ex_1007.htm


    
      

      

    

    EXHIBIT
      10.7

     

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933 OR APPLICABLE STATE SECURITIES LAWS.  SUCH SECURITIES
AND
      ANY
      SECURITIES OR SHARES ISSUED HEREUNDER OR THEREUNDER MAY
      NOT
      BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
      THEREFROM UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

     

    
      	
              No.
                W – A(1)

            	
              Warrant
                to Purchase 500,000 Shares of

            
	 	
              Common
                Stock (subject to adjustment)

            


    

     

    WARRANT
      TO PURCHASE COMMON STOCK

    of

    LOCATION
      BASED TECHNOLOGIES, CORP

    Void
      after August 14, 2012

     

    This
      certifies that, for value received, NORTHSTAR INVESTMENTS, INC., or registered
      assigns (“Holder”) is entitled, subject to the terms set forth below, to
      purchase from LOCATION BASED TECHNOLOGIES, CORP. (the “Company”), a California
      corporation, 500,000 shares of the Common Stock of the Company, as constituted
      on the date hereof (the “Warrant Issue Date”), upon surrender hereof, at the
      principal office of the Company referred to below, with the Election to Exercise
      form attached hereto duly executed, and simultaneous payment therefor in lawful
      money of the United States or otherwise as hereinafter provided, at the Exercise
      Price as set forth in Section 2 below.  The number, character and
      Exercise Price of such shares of Common Stock are subject to adjustment as
      provided below.  The term “Warrant” as used herein shall include this
      Warrant, which is one of a series of warrants issued to Holder for the Common
      Stock of the Company, and any warrants delivered in substitution or exchange
      therefor as provided herein.  This Warrant is sometimes referred to
      herein or in Exhibit A hereto as the “A Warrant” and is issued to Holder
      simultaneously with the issuance to Holder of a warrant (“B Warrant”) to
      purchase 250,000 shares of Company Common Stock at $2 per share.

     

    1.           Term
      of Warrant.  Subject to the terms and conditions set forth herein,
      the purchase right represented by this A Warrant shall terminate on or before
      the earlier of

     

    (a)           5
      p.m., Pacific Time, on August 14, 2012 or

     

    (b)           the
      closing of the sale and issuance of shares of Common Stock of the Company (or
      any successor assuming the Company’s obligations hereunder) in a firmly
      underwritten public offering, pursuant to an effective registration statement
      under the Securities Act of 1933, as amended, the gross proceeds of which exceed
      $10,000,000.

     

    2.           Exercise
      Price.  The Exercise Price at which this A Warrant may be
      exercised shall be $1 per share of Common Stock, as adjusted from time to time
      pursuant to Section 11 hereof.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    3.           Exercise
      of Warrant.

     

    (a)           The
      purchase rights represented by this Warrant are exercisable by the Holder in
      whole or in part, but not for less than 100,000 shares at a time (or such lesser
      number of shares which may then constitute the maximum number purchasable;
      such
      number being subject to adjustment as provided in Section 11 below), at any
      time, or from time to time, during the term hereof as described in Section
      1
      above, by the surrender of this Warrant and the Election to 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), upon payment (i) in cash or by check acceptable to the
      Company, (ii) by cancellation by the Holder of indebtedness of the Company
      to
      the Holder, or (iii) by a combination of (i) and (ii), of the purchase price
      of
      the shares to be purchased.

     

    (b)           This
      Warrant shall be deemed to have been exercised immediately prior to the close
      of
      business on the date of its surrender for exercise as provided above, and the
      person entitled to receive the shares of Common Stock issuable upon such
      exercise shall be treated for all purposes as the holder of record of such
      shares as of the close of business on such date.  As promptly as
      practicable on or after such date and in any event within ten (10) days
      thereafter, the Company at its expense shall issue and deliver to the person
      or
      persons entitled to receive the same a certificate or certificates for the
      number of shares issuable upon such exercise.  In the event that this
      Warrant is exercised in part, the Company at its expense will execute and
      deliver a new Warrant of like tenor exercisable for the number of shares for
      which this Warrant may then be exercised.

     

    (c)           Cashless,
      or Net Issue, Exercise.  Notwithstanding any provisions herein to the
      contrary, if the fair market value of one share of Common Stock is greater
      than
      the Exercise Price (at the date of calculation as set forth below), in lieu
      of
      exercising this Warrant for cash, the Holder may elect to receive shares equal
      to the value (as determined below) of this Warrant (or the portion thereof
      being
      canceled) by surrender of this Warrant at the principal office of the Company
      together with the properly endorsed Notice of Exercise and notice of such
      election in which event the Company shall issue to the Holder a number of shares
      of Common Stock computed using the following formula:

     

    X                      =           Y(A-B)

                                              
      A

     

    
      
        	
                
                                                        
                    Where

                

              	
                
                  X

                

              	
                =

              	
                
                  the
                    number of shares of Common Stock to be issued to the
                    Holder

                

              


      

       

    

    
      	
               

            	
              Y

            	
              =

            	
              the
                number of shares of Common Stock purchasable under the Warrant or,
                if only
                a portion of the Warrant is being exercised, the portion of the Warrant
                being canceled (at the date of such
                calculation)

            


    

     

    
      	
               

            	
              A

            	
              =

            	
              the
                fair market value of one share of the Company’s Common Stock (at the date
                of such calculation)

            


    

     

    
      	
               

            	
              B

            	
              =

            	
              Exercise
                Price (as adjusted to the date of  such
                calculation)

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    For
      purposes of the above calculation, fair market value of one share of Common
      Stock shall be determined by the Company’s Board of Directors in good faith;
      provided, however, that where there exists a public market for the Company’s
      Common Stock at the time of such exercise, the fair market value per share
      shall
      be the average of the closing bid and asked prices of the Common Stock quoted
      in
      the OTC Bulletin Board or the last reported sale price of the Common Stock
      or
      the closing price quoted on the NASDAQ Stock Market or on any exchange on which
      the Common Stock is listed, whichever is applicable, as published in the Western
      Edition of The Wall Street Journal for the five (5) trading days prior to the
      date of determination of fair market value.  Notwithstanding the
      foregoing, in the event the Warrant is exercised in connection with a public
      offering of the Company’s Common Stock, the fair market value per share shall be
      the per share offering price to the public of the Company’s public
      offering.

