ex_1006.htm


    
      

      

    

    
      EXHIBIT
        10.6

       

       

      LOCATION
        BASED TECHNOLOGIES, CORP.

      STOCK
        OPTION AWARD AGREEMENT

       

       

      This
        agreement dated as of October 11, 2007, (“Award Agreement”), is entered into by
        and between Location Based Technologies, Corp., a California corporation
        (the
“Company”), and Desiree Mejia (the “Optionee”).

       

      1.           General.  The
        options evidenced by this Award Agreement (“Options”) are nonqualified stock
        options granted as of the date specified above (the “Award
        Date”).  They are issued pursuant to the power of the Company to do so
        set forth in Section 404 of the California Corporations Code, and not pursuant
        to any plan.

       

      2.           Grant/Termination.  The
        Company hereby grants to the Optionee Options to purchase a total of 2,000,000
        shares of Common Stock of the Company, exercisable as provided in the Exercise
        Schedule set forth in Section 5 below at $1 per share (the “Exercise
        Price”).  These Options shall terminate immediately upon Optionee’s
        termination of employment by the Company for Cause; twelve months after the
        Optionee’s termination of employment by the Company for other than Cause or
        voluntary termination of employment by Optionee; 12 months after the Optionee’s
        death or total disability; or ten years from the Award Date.  For
        purposes of this Award Agreement, the term “Cause” means engaging in any
        activity adverse, contrary or harmful to the interests of the Company,
        including, but not limited to: (i) conduct related to the Optionee’s employment
        for which either criminal or civil penalties have been awarded against the
        Optionee, (ii) violation of Company policies, including, without limitation,
        the
        Company’s discrimination, harassment or insider trading policies, (iii)
        accepting employment with or serving as a consultant, advisor or in any other
        capacity to an entity that is, or proposes to be, in competition with or
        acting
        against the interests of the Company, including employing or recruiting any
        present, former or future employee of the Company

       

      3.           Exercise
        Procedure.  In order to exercise the Options granted hereunder,
        the Optionee must give written notice thereof (using Exhibit A hereto) to
        the
        Board of Directors of the Company (“Board”) at the Company’s corporate
        headquarters specifying the number of shares of Common Stock being
        purchased.  Such notice must be accompanied by payment of the Exercise
        Price for the share or shares being purchased and this Award Agreement so
        that
        appropriate notation can be made thereon to reflect such
        exercise.  Such payment shall be by cash or check payable to the order
        of the Company, in an amount equal to the Exercise Price of the shares of
        Common
        Stock being purchased; provided, however, that all or a portion of the Exercise
        Price for the share or shares of Common Stock being purchased may also or
        alternatively be paid by the delivery of shares of Common Stock, the aggregate
        Fair Market Value of which is equal to the portion of such Exercise Price
        being
        paid by the delivery of shares of Common Stock.  Shares of Common
        Stock that may be used for payment shall include shares which were received
        by
        the Optionee upon the exercise of one or more Options and shares which the
        Optionee directs the Company to withhold, for the purpose of paying the Exercise
        Price, from shares which the Optionee would have received upon the exercise
        of
        one or more Options (so-called “cashless exercise”).  For purposes of
        this Agreement, Fair Market Value shall be determined in good faith by the
        Board
        of Directors in a manner not inconsistent with that described in Section
        260.140.50 of the California Code of Regulations.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      4.           No
        Other Rights.  Nothing herein contained shall confer on the
        Optionee any right with respect to continuation of employment by the Company
        or
        its Subsidiaries or Affiliates, or interfere with the right of the Company
        or
        its Subsidiaries or Affiliates to terminate at any time the employment of
        the
        Optionee, or, except as to shares of Common Stock actually delivered, confer
        any
        rights as stockholder upon the holder hereof.

