lender shall receive 25,000 shares of the Company’s
restricted common stock.  The Holder shall the receive stock
certificate within ten (10) business days of signing.

      


      4.              Events of
Default.  If any of the events of default specified in this
Section shall occur, Holder may, so long as such condition remains uncured for a
period of seven (7) days, declare the entire principal and unpaid accrued
interest hereon immediately due and payable, by notice in writing to the
Company, this Note and any other obligations of the Borrower to the Lender,
shall become due immediately, without demand or notice. In the Event of
Default(s), the Company shall pay any and all legal and administrative fees
associated with remedying the Event of Default(s):

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                a.

              	
                Default
      in the payment of the principal or unpaid accrued interest of this Note
      when due and payable;

              


      

       

      
        	
                 
      

              	
                b.

              	
                Failure
      to issue Conversion Shares within ten (10) business day after request
      following a conversion hereunder;
or

              


      

       

      
        	
                 
      

              	
                c.

              	
                Filing
      of bankruptcy proceedings involving the
Company.

              


      

       

      
        	
                 
      

              	
                d.

              	
                Additional
      default provisions: Upon such act of default, the Holder shall be entitled
      to the following relief, in addition to all of its rights and remedies
      under law and/or equity:

              


      

       

      
        	
                 
      

              	
                i.

              	
                Interest
      rate for the Note, including any unpaid interest and principal amounts,
      shall be adjusted to 18%

              


      

       

      5.              Successors and Assigns:
Assignment.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto.  Nothing in this Note, express or implied, is intended to
confer upon any party, other than the parties hereto and their successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Note, except as expressly provided herein.  The Company may not
assign this Note or any of the rights or obligations referenced herein without
the prior written consent of Holder.

      


      6.              Prepayment.  This
Note may be prepaid in whole or in part, at any time, with the prior written
consent of the Lender, upon at least ten business days prior written notice to
the Holder. 

      


      7.              Governing
Law.  This agreement is entered into in Orange County,
California, and shall be construed in accordance with and governed by the laws
of the State of California applicable to contracts made and to be performed in
California.  Further, the parties agree that venue shall rest solely
and exclusively in Orange County, California, and any challenge or objection
thereto is hereby waived.

       

      8.              Notices.  For
the purpose of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given as of the date if delivered in person or by telecopy, on the next business
day, if sent by a nationally recognized overnight courier service, and on the
second business day if mailed by registered mail, return receipt requested,
postage prepaid, and if addressed to the Company then at its principal place of
business, or if addressed to the Holder, then the last known address on file
with the Company.

      


      9.              Heading;
References.  The headings have been inserted for convenience
only and are not to be considered when construing the provisions of this
Agreement.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      10.              Entire
Agreement.  This Agreement constitutes the entire understanding
between the parties hereto in respect of the terms of this Note by the Holder
and by the Company, superseding all negotiations, prior discussions, prior
written, implied and oral agreements, preliminary agreements and understandings
with Company or any of its officers, employees or agents.

       

       

      IN WITNESS WHEREOF, the
Borrower has executed this Promissory Note as of the date first set forth
above.

       

      


      Borrower:

      


      


      LOCATION
BASED TECHNOLGIES, INC.


      


      


      By: /s/ David M. Morse

      Name:  David
M. Morse

      Title:  CEO

      


      


      


      Lender:

      


      


      CGM
Custodian for the IRA of David S. Nagelberg


      


      


      By: /s/ David S. Nagelberg

      Name:  David
S. Nagelberg

       

       

       

      3