Exhibit 10.58
 
Terms And Conditions
for
Time and Materials Project,
 
Scope Of This Agreement:
· This is a Time and Materials Agreement
· This Agreement applies to Projects performed for US-based companies
· This Agreement  assumes that the following documents will be created as part
of the Project:
o Project Requirements Document
o Design Verification Test Plan
To Complete This Agreement:
· Complete the information on this first page
· Confirm pricing in Exhibit A
· Client signature

 

Effective Date: 1/6/2010   Spectrum:      
Spectrum Design Solutions, Inc.
110 N 5th St. Floor 3
Minneapolis, MN 55403
Attention: General Manager, Spectrum Services
Telephone: (612) 435-0789
Facsimile: (612) 435-0736
A wholly owned subsidiary of Digi International Inc.
  Client:       Location Based Technologies, Inc.      Client Name          
Address of Principal Office           38 Discovery, Suite 150           Irvine,
CA 92618 - 3127     City, State, Zip           Client is a (choose one)    
    o   Corporation         o   LLC         o   Partnership         o   Other:
_____________________________       formed under the laws of ___________________
        Contact:  

 
Name
            Joseph Scalisi 
  Mailing Address, if different from Principal Office   Phone      
            888-600-1044       Email                   joseph@pocketfinder.com 
   

 
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1.  
Definitions.

a.  
“Project” shall mean the services performed for and Deliverables to be received
by Client.

b.  
“Project Documents” shall mean the set of documents defining the Project and the
respective rights and obligations of the Parties.  The Project Documents may
contain some or all of the following:

i.  
“Agreement” – this Terms and Conditions document, along with any Exhibits and
Attachments

ii.  
“Project Plan” – a written Plan describing the separate phases of the Project

iii.  
“PRD” – the Product Requirements Document that is delivered as part of Phase 1
of the Project

iv.  
“DVT” -- the Design Verification Test plan that is delivered as part of Phase 1
of the Project

v.  
“VOR” – a Variation Order Request, which is a written request for modifications
to the Project, as required by changes in assumptions or requirements.

vi.  
“MOR” – Materials Order Request

c.  
“Deliverables” shall mean the items, reports and information to be delivered to
the Client, as defined in the Project Documents.

d.  
“Project Costs” shall consist of labor costs, non-labor expenses and materials
costs.

e.  
“Party” or “Parties” shall refer to Spectrum and Client, either individually or
collectively, as the context requires.

 
2.  
Project Initiation, Documentation, Variation

a.  
By its signature below, Client authorizes Spectrum to begin the Project.

b.  
During Phase 1 of the Project, Spectrum will produce a PRD and a DVT.  Once
Client has accepted the PRD and DVT, those documents will define the
Deliverables and the acceptance process for the Deliverables.

c.  
Client may cancel a project or any phase of a project or put it on hold with a
written notice to Spectrum.  After receipt of notice, Spectrum will discontinue
work on the project and will only engage in such work as is necessary to close
the project or phase.

 
3.  
Pricing and Payment Terms.

a.  
The Project labor costs are specified in Exhibit A or, otherwise, in a written
document.

b.  
This is a Time and Materials contract.  This means that Spectrum will perform
work on an hourly rate basis for engineering services.  Any needed materials
will be handled as set forth in Section 3.e.

c.  
Estimates provided by Spectrum are just that, estimates.  Of necessity,
estimates require that certain assumptions be made.  For instance, one
assumption normally made is that the Client will provide needed data in a timely
manner and that data will be accurate.  If any assumptions turn out to be wrong
the resulting estimate may very well be wrong as well.  Even if assumptions are
correct, the work may turn out to be more or less complex than originally
thought.   Spectrum will use its best judgment in providing estimates but the
parties acknowledge that Spectrum will be reimbursed for the total number of
hours for which it provides services, whether that is more or less than or
exactly as estimated.

d.  
The scope, structure, and any estimated costs are based on Spectrum’s
understanding of the Project requirements as communicated by the Client.  If
requirements or assumptions change, Spectrum will provide the Client with
written recommendations for Project changes in the form of a VOR.  Spectrum will
only proceed with major changes after Client has approved the appropriate
VOR.  A Major Change is a variation in the Project requirements that is
estimated by Spectrum to require more than eight hours of additional work.  If
the variation in Project requirements requires the services of more than one
person, the eight-hour threshold applies to the aggregated amount of estimated
additional work.  A Minor Change shall be a variation in the Project
requirements that is not a Major Change.  Minor changes do not require a VOR.

e.  
Spectrum will notify Client in writing when it reaches or is about to reach the
most current estimate for the work being performed.  It will also provide a new
estimate to complete the work.  Spectrum may then, at its option, suspend work
until Client provides written authorization to proceed in accordance with the
new estimate.