     

    4.           No
      Fractional Shares or Scrip.  No fractional shares or scrip
      representing fractional shares shall be issued upon the exercise of this
      Warrant.  In lieu of any fractional share to which the Holder would
      otherwise be entitled, the Company shall make a cash payment equal to the
      Exercise Price multiplied by such fraction.

     

    5.           Replacement
      of Warrant.  On receipt of evidence reasonably satisfactory to the
      Company of the loss, theft, destruction or mutilation of this A Warrant and,
      in
      the case of loss, theft or destruction, on delivery of an indemnity agreement
      reasonably satisfactory in form and substance to the Company or, in the case
      of
      mutilation, on surrender and cancellation of this A Warrant, the Company at
      its
      expense shall execute and deliver, in lieu of this A Warrant, a new warrant
      of
      like tenor and amount.

     

    6.           Rights
      of Stockholders.  This A Warrant shall not entitle its Holder to
      any of the rights of a stockholder of the Company.

     

    7.           Transfer
      of Warrant.

     

    (a)           Warrant
      Register.  The Company will maintain a register (the “A Warrant
      Register”) containing the names and addresses of the Holder or
      Holders.  Any Holder of this A Warrant or any portion thereof may
      change his address as shown on the A Warrant Register by written notice to
      the
      Company requesting such change.  Any notice or written communication
      required or permitted to be given to the Holder may be delivered or given by
      mail to such Holder as shown on the A Warrant Register and at the address shown
      on the A Warrant Register.  Until this A Warrant is transferred on the
      A Warrant Register of the Company, the Company may treat the Holder as shown
      on
      the A Warrant Register as the absolute owner of this A Warrant for all purposes,
      notwithstanding any notice to the contrary.

     

    (b)           Warrant
      Agent.  The Company may, by written notice to the Holder, appoint
      an agent for the purpose of maintaining the A Warrant Register referred to
      in
      Section 7(a) above, issuing the Common Stock or other securities then issuable
      upon the exercise of this A Warrant, exchanging this A Warrant, replacing this
      A
      Warrant, or any or all of the foregoing.  Thereafter, any such
      registration, issuance, exchange, or replacement, as the case may be, shall
      be
      made at the office of such agent.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c)           Transferability
      and Non-negotiability of Warrant.  This Warrant may not be
      transferred or assigned in whole or in part without compliance with all
      applicable federal and state securities laws by the transferor and the
      transferee (including the delivery of investment representation letters and
      legal opinions reasonably satisfactory to the Company, if such are requested
      by
      the Company).  Subject to the provisions of this Warrant with respect
      to compliance with the Securities Act of 1933, as amended (the “Act”), and
      applicable state securities laws, title to this Warrant may be transferred
      by
      endorsement (by the Holder executing the Assignment Form annexed hereto) and
      delivery in the same manner as a negotiable instrument transferable by
      endorsement and delivery.

     

    (d)           Exchange
      of Warrant Upon a Transfer.  On surrender of this Warrant for
      exchange, properly endorsed on the Assignment Form and subject to the provisions
      of this Warrant with respect to compliance with the Act and applicable state
      securities laws, and with the limitations on assignments and transfers contained
      in this Section 7, the Company at its expense shall issue to or on the order
      of
      the Holder a new warrant or warrants of like tenor, in the name of the Holder
      or
      as the Holder (on payment by the Holder of any applicable transfer taxes) may
      direct, for the number of shares issuable upon exercise hereof.

     

    (e)           Compliance
      with Securities Laws.

     

    (i)           The
      Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
      and
      the shares of Common Stock or Common Stock to be issued upon exercise hereof
      are
      being acquired solely for the Holder’s own account and not as a nominee for any
      other party, and for investment, and that the Holder will not offer, sell or
      otherwise dispose of this Warrant or any shares of Common Stock or Common Stock
      to be issued upon exercise hereof except under circumstances that will not
      result in a violation of the Act or any state securities laws.  Upon
      exercise of this Warrant, the Holder shall, if requested by the Company, confirm
      in writing, in a form satisfactory to the Company, that the shares of Common
      Stock or Common Stock so purchased are being acquired solely for the Holder’s
      own account and not as a nominee for any other party, for investment, and not
      with a view toward distribution or resale.

     

    (ii)           This
      Warrant and all shares of Common Stock issued upon exercise hereof shall be
      stamped or imprinted with a legend in substantially the following form (in
      addition to any legend required by state securities laws):

     

    
      	 	
              THE
                SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND
                HAVE
                NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE
                STATE
                SECURITIES LAWS.  SUCH SECURITIES AND ANY SECURITIES OR SHARES
                ISSUED HEREUNDER OR THEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN
                THE
                ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
                ACT OR
                APPLICABLE STATE SECURITIES LAWS.

