EXHIBIT 10.23
LICENSE AGREEMENT
This license agreement ("Agreement"), dated September 1, 1998, is by
and between Chromatics Color Sciences International, Inc., a New York
corporation, having its offices at 0 X. 00 Xx., Xxx Xxxx, XX 00000
("Chromatics") and Nordstrom, Inc., a Washington corporation, having its offices
at 0000 0xx Xxx., Xxxxx 000, Xxxxxxx, XX 00000 ("Nordstrom").
RECITALS
WHEREAS, Chromatics is the developer and owner of certain technology
and processes for skin and cosmetic product color analysis and custom color
formulation of cosmetics, whereby the color of various cosmetic products can be
coordinated to each other and to skin color;
WHEREAS, Nordstrom is a high quality specialty retailer of fashion wear
and related products including cosmetics and wishes to sell the Products defined
herein as a Nordstrom line of cosmetic products under the name C[2]O Color to
Order, a trademark solely owned by Nordstrom;
WHEREAS, Chromatics wishes to grant to Nordstrom and Nordstrom wishes
to accept from Chromatics, a license to use the software for the
Colormate(Registered) II System to sell the Products provided by Chromatics and
lease the Colormate(Registered) II System in the Territory for a Test Period
described in the Term of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, the parties agree as follows:
ARTICLE 1
DEFINITIONS
For purpose if this Agreement, the following terms shall have the meaning stated
below:
1.1 "Bulk Materials" means the lipsticks and foundations to be provided by
Chromatics for Nordstrom to sell which are recommended by the
Colormate(Registered) II System. Nordstrom shall approve the non-color related
formulations of these lipsticks and foundations within 30 days of signing this
Agreement providing such formulations are delivered to Nordstrom at least two
(2) weeks prior to the expiration of such thirty (30) days.
1.2 "Colormate(Registered) II System" refers to the Chromatics color measurement
units which measure and analyze skin color and based on such analysis select a
cosmetic color formulation which matches or compliments the skin color or other
Products.
1
1.3 "Marketing Intangibles" means Nordstrom's trademark "C[2]O Color to Order,"
and all trademarks, trade names, brand names, logos, trade dress, art work,
designs, service marks, packaging, marketing strategies, customer lists,
customer identification information, marketing campaigns, sales promotions and
advertising materials created, owned and/or registered to or by Nordstrom
relating to the marketing of any Products including searches concerning any such
Marketing Intangibles and any copyrights, and other rights which may exist in or
otherwise protect such Marketing Intangibles. Nordstrom does not claim, and
shall not acquire, any rights in or ownership of any Technology or Products or
other property of Chromatics by virtue of the fact that such items are
referenced or described in any Marketing Intangibles.
1.4 "Products" means all cosmetic color products produced using the Technology,
which currently include foundation, concealer, blush, eyeshadow, face powder and
lipstick.
1.5 "Technology" means all technology, relating to the Colormate(Registered) II
System, its color measurement hardware and software including without limitation
the Product Color Recommendations and the Product Color Formulations of the
Products developed by Chromatics as part of the custom color cosmetic system
embodied in the Colormate(Registered) II System.
1.6 "Territory" means the four Nordstrom full line specialty stores in the
United States to be designated by Nordstrom within 30 days of the signing of
this Agreement.
1.7 "Specialty Retail Department Stores" means retailers other than Nordstrom
that sell apparel, footwear, cosmetics and/or similar merchandise in multiple
departments within one store such as The Bon Marche, X.X. Xxxxxx, Macys, Neiman
Marcus and similar stores. This excludes specialty chain stores, such as, The
Gap, The Limited and Victoria's Secret.
1.8 "Custom Blending" means the custom mixing and blending of cosmetic pigments
by the salesperson for the Product to make a particular shade and formula of the
Product at point of sale (a physical location at the time the Product is sold to
a particular customer) based on the Product Color Formulations and Product Color
Recommendations for that particular customer. This does not include a Product
(which may be claimed to be custom blended) but which is carried in a line of
cosmetic products and recommended and sold to a particular customer based on a
Product Color Formulation and a Product Color Recommendation for that particular
customer if it is not custom blended as specified above.
1.9 "Product Color Formulations" means the color formulations of the Products
produced using the Technology.
1.10 "Product Color Recommendations" means the cosmetic Product colors
recommended for a customer's use by the Technology.
2
ARTICLE 2
GRANT
2.1 License Grant. Chromatics hereby grants to Nordstrom, and Nordstrom hereby
accepts, a non-exclusive license in the Territory to use the Technology solely
to sell the Products in the Territory in order to evaluate the Technology (the
"Test") for the six month term of this Agreement.
