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Exhibit 10.45
 
 
SETTLEMENT AGREEMENT AND RELEASE
 
This Settlement Agreement and Release (the "Agreement”) is between Location
Based Technologies, Inc. (“LBAS”), on the one hand, and Jens Dalsgaard
(“Dalsgaard”),Redwood Consultants, LLC (“Redwood”), Constellation Capital
Management (“Constellation”), William Gilliam (“Gilliam”), the Gilliam Exempt
Family Trust (“the Trust”), Angela Williams (“Williams”), Richard Pisano
(“Pisano”), Amanda Schmieder (“Schmieder”), Giuliana Dalsgaard (“G. Dalsgaard”),
Matthew Murawski (“Murawski”), and Arron Johnson (“Johnson”) (collectively, the
“Redwood Parties”), on the other hand.
 
The Scigliano Group LLC (“Scigliano”), a business consultant for LBAS, and
TranShare Corporation (“TranShare”), the stock transfer agent for LBAS, are also
parties to this Agreement, but solely for the purposes of paragraphs 6-8 and 10
(Scigliano) and 2 and 10 (TranShare), respectively, below.
 
LBAS and the Redwood Parties shall collectively be referred to as “the Settling
Parties.”
 
TERMS AND CONDITIONS
 
In consideration of the covenants, conditions and promises described in this
Agreement, the Settling Parties, Scigliano and TranShare agree as follows:
 
1.           Cancellation of the Warrant. The Redwood Parties represent and
warrant that they never received the warrant for the purchase of 300,000 shares
of LBAS common stock (the “Warrant”), which was granted on or about October 27,
2008 under the written agreement between LBAS and Redwood entitled Consulting
Agreement entered into on or about October 26, 2008 (“Consulting Agreement”).
After the Effective Date of this Agreement, LBAS is authorized under this
Agreement to cancel the Warrant.
 
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2.           Return and Reissuance of Stock Certificates.
 
 
a.
Within seven business days of the Effective Date, the Redwood Parties shall each
return, or cause to be returned, to TranShare for cancellation the share
certificates for LBAS restricted stock (“the Restricted Shares”) as follows:

 
Holder
# of Shares
Redwood Consultants LLC
325,000
Jens Dalsgaard
75,000
Giuliana Dalsgaard
75,000
Angela Williams
150,000
Constellation Capital Management
225,000
Constellation Capital Management
250,000
Gilliam Exempt Family Trust
127,500
Richard Pisano
127,500
Amanda Schmieder
63,750
Matthew Murawski
63,750
Arron Johnson
5,000

 
b.
The returned certificates shall be properly endorsed in accordance with
customary requirements of TranShare.

 
 
c.
Upon receipt of the Restricted Shares, TranShare shall cancel each of the
certificates.

 
 
d.
When TranShare has received, in compliance with subparagraphs a and b, and
cancelled, the Restricted Shares (for all 1,487,500 shares listed above),
TranShare shall within five (5) business days reissue and deliver to the
recipients listed below a total of 487,500 shares of LBAS common stock
(“Reissued Shares”) in the aggregate amounts set forth in the following
schedule:

 
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Holder
# of Shares
Redwood Consultants LLC
10,000
Jens Dalsgaard
10,000
Giuliana Dalsgaard
10,000
Angela Williams
50,000
Constellation Capital Management
252,500
Gilliam Exempt Family Trust
50,000
Richard Pisano
50,000
Amanda Schmieder
25,000
Matthew Murawski
25,000
Arron Johnson
5,000

 
 
e.
The issuance of the Reissued Shares pursuant to sub-paragraph 2(d) shall not be
affected in any way whatsoever by the shares held by Kimchi Moyer Enterprises
(2,500 shares), Sorena AB (2,500 shares), and/or Jonathan Groves (7,500 shares).

 
 
f.
TranShare agrees that, within 5 business days of a request from Kimchi Moyer
Enterprises, Sorena AB, and/or Jonathan Groves, it will remove any and all
restrictive legend(s) from the shares held by Kimchi Moyer Enterprises (2,500
shares), Sorena AB (2,500 shares), and Jonathan Groves (7,500 shares),
respectively.