            	 


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    8.           Reservation
      of Stock.  The Company covenants that during the term 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 Common Stock
      upon the exercise of this Warrant and, from time to time, will take all steps
      necessary to amend its Articles of Incorporation to provide sufficient reserves
      of shares of Common Stock issuable upon exercise of the Warrant.  The
      Company further covenants that all shares that may be issued upon the exercise
      of rights represented by this Warrant, upon exercise of the rights represented
      by this Warrant and payment of the Exercise Price, all as set forth herein,
      will
      be free from all taxes, liens and charges in respect of the issue thereof (other
      than taxes in respect of any transfer occurring contemporaneously or otherwise
      specified herein).  The Company agrees that its issuance of this
      Warrant shall constitute full authority to its officers who are charged with
      the
      duty of executing stock certificates to execute and issue the necessary
      certificates for shares of Common Stock upon the exercise of this
      Warrant.

     

    9.           Notices.

     

    (a)           Whenever
      the Exercise Price or number of shares purchasable hereunder shall be adjusted
      pursuant to Section 11 hereof, the Company shall issue a certificate signed
      by
      its Chief Financial Officer setting forth, in reasonable detail, the event
      requiring the adjustment, the amount of the adjustment, the method by which
      such
      adjustment was calculated, and the Exercise Price and number of shares
      purchasable hereunder after giving effect to such adjustment, and shall cause
      a
      copy of such certificate to be mailed (by first-class mail, postage prepaid)
      to
      the Holder of this Warrant.

     

    (b)           In
      case:

     

    (i)           the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of this Warrant) for
      the
      purpose of entitling them to receive any dividend or other distribution, or
      any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities, or to receive any other right, or

     

    (ii)           of
      any capital reorganization of the Company, any reclassification of the capital
      stock of the Company, any consolidation or merger of the Company with or into
      another corporation, or any conveyance of all or substantially all of the assets
      of the Company to another corporation, or

     

    (iii)           of
      any voluntary dissolution, liquidation or winding-up of the
      Company,

     

    then,
      and
      in each such case, the Company will mail or cause to be mailed to the Holder
      or
      Holders a notice specifying, as the case may be, (A) the date on which a record
      is to be taken for the purpose of such dividend, distribution or right, and
      stating the amount and character of such dividend, distribution or right, or
      (B)
      the date on which such reorganization, reclassification, consolidation, merger,
      conveyance, dissolution, liquidation or winding-up is to take place, and the
      time, if any is to be fixed, as of which the holders of record of Common Stock
      (or such stock or securities at the time receivable upon the exercise of this
      Warrant) shall be entitled to exchange their shares of Common Stock (or such
      other stock or securities) for securities or other property deliverable upon
      such reorganization, reclassification, consolidation, merger, conveyance,
      dissolution, liquidation or winding-up.  Such notice shall be mailed
      at least 15 days prior to the date therein specified.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c)           All
      such notices, advices and communications shall be deemed to have been received
      (i) in the case of personal delivery, on the date of such delivery and (ii)
      in
      the case of mailing, on the third business day following the date of such
      mailing.

     

    10.           Amendments.  This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought.

     

    11.           Adjustments.  The
      Exercise Price and the number of shares purchasable hereunder are subject to
      adjustment from tune to time as follows:

     

    11.1           Merger,
      Sale of Assets, Etc.  If at any time while this Warrant, or any
      portion thereof, is outstanding and unexpired there shall be (i) a
      reorganization (other than a combination, reclassification, exchange or
      subdivision of shares otherwise provided for herein), (ii) a merger or
      consolidation of the Company with or into another corporation in which the
      Company is not the surviving entity, or a reverse triangular merger in which
      the
      Company is the surviving entity but the shares of the Company’s capital stock
      outstanding immediately prior to the merger are converted by virtue of the
      merger into other property, whether in the form of securities, cash, or
      otherwise, or (iii) a sale or transfer of the Company’s properties and assets
      as, or substantially as, an entirety to any other person, then, as a part of
      such reorganization, merger, consolidation, sale or transfer, lawful provision
      shall be made so that the holder of this Warrant shall thereafter be entitled
      to
      receive upon exercise of this Warrant, during the period specified herein and
      upon payment of the Exercise Price then in effect, the number of shares of
      stock
      or other securities or property of the successor corporation resulting from
      such
      reorganization, merger, consolidation, sale or transfer that a holder of the
      shares deliverable upon exercise of this Warrant would have been entitled to
      receive in such reorganization, consolidation, merger, sale or transfer if
      this
      Warrant had been exercised immediately before such reorganization, merger,
      consolidation, sale or transfer, all subject to further adjustment as provided
      in this Section 11.  The foregoing provisions of this Section 11.1
      shall similarly apply to successive reorganizations, consolidations, mergers,
      sales and transfers and to the stock or securities of any other corporation
      that
      are at the time receivable upon the exercise of this Warrant.  If the
      per share consideration payable to the holder hereof for shares in connection
      with any such transaction is in a form other than cash or marketable securities,
      then the value of such consideration shall be determined in good faith by the
      Company’s Board of Directors.  In all events, appropriate adjustment
      (as determined in good faith by the Company’s Board of Directors) shall be made
      in the application of the provisions of this Warrant with respect to the rights
      and interests of the Holder after the transaction, to the end that the
      provisions of this Warrant shall be applicable after that event, as near as
      reasonably may be, in relation to any shares or other property deliverable
      after
      that event upon exercise of this Warrant.

     

    11.2           Reclassification,
      Etc.  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 11.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    11.3           Split,
      Subdivision or Combination of Shares.  If the Company at any time
      while this Warrant, or any portion thereof, remains outstanding and unexpired
      shall split, subdivide or combine the securities as to which purchase rights
      under this Warrant exist, into a different number of securities of the same
      class, the Exercise Price for such securities shall be proportionately decreased
      in the case of a split or subdivision or proportionately increased in the case
      of a combination.