2.2 Additional Options. Chromatics hereby grants to Nordstrom for the six month
term of this Agreement and under terms acceptable to both parties the right of
first refusal for the exclusive use of the Technology for the sale of Products
in Specialty Retail Department Stores in the Territory and the exclusive right
to do Custom Blending of the Products in the Territory during the six month term
of this Agreement. In the event Chromatics at any time during the six month term
of this Agreement offers a license to any third party (except for this
non-exclusive six month license) for the use of the Technology, or any part
thereof as defined in Section 1.5, for the sale of Products in Specialty Retail
Department Stores and/or the Custom Blending of the Products in the United
States, Chromatics shall give Nordstrom written notice thereof, including the
terms of any proposed license or agreement that Chromatics desires to enter
into, and Nordstrom may exercise its right of first refusal by written notice to
Chromatics within thirty (30) days after receipt of such notice after which date
Nordstrom's right of first refusal for such license if not exercised will
expire. In the event Nordstrom exercises its right of first refusal hereunder,
the non-exclusive license granted in Section 2.1 shall become an exclusive
license as specified above for the remainder of the six month term of this
Agreement, under terms no less favorable than the terms offered or to be offered
to such third party.
ARTICLE 3
DUTIES OF NORDSTROM
3.1 Reasonable Efforts. During the term of this Agreement, Nordstrom shall give
and devote commercially reasonable efforts to the marketing, promotion and sale
of the Products under the name C[2]O Color to Order in the Territory. Nordstrom
shall provide computers capable of interfacing with the Colormate(Registered) II
Systems at each of the four (4) Nordstrom store locations of the Territory.
Chromatics can take credit publicly for the Technology, the
Colormate(Registered) II System, the Product Color Formulations and the Product
Color Recommendations of the Products providing, such credit shall not make use
of the Nordstrom name other than to say the technology is used in the Nordstrom
stores in any SEC filing, or related press release for public disclosure by
Chromatics or, unless otherwise agreed in advance in writing.
3.2 Equipment and Insurance. Nordstrom shall lease one Colormate(Registered) II
System unit from Chromatics for each of the four (4) Nordstrom full-line
specialty stores of the Territory, at a cost of Two Hundred Dollars U.S. ($200)
per month for four units for a three month period
3
commencing on the date of delivery of the Colormate(Registered) II System units.
In the event of theft, loss or extensive damage to any Colormate(Registered) II
System unit while in Nordstrom's possession or control, Nordstrom will be
responsible for the replacement cost of $3,500 for each such unit.
3.3 Purchase Orders. Nordstrom shall place an initial order for six hundred
(600) each of thirty-five (35) lipsticks at a cost per lipstick of $3.00 and one
thousand (1,000) each of seventeen (17) foundations at a cost per foundation of
$3.00 for delivery no later than three (3) months from the date this Agreement
is fully executed.
3.4 License Fee. Nordstrom shall pay Chromatics $45,000 upon signing of this
Agreement for the six month non-exclusive license of: the software including the
Product Color Recommendations of the Colormate(Registered) II System, the
Technology, the Colormate(Registered) II System and the Product Color
Formulation of Products and Product Color Recommendations of the
Colormate(Registered) II System software program. This fee will include
Chromatics' inclusion of the pigments submitted to Chromatics by Nordstrom for
use in formulating certain eyeshadows, blush, face powder, concealer and
foundations in the Product Color Formulation of Products within three (3) months
of the date on which Chromatics receives thirty (30) unit doses of each shade of
such pigment formulations from Nordstrom.
ARTICLE 4
DUTIES OF CHROMATICS
4.1 Colormate(Registered) II Systems. Chromatics shall provide to Nordstrom no
later than three (3) months from the date this Agreement is fully executed, one
Colormate(Registered) II System unit each for the four Nordstrom full line
specialty stores of the Territory including Roosevelt Field, NY, Downtown
Seattle, WA and Dallas Galleria, TX, and one additional store in California to
be designated by Nordstrom within 30 days of the signing of this Agreement.
Chromatics shall also provide the software contained in the
Colormate(Registered) II System to Nordstrom in accordance with Section 3.4 and
4.3. During the term of this Agreement Chromatics shall repair or replace at its
own expense any Colormate(Registered) II System units that are not functioning
properly if due to defect in workmanship in the Colormate(Registered) II System,
promptly after receiving a request from Nordstrom. If such non-functioning unit
is due to damage caused by a negligent act of Nordstrom or of an employee or
agent of Nordstrom, Chromatics shall repair or replace any such
Colormate(Registered) II System unit at Nordstrom's expense.
4.2 Bulk Materials. Chromatics shall sell and deliver to Nordstrom, no later
than three (3) months from the date this Agreement is fully executed, the Bulk
Materials ordered by Nordstrom in accordance with Section 3.3 of this Agreement,
subject to the terms and conditions of 3.4.
4.3 Training and Operation. Chromatics shall provide Nordstrom with all
necessary training and operational information for the efficient use and
operation of the Colormate II System licensed, provided or purchased under this
Agreement at no additional cost, including but not
4
limited to operational information for the use of the software that will collect
and store all contact information, Product Color Formulations and Product Color
Recommendations for each Nordstrom customer.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Chromatics represents that to the best of its knowledge and belief, the
Technology and Products do not infringe any rights owned or possessed by any
third party;
5.2 Chromatics represents that it is the sole and exclusive owner of the
Technology, all of which is free and clear of any liens, charges and
encumbrances, and no other person or entity has any claim of ownership with
respect to the Technology whatsoever;
5.3 Chromatics warrants that it has the full right, power and authority to enter
into this Agreement and to grant the interest in the Technology granted herein
and that it has registered the trademark "My Colors by Chromatics(Registered)"
and "Colormate(Registered);"
5.4 Chromatics represents that there are no claims, judgements, or settlements
to be paid by Chromatics or pending claims or litigation relating to the
Technology or Products;
5.5 Chromatics represents that foundations provided to Nordstrom under this
Agreement comply with the manufacturing and product safety standards described
in the Nordstrom purchase order attached as Exhibit A;
5.6 Chromatics represents that the Colormate(Registered) II System units, are
UL and FCC approved for use pursuant to this Agreement.