       

      5.           Vesting.

       

      (a)           If
        the Optionee continues to be employed by the Company (or a Subsidiary or
        Affiliate thereof), subject to Section 6 hereof, the Options granted hereunder
        will become exercisable by the Optionee in accordance with the following
        exercise schedule until the specified events have occurred after the Award
        Date
        of the Options:

       

      
        	
                As
                  of the Date

                the
                  Company Achieves

                the
                  No. of Customers

                Specified
                  Below*

                100,000

                250,000

              	
                 

                 

                No.
                  of

                Options
                  Vested

                1,000,000

                1,000,000

              


      

       

      For
        purposes of this Award Agreement, a person or entity will be deemed to be
        a
“customer” if it actually pays for service in any month of measurement as
        reflected on the Company’s server system showing active devices.

       

      (b)           Notwithstanding
        the foregoing, upon a “Change in Control”, all Options which have not lapsed
        prior to the date of such Change in Control shall become fully vested and
        exercisable (if not already vested and exercisable) by Optionee.  The
        phrase “Change in Control” means the following and shall be deemed to occur if
        any of the following events specified in clauses (i), (ii), (iii) or (iv)
        occur:

       

      (i)           Any
        person or entity becomes, after the Award Date, the beneficial owner (within
        the
        meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1923,
        as
        amended), directly or indirectly, more than 50% of the combined voting power
        of
        the Company’s then outstanding securities; or

       

      (ii)           During
        any period of two consecutive years, individuals, who at the beginning of
        such
        period, constitute the Board and any new Director of the Company (other than
        a
        Director designated by a person who has entered into an agreement with the
        Company to effect a transaction described in clause (i), (iii) or (iv) of
        this
        definition) whose election by the Board or nomination for election by the
        Company’s shareholders was approved by a vote of at least two-thirds of the
        Directors of the Company then still in office who either were Directors of
        the
        Company at the beginning of the two-year period or whose election or nomination
        for election was previously so approved, cease for any reason to constitute
        at
        least a majority of the Board;

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (iii)           A
        merger or consolidation of the Company with any other corporation, other
        than a
        merger or consolidation that would result in the voting securities of the
        Company outstanding immediately prior thereto continuing to represent (either
        by
        remaining outstanding or by being converted into voting securities of the
        surviving entity) more than 50% of the combined voting power of the voting
        securities of the Company or such surviving entity outstanding immediately
        after
        such merger or consolidation; provided, however, that a merger or consolidation
        effected to implement a recapitalization of the Company (or similar transaction)
        in which no person acquires more than 50% of the combined voting power of
        the
        Company’s then outstanding securities shall not constitute a Change in Control,
        and provided further a merger or consolidation in which the Company is the
        surviving entity (other than as a wholly owned subsidiary of another entity)
        and
        in which the Board of Directors of the Company or the successor to the Company
        after giving effect to the merger or consolidation, is comprised of a majority
        of members who are either (x) Directors of the Company immediately preceding
        the
        merger or consolidation, or (y) appointed to the Board of Directors by the
        Company (or the Board) as an integral part of such merger or consolidation,
        shall not constitute a Change in Control; or

       

      (iv)           Approval
        by the shareholders of the Company or any order by a court of competent
        jurisdiction of a plan of liquidation of the Company, or the sale or disposition
        by the Company of all or substantially all of the Company’s assets other than
        (i) the sale or disposition of all or substantially all of the assets of
        the
        Company to a person or persons who beneficially own, directly or indirectly,
        at
        least 50% or more of the combined voting power of the outstanding voting
        securities of the Company at the time of the sale; or (ii) pursuant to a
        dividend in kind or spin-off type transaction, directly or indirectly, of
        such
        assets to the shareholders of the Company;

       

      (v)           Notwithstanding
        the foregoing, a Change in Control of the type described in clauses (ii),
        (iii)
        or (iv) above shall be deemed to be completed on the date it occurs, and
        a
        Change in Control of the type described in clause (i) above shall be deemed
        to
        be completed as of the date the entity or group attaining greater than 50%
        ownership has elected its representatives to the Board and/or caused its
        nominees to become officers of the Company with the authority to terminate
        or
        alter the terms of any Employee’s employment.

