Exhibit 10.6
-------------
Contract Agreement
CONTRACT AGREEMENT made this 19th day of December, 1997 between Centro
Alameda Inc. ("Contractor"), a non-profit organization having its principal
place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and
Synthonics Technologies, Inc. ("Synthonics"), a Utah corporation having its
principal place of business at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Contractor desires the procurement of a unique data base for
display purposes at a scheduled conference with the Virgin ▇▇▇▇ as the subject
of the conference,
WHEREAS, Contractor represents that the scheduled conference is a preview
to a larger exhibit, held in conjunction with the Smithsonian Institution that
will require a much larger data base created from similar subject matter,
WHEREAS, Synthonics will utilize its patented Rapid Virtual Reality
technology to create and provide the unique data base, and
WHEREAS, Contractor shall secure access by Synthonics to the statues,
paintings, images, sketches, photographs, videos, etc. required for the creation
of the unique data base,
NOW THEREFORE, in consideration of the promises and mutual agreements
herein contained, the parties agree with each other as follows:
1. SPECIFICATIONS OF THE PRODUCT
-----------------------------
a) The Product will be a unique data base with the Virgin ▇▇▇▇ as its
central theme. Included in the Product will be the following sets of
data:
Twenty-five (25) three dimensional (3D) digital models of selected
statues,
Two (2) 3D digital models of selected statues that also include 3D
digital models of x-ray images of each statue,
A series of photographs of ten (10) paintings, and
Two (2) 3D digital models of above selected paintings that also
include 3D digital models of x-ray images of each painting,
Selected support data (videos, text, audio recordings, etc.) for one
(1) of the 3D digital models described above.
b) The Product will include specific features designed for the analysis
of the data base. Included in the Product will be the following
features:
All 3D digital models will be viewable in Synthonics' latest version
of its VRX(TM) Viewer,
Side-by-side viewing and comparison capability of two (2) 3D digital
models simultaneously,
The ability to "walk-thru" layers of those 3D digital models created
from x-rays,
Page 1
The ability to overlay-multiple two dimensional (2D) photographs for
profile comparisons, and
The ability to access, via "hot spots" on the selected 3D digital
model, the support data.
c) A simple CD-ROM will be created and produced that will only include a
promotional film clip (not to exceed eight (8) minutes in duration)
provided by the Contractor and the VRX(TM)3D digital model library.
Except for the VRX(TM) 3D digital model library, this CD-ROM will not
include any other Product features as described above in Paragraph
l(b). A total of one hundred (100) CD-ROMs will be provided by
Synthonics in time for the scheduled conference. Additional CD-ROMs
may be purchased from Synthonics at a price of $35 each for a minimum
order quantity of 100 units or a price of $20 each for a minimum order
quantity of 1000 units.
d) The Product (defined as the unique data base, its features, and its
associated CD-ROM) are for the sole use of the Conference on the
Virgin ▇▇▇▇, the participants in this Conference, and the Contractor.
The Product is not to be licensed, sold or reproduced by any person or
entity.
e) The underlying source code used to develop the Product (including data
base, analysis features, and the CD-ROM) is the proprietary property
of Synthonics and is not considered to be any part of the Product
being purchased by the Contractor under the terms of this Agreement.
f) Synthonics retains the right to use the Product for other promotional
applications as it may choose. Synthonics shall treat the data base in
a proper and reverent manner in any other promotional application
within which it may be used. The associated CD-ROM may only be used by
Synthonics in a promotional manner and is not to be offered for sale.
Likewise, Contractor retains the right to use the data base and its
features for other non-revenue applications within the context of the
conference and subsequent exhibit. The associated CD-ROM may only be
used by the Contractor in a promotional manner and is not to be offered
for sale.
2. SYNTHONICS' RESPONSIBILITIES
----------------------------
a) Synthonics shall produce the Product in accordance with the
specifications set forth above.
b) Synthonics shall use its best efforts to complete the Product by April
24, 1998, but, in no case, later than May 15, 1998, unless the penalty
clause included in paragraph 4(b) is in effect. In such case, the
terms defined in paragraph apply.
3. CONTRACTOR'S RESPONSIBILITIES
-----------------------------
a) Contractor shall identify and provide access to all statues,
paintings, images, photographs, sketches, videos, etc. that are
required for the Product.
Page 2
b) Contractor shall work with Synthonics to provide all required Product
approvals by the required dates provided, however, Contractor shall
not be required to incur any extraordinary costs or expenses in
connection with such approvals.
c) Contractor shall make timely payments to Synthonics at the completion
of specific milestones as described later in this Agreement.
