Common use of Field Test Clause in Contracts

Field Test. 1. On or before 30 days from the date hereof, ▇▇▇▇▇▇ shall provide Chromatics with samples and specifications of basic Foundation Product Formulations to be included in the Field Test, which Foundation Product Formulations must be approved by Chromatics. Chromatics shall be entitled to unilaterally terminate this agreement without penalty pursuant to Article VI hereof by written notice to ▇▇▇▇▇▇ if such basic Foundation Product Formulations have not been delivered by ▇▇▇▇▇▇ and approved by Chromatics within 60 days of the date hereof. Upon approval, Chromatics shall perform chromaticity studies at Chromatics' expense on the sample to determine the appropriate color compatibilities ("Chromaticity Studies"). Upon completion of the Chromaticity Studies (approximately three (3) months), Chromatics shall provide to ▇▇▇▇▇▇ a written report of Foundation Product Color Formulations which report and Foundation Product Color Formulations shall remain the property of Chromatics. Promptly following receipt of such written report (but in no event later than 30 days from such receipt, plus an additional 30 days grace period), ▇▇▇▇▇▇ shall provide to Chromatics, for review and approval by Chromatics, such number of samples and reformulation of each Foundation Product Formulation as Chromatics may request, until such samples shall meet Chromatics' specifications for the Foundation Product Color Formulations (the "Final Samples"). ▇▇▇▇▇▇ shall not manufacture quantities of any Foundation Cosmetic Products unless and until it has received written notice from Chromatics that, based on the Final Samples, all Foundation Product Formulations meet Chromatics, specifications. Chromatics shall give, ▇▇▇▇▇▇ the Ship Notice within 30 days (plus an additional 15 days grace period) of Chromatics receipt of the Final Samples. If ▇▇▇▇▇▇ fails to deliver and have available twenty (20) Custom Blended Foundation Cosmetic Product Dispensing Systems by the date of the Ship Notice, or fails to provide Chromatics within thirty (30) days (plus an additional 30 days grace period) following delivery to ▇▇▇▇▇▇ of the written report regarding the Chromaticity Studies (but in no event later than the date of the Ship Notice) with Final Samples for all Foundation Product Formulations that meet Chromatic's specifications, Chromatics shall have the right, to unilaterally terminate this Agreement pursuant to Article VI hereof without penalty or liability to either party by written notice to ▇▇▇▇▇▇. In the event that Chromatics has not completed the Chromaticity Studies by April 1, 1997 (plus an additional 15 (days grace

Field Test. 1. On or before 30 days from the date hereof, ▇▇▇▇▇▇ shall provide Chromatics with samples and specifications of basic Foundation Product Formulations to be included in the Field Test, which Foundation Product Formulations must be approved by Chromatics. Chromatics shall be entitled to unilaterally terminate this agreement without penalty pursuant to Article VI hereof by written notice to ▇▇▇▇▇▇ if such basic Foundation Product Formulations have not been delivered by ▇▇▇▇▇▇ and approved by Chromatics within 60 days of the date hereof. Upon approval, Chromatics shall perform chromaticity studies at Chromatics' expense on the sample to determine the appropriate color compatibilities ("Chromaticity Studies"). Upon completion of the Chromaticity Studies (approximately three (3) months), Chromatics shall provide to ▇▇▇▇▇▇ a written report of Foundation Product Color Formulations which report and Foundation Product Color Formulations shall remain the property of Chromatics. Promptly following receipt of such written report (but in no event later than 30 days from such receipt, plus an additional 30 days grace period), ▇▇▇▇▇▇ shall provide to Chromatics, for review and approval by Chromatics, such number of samples and reformulation of each Foundation Product Formulation as Chromatics may request, until such samples shall meet Chromatics' specifications for the Foundation Product Color Formulations (the "Final Samples"). ▇▇▇▇▇▇ shall not manufacture quantities of any Foundation Cosmetic Products unless and until it has received written notice from Chromatics that, based on the Final Samples, all Foundation Product Formulations meet Chromatics, specifications. Chromatics shall give, ▇▇▇▇▇▇ the Ship Notice within 30 days (plus an additional 15 days grace period) of Chromatics receipt of the Final Samples. If ▇▇▇▇▇▇ fails to deliver and have available twenty (20) Custom Blended Foundation Cosmetic Product Dispensing Systems by the date of the Ship Notice, or fails to provide Chromatics within thirty (30) days (plus an additional 30 days grace period) following delivery to ▇▇▇▇▇▇ of the written report regarding the Chromaticity Studies (but in no event later than the date of the Ship Notice) with Final Samples for all Foundation Product Formulations that meet Chromatic's specifications, Chromatics shall have the right, to unilaterally terminate this Agreement pursuant to Article VI hereof without penalty or liability to either party by written notice to ▇▇▇▇▇▇. In the event that Chromatics has not completed the Chromaticity Studies by April 1, 1997 (plus an additional 15 (days gracegrace period), or delivered the Ship Notice within 30 days (plus an additional 15 days grace period) of receipt of the Final Samples, either Chromatics or ▇▇▇▇▇▇ may unilaterally terminate this Agreement without penalty or liability to either party pursuant to Article VI hereof on written notice to the other. All Foundation Cosmetic Product manufactured by ▇▇▇▇▇▇ under the terms of this Agreement will bear the label of Chromatics and will remain the property of Chromatics. ▇▇▇▇▇▇ shall manufacture the initial inventory of Foundation Cosmetic Product to implement the Field Test, together with, at no additional cost, the bottle, cap, label and packaging, at a price of $1.25 per ounce of Foundation Cosmetic Products, payable solely from the Budget Account (but in an amount not to exceed $8,650) except as set forth in the last sentence of the next paragraph. ▇▇▇▇▇▇ shall manufacture additional quantities of such inventory and such related materials as agreed upon by both parties to be needed to implement the Field Test at the same per ounce cost, payable from the Budget Account. The suggested wholesale price and retail resale price and other terms of sales of the Foundation Cosmetic Products to be offered to ▇▇▇▇▇▇ Approved Customers and their customers, respectively, to the extent not specifically set forth herein, shall be mutually agreed upon by ▇▇▇▇▇▇ and Chromatics, including without limitation providing written instructions directing such ▇▇▇▇▇▇ Approved Customers to direct payment for Foundation Cosmetic Products invoiced by ▇▇▇▇▇▇ to the Budget Account. At the end of the Field Test Chromatics will purchase from ▇▇▇▇▇▇ all remaining inventory of Foundation Cosmetic Products manufactured by ▇▇▇▇▇▇ under the Budget at a cost of $.625 per ounce of Foundation Cosmetic Products, together with at no additional cost the bottle, cap, label and packaging, dispenser and customer support/sales materials used in connection with the Field Test, but only to the extent that (i) the foregoing have not been invoiced to ▇▇▇▇▇▇ Approved Customers, (ii) any such purchase by Chromatics does not exceed $4,325 in the aggregate, (iii) that the funds remaining in the Budget Account are not sufficient therefor, and (iv) any such amount to be paid to ▇▇▇▇▇▇ by Chromatics is in excess of amounts otherwise to be paid to Chromatics pursuant hereto as contemplated by the Budget. Chromatics shall develop software proprietary to Chromatics recommending appropriate shades of the Foundation Cosmetic Products based on skin tone (the "Software") for distribution and installation in the Colormate Systems. The Software will provide a custom color formulation for each skin tone that may be custom blended (pigments mixed with the basic Foundation Product Formulation colors). At the conclusion of the Field Test, Chromatics shall receive from the Budget Account and pursuant to the Budget in consideration of developing and programming such Software the sum of $10,000. 2. During the Field Test, Chromatics' at its cost and expense shall maintain and keep in good working order all Colormate Systems used in this test, providing such maintenance is required as a result of normal wear and tear. Each ▇▇▇▇▇▇ Approved Customer will insure, pursuant to the terms of the Chromatics lease, the Colormate System for damage or replacement under their existing policies and Chromatics will be named the beneficiary and loss payee under these policies for this purpose. Each Colormate System also will be insured while shipping for its replacement cost of $3,500.00 per System; payable to Chromatics, and the cost of all such shipping and insurance will be paid from the Budget Account in conformity with the Budget. In the event any Colormate System is damaged for reasons other than normal wear and tear then Chromatics shall be reimbursed from the insurance carrier. 