     

    11.4           Adjustments
      for Dividends in Stock or Other Securities or Property.  If while
      this Warrant, or any portion hereof, remains outstanding and unexpired the
      holders of the securities as to which purchase rights under this Warrant exist
      at the time shall have received, or, on or after the record date fixed for
      the
      determination of eligible shareholders, shall have become entitled to receive,
      without payment therefor, other or additional stock or other securities or
      property (other than cash) of the Company by way of dividend, then and in each
      case, this Warrant shall represent the right to acquire, in addition to the
      number of shares of the security receivable upon exercise of this Warrant,
      and
      without payment of any additional consideration therefor, the amount of such
      other or additional stock or other securities or property (other than cash)
      of
      the Company that such holder would hold on the date of such exercise had it
      been
      the holder of record of the security receivable upon exercise of this Warrant
      on
      the date hereof and had thereafter, during the period from the date hereof
      to
      and including the date of such exercise, retained such shares and/or all other
      additional stock available by it as aforesaid during such period, giving effect
      to all adjustments called for during such period by the provisions of this
      Section 11.

     

    11.5           Certificate
      as to Adjustments.  Upon the occurrence of each adjustment or
      readjustment pursuant to this Section 11, the Company at its expense shall
      promptly compute such adjustment or readjustment in accordance with the terms
      hereof and furnish to each Holder of this Warrant a certificate setting forth
      such adjustment or readjustment and showing in detail the facts upon which
      such
      adjustment or readjustment is based.  The Company shall, upon the
      written request, at any time, of any such Holder, furnish or cause to be
      furnished to such Holder a like certificate setting forth: (i) such adjustments
      and readjustments; (ii) the Exercise Price at the time in effect; and (iii)
      the
      number of shares and the amount, if any, of other property that at the time
      would be received upon the exercise of the Warrant.

     

    11.6           No
      Impairment.  The Company will not, by any voluntary action, avoid
      or seek to avoid the observance or performance of any of the terms to be
      observed or performed hereunder by the Company, but will at all times in good
      faith assist in the carrying out of all the provisions of this Section 11 and
      in
      the taking of all such action as may be necessary or appropriate in order to
      protect the rights of the Holders of this Warrant against
      impairment.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    12.           Registration
      Rights.  Upon exercise of this Warrant, the Holder shall have and
      be entitled to exercise the registration described in Exhibit A attached hereto
      and incorporated by this reference.

     

    13.           Miscellaneous.

     

    13.1           Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Warrant must be in writing and will be deemed
      to
      have been delivered:  (i) upon receipt, when delivered personally;
      (ii) upon receipt, when sent by facsimile (provided confirmation of transmission
      is mechanically or electronically generated and kept on file by the sending
      party); or (iii) one business day after deposit with a reputable overnight
      delivery service, in each case properly addressed to the party to receive the
      same.  Such addresses and facsimile numbers are below the signature
      lines on the signature page hereof.

     

    13.2           Failure
      of any party to exercise any right under this Warrant or otherwise, or delay
      by
      a party exercising such right, shall not operate as a waiver
      thereof.

     

    13.3           All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be governed by the internal laws of the State of
      California, without giving effect to any choice of law or conflict of law
      provision or rule (whether of the State of California or any other
      jurisdictions) that would cause application of the laws of any jurisdictions
      other than the State of California.

     

    13.4           Except
      as otherwise provided in this Warrant, this Warrant shall inure to the benefit
      of and be binding upon the permitted successor and assigns of each of the
      parties hereto.

     

    13.5           The
      headings in this Warrant are for reference only and shall not limit or otherwise
      affect the meaning thereof.

     

    13.6           The
      Company shall provide Holder with quarterly financial statements within 45
      days
      of the end of each fiscal quarter and annual financial statements within 90
      days
      of the end of each fiscal year.  At such time as the Company’s
      financial statements (or those of any successor entity which assumes the
      Company’s obligations hereunder) are available on the website of the Securities
      and Exchange Commission, the obligation of the Company (or such successor)
      to
      provide such quarterly and annual financial statements shall cease.

     

    13.7           This
      Warrant may be executed in two or more identical counterparts, all of which
      shall be considered one and the same document 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 of
      the
      signature were an original, not facsimile.

     

    13.8           The
      language used in this Warrant will be deemed to be the language chosen by the
      parties to express their mutual intent and no rules of strict construction
      will
      be applied against any party.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    13.9           This
      Warrant may be amended only in writing by a document signed by the parties
      hereto.

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Warrant to be
      executed.

     

    Dated:  August
      15, 2007

     

    
      	
              ACCEPTED
                BY HOLDER:

            	 	 	
              LOCATION
                BASED TECHNOLOGIES, CORP.

            	 
	 	 	 	 	 
	NORTHSTAR
              INVESTMENTS,
              INC.	 	 	 	 
	 	 	 	 	 
	
              /s/
                Glenn
                Busch  

            	 	
               
                

            	
              /s/
                Jopseh
                Scalisi

            	 
	
              Glenn
                Busch,
                President  

            	 	 	
              Joseph
                Scalisi,
                President

            	 
	
               

            	 	 	
               

            	 
	 	 	 	 	 
	Address:
              5027 Randall Street	 	 	Address:
              4999 E. La Palma Boulevard 	 
	                
              San Diego, CA 92109 	 	 	                
              Anaheim, California 92807	 
	 	 	 	 	 
	Fax
              No.:   N/A  	 	 	 Fax
              No.:  714-200-0287	 


    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    To:           LOCATION
      BASED TECHNOLOGIES, CORP.