4. PRODUCTION AND DELIVERY SCHEDULE MILESTONES
-------------------------------------------
a) Both Synthonics and the Contractor shall be committed to achieving the
scheduled milestones required for an on-time delivery of the Product.
These milestones are described below:
Milestone #1: Signed Agreement December 19, 1997
Milestone #2: All Product content identified by
Contractor
(see Attachment A for details) December 26, 1997
Milestone #3: Beta review of the Product April 8, 1998
Milestone #4: Product ready for Conference April 24, 1998
Milestone #5: ▇▇▇ ▇▇-▇▇▇▇ packaged May 15, 1998
Milestone #6: Conference start May 15, 1998
b) In the event Contractor does not achieve Milestone #2 (as described in
Attachment A) by December 26, 1997, the dates set forth in the above
description of Milestones shall be extended one day for each day
Contractor fails to meet Milestone #2.
c) Both Synthonics and Contractor acknowledge that the Milestone schedule
detailed in paragraph 3(a) is very aggressive and that each party
shall commit appropriate resources to insure that product design and
development, along with associated reviews and approvals, are
accomplished in a timely manner.
5. PAYMENTS TO SYNTHONICS FOR THE PRODUCT
--------------------------------------
a) The Contractor shall pay to Synthonics a total of $235,800 for the
Product.
b) A down payment of 50% of the total, equal to $117,900, is payable to
Synthonics by the Contractor at the time of the signing of this
Agreement (Milestone # 1).
c) A progress payment of 25% of the total, equal to $58,950 is payable to
Synthonics by the Contractor at the time of the Beta review of the
Product (Milestone #3).
d) A final payment of 25% of the total, equal to $58,950 is payable to
Synthonics by the Contractor at the time the Product is ready for the
Conference (Milestone #4).
e) All payments are to be made by Contractor in US dollars and are due to
Synthonics upon receipt of the invoice by the Contractor and approval
of meeting relevant Milestone by Contractor.
Page 3
6. WARRANTIES AND INDEMNIFICATIONS
-------------------------------
a) Warranties
i) Contractor Warranties: Contractor warrants and represents that
it has the full right and authority to grant all of the rights
granted herein, that except as may be noted in a separate writing
from the Contractor to Synthonics, no permission is required from
any other party to fully enforce the rights granted herein; the
use of Contractor provided materials is not a violation of the
copyright or any proprietary or personal right of any person or
entity or otherwise contrary to law; that it has not previously
assigned, pledged or otherwise encumbered the rights herein
granted to Synthonics; that it will not grant to any other party
a license to use the Product, and that the Product shall not be
sold or reproduced by Contractor, its agents, its principals, or
its employees.
ii) Synthonics Warranties: Synthonics warrants and represents
that it has the full right and authority to enter into this
Agreement; that none of the non-Contractor provided materials
incorporated in the completed Product are a violation of the
copyright, patent right, or any proprietary or personal right of
any person or entity or otherwise contrary to law; that
Synthonics has fully complied with all applicable laws and
regulations both within and outside the United States pertaining
to the development and manufacture of the Product; and that
Synthonics has not nor will not in any manner grant, assign,
encumber, or dispose of any of the rights granted herein except
as provided herein.
b) Contractor hereby indemnifies Synthonics and shall hold it harmless:
i) against any claims or suits asserting any proprietary rights
in an item identified and provided for inclusion by Contractor
which Synthonics has reproduced pursuant to this Agreement, but
only to the extent of Synthonics' out-of-pocket costs; and
ii) against any judgments or settlements arising out of a breach
of one of the warranties made above in paragraph 6(a), but only
to the extent of Synthonics' actual out-of-pocket costs including
reasonable legal fees. Nothing contained in this subparagraph, or
elsewhere in this Agreement, shall create any liability on the
part of Contractor for any other claims or suits against
Synthonics.
c) Synthonics hereby agrees to indemnify, defend, and hold Contractor
harmless from any claim, suit, judgment, settlement, loss, or damage
arising or alleging to arise out of or from the development of the
Product or arising out of a breach of Synthonics' warranties under the
Synthonics name, excepting claims for which Contractor is indemnifying
Synthonics.