3. During the term of this Agreement, ▇▇▇▇▇▇ shall provide the following promotional, marketing, distribution, formulations, research and merchandising functions for the consideration indicated below, payable solely from the Budget Account and as set forth in the Budget as being payable to ▇▇▇▇▇▇: a) Design, develop and provide prior to the date of the Ship Notice in quantities necessary, (but in no event fewer than twenty (20)), point of sale packaging and custom blending dispensing system as approved in writing by Chromatics (the "Custom Blended Foundation Cosmetic Product Dispensing System") for Foundation Cosmetic Products to be used at Customer Locations, for consideration as set forth in the Budget (Item #10) (and not in excess of $4,375 in the aggregate). b) Provide twenty (20) Customer Locations which will utilize the Chromatics Colormate System and the Foundation Product Color Formulations solely in connection with the sale, utilizing the Custom Blended Foundation Cosmetic Product Dispensing System, of Foundation Cosmetic Products as described herein solely at each such Customer Location for the term of the Field Test, without additional compensation. c) Design and supply any supporting promotional literature, to be approved by Chromatics, not to be unreasonably withheld for consideration as set forth in the Budget (Item #2); provided, however, that Chromatics shall in all events have final legal approval. d) Supply and distribute the Foundation Cosmetic Product, the supporting promotional literature and the printer paper rolls supplied by Chromatics for computer print-outs in quantities as needed for each Customer Location during the Field Test, without additional compensation. ▇▇▇▇▇▇ Approved Customers shall pay to Chromatics $2.00 per roll for each additional roll beyond the first such roll provided by Chromatics e) Compile and tabulate research/sales data relating to the Field Test as specified in Exhibit A, without additional compensation other than that approved for personnel in the Budget (Item #1). f) Provide in-store training for each Customer Location during the Field Test, at ▇▇▇▇▇▇'▇ cost and expense (but reimbursed as set forth in the Budget) (Items #1 and 6) and utilizing ▇▇▇▇▇▇ personnel trained by Chromatics as described above. g) Provide a name, logo and mechanical art work for the Colormate Systems to be used at Customer Locations. Cost of producing and installing this into the Colormate Systems will be paid to Chromatics as provided in the Budget (Item #3). h) Provide Foundation Cosmetic Product tester kits for each of twenty (20) Customer Locations for consideration as provided in the Budget (Item #11). i) Provide two (2) Foundation Product Formulations in 10 basic color formulations specified by Chromatics and up to 3 pigment formulations specified by Chromatics (all of which are to be approved by Chromatics and which remain the property of and proprietary to Chromatics and for use only in this Field Test and under the terms of this Agreement) for aggregate consideration of $10,000 payable at the conclusion of the Field Test (Item #13). j) Coordinate distribution and sales support and overall customer support during the term of the Field Test, without additional compensation other than as provided in the Budget (Items #1, 2, 4, 6). k) Manage overall activities of the Field Test as approved by Chromatics, without additional compensation other than as provided in the Budget (Items #1, 5). Disbursement of Budget items requires joint signatures by Chromatics and ▇▇▇▇▇▇. 4. If The Field Test has met the requirements set forth in Exhibit A hereto, Chromatics and ▇▇▇▇▇▇ intend to enter into good faith negotiations to establish a joint venture under terms acceptable to both parties and which shall include the terms referenced in Exhibit C hereto, it being expressly acknowledged that there are no other obligations or agreements of the parties with respect to the formation of any joint venture or other business arrangement.