 
 
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f.  
Project non-labor expenses and materials costs (“Non-labor Costs”) not otherwise
set out in a Project Document must be pre-approved by Client and are an added
expense.  Non-labor Costs will be billed at cost plus 15%.  Items that may be
included in Non-labor Costs are travel expenses, third-party testing fees,
fabrication expenses, certification expenses, hardware and materials.  Any
required materials purchase over five thousand ($5000.00) dollars will be
invoiced immediately.

g.  
Project Costs are exclusive of all federal, state, municipal or other
government, excise, sales, use, occupational, or like taxes or customs, except
for taxes on Spectrum’s net income.  Client agrees to pay any tax Spectrum may
be required to collect or pay now or at any time in the future which are imposed
upon the sale or delivery of the services provided.

h.  
Client may request credit terms.  If credit is approved on Client’s account,
Spectrum will issue monthly progress billings with terms as indicated in the
credit approval letter.  Client’s account may not exceed the credit or payment
terms.  Overdue invoices are subject to expenses of collection, if any, and a
finance charge of the lower of:

i.  
1.5% per month on any past-due balance, calculated per-diem, simple interest; or

ii.  
the maximum permitted by law,

i.  
Unless otherwise agreed to by Spectrum and prior to Spectrum initiating the
Project, Client will tender payment equal to the estimated Project Costs for the
first month of the Project. This down payment will apply to the final
installments of progress billing.

j.  
Accounts that are past due may be placed on hold and internal resources
reallocated.

k.  
If no credit is requested or credit approval has not occurred, Client will make
periodic estimated advance payments in amounts set by Spectrum.  The estimated
advance payment and the payment of any outstanding balance on Client’s account
must be received in order for work on the Project to proceed.  Project Costs
will be charged against the Client’s account as they accrue.  A statement of
Client’s account and Project Costs charged against it will be sent periodically
or will be available upon reasonable request.

l.  
Accounts that exceed the credit terms or fail to maintain a positive balance
will immediately be placed on hold and internal resources will be reallocated
until the account is paid.  If internal resources are reallocated due to lack of
funds or a past-due account balance, Spectrum cannot guarantee the date when
internal resources will be available for allocation to the Project and any
Project time estimates will be deemed withdrawn.

m.  
If Client terminates or suspends the Project, Client agrees to pay Spectrum for
accrued Project Costs and for additional Project Costs incurred in terminating
or suspending the Project.

n.  
Spectrum will send final billings or a final statement immediately upon
conclusion of the Project.  Credit balances remaining in Client’s account after
final payment will be refunded.

 
4.  
Deliverables, Testing And Acceptance.

a.  
Project Deliverables will be tested by Spectrum and Client according to the
DVT.  If a Deliverable fails to pass a DVT requirement, the Deliverable will be
revised and then retested.  The process of revision and retesting will continue
iteratively until the Deliverable passes the applicable requirements.  Once a
Deliverable passes the requirements of the DVT, it is deemed accepted.

b.  
When the Project is concluded, terminated or suspended and full Payment has been
received by Spectrum, Spectrum will deliver to Client:

i.  
any remaining Deliverables;

ii.  
unused project materials purchased by Spectrum for the Project; and

iii.  
source code files.

c.  
Executables that are delivered during the course of the Project and prior to
full payment of Project Costs may be trial versions only and may function only
during the trial period.