Page 4
7. TERMINATION
-----------
a) Material Breach: Contractor may terminate this Agreement in the event
of a material breach by Synthonics provided that Synthonics has been
given thirty (30) days written notice of such breach, the nature of
the breach has been identified, and Synthonics has failed to cure the
asserted breach to the satisfaction of Contractor within the notice
period. Failure to meet any of the Milestones as described in
paragraph 4 shall be deemed a material breach, providing the cause of
failure to meet such deadlines was not the responsibility of the
Contractor. If the cause of a miss to a Milestone is the
responsibility of Contractor or if the penalty clause described in
paragraph 4(b) is activated, the miss of any Milestone shall not be
considered a material breach of this Agreement.
b) Bankruptcy or Cessation of Business: In the event Synthonics enters
into proceedings relating to bankruptcy, whether voluntary or
involuntary, Synthonics agrees to furnish, by certified mail, written
notification of the bankruptcy to the Contractor. This notification
shall be provided within five (5) days of the initiation of the
proceedings relating to bankruptcy filings. This notification shall
include the date on which the bankruptcy petition was filed, the name
and location of the court where the petition was filed. This
obligation remains in effect until final payment is made under this
Agreement. Upon receipt of such notice, and subject to such approvals
as may be required by the bankruptcy court and/or trustee in
bankruptcy, Contractor shall have the first and exclusive right to
purchase all or part of the Product being developed by Synthonics for
the Contractor. If Contractor chooses not to purchase the in-progress
development of the Product, Synthonics may dispose of the in-progress
development of the Product consistent with the terms and conditions of
any arrangement ordered by the court and/or trustee. The voluntary or
involuntary filing of bankruptcy proceedings by Synthonics shall be
deemed a material breach of this Agreement.
c) Transfer: Contractor may terminate this Agreement effective
immediately, at its sole option, if Synthonics sells or otherwise
disposes of substantially all of its business or assets to a third
party, or control of Synthonics is transferred, or present management
of Synthonics is changed, or no longer is involved directly in the
day-to-day supervision of Synthonics' performance under this Agreement
unless Synthonics shall have first obtained Contractor's prior written
permission to such transfer and/or changes.
d) Force Majeure: If by reasons of the laws, regulations, acts, demands,
orders, or interpositions of any government or any subdivision or
agent thereof; or by acts of God, strike, flood, weather, explosion,
accidents, war, rebellion, insurrection, terrorism or any other cause
beyond the control of either party whether similar or dissimilar to
the foregoing Synthonics shall be delayed or prevented from performing
this Agreement, such delay or failure to perform shall be excused
during the continuance of and to the extent of such cause, and the
Agreement period for performance shall be extended for a period equal
to the duration of such cause. If such delay exceeds ninety (90) days,
either party hereto may terminate this Agreement, and all rights and
obligations hereunder shall cease, except that Contractor shall be
responsible for all sums due and owing as of the date of delay.
Page 5
e) In the event Contractor terminates this Agreement as provided herein,
and the Contractor has met all of its obligations as described in this
Agreement, Synthonics shall immediately pay to Contractor all sums
which have been paid by Contractor to Synthonics as of the date of
termination and Contractor shall have no further obligations under
this Agreement. If this Agreement is terminated for any reason and the
Contractor has not fulfilled its obligation as described in this
Agreement all sums previously paid to Synthonics are not reimbursable
to Contractor, and Synthonics will be paid by Contractor for any
non-billed costs that they have incurred prior to the date of the
termination.
8. AUTHORIZED REPRESENTATIVES
--------------------------
a) Contractor's Representative: For purposes of providing a liaison,
providing guidance and direction in daily operational matters,
granting approvals and withholding same, and for general Agreement
coordination as detailed herein, the Contractor shall be represented
by ▇▇▇▇▇ ▇▇▇▇▇, President of Centro Alameda Inc. or his designated
representative.
b) Synthonics' Representative: For the purpose of liaison and direction
in daily operation matters, Synthonics shall be represented by ▇▇▇▇▇▇
▇▇▇▇▇, VP Marketing & Sales for Synthonics Technologies, Inc., or his
designated representative. The Synthonics representative shall be
responsible for informing the staff of Synthonics working on the
Product about each and every provision of this contract.
9. NOTICES
-------
All correspondence, notices, payments and all other written communications
related to this Agreement in any way should be delivered by US certified
mail, postage prepaid, return receipt requested, or a similar carrier
requiring signature and receipt.
All notices which shall be required to be sent by Contractor to Synthonics
shall be sent to the following address:
Synthonics Technologies, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
All notices which shall be required to be sent by Synthonics to Contractor
shall be sent to the following address:
Centro Alameda Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
By providing notice pursuant to this paragraph, either party to this
Agreement may change the individual and/or address for correspondence,
notices, or payments that are to be sent.
10. NO PARTNERSHIP
--------------
This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between Contractor and
Synthonics. Neither party shall have the right to obligate or bind the
other in any manner whatsoever and nothing herein contained shall give or
is intended to give any rights of any kind to any third persons.