5.7 Nordstrom represents that it has filed an application for registration of
the trademark "C[2]O Color to Order" in the United States Patent and Trademark
Office ("PTO") and will take reasonable efforts to prosecute said application to
final determination by the PTO;
5.8 Nordstrom warrants that it has the full right, power and authority to enter
into this Agreement.
ARTICLE 6
PAYMENT
6.1 Amount of Payment. As full consideration for the rights and license granted
under this Agreement, Nordstrom shall pay Chromatics the License Fee of Section
3.4 and the lease
5
payments for leased Colormate(Registered) II System units and the purchase price
of the Bulk Materials ordered from Chromatics in accordance with Sections 3.2,
3.3, 3.4, 6.1 and 6.2.
6.2 Terms of Payment. Nordstrom shall pay Chromatics its License fee on the date
of signing of this Agreement. Payment for the initial order of foundations shall
be made 1/2 at the time of the order and the balance within seven (7) days of
Nordstrom's receipt of an invoice from Chromatics or the delivery of such
foundations to Nordstrom, whichever is later. Payment for the initial order of
lipsticks shall be made as the lipsticks are sold, every thirty days during the
term of this Agreement and a final payment within thirty (30) days of the
expiration of the term of this Agreement. Any remaining unsold lipsticks will be
returned to Chromatics within thirty (30) days of the expiration of the term of
this Agreement. Any lipsticks not returned to Chromatics or not paid previously
for by Nordstrom to Chromatics will be paid for by Nordstrom to Chromatics in
the final payment.
ARTICLE 7
INTELLECTUAL PROPERTY OWNERSHIP
7.1 Ownership of Technology. Nordstrom acknowledges that all Technology, the
Product Color Formulations, and the Product Color Recommendations of the
Products, the Colormate(Registered) II System and its software are the exclusive
property of Chromatics, subject to the license hereby granted.
7.2 Ownership of Marketing Intangibles. Chromatics acknowledges that Marketing
Intangibles are and shall remain the exclusive property of Nordstrom. Chromatics
is the owner of the Product Color Formulations and Product Color
Recommendations, the trademarks "Colormate(Registered)" and "My Colors by
Chromatics" and the Colormate(Registered) II System as the color analysis system
for the Products. Chromatics shall not use the name "Nordstrom", the trademark
"C[2]O Color to Order," or any other trademark, trade name, service xxxx, logo,
or other intellectual property of Nordstrom for any purpose, except as
specifically authorized by Nordstrom in writing. Nordstrom shall not use the
name Chromatics, the trademarks, "Colormate(Registered)" or "My Colors by
Chromatics(Registered)" or any other trademark, trade name, service xxxx, logo,
Product Color Formulations and Product Color Recommendations of the
Colormate(Registered) II System or other intellectual property of Chromatics for
any purpose except as specifically authorized by Chromatics in writing.
ARTICLE 8
TERM & TERMINATION
8.1 Term. Unless earlier terminated in accordance with Section 8.2 below, this
Agreement shall continue in effect for a period of six (6) months from the date
of the signing of this Agreement (the "Test Period") as a non-exclusive license
and lease of the Colormate(Registered) II System
6
and Technology. If sales of the Products are deemed successful during the Test
Period of this Agreement, then the term of this Agreement may be renewed until
December 31, 1999 upon terms mutually agreeable to both parties. Thereafter this
Agreement may be renewed annually for a period of one year on January I of each
subsequent year, and expanded to additional Nordstrom stores by written notice
given by Nordstrom to Chromatics thirty (30) days before January 1 of the
renewal year for a total additional period of five (5) years under terms
mutually acceptable to both parties. Sale of such Products will be deemed
successful if one-third of the quantities purchased in the initial order as
specified in Section 3.3 are sold during the term of this Agreement.
8.2 Termination Events. This Agreement may be terminated upon the occurrence of
any of the following events:
8.2.1 The parties may, at any time, mutually agree to terminate this
Agreement, such termination to be effective at such time as they deem
appropriate, however, Nordstrom will be responsible to Chromatics for
all payments in Sections 3.2, 3.3, 3.4, 6.1 and 6.2. Lease payments for
the Colormate(Registered) II System will be prorated to date of
termination.
8.2.2 Upon the breach or the discovery of a breach of a warranty set
forth in Article 5, either party may terminate this Agreement by
notice, to take effect immediately upon receipt thereof by the other
party, unless otherwise specified in the notice.
8.2.3 If either party makes any transfer in violation of Section 11.2,
the non-transferring party shall have the right to terminate this
Agreement immediately by giving written notice to the transferring
party.