    
      _______________

      _______________

      _______________

       

      ELECTION
        TO EXERCISE

       

      The
        undersigned hereby exercises his or its rights to purchase _______________
        shares of Common Stock covered by the within A Warrant and tenders payment
        herewith in the amount of $_______________ in accordance with the terms thereof,
        and requests that certificates for such securities be issued in the name
        of, and
        delivered to

       

      
        
          

        

         

          

        

         

        
          
            

          

        

         

      

      and,
        if
        such number of shares of Common Stock shall not be all the shares of Common
        Stock covered by the within A Warrant, that a new A Warrant for the balance
        of
        the shares of Common Stock covered by the within A Warrant be registered
        in the
        name of, and delivered to, the undersigned at the address stated
        below.

       

      
        	 	 	 	 	 
	
                Dated:  _______________,
                  20__       

              	 	
                 Name:
                    

              	
                 

              	 
	
                 

              	 	 	
                (Print)

              	 
	 	 	 	 	 
	Address:
                _________________________________________ 	 	 	 


      

      
        	 	 	 	 	 
	
                 

              	 	 	
                 

              	 
	
                 

              	 	 	
                Signature

              	 


      

                                                        

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      To:           LOCATION
        BASED TECHNOLOGIES, CORP.

      _______________

      _______________

      _______________

       

      CASHLESS
        EXERCISE FORM

       

      The
        undersigned hereby irrevocably elects to surrender it’s A Warrant for the number
        of shares of Common Stock as shall be issuable pursuant to the cashless exercise
        provisions set forth in Section 3(c) of the within A Warrant, in respect
        of
        _______________ shares of Common Stock underlying the within A Warrant, and
        requests that certificates for such securities be issued in the name of,
        and
        delivered to

       

      
        
          
            

          

           

            

          

           

          
            
              

            

          

        

      

       

      and,
        if
        such number of shares shall not be all the shares exchangeable or purchasable
        under the within A Warrant for the balance of the shares of Common Stock
        covered
        by the within A Warrant be registered in the name of, and delivered to, the
        undersigned at the address stated below.

       

      
        
          	 	 	 	 	 
	
                  Dated:  _______________,
                    20__       

                	 	
                   Name:
                      

                	
                   

                	 
	
                   

                	 	 	
                  (Print)

                	 
	 	 	 	 	 
	Address:
                  _________________________________________ 	 	 	 


        

        
          	 	 	 	 	 
	
                   

                	 	 	
                   

                	 
	
                   

                	 	 	
                  Signature

                	 


        

                          

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      


      ASSIGNMENT
        FORM

       

      (To
        be
        executed by the registered holder  if such holder desires to transfer
        the attached Warrant.)

       

      FOR
        VALUE
        RECEIVED, ______________________________ hereby sells, assigns and transfers
        unto ______________________________ [choose either:  this A Warrant in
        its entirety OR the right to purchase pursuant to this A Warrant _______________
        shares of Common Stock of Location Based Technologies, Corp. (the “Company”)],
        together with all right, title and interest therein, and does hereby irrevocably
        constitute and appoint ______________________________ attorney to transfer
        such
        A Warrant on the books of the Company, with full power of
        substitution.

       

       

      
        	
                Dated:  _______________,
                  20__

              	 	
                Signature

              	
                 

              	 
	
                 

              	 	 	
                 

              	 


      

                                                                                             

       

      NOTICE

       

      The
        Signature on the foregoing Assignment must correspond to the name as written
        upon the fact of this A Warrant in every particular, without alteration or
        enlargement or any change whatsoever.

       

      
        
          
          

        

        
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      EXHIBIT
        A

      REGISTRATION
        RIGHTS PROVISION

       

      1.1           Definitions.

       

      (a)           The
        terms “register,” “registered,” and “registration” refer to a registration
        effected by filing with the Securities and Exchange Commission (the “SEC”) a
        registration statement (“Registration Statement”) in compliance with the
        Securities Act of 1933, as amended (the “1933 Act”) and the declaration or
        ordering by the SEC of the effectiveness of such Registration
        Statement.

       

      (b)           The
        term “Registrable Securities” means any and all shares of Common Stock hereafter
        issued or issuable upon exercise of this A Warrant or its companion B
        Warrant.  The term “Registrable Securities” shall also include any
        Common Stock issued as (or issuable upon the conversion or exercise of any
        warrant, right, or other security that is issued as) a dividend, stock split
        or
        other distribution with respect to, or in exchange for, upon reclassification
        or
        in replacement of, Registrable Securities.  In the event of any
        recapitalization by the Company, whether by stock split, reverse stock split,
        stock dividend or otherwise, the number of shares of Registrable Securities
        used
        throughout this Registration Rights Provision for various purposes shall
        be
        proportionately increased or decreased.

       

      (c)           Capitalized
        terms not defined herein shall have the meanings ascribed to them in the
        Warrant
        to Purchase Common Stock, dated as of August __, 2007 (“A Warrant”), to which
        this Exhibit A is attached which was issued by Location Based Technologies,
        Corp. (the “Company”).