11. NO ASSIGNMENT
-------------
This Agreement and all rights and obligations herein are personal to
Synthonics and shall not be assigned without Contractor's prior written
consent.
Page 6
12. AMENDMENTS
----------
No amendments, modifications or waivers to this Agreement shall be valid
unless in writing and signed by all parties to this Agreement.
13. TIME IS OF THE ESSENCE
----------------------
The parties agree that time is of the essence in this Agreement, and that
adherence to the mutually agreed schedule is vital to the performance of
the parties' respective obligations.
14. DISCLAIMER OF IMPLIED WAIVERS
-----------------------------
The failure of Contractor to insist upon the strict performance by
Synthonics of any of the terms of this Agreement or the acceptance by
Synthonics of any payments, even partial payments, from Contractor with
knowledge of any default or breach thereof, shall not be construed as a
waiver by Contractor of its right to insist at any subsequent time upon the
* full performance of any of the terms of this Agreement.
15. CONSTRUCTION
------------
This Agreement shall be construed in accordance with the applicable federal
laws and the laws of the State of Texas regardless of its place of
execution or performance.
16. NECESSARY SIGNATURES AND CONSENT
--------------------------------
This Agreement constitutes the complete understanding of the parties. This
Agreement shall not be deemed effective, final or binding upon Contractor
or Synthonics until signed by each of them at the appropriate places at the
conclusion of this Agreement.
17. SEVERABILITY
------------
The terms of this Agreement are severable. If any term or provision is
declared invalid, it shall not affect the remaining terms which shall
continue to be binding.
18. HEADINGS
--------
The Section headings hereof are for the convenience of the parties of this
Agreement only and shall not be used in the interpretation of this
Agreement.
19. RECITALS
--------
The recitals herein constitute an integral part of the Agreement reached
and are to be considered as such.
20. ENTIRE AGREEMENT
----------------
This Agreement constitutes the entire agreement between the parties and
supersedes all previous agreements in this matter. There are no other
written or oral agreements, representations or understandings with respect
to the matter of this Agreement. This Agreement and its terms may be
amended, modified, or waived only by written agreement, signed by the
authorized representatives of Synthonics and the Contractor. This Agreement
may not be assigned by either party without the prior written consent of
the other.
Page 7
IN WITNESS WHEREOF, THE PARTIES hereto have signed this Agreement in
duplicate originals as of the day and year above written.
Accepted and Agreed:
CENTRO ALAMEDA, INC. SYNTHONICS TECHNOLOGIES, INC.
/S/ ▇▇▇▇▇ ▇▇▇▇▇ /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------- ----------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇▇▇▇▇
Its: President Its: VP Marketing & Sales
Date: 12-18-97 Date: 12-19-97
Page 8
Attachment A
Milestone #2 requires the delivery of the information described below as
well as access to extended information on the dates indicated.
I. Items required from Contractor to create database:
1) Twenty-five (25) ▇▇▇▇▇▇▇ statues.
2) Two (2) ▇▇▇▇▇▇▇ statues (from 25 statues listed as #1 above) that
have x-rays of sub-layers available.
3) Ten (10) ▇▇▇▇▇▇▇ paintings that are considered a series of
paintings.
4) Two (2) ▇▇▇▇▇▇▇ paintings (from the 10 paintings listed as #3
above) that have x-rays of sub-layers available.
5) Support data (text, audio, video, etc.) for the ▇▇▇▇▇▇▇ statue,
included as part of #1 above, that is to be considered the
"centerpiece" statue of the data base.
II. The following information is required for the items listed above:
1) Location of statues and paintings. (I-1 & I-3)
2) Date, during January, when Synthonics will have access to each
painting and each statue for photography purposes. (I-1 & I-3)
3) Date, during January, when required x-rays will be provided to
Synthonics by Contractor. (I-2 & I-4)
4) Name and location of technical resource(s) that will provide
Synthonics with the required background information for the statues
and paintings. (I-l, I-2, I-3, I-4, & I-5)
5) Name and location of technical resource(s) that will provide
Synthonics with the required interpretations of the x-rays taken of
the statues and paintings. (I-2 & I-4)
6) Listing of each item of support data to be included with the
"centerpiece" statue. (I-5)
7) Date, during January, when each support data item [II-6 above] will
be provided to Synthonics by Contractor. (I-5)
III. All items identified by Contractor in Section I-1 through I-4 of this
Attachment A must be available for photography by Synthonics prior to
January 16, 1998.
Page 9