 
 
g.
After the execution of this Agreement by all Parties, Constellation shall open a
brokerage account with Grant Bettengen, for the purpose of sales, liquidation
and distribution of proceeds from the shares issued to it pursuant to
subparagraph 2(c). Upon the opening of the brokerage account, Constellation
shall cause Grant Bettengen to execute and deliver a letter to LBAS providing
electronic access to the accounts for monitoring, acknowledging the selling
limitations that are contained in Paragraph 3 below, applicable to such account
and agreeing not to short or otherwise trade in the stock of LBAS through such
shares on deposit in such account or in any other way seek to circumvent the
provisions of Paragraph 3 of this Agreement. Upon the opening of such account,
LBAS shall cause TranShare to transfer the applicable shares to the applicable
account. Prior to any sales through the account, Constellation shall deliver a
copy of this Agreement to Grant Bettengen. Any and all sales of the shares
issued to Constellation pursuant to subparagraph 2(d) shall only be made in
accordance with the Paragraph 3 of this Agreement. To the extent Grant Bettengen
is unable or unwilling to perform the functions contemplated by this
subparagraph, LBAS and the Redwood Parties shall in good faith agree upon an
alternative broker to perform the functions of Grant Bettengen described in this
subparagraph.

 
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3.           Limitations on Sale of the Reissued Shares. From the Effective Date
until June 1, 2010, Constellation irrevocably agrees it will not offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, or announce the
offering of, (collectively referred to as “Dispose”) any of the shares issued to
Constellation pursuant to subparagraph 2(d) (including any securities
convertible into, or exchangeable for, or representing the rights to receive,
Constellation’s Reissued Shares), other than in accordance with each of the
following clauses of this Paragraph 3:
 
(a) In any calendar month, beginning June 1, 2009, Constellation may not Dispose
of in excess of three thousand (3,000) of its Reissued Shares per trading day.
All remaining Redwood Parties who are issued shares pursuant to subparagraph
2(d) shall not be subject to any selling restrictions, except as the law
otherwise requires;
 
(b) Each of the Redwood Parties warrants that he, she or it will comply with all
applicable laws, including SEC rules and regulations, whenever selling any of
the Reissued Shares;
 
(c) Constellation shall disclose the terms of this Paragraph 3 to any broker(s)
it uses to facilitate any sales of the shares issued to Constellation pursuant
to subparagraph 2(d);
 
(d) Notwithstanding the restrictions contained in this Section 3, Constellation
may, from time to time, transfer all or any of the shares issued to
Constellation pursuant to subparagraph 2(d) in connection with an Acquisition
Transaction. For purposes of this Agreement, “Acquisition Transaction” means
where (A) any person or “group” (as such term is defined in Section 13(d) of the
Exchange Act) has commenced a tender or exchange offer seeking to acquire
control of the Company, but then only a transfer to such person or group
pursuant to such offer or any competing offer, (B) any person or group has
acquired securities of the Company representing more than 50% of the voting
power of all of the outstanding securities of the Company (a “Change of
Control”), or (C) any transaction as to which the Company has entered into a
definitive agreement or publicly announced its support of which, if effected,
would constitute a Change of Control, but then only a transfer pursuant to such
transaction.
 
(e) LBAS (including, but not limited to, its employees, agents and/or assigns)
understands and agrees that if Constellation Disposes its Reissued Shares in
accordance with each of the foregoing clauses of this Paragraph 3, LBAS cannot
and will not take any actions with respect to the transfer agent and any other
entity or individual that has or could have the effect of delaying, stopping or
interfering in any way with the rights of Constellation to dispose of the shares
issued to Constellation pursuant to subparagraph 2(d) of this Agreement. The
Parties further expressly agree that the sole and exclusive remedy available to
either party with respect to an alleged breach of this Paragraph 3 shall be to
seek relief (including, but not limited to, injunctive and/or provisional
relief) through arbitration in accordance with Paragraph 17 of this Agreement.
The Parties expressly acknowledge and agree that, not withstanding federal or
California statutory and/or common law, the sole venue for injunctive or other
relief under this Agreement is arbitration before the arbitration in accordance
with Paragraph 17 of this Agreement.
 
