Document:

ex10-25.htm

Exhibit 10.25

 

UNSECURED PROMISSORY NOTE

 

	$50,000	 	 	Orange County, California
	 	 	 	November 1, 2012

 

 

 

FOR VALUE RECEIVED, the undersigned, Location Based Technologies Inc. (referred to herein as the “Borrower”), hereby unconditionally promises to pay to the order of Chuck Smith, its endorsees, successors and assigns (the “Lender”), in lawful money of the United States at such other address as the Lender may from time to time designate, the principal sum of Fifty Thousand Dollars ($50,000).

 

1.      Terms of Repayment.  Principal of and interest on this Note shall be one (1) year from date of issuance. Borrwer shall have the right to call the Note due any time within the first Ninety (90) days.

 

a.           Upon the execution and delivery of this Note, the Lender shall disburse to the Borrower the sum of $50,000, which is the principal amount. All remaining amounts outstanding under this Note shall mature and become due and payable in full on November 1, 2013 (the "Maturity Date"), subject to any prior pre-payment required.

 

2.      Interest Rate.  This Note shall accrue interest on the principal for a period of thirty days from the date of this Note at a rate of Ten Percent (10%)  (the “Interest Rate”).  All payments hereunder are to be applied first to the payment of accrued interest, and the remaining balance to the payment of principal. Additionally, Lender shall receive one (1) share of common stock for every dollar invested. The Lender is thereby entitled to Fifty Thousand (50,000) shares of restricted common stock.

3.        At any time and from time to time this Note shall be convertible, in whole or in part, into shares of the Company’s Common Stock (“Conversion Shares”) at the option of the Lender.  The Lender shall effect conversions by delivering written notice to the Company specifying therein the principal amount of this Note to be converted.  The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted plus any accrued but unpaid interest thereon, by (y) the Conversion Price, where the “Conversion Price” shall equal $0.20. The Conversion Price shall be appropriately and equitably adjusted following any stock splits, stock dividends, spin-offs, distributions and similar events.  The Conversion Shares shall be duly and validly issued, fully paid and non-assessable and, following the applicable Rule 144 holding period, freely tradable.  The Lender shall receive the stock certificate(s) within ten (10) business days following the date of conversion

4.      Events of Default.  If any of the events of default specified in this Section shall occur, Lender may, so long as such condition declare the entire principal and unpaid accrued interest hereon immediately due and payable, by notice in writing to the borrower, this Note and any other obligations of the Borrower to the Lender, shall become due immediately, without demand or notice:

 

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

b.           Lender may exercise collateral as payment in full for said Promissory Note by placing a written request to LBAS transfer agent (www.Transhare.com) for ownership change at the day of default.

 

  

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

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

 

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

 

If to the  Borrower:               Location Based Tech Inc

49 Discovery Suite 260

Irvine, CA 92618

Facsimile Number:  (714) 200-0287

E-mail:  Greg.harrison@pocketfinder.com

If to Lender:

5501 Merritt Dr.

Concord, CA  94521

 

or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties.

 

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

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

[Signature Page to Follow]

 

  

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

The “Borrower”: Location Based Tech Inc

By:                                                                      

Dave Morse

The “Lender”:

By:                                                                   

Chuck Smith

 

 

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Exhibit 10.26

 

FOURTH AMENDMENT TO

LOAN AND SECURITY AGREEMENT

 

THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into this __ day of November, 2012, but effective as of October 5, 2012, by and between SILICON VALLEY BANK (“Bank”) and LOCATION BASED TECHNOLOGIES, INC., a Nevada corporation (“Borrower”).

 

Recitals

 

A.           Bank and Borrower have entered into that certain Loan and Security Agreement dated as of January 5, 2011 (as the same may from time to time be further amended, modified, supplemented or restated, the “Loan Agreement”). Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

 

B.           Borrower has requested that Bank amend the Loan Agreement to extend the Non Formula Line Maturity Date and make certain other revisions to the Loan Agreement as more fully set forth herein.