 
 
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5.  
Intellectual Property Rights.

a.  
In connection with its performance of the Project, Spectrum may use certain
tools, utilities, modules, techniques, processes, knowledge, data, code or other
materials that Spectrum developed (or had developed) independently of any work
on the Project (collectively, “Spectrum Technology”).  As between Spectrum and
Client, Spectrum will retain sole and exclusive ownership of all Spectrum
Technology, including all Intellectual Property Rights therein.

b.  
In connection with its performance of the Project, Spectrum may produce
software, Source Code, Object Code, or a set of Schematics that (a) implements
hardware-level functionality or (b) consists of intermediate–level or low-level
technology building blocks that provide basic functionality and consist of
routines that may be used in different contexts and that are not unique to the
deliverable and which shall remain the property Spectrum (“Intermediate Code”).

c.  
Unless otherwise specified in the Project Documents, to the extent that Spectrum
incorporates any Spectrum Technology or Intermediate Code into the Deliverables,
Spectrum hereby grants to Client a non-exclusive, irrevocable, perpetual,
royalty-free, fully paid-up, worldwide license to make, have made, use, offer to
sell, sell, import, copy, modify, create derivative works based upon,
distribute, sublicense, display, perform and transmit such Spectrum Technology
and Intermediate Code in conjunction with Client’s commercial utilization of the
Deliverables.

d.  
Excluding Spectrum Technology, Intermediate Code and any third party materials
and information, all developments, discoveries and trade secrets conceived,
discovered, developed or reduced to practice by Spectrum, solely or in
collaboration with Client, that are created in connection with the Project shall
be considered Project “Inventions”. An example of an Invention is the PCB layout
for the project.  Once Spectrum receives full payment of all Project Costs
associated with the Project phase in which an Invention was included as part of
the Deliverable, that Invention will become the sole property of the
Client.  Prior to receipt of payment, as described in the preceding sentence,
any Project Inventions remain the sole property of Spectrum.

 
6.  
Confidentiality.

a.  
Exhibit B (“Protection Of Proprietary Information”) is incorporated herein. In
the event a separate agreement that protects the confidentiality of a Party’s
Proprietary Information exists and is in effect, the terms of that separate
agreement will control over Exhibit B.

b.  
Spectrum does not consider the fact that it is doing work for the Client in and
of itself to be confidential unless otherwise instructed by the Client.  If the
Client does consider its relationship with Spectrum confidential, and so
notifies Spectrum in writing, Spectrum will only disclose such information with
prior approval of the Client.

c.  
Spectrum’s viability in the marketplace is dependent upon the presentation of
past work performed.  To that end, Spectrum may make public a general
description regarding its work for Client as an example of Spectrum’s value to
the marketplace, once approved by Client.

 
7.  
Indemnification.  Client shall defend, indemnify and hold harmless Spectrum and
its affiliated or controlling companies, and each of their respective directors,
officers, employees, agents, or customers, from and against any and all claims,
losses, damages, costs, (including legal fees and other litigation expenses),
penalties, liabilities, judgments, amounts paid in settlement, fines and
expenses arising out of or in connection with any claim against Spectrum that
relate to work performed or actions taken in reliance on or conformity with
information, documents, intellectual property, designs, specifications or
instructions provided by Client.

 
8.  
Warranty and Limitation of Liability.  Spectrum warrants that it shall perform
the Project in a workmanlike manner, customary in the industry.  Spectrum
warrants that any hardware produced in conjunction with the Services rendered
will perform to generally accepted industry standards.  THIS IS THE ONLY
WARRANTY APPLICABLE TO THE WORK HEREUNDER.  ANY OTHER WARRANTIES OR
REPRESENTATIONS EXPRESS, IMPLIED OR STATUTORY; INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF QUALITY, PERFORMANCE, NONINFRINGEMENT, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE ARE EXPRESSLY DISCLAIMED TO THE FULLEST EXTENT ALLOWED
BY LAW.  SPECTRUM DOES NOT WARRANT THAT THE PROJECT DELIVERABLES WILL MEET
CUSTOMER NEEDS OR BE FREE FROM ERRORS.  THE FOREGOING EXCLUSIONS AND DISCLAIMERS
ARE AN ESSENTIAL PART OF THIS AGREEMENT AND FORM THE BASIS FOR DETERMINING THE
PRICE CHARGED FOR THE SERVICES.  IN NO EVENT SHALL SPECTRUM BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING LOST REVENUE OR
PROFITS.  SPECTRUM’S TOTAL LIABILITY HEREUNDER REGARDLESS OF THE FORUM OR FORM
OF ACTION WILL NOT EXCEED THE TOTAL AMOUNT PAID BY CLIENT UNDER THIS AGREEMENT.