8.2.4 If either party fails to perform any of its obligations or
covenants contained in this Agreement and fails to cure such default
within thirty (30) days after notice from the other party, the party
giving such notice shall have the right to terminate this Agreement
immediately by giving written notice to the defaulting party. Absence
of a notice of default or of a written notice of termination under this
Section shall not constitute a waiver of any rights arising as a result
of such default. An election to terminate the Agreement under this
Section shall not constitute a waiver of any damages that may be
available to the non-breaching party as a result of the default by the
other party.
8.3 Rights and Obligations of Termination.
8.3.1 Upon the expiration of this Agreement, Nordstrom shall return the
Colormate(Registered) II System units in good and working condition to
Chromatics, or pay for repair or replacement of any damaged unit.
8.3.2 Upon the termination of this Agreement, all right, title, and
interest in any Marketing Intangibles owned by Nordstrom shall remain
exclusively with Nordstrom.
7
8.3.3 During the term of this Agreement (with the exception of the
non-exclusive six month license granted herein) and upon the
termination of this Agreement, all right, title, and interest in the
Technology, Colormate(Registered) II System, Product Color
Recommendations and Product Color Formulations, all of which have been
developed or are owned by Chromatics shall remain exclusively with
Chromatics.
8.4 In the event that the six month term of this Agreement is not renewed and a
customer who purchased from Nordstrom during the six month term of this
Agreement a Product of a particular shade recommended for that customer by the
Technology in the Colormate(Registered) II System wishes to purchase a Product
of the same particular shade after termination of this Agreement, Nordstrom
shall purchase the Product of that particular shade from Chromatics at the same
or a comparable cost at which the Product of that particular shade was
originally purchased from Chromatics unless (i) Chromatics is unable or
unwilling to provide the Product of that particular shade, or (ii) Chromatics
has been acquired by another company, in either event of which Nordstrom shall
have the right to have that cosmetic product of a shade matching that particular
shade of Product made for it by any party other than Chromatics and the right to
sell that matched cosmetic product solely to the customer who purchased the
Product of that particular shade during the six month term of this Agreement so
as to continue to serve that particular customer. Nothing in this paragraph or
this Agreement shall limit or restrict Nordstrom's rights to purchase cosmetic
products from others or to sell cosmetic products which compete with the
Products licensed under this Agreement as long as the sale of such competitive
cosmetic products by Nordstrom is not a breach of this Agreement, including
Exhibit B.
ARTICLE 9
REASONABLE PRECAUTIONS TO MAINTAIN SECRECY
9.1 Precautions. Nordstrom shall treat all Chromatics' Confidential Information
as provided in the "Confidential Agreement" attached as Exhibit B and shall use
the Confidential Information solely as specified in the Confidential Agreement
and in this Agreement and solely during the term of this Agreement or as
expressly provided for in Section 8.4 herein.
9.2 Survival. This Article 9 shall survive the termination of this Agreement,
regardless of the reason for such termination.
ARTICLE 10
INDEMNIFICATIONS
10.1 Indemnification. Chromatics shall defend (with counsel acceptable to
Nordstrom), indemnify, and hold Nordstrom harmless from any and all claims,
suits, liabilities, damages, losses or expenses, including attorneys' fees,
asserted against or incurred by Nordstrom by reason of, or arising out of, or
occurring in connection with any infringement or alleged infringement of
8
intellectual property resulting from the use of the Technology and the
Colormate(Registered) II System or the manufacture, sale or use of the Products
(other than the Marketing Intangibles) by Nordstrom. In the event that Nordstrom
learns of any infringement or threatened infringement by the Technology and the
Colormate(Registered) II System, Nordstrom shall notify Chromatics forthwith.
Nordstrom agrees to cooperate and provide necessary information and assistance
to Chromatics at Chromatic's expense for actions that Chromatics may take to
defend Chromatics proprietary interest in the Technology and the
Colormate(Registered) II System. Chromatics agrees that Nordstrom may maintain
records of Chromatics compliance with the representations and warranties of
Chromatics made in this Agreement or otherwise, and that Nordstrom may at any
time, upon reasonable notice to Chromatics, undertake inspection of Chromatic's
manufacturing facilities for foundations, excluding lipsticks and equipment, in
order to determine such compliance with subsection 5.5 herein. The lipsticks
provided pursuant to this Agreement are ready for shipment and any inspection of
such lipsticks is limited to the finished product.
10.2 Indemnification. Nordstrom shall defend (with counsel acceptable to
Chromatics), indemnify and hold Chromatics harmless from any and all claims,
suits, liabilities, damages, losses or expenses, including attorneys' fees,
asserted against or incurred by Chromatics by reason of, or arising out of, or
occurring in connection with any infringement or alleged infringement of
intellectual properties resulting from the use of the Marketing Intangibles for
the sale of Products by Nordstrom. In the event that Chromatics learns of any
infringement or threatened infringement by Marketing Intangibles, Chromatics
shall notify Nordstrom forthwith. Chromatics agrees to cooperate and provide
necessary information and assistance to Nordstrom at Nordstrom's expense for
actions that Nordstrom may take to defend Nordstrom's proprietary interest in
the Marketing Intangibles.
10.3 Survival. This Article 10 shall survive the termination of this Agreement,
regardless of the reason for such termination.