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4.           Dismissal of the Action. LBAS shall file a dismissal of the action
pending in the United States District Court for the Northern District of
California, Case No. CV- 09-1618-WHA (“the Action”) with prejudice as soon as is
practicable after LBAS has received executed copies of signature pages of this
Agreement from each of the signatories to this Agreement. In no event shall the
dismissal be filed more than three business days after notice that this
Agreement has been fully executed.
 
5.           Termination of the Agreements. As of the Effective Date, the
written agreement between LBAS and Dalsgaard entitled Contract for Professional
Consulting Services entered into on or about October 15, 2008 (the “Dalsgaard
Agreement”), the Consulting Agreement, and the written agreement between LBAS
and Constellation entitled Financial Advisory Services Agreement entered into on
or about November 7, 2008 (the “FASA”) are terminated and each of the Settling
Parties is released from any and all obligations contained in the terminated
Dalsgaard Agreement, Consulting Agreement, and/or FASA, including without
limitation, any obligations of LBAS to provide the Redwood Parties additional
shares of LBAS stock and to honor the exercise of any warrants to purchase
common stock that LBAS granted Redwood.
 
6.           Release. In consideration for the promises set forth above, and for
other good and valuable consideration:
 
a. As of the Effective Date, LBAS hereby mutually releases and forever
discharges each of the Redwood Parties, and their respective heirs, executors,
administrators, trustors, trustees, beneficiaries, predecessors, successors,
assigns, partners, partnerships, parents, subsidiaries, affiliated and related
entities, officers, directors, shareholders, principals, agents, employees,
servants, attorneys, representatives, and all persons, firms, associations
and/or corporations connected with them, including, without limitation, their
insurers, sureties, consultants and experts, from all claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, attorneys’ fees, damages, judgments,
orders and liabilities, of whatever kind or nature, whether in law, equity or
otherwise, and whether now known or unknown, suspected or unsuspected, and
whether or not concealed or hidden, which LBAS now owns or holds, or has at any
time heretofore owned or held, that have arisen prior to the Effective Date,
including without limitation, any that (a) are in anyway related to, arise from
or based on the Dalsgaard, Consulting and FASA Agreements; and (b) are or could
have been asserted in the Action; provided, however, that with respect to any
claim brought against LBAS by a third party, LBAS, by this release, does not
release and expressly preserves any claims for indemnity.
 
 b. As of the Effective Date, the Redwood Parties and each of them hereby
mutually release and forever discharge LBAS, and its predecessors, successors,
assigns, partners, partnerships, parents, subsidiaries, affiliated and related
entities, officers, directors, shareholders, principals, agents, employees,
servants, representatives and all persons, firms, associations and/or
corporations connected with them, and including also, without limitation, their
insurers, sureties, consultants and experts, from all claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, attorneys’ fees, damages, judgments,
orders and liabilities, of whatever kind or nature, whether in law, equity or
otherwise, and whether now known or unknown, suspected or unsuspected, and
whether or not concealed or hidden, which he or it now owns or holds, or has at
any time owned or held, that have arisen prior to the Effective Date, including
without limitation, any that (a) are in anyway related to, arise from or based
on the Dalsgaard, Consulting and FASA Agreements; and (b) are or could have been
asserted in the Action; provided, however, that with respect to any claim
brought against the Redwood Parties by a third party, the Redwood Parties, by
this release, do not release and expressly preserve any claims for indemnity.
 
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7.           Waiver of California Civil Code Section 1542. The Settling Parties
waive all rights under Section 1542 of the Civil Code of the State of
California, which provides as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the  release,
which if known by him or her must have materially affected his or her settlement
with the debtor.