 
 
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9.  
Employee Solicitation.

a.  
Client recognizes that Spectrum has a substantial investment in its employees
and design service subcontractors. Client agrees that it will not, except as set
forth in this Agreement, solicit for employment Spectrum employees or design
service subcontractors for a period of two years after completion of the
Project.

b.  
Spectrum recognizes that Client has a substantial investment in its employees.
Spectrum agrees that it will not, except for activities related to this
Agreement, solicit for employment Client employees for a period of two years
after completion of the Project.

 
10.  
Governing Law and Resolution of Disputes.

a.  
This Agreement shall be governed by the laws of Minnesota without regard to
Minnesota’s conflict of laws rules.  The application of the UN Convention on
Contracts for the International Sale of Goods is specifically excluded.

b.  
In any proceeding or action brought by one of the Parties to enforce or
interpret the provisions of this Agreement, the prevailing Party will be
entitled to be reimbursed by the other Party for its reasonable attorney fees
and other legal costs, in addition to other relief to which that Party may be
entitled.

 
11.  
General Provisions:

a.  
Assignment.  Except as stated in Section 5, Party may not sell, assign or
delegate any rights or obligations under this Agreement to a third party, unless
the entity receiving the assignment owns a controlling interest in the assigning
Party.

b.  
Entire Agreement.  This Agreement constitutes the entire agreement between the
Parties with respect to the subject matter herein and supersedes all prior
written and oral agreements between the Parties regarding the subject matter
herein. Any modifications or additions to this Agreement must be in writing and
signed by both Parties.

c.  
Headings.  Headings used in this Agreement are for reference only and shall not
be considered when interpreting this Agreement.

d.  
Impossibility of Performance.  With the exception of a requirement to make a
payment, neither Party shall be liable for any damages or penalty for delay or
for any other failure to perform in accordance with the terms and conditions of
this Agreement if such delay or failure to perform is made impossible, in whole
or in part, due to factors beyond the Party’s reasonable control, including, but
not limited to, a) natural events, b) acts of government or c) acts of third
parties, including criminal acts, civil unrest, labor disputes, transport and
delivery disruption, supply chain disruptions, cybercrimes or terrorism.

e.  
Notices.  Any notice or other communication required or permitted by this
Agreement to be given to a Party shall be in writing and shall be deemed given:

i.  
When delivered, if delivered personally;

ii.  
When sent, if transmitted via facsimile (with receipt of confirmation of
complete transmission) to the Party at the Party's facsimile number listed in
this Agreement;

iii.  
When sent, if transmitted via email with a copy of the transmission to the other
Party’s email address;

 
 
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iv.  
When received, if sent by commercial service that provides tracking and
confirmation of receipt;

v.  
Three business days after posting with the US Postal Service, registered or
certified mail (return receipt requested), for delivery within the United
States;

vi.  
Seven business days after posting with the US Postal Service, registered or
certified mail (return receipt requested), for delivery outside the United
States;

f.  
Severability.  If any provision of this Agreement is found to be illegal or
unenforceable, the other provisions shall remain effective and enforceable to
the greatest extent permitted by law.

 
Thank you for the opportunity to work with your company.  Please sign below to
indicate your acceptance of the terms in this Agreement.
 
 
Spectrum Design Solutions
 
_______________________________________________________
Rodney P. Landers
VP of Technical Sales
 
Project Authorization
 
Estimated Cost of Development

Phase I Labor Fees
$N/A
Phase II Labor Fees
$184K
Phase III Labor Fees
$103K
Phase IV Labor Fees
$31K
Phase IV Labor Fees
$6K

 
No materials have been included in this estimate.  Any materials purchases to be
made by Spectrum will require a signed MOR and/or VOR by Client.
 
 
On behalf of Client,
The terms and conditions in this Agreement are acknowledge and accepted, and
Spectrum is authorized to perform the Project.