ARTICLE 11
GENERAL PROVISIONS
11.1 Governing Law. This Agreement, and any disputes arising out of or in
connection with this Agreement, shall be governed by and construed in accordance
with the laws of the state of Washington.
11.2 Assignment. Neither party shall have the right or the power to assign,
delegate, or otherwise transfer any or all of its rights or obligations arising
under this Agreement without the prior written consent of the other party. The
transfer, assignment, or change in the beneficial ownership of stock or voting
control of Chromatics in the aggregate in excess of 50% shall constitute an
assignment hereunder.
9
11.3 Legal Expenses. The prevailing party in any legal proceeding brought by one
party against the other party to this Agreement, and arising out of or in
connection with this Agreement, shall be entitled to recover its legal expenses
including costs and reasonable attorneys' fees.
11.4 Force Majeure. Neither party shall be liable to the other party for any
delay or omission in the performance of any obligation under this Agreement,
other than the obligation to pay monies, where the delay or omission is due to
any cause or condition beyond the reasonable control of the party who is obliged
to perform.
11.5 Purchase Order. The terms and conditions of Nordstrom's purchase order,
attached hereto as Exhibit A, shall be incorporated herein by reference. To the
extent of any inconsistency, the terms and conditions of the purchase order
shall override the specific terms of this Agreement. Subsection 10 of the
purchase order attached hereto as Exhibit A is deleted from this Agreement.
11.6 Notices. All notices required by this Agreement shall be in writing and
sent by facsimile and by certified U.S. mail, postage prepaid, return receipt
requested to Chromatics or Nordstrom at their addresses as listed herein, or to
such addresses as either party may from time to time advise the other party in
writing in accordance with this notice requirement.
To Chromatics: To Nordstrom:
Chromatics Color Sciences Nordstrom, Inc.
International, Inc. 0000 0xx Xxx., Xxxxx 000
0 Xxxx 00 Xx. Xxxxxxx, XX 00000
Xxx Xxxx, XX 00000 Attn: Xxxx Xxxxxxxx
Attn: Xxxxx Xxxxxxxxxx
Tel. No.: (000) 000-0000 Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000 Fax. No.: (000) 000-0000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 1st day of September, 1998.
Chromatics Color Sciences. Nordstrom, Inc.
International, Inc.
BY: /s/ Xxxxx Xxxxxxxxxx BY: /s/ Xxxx X. Xxxxxxxx
------------------------------ -----------------------------
Xxxxx X. Xxxxxxxxxx Xxxx X. Xxxxxxxx
Chief Executive Officer Executive Vice President
10
EXHIBIT A
NORDSTROM
TERMS AND CONDITIONS OF PURCHASE ORDER
The following terms and conditions, in addition to those on the front hereof,
are a part of this purchase order and are binding upon Seller.
ACCEPTANCE BY SELLER IS LIMITED TO THE TERMS OF THIS PURCHASE ORDER. PURCHASER
OBJECTS TO ANY DIFFERENT OR ADDITIONAL TERMS IN SELLER'S ACCEPTANCE OR ANY OTHER
DOCUMENT OR FORM TRANSMITTED ON BEHALF OF SELLER, UNLESS PURCHASER'S WRITTEN
CONSENT IS FIRST OBTAINED.
1. This order is not valid unless signed or otherwise authorized in writing by
the Purchaser's buyer and, when applicable, by Purchaser's Merchandise Manager.
2. Purchaser will not assume liability for any goods shipped to it or upon which
work is commenced by Seller prior to receipt by Seller of the order duty signed
or otherwise authorized.
3. In the event Seller is unable to deliver any part or all of the merchandise
called for by this order, Seller agrees to notify the Purchaser immediately.
Such notice will not limit the remedies available to Purchaser or the liability
of Seller for nonperformance.
4. Purchaser or Purchaser's agent may refuse delivery or return F.O.B.
Purchaser's dock:
a. Shipments made before the earliest ship date or after the cancel
date specified on the face of this order, time of shipment being
of the essence of this order.
b. Shipments of less than or in excess of quantities ordered.
c. Goods which are not according to sample or which are not specified
in this order.
d. Goods which are not as represented or as warranted.
e. Shipments which are not in compliance with the packing
instructions and invoicing instructions specified on the face of
this order.
f. Shipments which are not in compliance with the transportation
terms and conditions contained in this order or in the Nordstrom
Routing Guide.
11
g. Goods which for any reason, except payment of applicable duties
and tariffs, will not be cleared for entry by U.S. Customs.
5. All goods furnished under this order shall be subject to inspection and
testing by representatives of Purchaser, its customers or agents. Payments for
goods prior to inspection shall not constitute acceptance and Purchaser reserves
the right to hold for Seller or return to Seller, at Seller's expense, any
rejected goods.
6. Seller warrants that the merchandise shipped under this order is fit and safe
for the use for which it was manufactured and that said merchandise or the
resale thereof by Purchaser does not and will not violate any laws, regulations,
orders or ordinances of the country of origin or of the United States or any
state or any agency or political subdivision thereof.
7. Seller warrants that it does not and will not in violation of applicable law,
custom or practice (a) discriminate in hiring on the basis of race, color,
national origin, gender, religion or sexual orientation, or (b) utilize child
labor, prison labor or indentured or force labor in the operation of its
business.