       

      1.2           Demand
        Registration.  The initial Holder, or all but not less than all of
        the holders, of the A Warrant(s) and the B Warrant(s), together but not
        separately, may, by written notice to the Company, demand that the Company
        file,
        and the Company shall file within 45 days of such demand, a resale registration
        statement covering not less than all of the Registrable Securities issued
        or
        issuable pursuant to this A Warrant and its companion B Warrant (the “Demand
        Registration Statement”).  Notwithstanding the foregoing, no Holder of
        Registrable Securities may require the Company to file a Demand Registration
        Statement until such time as the Company (or any successor which acquires
        the
        Company’s obligations hereunder) is eligible to file a registration statement on
        Form S-3 or a successor form thereto.  The Company or any shareholder
        of the Company entitled to registration rights may request that securities
        of
        the same class as the Registrable Securities be included in the Demand
        Registration Statement for sale in the offering subject to customary normal
        agreements that may be required in connection therewith.  The Holder
        of the A Warrant and B Warrant may make only one collective demand pursuant
        to
        this Section 1.2 and the corresponding Section 1.2 of the B Warrant and all
        Registrable Securities covered by this A Warrant and its companion B Warrant
        (as
        such Warrants may be fractionalized in the future) must be included in that
        one
        Demand Registration Statement.

       

      
        
          
          

        

        
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      1.3           “Piggyback”
        Registrations.

       

      (a)           If
        at any time or from time to time, prior to the third anniversary of Holder’s
        initial exercise of this A Warrant or its companion B Warrant, the Company
        shall
        determine to register any of its securities, either for its own account or
        the
        account of security holders, other than a registration relating solely to
        employee benefit plans or a registration on Form S-4 relating solely to a
        SEC
        Rule 145 transaction, the Company will:

       

      (i)           promptly
        give to Holder written notice thereof (which shall include a list of the
        jurisdictions in which the Company intends to attempt to qualify such securities
        under the applicable blue sky or other state securities laws); and

       

      (ii)           include
        in such registration (and any related qualification under blue sky laws or
        other
        compliance), and in any underwriting involved therein, all the Registrable
        Securities specified in a written request, made by Holder within 30 days
        after
        receipt of such written notice from the Company, except as set forth in Section
        1.3(b) below.

       

      (b)           If
        the registration of which the Company gives notice is for a registered public
        offering involving an underwriting, the Company shall so advise Holder as
        a part
        of the written notice given pursuant to Section 1.3(a)(i). In such event
        the
        right of Holder to registration pursuant to this Section 1.3 shall be
        conditioned upon Holder’s participation in such underwriting and the inclusion
        of Holder’s Registrable Securities in the underwriting to the extent provided
        herein.  Holder, together with the Company and the other parties
        distributing their securities through such underwriting, shall enter into
        an
        underwriting agreement in customary form with the underwriter or underwriters
        selected for such underwriting by the Company.  Notwithstanding any
        other provision of this Section 1.3, if the underwriter determines that
        marketing factors require a limitation of the number of shares or type of
        securities to be underwritten, the underwriter may limit the number of
        Registrable Securities to be included in the registration and underwriting,
        or
        may exclude Registrable Securities entirely from such registration and
        underwriting subject to the terms of this Section.  The Company shall
        so advise all holders of the Company’s securities that would otherwise have a
        right to be so registered and underwritten and the number of shares of such
        securities, including Registrable Securities, that may be included in the
        registration and underwriting shall be allocated among Holder and all such
        other
        holders in proportion, as nearly as practicable, to the respective amounts
        of
        securities of the Company proposed to be included in such underwritten offering
        by all shareholders other than the Company; provided, however, that the rights
        of Holder to include all or any allocable portion of such Registrable Securities
        shall be subject to the priority (prior to any allocation to Holder or others)
        of the holders of existing “demand” registration rights existing on the date
        hereof or that otherwise have priority over the rights of Holder set forth
        in
        this Section 1.3.  No securities excluded from the underwriting by
        reason of the underwriter’s marketing limitation shall be included in such
        registration.  If Holder disapproves of the terms of the underwriting,
        it may elect to withdraw therefrom by written notice to the Company and the
        underwriter.  The Registrable Securities so withdrawn shall also be
        withdrawn from registration.  Any such withdrawal will cause the lapse
        of Holder’s demand rights under Section 1.2 hereof.

       

      (c)           The
        Holder agrees that any shares of Registrable Securities which are not included
        in an underwritten public offering described in Section 1.3(b) shall not
        be
        publicly sold by the Holder for a period, not to exceed 180 days, which the
        managing underwriter reasonably determines is necessary in order to effect
        such
        underwritten public offering.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      1.4           Expenses
        of Registration.  All expenses incurred in connection with the
        registrations effected pursuant to Sections 1.2 and 1.3, including without
        limitation all registration, filing, listing and qualification fees (including
        SEC, securities exchange, National Association of Securities Dealers Inc.
        and
        blue sky fees and expenses), printing expenses, escrow fees, fees and
        disbursements of counsel for each of the Company and Holder (if Holder is
        participating in such registration), and expenses of any special audits and/or
        “cold comfort” letters incidental to or required by such registration, fees and
        disbursements of underwriters customarily paid by issuers or sellers of
        securities, and the reasonable fees and expenses of any special experts retained
        by the Company in connection with the requested registration shall be borne
        by
        the Company; provided, however, that the Company shall not be required to
        pay
        stock transfer taxes or underwriters’ discounts or commissions relating to
        Registrable Securities.