8.           Waiver of Compensation. Scigliano waives the right to receive any
compensation, including stock, from any of the Redwood Parties for introducing
the Redwood Parties to LBAS.
 
9.           Confidentiality. LBAS, on the one hand, and the Redwood Parties, on
the other, each agree to maintain in the strictest confidence any confidential
or proprietary information each provided the other during the course of their
relationship under the Dalsgaard, Consulting Agreement and the FASA Agreements.
 
10.         Representations and Warranties regarding Authority to Settle. Each
of The Settling Parties, Scigliano and TranShare represents and warrants that
he, she or it has the authority to execute this Agreement and to release or
waive the claims described in this Agreement.
 
11.         Representations and Warranties regarding Stock Transfer. Each of the
Redwood Parties represents and warrants that they have not transferred to
anyone, including agents and employees, any LBAS common stock that they are
agreeing to return pursuant to paragraph 2(a) of this Agreement.
 
12.         Modification or Waiver. This Agreement may not be changed or
modified or any covenant or provision in this Agreement waived, except by
another agreement, in writing, signed by each party affected by the modification
or waiver.
 
13.         Final Integrated Agreement. This Agreement constitutes the entire,
final and binding understanding between the Settling Parties; no other statement
or representation, written or oral, express or implied, has been received and
relied upon in the settlement contained in this Agreement; and all prior
discussions, statements and negotiations made or that have occurred prior to the
Effective Date of this Agreement shall be deemed merged into this Agreement and
shall not be used for any other purpose whatsoever.
 
14.         Understanding of Agreement. In entering into this Agreement, each of
the Settling Parties has relied upon her or its own judgment, belief, knowledge,
and understanding concerning the settlement and all of the terms of this
Agreement. Each of the Settling Parties either has consulted with counsel, or
has had the opportunity to consult with counsel, regarding the legal effect of
the settlement and all of the terms of this Agreement. Any of the Settling
Parties who has not consulted counsel before signing this Agreement voluntarily
has assumed the risk of not doing so, and agrees that the Agreement or any of
its provisions may not be set aside on that basis.
 
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15.         Voluntary Settlement. Each of the Settling Parties enters into the
settlement knowingly and voluntarily in the total absence of any fraud, mistake,
duress, coercion or undue influence and after careful thought and reflection
upon the terms of the settlement. Accordingly, by signing this Agreement, each
of the Settling Parties signifies his, her or its full understanding, agreement
and acceptance.
 
16.         Investigation of Facts. Each of the Settling Parties has
investigated the facts pertaining to the settlement contained in this Agreement
and all other matters deemed necessary by him, her or it in deciding to sign
this Agreement.
 
17.         Certain Remedies and Arbitration. The Settling Parties agree that
they will not have an adequate remedy at law to remedy the failure of the other
to comply with this Agreement and as a result agree that the Settling Parties
shall be entitled to equitable relief, including a temporary restraining order
and preliminary and permanent injunctions, to enforce this Agreement. The
Settling Parties further agree that any controversy or claim arising out of or
relating to this Agreement or the alleged breach thereof, including any claim
for equitable relief and/or interim measures, shall be settled by binding
arbitration before the American Arbitration Association (“AAA”) in California in
accordance with the then applicable rules of the AAA governing commercial
disputes, and judgment on the award rendered by the arbitrator(s) shall be
binding on the parties and may be entered in any court having jurisdiction. The
provisions of Title 9 of Part 3 of the California Code of Civil Procedure,
including section 1283.05, and successor statutes, permitting expanded discovery
proceedings shall be applicable to all disputes that are subject to arbitration
under this paragraph.
 
18.         Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California.

19.         Paragraph Headings. The paragraph headings in this Agreement are for
convenience only, are not considered a part of the Agreement and shall not be
used in the construction and interpretation of the Agreement.
 
20.         Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the respective spouses, children, family members,
partners, offspring, heirs, executors, administrators, successors and assigns of
the Settling Parties.
 