8. Seller warrants that the merchandise shipped under this order, including
packaging and labeling: (a) was produced in compliance with all applicable laws,
regulations, orders and ordinances of the country of origin and of the United
States and any state, or any agency or political subdivision thereof, including
without limitation any environmental or hazardous substance laws and
regulations, the Federal Fair Labor Standards Act and other state and local wage
and hour and wage payment laws and regulations; (b) does not and will not
infringe any patent, trademark, trade name, copyright, trade secret or other
similar right; (c) is accurately labeled and clearly identifies the country of
origin; and (d) is labeled in accordance with and complies in all respects with
any and all applicable federal, state and local laws, regulations, orders and
ordinances, including without limitation any applicable rules of the Federal
Trade Commission, the Consumer Products Safety Commission and the Department of
Health, Education and Welfare and the requirements of each of the following Acts
to which it may be subject: The Federal Food, Drug and Cosmetic Act, the Wool
Products Labeling Act of 1939, the Fair Packaging and Labeling Act, the Fur
Products Labeling Act, the Textile Fiber Products Identification Act, the
Federal Hazardous Substances Act and the Flammable Fabrics Act.
9. Seller agrees to defend (with counsel acceptable to Purchaser), indemnify and
save harmless the Purchaser from any and all claims, suits, liabilities,
damages, losses or expenses, including attorneys' fees, asserted against or
incurred by Purchaser by reason of, or arising out of or occurring in connection
with (a) any breach or alleged breach of any of the terms of conditions of this
order or any representations or warranties of Seller made in this order or
otherwise, (b) any act or omission of Seller, or the servants, agents or
subcontractors of Seller, in the furnishing of goods in the performance of work
hereunder, or (c) the use of Seller's merchandise by customers of Purchaser or
others. Seller agrees that Purchaser may maintain records of Seller's compliance
with the representations and warranties of Seller made in this order or
otherwise and that
12
Purchaser may at any time, upon notice to Seller, undertake inspection of
Seller's facilities in order to determine such compliance.
10. The prices herein specified are guaranteed by Seller against manufacturer's
or Seller's own price decline and against legitimate competition until date of
shipment. In the event that prior to final shipment under this order Seller
sells or offers to sell to others goods substantially of the same kind as
ordered herein at lower prices and/or on terms more favorable to a third party
than those stated in this order, the prices and/or terms herein shall be
automatically revised to equal the lowest prices and/or most favorable terms at
which Seller shall have sold or shall have offered such goods and payment shall
be made accordingly. In the event Purchaser shall become entitled to such lower
prices, but shall have made payment at any price in excess thereof, Seller shall
promptly refund the differences in price to the Purchaser. Seller agrees to meet
the price of legitimate competition or accept cancellation of this order by
Purchaser. Unless otherwise provided in this order, prices include all charges
for packaging, boxing, crating and freight, F.O.B. destination.
11. Purchaser reserves the right to cancel all or any part of this order which
has not actually been shipped by Seller in the event Purchaser's business is
interrupted because of strikes, labor disturbances, lockout, riot, fire, act of
God, or the public enemy, or any other cause, whether like or unlike the
foregoing, if beyond the reasonable efforts of the Purchaser to control.
12. A waiver of and/or failure to perform any one or more of the conditions of
this order shall not constitute a waiver of or an excuse for nonperformance as
to any other part of this or any other order.
13. All dating except "end of month" begins at the date on which the merchandise
is received. "Eng of month" terming for shipments received after the 25th of the
month will be considered next month's business. Discount terms begin with the
receipt of invoice or goods, whichever is later.
14. In addition to any other remedies available to Purchaser, failure to comply
with any terms and conditions of this purchase order or the Nordstrom routing
Guide will result in additional handling charges and expenses being charged to
Seller. In any dispute hereunder, whether or not litigation is commenced, the
prevailing party shall be entitled to its costs and expenses incurred, including
reasonable attorneys' fees. The rights and remedies herein expressly provided
shall be in addition to any other rights and remedies given by law, including
without limitation the right to recover all incidental and consequential
damages. All warranties, representations and guaranties made by Seller herein
are in addition to any and all expenses or implied warranties provided by law.
15. In the event of any proceeding, voluntary or involuntary, in bankruptcy or
insolvency by or against the Seller, including any proceeding under the United
States bankruptcy laws, or any bankruptcy, insolvency or receivership laws of
any state or any foreign country, or any political
13
subdivision thereof or in the event of the appointment with or without Seller's
consent of a receiver or an assignee for the benefit of creditors, Purchaser
may, at its option, cancel this order as to any undelivered portion of the
merchandise.
16. Seller agrees that it will not use any trademark or trade name of Purchaser,
including but not limited to "Nordstrom, "Nordstrom Rack," "Place Two," and
"Nordstrom Factory Direct" except in connection with merchandise shipped to
Purchaser in accordance with this order. Seller agrees that all trademarks and
trade names of Purchaser belong to Purchaser and Seller will make no claim of
ownership nor attempt to register any such trademark or trade name. Seller
agrees that merchandise rejected or returned for any reason pursuant to the
terms of this order, whether or not such rejection is disputed by Seller,
including but not limited to merchandise rejected or returned due to shipment
after the cancel date specified on the face of this order, will not be resold or
otherwise distributed by Seller unless all labels, tags, logos, monograms and
other items or characteristics identifying Nordstrom, Nordstrom Rack, Place Two,
Nordstrom Factory Direct, or any other trademark or trade name of Purchaser have
first been removed.