 

C.           Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

 

Agreement

 

NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

 

1.            Definitions.  Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

 

2.            Amendments to Loan Agreement.

 

2.1           Section 2.2 (Payment of Interest on the Credit Extensions). Section 2.2(a) of the Loan Agreement is amended in its entirety and replaced with the following:

 

(a)           Interest Rate.  Subject to Section 2.2(b), the principal amount outstanding under the Non Formula Line shall accrue interest at a floating per annum rate equal to the following: (i) through April 5, 2013, the greater of (A) the Prime Rate, plus four and one half percent (4.50%), or (B) eight and one half percent (8.50%), and (ii) from and after April 6, 2013, the greater of (A) the Prime Rate, plus four and one half percent (4.50%), or (B) ten and one half percent (10.50%).  Interest shall be payable monthly in accordance with Section 2.2(f) below.

 

2.2           Section 13 (Definitions).  The following definition set forth in Section 13.1 is amended in its entirety and replaced with the following:

 

“Non Formula Line Maturity Date” is October 5, 2013.

 

  

  

  

 

3.            Limitation of Amendments.

 

3.1           The amendments set forth in Section 2 above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.

 

3.2           This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

 

3.3           In addition to those Events of Default specifically enumerated in the Loan Documents, the failure to comply with the terms of any covenant or agreement contained herein shall constitute an Event of Default and shall entitle the Bank to exercise all rights and remedies provided to the Bank under the terms of any of the other Loan Documents as a result of the occurrence of the same.

 

4.            Representations and Warranties.  To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

 

4.1           Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

 

4.2           Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

 

4.3           The organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

 

4.4           The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;

 

4.5           The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;

 

  

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4.6           The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

 

4.7           This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

 

5.            Counterparts.  This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

 

6.            Effectiveness.  This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) Bank’s receipt of the Reaffirmation of Unconditional Guaranty substantially in the form attached hereto as Schedule 1, duly executed and delivered by Guarantor, (c) Borrower’s payment of a non refundable amendment fee in an amount equal to Six Thousand Dollars ($6,000), and (d) payment of Bank’s legal fees and expenses in connection with the negotiation and preparation of this Amendment.

 

[Signature page follows.]

 

  

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In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

	
BANK

	 	 
	 	 	 	 
	
SILICON VALLEY BANK

	 	 
	 	 	 	 
	
By: 

	 	 	 
	
Name: 

	 	 	 
	
Title: 

	 	 	 
	 	 	 	 
	 	 	 	 
	
BORROWER

	 	 
	 	 	 	 
	
LOCATION BASED TECHNOLOGIES, INC.

	 	 
	 	 	 	 
	
By: 

	 	 	 
	
Name: 

	 	 	 
	
Title: 

	 	 	 
	 	 	 	 

 

 

 

 

 

[Signature Page to Fourth Amendment to Loan and Security Agreement]

 

  

  

  

 

Schedule 1

 

REAFFIRMATION OF UNCONDITIONAL GUARANTY

 

Section 1.          Guarantor hereby acknowledges and confirms that it has reviewed and approved the terms and conditions of the Fourth Amendment to Loan and Security Agreement dated as of even date herewith (the “Amendment”).

 

Section 2.          Guarantor hereby consents to the Amendment and agrees that the Guaranty relating to the Obligations of Borrower under the Loan Agreement shall continue in full force and effect, shall be valid and enforceable and shall not be impaired or otherwise affected by the execution of the Amendment or any other document or instrument delivered in connection herewith.

 

Section 3.          Guarantor represents and warrants that, after giving effect to the Amendment, all representations and warranties contained in the Guaranty are true, accurate and complete as if made the date hereof.

 

Dated as of November __, 2012

	
GUARANTOR

	 
	 	 
	 	 
	
GREGGORY S. HAUGEN

	 

 

Schedule 1 Page 1

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