             
Signature
               
Printed Name
               
Title
               
Date
 

 
 
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Exhibit A: Project Labor Costs
 
 
Technicians
     
Electrical Tech
$80.00/hr
   
Senior PCB Designer
$85.00/hr
       
Standard Engineers
     
Associate Engineer/Designer
$90.00/hr
   
Engineer/Designer
$105.00/hr
   
Senior Engineer/Designer
$125.00/hr
       
Wireless Engineers
     
Associate Wireless Engineer
$115.00/hr
   
Wireless Engineer
$130.00/hr
   
Senior Wireless Engineer
$150.00/hr
       
ASIC Engineers
     
Associate ASIC Design Engineer
$115.00/hr
   
ASIC Design Engineer
$130.00/hr
   
Senior ASIC Design Engineer
$150.00/hr
       
Project Management
     
Project Coordinator
$50.00/hr
   
Project Manager
$125.00/hr

 
 
 

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Exhibit B
Protection Of Proprietary Information
 
In order to protect Proprietary Information, the Parties agree that:
1.  
For purposes of this Exhibit, “Agreement” shall refer to the document to which
this Exhibit is attached. If any provision in this Exhibit conflicts with the
express provisions of the Agreement, the Agreement will control.

2.  
Notwithstanding expiration of the Agreement, all Proprietary Information (as
defined below) disclosed by a Party prior to expiration shall be treated in
accordance with the terms of this Exhibit for so long as it is maintained in
Proprietary Information status.

3.  
Proprietary Information (as defined below) may be used by the receiving Party
for the purpose of performing and completing the Project. Proprietary
Information includes any and all current and future product information,
business information, identity of current or future business partners, technical
or financial information including but not limited to software source code,
reports, plans, documents, drawings, inventions, and proposals (a) disclosed in
tangible form clearly labeled or identified in writing as “confidential”,
“proprietary” or words of similar meaning at the time of disclosure or (b)
disclosed in non-tangible form , identified as “confidential” or “proprietary”
or  words of similar meaning at the time of disclosure, and summarized in a
writing, designated as “confidential”, “proprietary” or words of similar
meaning, and delivered to the other Party within thirty (30) days after
disclosure.

4.  
Unless otherwise stated in the Agreement, Proprietary Information disclosed
hereunder remains the property of the disclosing Party. Promptly after receipt
of a written request from the disclosing Party, the receiving Party shall return
all documents comprising Proprietary Information to the disclosing Party. All
Proprietary Information is provided “AS IS” without warranty of any
kind.  Neither Party is obligated to disclose or receive Proprietary
Information.

5.  
This Agreement imposes no obligation upon a receiving Party with respect to
Proprietary Information which (a) was in the possession of, or was known by, the
receiving Party prior to its receipt from the disclosing Party, without an
obligation to maintain its confidentiality; or (b) is or becomes publicly
available through no fault of the receiving Party; or (c) is rightfully received
by the receiving Party from a third Party without a duty of confidentiality; or
(d) is disclosed by the disclosing Party to a third Party without a duty of
confidentiality by the third Party; or  (e) is independently developed by the
receiving Party without a breach of this Agreement; or becomes available to the
receiving Party without a breach of this Agreement; or (f) is disclosed by the
receiving Party with the disclosing Party’s prior written approval.  If a
receiving Party is required by a government body or court of law to disclose
Proprietary Information, the receiving Party agrees to give the disclosing Party
prompt written notice sufficient to permit the disclosing Party to contest the
disclosure or seek a protective order.

6.  
A receiving Party shall protect Proprietary Information by using the same degree
of care, but no less than a reasonable degree of care, as it uses to protect its
own similar Proprietary Information and to prevent (a) any use not authorized
herein, (b) dissemination to any employee without a need to know, (c)
communication to any third party or (d) publication.

7.  
Neither Party will be precluded from independently developing technology or
pursuing business opportunities similar to those covered by this Agreement, as
long as it does no without using the Proprietary Information of the other Party.

8.  
Each disclosing Party warrants that it has the right to disclose the Proprietary
Information it discloses hereunder.

9.  
A receiving Party will adhere to all applicable laws and regulations of the U.S.
Export Administration and will not export or re-export any technical data or
products received from a disclosing Party to any proscribed person or country
listed in the U.S. Export Administration regulations unless properly authorized
by the U.S. Government.