17. This order and the rights and obligations of the parties hereunder shall be
determined in accordance with the laws of the State of Washington and shall not
be subject to or governed by the U.N. Convention on Contracts for the
International Sale of Goods. If litigation arises hereunder or as a consequence
of any transaction contemplated or resulting from this or either party's
performance or breach thereof, jurisdiction and venue of such litigation shall
be in the Superior Court for the State of Washington for King County, or the
United States District Court for the Western District of Washington in Seattle,
at the option of Purchaser, and Seller hereby consents to such jurisdiction and
venue. Any award or judgment of any of said counts may be entered and enforced
in any other domestic or foreign court of competent jurisdiction, and shall be
awarded full faith and credit.
18. No claim, action or demand arising out of the transactions under this order
may be brought by Seller more than one year after the cause of action has
accrued.
19. Seller hereby assigns to Purchaser all assignable warranty rights with
respect to the merchandise in this order, including without limitation all
rights of Seller under warranties of any manufacturer of any of the merchandise
or any part or component thereof.
20. This order is enforceable by Purchaser directly against Seller, regardless
of whether the order was submitted directly to Seller by Purchaser or was
submitted to Seller by another party on behalf of Purchaser. No such other party
shall have any authority to act for Purchaser, bind Purchaser to any agreements
or modifications or otherwise act as agent for Purchaser.
Transportation Terms and Conditions
A. Routing mode specified on face of purchase order must be adhered to exactly
unless permission to deviate is given by Purchaser's Traffic Manager or Buyer,
or if there is a written
14
agreement or exception signed by Purchaser on file. Authorized carrier selection
should be made from Nordstrom Routing Guide. Any questions should be directed to
the Regional Traffic Department. For questions concerning foreign shipments,
please contact the Corporate Traffic and Distribution Office.
B. Orders shipped F.O.B. city of purchase or any specific city and/or state will
be delivered free of charge to Purchaser's consolidator and will be considered
F.O.B. consolidator. Advance charges to the consolidation point will be Seller's
expense.
Orders shipped F.O.B. factory will not be free of charge to Purchaser's
consolidator and freight charges will be the responsibility of the Purchaser
from the shipper's door.
Orders shipped F.O.B. store will be delivered free of charge to Purchaser's
receiving facility and total freight charges will be at Seller's expense.
Notwithstanding any agreement to pay freight or other transportation charges,
delivery will not be deemed complete and all risk of loss shall remain with
Seller until the goods have been actually received and accepted by Purchaser.
C. All C.O.D. shipments will be refused.
D. For all domestic shipments:
(i) in addition to any other remedies available to Purchaser, any
deviation from the terms of this order or the Nordstrom routing Guide
will result in chargebacks to Seller for freight expenses and handling
charges.
(ii) Merchandise must be packed, shipped and described on bills of
lading in accordance with applicable freight tariffs, and shipment must
be without declared value except when shipping Parcel Post or UPS
prepaid. Any deviation will result in a chargeback to Seller.
(iii) Enter all packages forwarded during the same day to the same
final destination on one xxxx of lading or airbill. If more than one
page is needed, label "1 of 2", "2 of 2," etc., and include total
weight and number of cartons only on the last page of the xxxx of
lading or airbill. If shipping to several final destinations, a
separate xxxx of lading must be filled out for each address.
(iv) Prepaid shipments: All shipments to Purchaser via motor freight
must be sent "collect," except Parcel Post and UPS shipments, which by
their nature must be sent "prepaid." Purchaser will not reimburse
Seller for "prepaid" shipments via motor and air freight.
15
(v) Shipping surface: Articles not authorized for air shipment must
follow Purchaser's shipping instructions for surface. Seller is
responsible for marking "surface" on the top of general xxxx of lading.
An air xxxx which is used for surface shipment must have the special
services requested box marked.
16
EXHIBIT B
CONFIDENTIALITY AGREEMENT
This Agreement made this ____ day of September 1998, is between
Chromatics Color Sciences International, Inc. ("Chromatics"), and Nordstrom,
Inc. ("Nordstrom").
WHEREAS, Chromatics owns technology and information relating to skin
and cosmetic product color analysis and custom color formulations of cosmetics
so that the color of various cosmetic products can be coordinated to each other
and to skin color, which is not disclosed in Chromatics' patents or publications
or by a Product sold to an individual customer as recommended by the
Color-Mate(Registered) II system, and which Chromatics considers to be
confidential, proprietary and secret in nature, hereinafter referred to as the
"Confidential Information."
WHEREAS, Nordstrom acknowledges and recognizes the need to preserve the
confidential nature of the Confidential Information.