       

      1.5           Obligations
        of the Company.  Whenever required under this Registration Rights
        Provision to effect the registration of any Registrable Securities, the Company
        shall, as expeditiously as reasonably possible:

       

      (a)           prepare
        and file with the SEC a Registration Statement with respect to such Registrable
        Securities and use its diligence and reasonable commercial efforts to cause
        such
        Registration Statement to become effective, and, upon the request of Holder,
        keep such Registration Statement effective until Holder has completed the
        distribution relating thereto, but in no event longer than one
        year;

       

      (b)           prepare
        and file with the SEC such amendments and supplements to such Registration
        Statement and the prospectus used in connection with such Registration Statement
        as may be necessary to keep such registration statement effective as provided
        in
        Section 1.5(a) and to comply with the provisions of the 1933 Act with respect
        to
        the disposition of all securities covered by such Registration
        Statement;

       

      (c)           furnish
        to Holder such numbers of copies of the registration statement, the prospectus,
        including a preliminary prospectus, and of each amendment and supplement
        (in
        each case, including all exhibits), in conformity with the requirements of
        the
        1933 Act, and such other documents as Holder may reasonably request in order
        to
        facilitate the disposition of Registrable Securities owned by
        Holder;

       

      (d)           use
        commercially reasonable efforts to register and qualify the securities covered
        by such Registration Statement under such other securities or Blue Sky laws
        of
        such jurisdictions in such states as shall be reasonably necessary to facilitate
        an orderly distribution of the Registrable Securities, provided that the
        Company
        shall not be required in connection therewith or as a condition thereto to
        qualify to do business in any such jurisdiction that, but for the requirements
        of this Section 1.5(d), it would not be obligated to be so qualified or to
        file
        a general consent to service of process in any such states or
        jurisdictions;

       

      (e)           use
        commercially reasonable efforts to cause such securities covered by such
        Registration Statement to be registered with or approved by such other
        governmental agencies or authorities of the United States of America or any
        state thereof as may be necessary to enable Holder to consummate the disposition
        of such securities;

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (f)           in
        the event of any underwritten public offering, enter into and perform its
        obligations under an underwriting agreement, usual and customary in form,
        with
        the managing underwriter of such offering; and the Company shall take such
        other
        actions as the underwriters reasonably request in order to expedite or
        facilitate a disposition of such securities;

       

      (g)           use
        reasonable commercial efforts to cause all such securities covered by such
        Registration Statement to be listed on, or included in, a stock exchange
        or
        national quotation system; and to provide a transfer agent and registrar
        for
        such securities covered by such Registration Statement no later than the
        effective date of such Registration Statement;

       

      (h)           use
        reasonable commercial efforts to obtain a “cold comfort” letter or letters from
        the Company’s independent public accountants in customary form and covering
        matters of the type customarily covered by “cold comfort” letters as Holder
        shall reasonably request;

       

      (i)           notify
        Holder at any time when a prospectus relating thereto is required to be
        delivered under the 1933 Act or the happening of any event as a result of
        which,
        or of the Company becoming otherwise aware that, the prospectus included
        in such
        Registration Statement, as then in effect, includes an untrue statement of
        a
        material fact or omits to state a material fact required to be stated therein
        or
        necessary to make the statements therein not misleading in the light of the
        circumstances then existing, and at the request of Holder, prepare and furnish
        to Holder a reasonable number of copies of an amended or supplemental prospectus
        as may be necessary so that, as thereafter delivered to the purchasers of
        such
        securities under such Registration Statement, such prospectus shall not include
        an untrue statement of a material fact or a misstatement of a material fact
        required to be stated therein or necessary to make the statements therein
        not
        misleading in light of the circumstances then existing; and

       

      (j)           make
        reasonably available for inspection by representatives of Holder, by any
        underwriter participating in any disposition to be effected pursuant to such
        Registration Statement and by any attorney, accountant or other agent retained
        by Holder or any such underwriter, all pertinent financial and other records,
        pertinent corporate documents and properties of the Company reasonably requested
        by such persons in connection with such Registration Statement.

       

      1.6           Obligations
        of Holder.  In the event of an underwritten public offering,
        Holder shall enter into and perform its obligations under an underwriting
        agreement, usual and customary in form, with the managing underwriter of
        such
        offering selected by the Company.  In addition, Holder agrees that,
        upon receipt of any notice from the Company of the happening of any event
        described in Section 1.5(i), Holder will forthwith discontinue disposition
        of
        such securities pursuant to such Registration Statement until Holder’s receipt
        of the copies of the supplemental or amended prospectus contemplated by Section
        1.5(i), and, as so directed by the Company, Holder will deliver to the Company
        (at the Company’s expense) all copies, other than permanent file copies then in
        Holder’s possession, of the prospectus covering such securities covered by such
        Registration Statement current at the time of receipt of such
        notice.

      
        
          
          

        

        
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      1.7           Selection
        of Underwriter.  The Company shall select, in its sole discretion,
        the managing underwriter or underwriters with respect to any underwritten
        offering of the Common Stock.

       

      1.8           Indemnification.

       

      (a)           The
        Company will, and does hereby undertake to, indemnify and hold harmless Holder,
        each of Holder’s officers, directors and affiliates, and each person controlling
        Holder, with respect to any registration, qualification, listing, or compliance
        effected pursuant to this Section 1, and each underwriter, if any (including
        any
        broker or dealer which may be deemed an underwriter), and each person who
        controls any underwriter (including any such broker or dealer), of the
        Registrable Securities held by or issuable to Holder, against all claims,
        losses, damages, liabilities and expenses, joint or several (or actions in
        respect thereto whether or not a party thereto), to which they may become
        subject under the 1933 Act, the Securities Exchange Act of 1934, as amended,
        (the “1934 Act”), or other federal, state or common law, or otherwise, arising
        out of or based on (i) any untrue statement (or alleged untrue statement)
        of a
        material fact contained in any preliminary, final or summary prospectus,
        offering circular, or other similar document or any amendment or supplement
        thereto (including any related Registration Statement, notification, or the
        like) incident to any such registration, qualification, listing, or compliance,
        or arising out of or based upon any omission (or alleged omission) to state
        therein a material fact required to be stated therein or necessary to make
        the
        statements therein not misleading, or (ii) any violation or alleged violation
        by
        the Company of any federal, state or common law, rule or regulation applicable
        to the Company in connection with any such registration, qualification, or
        compliance, and will reimburse, as incurred, Holder, each such underwriter,
        and
        each such director, officer, affiliate and controlling person, for any legal
        and
        any other expenses reasonably incurred in connection with investigating or
        defending any such claim, loss, damage, liability, or action (whether or
        not the
        indemnified party is a party to any proceeding); provided that the Company
        will
        not be liable in any such case to the extent that any such claim, loss, damage,
        liability or expense arises out of or is based on any untrue statement or
        omission based upon written information furnished to the Company by an
        instrument duly executed by Holder or by such underwriter and stated to be
        specifically for use therein.  Such indemnity shall remain in full
        force and effect regardless of any investigation made by or on behalf of
        Holder
        or any other indemnified party and shall survive the transfer of such securities
        by Holder.