       

      (c)           In
        addition, upon a Change in Control where the equity holders of the Company
        hold
        more than 50% of the outstanding voting equity of the survivor of the Change
        of
        Control, if necessary, this Option shall be automatically converted into
        the
        right to receive, and thereafter shall be exercisable for, in accordance
        with
        this Agreement, the securities, cash and/or other consideration that a holder
        of
        the shares underlying the Options would have been entitled to receive upon
        a
        consummation of such Change of Control had such shares been issued and
        outstanding immediately prior to the effective date and time of the Change
        of
        Control (net of appropriate exercise prices).

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      6.           Noncompetition.  In
        consideration for the grant of the Options granted hereunder, Optionee
        specifically agrees that while Optionee is an employee of the Company and
        for a
        period of 12 months after the termination of his employment with the Company
        and
        all Subsidiaries and Affiliates, Optionee he will not, either directly or
        indirectly:

       

      (a)           as
        an individual proprietor, partner, stockholder, officer, employee, director,
        joint venturer, investor, lender, or in any other capacity whatsoever (other
        than as the holder of not more than four percent of the total outstanding
        stock
        of a publicly held company), engage in the business of developing, producing,
        marketing or selling products or services which would compete with the products
        or services of the kind or type developed or being developed, produced, marketed
        or sold by the Company, or planned to be produced, marketed or sold as described
        in any business plan of the Company or as set forth in any notes or minutes
        of
        internal Company meetings, while the Employee was employed by the Company
        or any
        Subsidiary or Affiliate;

       

      (b)           recruit,
        solicit or induce, or attempt to induce, any employee or employees of the
        Company to terminate their employment with, or otherwise cease their
        relationship with, the Company; or

       

      (c)           solicit,
        divert or take away, or attempt to divert or to take away, the business or
        patronage of any of the clients, customers or accounts, or prospective clients,
        customers or accounts, of the Company which were contacted, solicited or
        served
        by the Employee while employed by the Company;

       

      provided,
        however, that this Section 6 shall cease to apply if the Optionee’s employment
        with the Company and all of its Subsidiaries and Affiliates is terminated
        by
        Optionee’s employer without Cause.  Optionee further agrees to notify
        anyone employing Optionee or utilizing Optionee as a consultant, advisor
        or in
        any other capacity, or evidencing an intention to employ or so utilize Optionee,
        of the existence and provisions of this Award Agreement.

       

      7.           Nontransferability
        of Option.  The Option shall not be transferable or assignable by
        the Optionee, other than by will or the laws of descent and distribution
        (or as
        otherwise permitted by the Board in its sole discretion), and shall be
        exercisable during the Optionee’s lifetime only by him or her or by his or her
        legal representative(s) or guardian(s) or any permitted transferee.

       

      8.           Notices.  All
        notices or other communications which are required or permitted hereunder
        shall
        be in writing and sufficient if (i) personally delivered, (ii) sent by reputable
        overnight courier, (iii) sent via telecopier (fax) transmission or via
        electronic mail (e-mail) or (iv) sent by registered or certified mail, postage
        prepaid, return receipt requested, addressed as follows: (a) if to Optionee,
        at
        the address, fax number or e-mail address set forth on the signature page
        hereto; or (b) if to the Company, at the address, fax number or e-mail address
        set forth in the signature page hereto, or in either case, to such other
        address
        or fax number as the party to whom notice is to be given may have furnished
        to
        each other party in writing in accordance herewith.  Any such
        communication shall be deemed to have been given (i) when delivered, if
        personally delivered, (ii) on the first Business Day (as hereinafter defined)
        after dispatch, if sent by a reputable overnight courier or via fax or e-mail
        and (iii) on the third Business Day following the date on which the piece
        of
        mail containing such communication is posted, if sent by mail.  As
        used herein, “Business Day” means a day that is not a Saturday, Sunday or a day
        on which banking institutions in the city to which the notice or communication
        is to be sent are not required to be open.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      9.           Legends.  All
        certificates representing any shares of Common Stock or other securities
        of the
        Company subject to the provisions of this Agreement shall have endorsed thereon
        the following legends:

       

      (a)           “These
        securities have not been registered under the Securities Act of 1933 or any
        state securities law.  They may not be sold, offered for sale, pledged
        or hypothecated in the absence of an effective registration statement as
        to the
        securities under said Act or law or an opinion of counsel satisfactory to
        the
        Company that such registration is not required.”

       

      (b)           Such
        other or similar legends as the Company may reasonably require.

       

      10.           Applicable
        Law.  The validity, construction, interpretation and
        enforceability of this Award Agreement shall be determined and governed by
        the
        laws of the State of California without regard to any conflicts or choice
        of law
        rules or principles that might otherwise refer construction or interpretation
        of
        this Award Agreement to the substantive law of another jurisdiction, and
        any
        litigation arising out of this Award Agreement shall be brought in the Superior
        Court of the State of California for Orange County or the United States District
        Court for the Central District of California and the Optionee consents to
        the
        jurisdiction and venue of those courts.

       

      11.           Severability.  The
        provisions of this Award Agreement are severable and if any one or more
        provisions may be determined to be illegal or otherwise unenforceable, in
        whole
        or in part, the remaining provisions, and any partially unenforceable provision
        to the extent enforceable in any jurisdiction, shall nevertheless be binding
        and
        enforceable.

       

      12.           Waiver.  The
        waiver by the Company of a breach of any provision of this Award Agreement
        by
        Optionee shall not operate or be construed as a waiver of any subsequent
        breach
        by Optionee.

       

      13.           Survival.  Section
        6 of this Award Agreement will remain in full force and effect following
        the
        termination of the Optionee’s employment with the Company and its Subsidiaries
        and Affiliates for any reason.

       

      14.           Binding
        Effect.  The provisions of this Award Agreement shall be binding
        upon the parties hereto, their successors and assigns, including, without
        limitation, the Company, its successors or assigns (including, without
        limitation, merger participants), the estate of the Optionee and the executors,
        administrators or trustees of such estate and any receiver, trustee in
        bankruptcy or representative of the creditors of the
        Optionee.  Notwithstanding anything herein to the contrary, in the
        event of the merger or consolidation of the Company with any other corporation
        or corporations, the sale by the Company of a major portion of its assets
        or of
        its business and good will, or any other corporate reorganization involving
        the
        Company, the Optionee’s obligations under Section 7 hereof may be assigned and
        transferred to such successor in interest.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      15.           Counterparts.  This
        Award Agreement may be executed in one or more counterparts, each of which
        shall
        be deemed to be an original, but all of which together shall constitute one
        and
        the same instrument.

       

      
         

        
          
            	
                    Optionee

                  	 	 	
                    LOCATION
                      BASED TECHNOLOGIES, CORP.

                  	 
	 	 	 	 	 
	 	 	 	 	 
	
                    /s/
                      Desiree
                      Mejia

                  	 	
                     
                      

                  	
                    /s/
                      Joseph
                      Scalisi

                  	 
	
                    Desiree
                      Mejia

                  	 	 	
                    Joseph
                      Scalisi,
                      President

                  	 
	
                     

                  	 	 	
                     

                  	 
	Address:
                    21520 Yorba Linda Blvd, G357. 	 	 	Address:
                    4989 E. La Palma Boulevard	 
	                
                    Yorba Linda, CA 92887	 	 	                
                    Anaheim, California 92807	 
	 	 	 	 	 
	Fax
                    No.:  714-200-0287 	 	 	 Fax
                    No.:  714-200-0287	 
	 	 	 	 	 
	E-Mail
                    Address: desiree@pocketfinder.com	 	 	E-mail:
                    joseph@pocketfinder.com   	 


          