WHEREAS, Chromatics desires to disclose certain portions of the
Confidential Information to Nordstrom under the following terms and conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. Chromatics shall disclose the Confidential Information to Nordstrom in
confidence solely for the purpose of permitting Nordstrom to use and evaluate
the Confidential Information in accordance with the License Agreement entered
into by the parties concurrently herewith. Nordstrom shall be under an
obligation to treat as confidential and maintain in confidence the Confidential
Information disclosed by Chromatics to Nordstrom, provided such information is
(a) disclosed in written form and marked prominently as "Confidential", or (b)
if not disclosed in written form, is identified and designated as confidential
in a written notice received by Nordstrom within ten (10) business days of the
disclosure. Nordstrom shall take all precautions reasonably necessary to prevent
any unauthorized disclosure of the Confidential Information.
2. Nordstrom may disclose the Confidential Information disclosed by Chromatics
to those of its employees or independent agents whose access to the Confidential
Information is necessary in order to carry out the purpose of the aforesaid
License Agreement; provided, however, that prior to any such disclosure (a)
Nordstrom informs the employee or independent agent that the disclosure is of
Confidential Information and is subject to the obligations of confidentiality
and non-use set forth in this agreement and (b) Nordstrom obtains from such
employee or independent agent a written undertaking, in the form annexed hereto,
to comply with those obligations with respect to all Confidential Information
that comes into the employee's or independent agent's possession.
17
3. Nordstrom shall not (a) directly or indirectly disclose or otherwise make
available to any third party the Confidential Information disclosed by
Chromatics to Nordstrom, in whole or in part; (b) permit any third party access
to any portion of the Confidential Information; or (c) use the Confidential
Information for any purpose other than the purpose of the aforesaid License
Agreement, without the prior written consent of Chromatics.
4. Nordstrom shall not copy, duplicate or otherwise replicate any of the
Confidential Information disclosed by Chromatics to Nordstrom, in whole or in
part, for any purpose other than the purpose of the aforesaid License Agreement,
without the prior written consent of Chromatics.
5 Upon the request of Chromatics, Nordstrom shall return to Chromatics all
tangible materials provided by Chromatics to Nordstrom, and shall certify to the
destruction of any writings, data, reports, records, plans, correspondence,
notes or memoranda of conversations, discussions, considerations or evaluations
which contain or summarize Confidential Information, including all copies and
all electronic, magnetic or other records thereof, within thirty (30) days after
Chromatics' request for their return and/or destruction.
6. The obligations of confidentiality and non-use set forth in this agreement
shall not apply to information which (a) was known to Nordstrom prior to
disclosure by Chromatics to Nordstrom, as evidenced by written records dated
prior to such disclosure, and was not acquired directly or indirectly from
Chromatics; (b) was publicly available or generally known in the trade at the
time of disclosure by Chromatics to Nordstrom, or becomes publicly available or
generally known in the trade after the disclosure by Chromatics to Nordstrom
through no act or fault of Nordstrom; (c) was rightfully received by Nordstrom
from a third party whose disclosure to Nordstrom did not violate any obligation
of confidentiality owed directly or indirectly to Chromatics; or (d) is
independently developed by or for Nordstrom and such independent development can
be shown by clear and convincing evidence. The fact that Nordstrom may be
relieved of its obligations of confidence under subparagraphs (a), (c) or (d)
above shall not prevent Chromatics from continuing to claim in its dealings with
third parties unrelated to Nordstrom or Nordstrom's suppliers or customers, in
appropriate situations, that the effected information remains confidential or
proprietary to Chromatics.
7. In the event that Nordstrom is requested or becomes legally compelled (by
oral questions, interrogatories, requests for information or documents,
subpoena, criminal or civil investigative demand or similar process) to disclose
any Confidential Information (including disclosures to regulatory agencies such
as the FDA), Nordstrom will, to the extent it is aware of such fact, provide
Chromatics with prompt written notice of such requirement and use reasonable
efforts to obtain a protective order or other appropriate remedy. Nordstrom also
agrees to cooperate with and assist Chromatics in any efforts it may make to
seek a protective order or other appropriate remedy. In the event that such
protective order or other remedy is not obtained, Nordstrom shall furnish only
that portion of the Confidential Information which it is advised in writing by
counsel of its choice it is legally required to furnish.
18
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed as of the date first written above.
Chromatics Color Sciences
International, Inc. Nordstrom, Inc.
BY: /s/ Xxxxx X. Xxxxxxxxxx BY: /s/ Xxxx X. Xxxxxxxx
--------------------------------- -------------------------------
Xxxxx X. Xxxxxxxxxx Xxxx X. Xxxxxxxx
TITLE: Chief Executive Officer TITLE Executive Vice President
19
UNDERTAKING
OF
-----------------------------------
I, , state that:
--------------------------------
1. My residence address is .
----------------------------------------------
My present employer is and the address of
----------------------------
my present employer is
------------------------------. My present
occupation is
---------------------------.
2. 1 have received a copy of the Confidentiality Agreement between
Chromatics Color Sciences International, Inc. ("Chromatics") and
Nordstrom, Inc. ("Nordstrom"), dated September , 1998 ("the
Confidentiality Agreement"). I have carefully read and understand the
provisions of the Confidentiality Agreement.
3. 1 will comply with all of the obligations set forth in the
Confidentiality Agreement, including those relating to confidentiality
and non-use with respect to the Confidential Information that comes
into my possession.
----------------------------------
Signature
20