21.         Attorneys’ Fees for Prevailing Party. In any action, litigation, or
other proceeding between LBAS, on the one hand, and any of the Redwood Parties,
on the other, at law or equity with respect to, pertaining to, or arising from
this Agreement, whether for enforcement or for damages by reason of any alleged
breach or for a declaration or rights and obligations or otherwise, and
including any appeal, contempt proceeding, bankruptcy proceeding and any action,
litigation, or other proceeding to enforce and/or collect any judgment or other
relief granted, whether or not such action or proceeding is prosecuted to final
judicial determination, the unsuccessful party to the action, litigation, or
proceeding shall pay to the prevailing party, in addition to any other relief
that may be granted, all costs and expenses of the action, litigation, or other
proceeding, including without limitation, the prevailing party’s attorneys’ fees
and expenses. “Attorneys’ fees and expenses” includes, without limitation,
paralegal or legal assistant fees and expenses, attorneys’ consultants’ fees and
expenses, expert witnesses’ fees and expenses, and all other expenses that the
prevailing party incurs in anticipation of and/or during the course of the
action, litigation, or other proceeding, whether or not otherwise recoverable as
“attorneys’ fees” or as “costs” under California law, and may be sought and
awarded in accordance with California procedure as pertaining to an award of
contractual attorneys’ fees.
 
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22.         Counterpart Originals. This Agreement may be executed in
counterparts without any requirement that each of the Settling Parties,
TranShare and Scigliano execute a single document. The executed counterparts
shall be deemed to constitute a signed original document. Signatures on the
executed counterparts may be transmitted by facsimile, which together shall be
deemed to constitute a signed original document.
 
23.         Effective Date. This Agreement shall become effective (“the
Effective Date”) when: (a) each of the Settling Parties, Scigliano and TranShare
have signed the Agreement; and (b) the dismissal of the Action with prejudice is
filed in accordance with Paragraph 4 of this Agreement and is accepted by the
Court.
 
24.         Cooperation. The Settling Parties agree to take all actions
reasonably necessary to effectuate the intent and purposes of this Agreement,
including but not limited to, executing additional documents.
 
WHEREFORE, the Settling Parties, Scigliano and TranShare have executed this
Agreement as of the Effective Date.
 
/s/ Jens Dalsgaard
   
 
 
Jens Dalsgaard, individually
   
 
 

 

Redwood Consultants, LLC                  
/s/ Jens Dalsgaard
   
 
 
By: Jens Dalsgaard
Its: President
   
 
 

 

Constellation Capital Management                  
/s/ Jens Dalsgaard
   
 
 
By: Jens Dalsgaard
Its: President
   
 
 

 
/s/ Giuliana Dalsgaard
   
 
 
Giuliana Dalsgaard, individually
   
 
           

/s/ William Gilliam
   
 
 
William Gilliam, individually
   
 
 

 
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The Gilliam Exempt Family Trust                  
/s/ Daniel Robert Bartley
   
 
 
By: Daniel Robert Bartley
Its: Attorney in Fact
   
 
 

 
/s/ Angela Williams
   
 
 
Angela Williams, individually
   
 
 

         
/s/ Richard Pisano
   
 
 
Richard Pisano, individually
   
 
           

/s/ Amanda Schmieder
   
 
 
Amanda Schmieder, individually
   
 
           

/s/ Matthew Murawski
   
 
 
Matthew Murawski, individually
   
 
           

/s/ Arron Johnson
   
 
 
Arron Johnson, individually
   
 
 

 

Location Based Technologies                  
/s/ David Morse
   
 
 
By: David Morse
Its: Co-President
   
 
 

 
TranShare Corporation (for purposes of Paragraph 2 and 10 only)
         
/s/ Mark Bogani
   
 
 
By: Mark Bogani
Its: President
   
 
 

 
The Scigliano Group LLC (for purposes of Paragraphs 6-8 and 10 only)
         
/s/ William Scigliano
   
 
 
By: William Scigliano
Its: Managing Member
   
 
 

 
 
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