        

         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

      

       

      EXHIBIT
        A

       

       

      NOTICE
        OF
        EXERCISE

      under

      STOCK
        OPTION AWARD AGREEMENT

       

       

      To:                 Location
        Based Technologies, Corp. (the “Company”)

       

      From:                                             

       

      Date:                                             

       

      Pursuant
        to the Stock Option Award Agreement (the “Agreement”) (capitalized terms used
        without definition herein have the meanings given such terms in the Agreement)
        between the Company and myself effective _______________, 2007, I hereby
        exercise my Option as follows:

       

      
        	
                Exercise
                  Price per Share

              	
                $

              
	
                Total
                  Exercise Price

              	
                $

              
	
                “Vested
                  Portion” of Option (see definition in Section 5 of the
                  Agreement)

              	 
	
                Number
                  of shares I have previously purchased by exercising the
                  Option

              	 
	
                Expiration
                  Date of the Option

              	 


      

       

      I
        hereby
        represent, warrant, and covenant to the Company that:

       

      (a)           I
        am acquiring the Common Stock for my own account, for investment, and not
        for
        distribution or resale, and I will make no transfer of such Common Stock
        except
        in compliance with applicable federal and state securities laws.

       

      (b)           I
        can bear the economic risk of the investment in the Common Stock resulting
        from
        this exercise of the Option, including a total loss of my
        investment.

       

      (c)           I
        am experienced in business and financial matters, am familiar with the Company’s
        business and prospects and am capable of (i) evaluating the merits and risks
        of
        an investment in the Common Stock; (ii) making an informed investment decision
        regarding exercise of the Option; and (iii) protecting my interests in
        connection therewith.

       

      (d)           Any
        subsequent offer for sale or distribution of any of the shares of Common
        Stock
        by me shall be made only pursuant to (i) a registration statement on an
        appropriate form under the Securities Act of 1933, as amended (“33 Act”), which
        registration statement has become effective and is current with regard to
        the
        shares being offered or sold, or (ii) a specific exemption from the registration
        requirements of the 33 Act, it being understood that to the extent any such
        exemption is claimed, I shall, prior to any offer for sale or sale of such
        shares, obtain a prior favorable written opinion, in form and substance
        satisfactory to the Board, from counsel for or approved by the Board, as
        to the
        applicability of such exemption thereto.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      I
        acknowledge that I must pay the total Exercise Price in full and make
        appropriate arrangements for the payment of all federal, state and local
        tax
        withholdings due (if any) with respect to the Option exercised herein, before
        the stock certificate evidencing the shares of Common Stock resulting from
        this
        exercise of the Option will be issued to me.

       

      Attached
        in full payment of the Exercise Price for the Option exercised herein is
        (i) a
        check made payable to the Company in the amount of $_______________ and/or
        (ii)
        a stock certificate for _______________ shares of Common Stock that have
        been
        owned by me or by me and my spouse jointly for at least six months, with
        a duly
        completed stock power attached, with a total Fair Market Value on the date
        hereof to the Total Exercise Price, or (iii) written instructions to treat
        this
        as a “cashless exercise” as described in paragraph 3 of the Award
        Agreement.

       

      
        
          
            	
                     

                  	 	 	
                     

                  	 
	
                     

                  	 	 	
                    Print
                      Name :

                  	 


          

           

          
            	 	 	 	
                    RECEIVED
                      BY THE COMPANY:

                  	 
	 	 	 	 	 
	 	 	 	
                    LOCATION
                      BASED TECHNOLOGIES, CORP.

                  	 
	 	 	 	 	 
	 	 	 	 	 
	
                     

                  	 	
                      

                  	
                     

                  	 
	
                     

                  	 	 	
                    Name:
                      ____________________________

                  	 
	
                     

                  	 	 	
                    Title:  
                      ____________________________

                  	 
	 	 	 	 	 
	 	 	 	
                    Date:  
                      ____________________________

                  	 


          

           

           

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