       

      (b)           Holder
        will indemnify the Company, each of its directors, and each officer who signs
        a
        Registration Statement in connection therewith, and each person controlling
        the
        Company, each underwriter, if any, and each person who controls any underwriter,
        of the Company’s securities covered by such a Registration Statement, against
        all claims, losses, damages, liabilities and expenses, joint or several (or
        actions in respect thereto whether or not a party thereto) arising out of
        or
        based on any untrue statement (or alleged untrue statement) of a material
        fact
        contained in any such Registration Statement, preliminary, final or summary
        prospectus, offering circular, or other document, or any omission (or alleged
        omission) to state therein a material fact required to be stated therein
        or
        necessary to make the statements therein not misleading, and will reimburse,
        as
        incurred, the Company, each such underwriter and each such director, officer,
        partner, and controlling person, for any legal or any other expenses reasonably
        incurred in connection with investigating or defending any such claim, loss,
        damage, liability or action (whether or not the indemnified party is a party
        to
        any proceeding), in each case to the extent, but only to the extent, that
        such
        untrue statement (or alleged untrue statement) or omission (or alleged omission)
        was made in such Registration Statement, preliminary, final or summary
        prospectus, offering circular or other document, in reliance upon and in
        conformity with written information furnished to the Company by an instrument
        duly executed by Holder and stated to be specifically for use
        therein.

       

      
        
          
          

        

        
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      (c)           Each
        party entitled to indemnification under this Section 1.8 (the “Indemnified
        Party”) shall give notice to the party required to provide such indemnification
        (the “Indemnifying Party”) of any claim as to which indemnification may be
        sought promptly after such Indemnified Party has actual knowledge thereof,
        and
        shall permit the Indemnifying Party to assume the defense of any such claim
        or
        any litigation resulting therefrom; provided that counsel for the Indemnifying
        Party, who shall conduct the defense of such claim or litigation, shall be
        subject to approval by the Indemnified Party (whose approval shall not be
        unreasonably withheld) and the Indemnified Party may participate in such
        defense
        at the Indemnifying Party’s expense if representation of such Indemnified Party
        would be inappropriate due to actual or potential differing interests between
        such Indemnified Party and any other party represented by such counsel in
        such
        proceeding; and provided further that the failure of any Indemnified Party
        to
        give notice as provided herein shall not relieve the Indemnifying Party of
        its
        obligations under this Section 1.8, except to the extent that such failure
        to
        give notice shall materially adversely affect the Indemnifying Party in the
        defense of any such claim or any such litigation.  No Indemnifying
        Party, in the defense of any such claim or litigation, shall except with
        the
        consent of each Indemnified Party, consent to entry of any judgment or enter
        into any settlement that does not include as an unconditional term thereof
        the
        giving by the claimant or plaintiff therein, to such Indemnified Party, of
        a
        full and final release from all liability in respect to such claim or
        litigation.

       

      (d)           Indemnification
        similar to that specified in this Section 1.8 (with appropriate modifications)
        shall be given by the Company and Holder with respect to any required
        registration or other qualification of securities under any federal or state
        law
        or regulation or governmental authority other than the 1933 Act.

       

      (e)           If
        recovery is not available under the foregoing indemnification provisions
        of this
        Section 1.8 for any reason other than as expressly specified therein, the
        parties entitled to indemnification by the terms thereof shall be entitled
        to
        contribution to liabilities and expenses.  In determining the amount
        of contribution which the respective parties are entitled, there shall be
        considered the relative fault of each party in connection with the statements
        or
        omissions which resulted in such claims, losses, damages or actions, as well
        as
        other equitable considerations appropriate under the
        circumstances.  No person guilty of fraudulent misrepresentation
        (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
        contribution from any person who was not guilty of such fraudulent
        misrepresentation.

       

      (f)           The
        obligations of the parties under this Section 1.8 shall be in addition to
        any
        liabilities which any party may otherwise have to any other party.

       

      1.9           Information
        by Holder.  Holder shall furnish to the Company such information
        regarding Holder and the distribution proposed by Holder as the Company may
        reasonably request in writing and as shall be required in connection with
        any
        registration, qualification, or compliance referred to in this Registration
        Rights Provision.

       

      1.10         Transfer
        of Registration Rights.  The rights contained in Sections 1.2 and
        1.3 hereof may be assigned or otherwise conveyed to a transferee or assignee
        of
        this A Warrant or the Registrable Securities, provided that such transferee
        or
        assignee may not demand that the Company to file a registration statement
        pursuant to Section 1.2 hereof unless the holders of all Registrable Securities
        issued or issuable pursuant to this A Warrant and its companion B Warrant
        join
        in such demand; and, provided further, that the Company is given written
        notice
        by the transferor at the time of or within a reasonable time after said
        transfer, stating the name and address of said transferee or assignee and
        identifying the securities with respect to which such registration rights
        are
        being assigned.

       

       

      18