FOREIGN DESIGN AND CONSULTING AGREEMENT
Dated as of January 1, 1985
individually and d/b/a
RALPH LAUREN DESIGN STUDIO
TABLE OF CONTENTS
1. Definitions............................................................ 4
2. Design................................................................. 7
3. Design Legends, Copyright Notice and Licensed Products................ 10.
4. Lauren's Compensation................................................. 13.
5. Foreign Currency and Reports.......................................... 17.
6. Operating Expenses.................................................... 19.
7. Death or Incapacity of Lauren......................................... 19.
8. Termination........................................................... 20.
9. Notices............................................................... 22.
10. Binding Effect........................................................ 23.
11. Assignment............................................................ 24.
12. Arbitration and Equitable Remedies.................................... 24.
13. Relationship of Parties............................................... 25.
14. Governing Law......................................................... 25.
15. Entire Agreement...................................................... 25.
16. Severability.......................................................... 25.
17. Counterparts.......................................................... 26.
18. Termination of Prior Agreement........................................ 26.
FOREIGN DESIGN AND CONSULTING AGREEMENT dated as of January 1, 1985
by and between Ralph Lauren ('Lauren') individually and doing business under the
name Ralph Lauren Design Studio, with a place of business at 40 West 55th
Street, New York, New York 10019, and L'Oreal S.A., a corporation organized
under the laws of France ('Company'), with a place of business at 41, Rue
Martre, 92117 Clichy Cedex, France.
A. Lauren is an internationally famous designer who has received
numerous awards for his design of men's and women's wear, has twice been
inducted into the Coty Hall of Fame for his design of men's and women's fashions
and is a creator of original designs for fragrances, jewelry and other products.
B. Lauren has previously sold and transferred to certain Trusts
created under an agreement dated September 21, 1976 (the 'Trusts') all his
rights and interest in and to certain present and future trademarks and trade
names ('Names') in connection with the manufacture, sale, marketing, use and
other commercial exploitation of fragrances and scents, cosmetic preparations,
personal hygiene products and toiletries around the world. The Trusts have
previously transferred to The Polo/Lauren Company ('PLC'), a New York limited
partnership, all of their rights and interests in and to the Names in connection
with the manufacture, sale, marketing, use and other commercial exploitation of
fragrances and scents, cosmetic preparations, personal hygiene products and
toiletries outside of the United
States of America, its territories and possessions (including, without
limitation, Puerto Rico) and any military bases and duty free shops situated
therein ('U.S.A.'), and the Trusts continue to own such rights in and for the
C. Pursuant to various agreements dated as of November 22, 1976
(executed on June 30, 1978) among Warner/Lauren Ltd. ('WLL'), the Trustees, PLC
and Lauren, WLL obtained (i) exclusive licenses to use the Names worldwide in
connection with the manufacture, marketing, use, sale and other commercial
exploitation of certain specified men's and women's fragrances, scents, cosmetic
preparations, personal hygiene products and toiletries, referred to as 'Royalty
Products' and (ii) the services of Lauren in the creation of packaging designs
for the Royalty Products and the exclusive worldwide right to use said
Lauren-created designs in conjunction with the Royalty Products.
D. Pursuant to a stock purchase agreement dated January 13, 1984 and
a subsequent series of corporate mergers and restructurings, Cosmair, Inc.
('Cosmair') assumed all the rights, duties and obligations of WLL under the
aforementioned agreements. As of the effective date hereof, the Company has been
assigned and has assured all the rights, duties and obligations of Cosmair under
the aforementioned agreements as they relate to the manufacture, marketing, use,
sale and other commercial exploitation of Royalty Products and said
Lauren-created Packaging designs outside of the U.S.A.
E. Contemporaneously herewith, pursuant to a restated foreign
license agreement (the 'Restated Foreign License Agreement') between the Company
and PLC, said parties have set forth their restated agreement concerning the
Company's exclusive license to use the Names in connection with the manufacture,
marketing, use, sale and other commercial exploitation outside of the U.S.A. of
certain men's and women's fragrances, scents, cosmetic preparations, personal
hygiene products, and toiletries, including, without limitation, those described
in Schedule A annexed to the Restated Foreign License Agreement (the 'Licensed
Products'), and which when sold or marketed under the Restated Foreign License
Agreement by the Company, its subsidiaries, its Affiliates or its Sub-licensees
(as such terms are hereinafter defined) are therein and herein also referred to
as the 'Royalty Products'. The Restated Foreign License Agreement is herein, at
times, referred to as the 'License Agreement' and capitalized defined term used
herein shall have the same meaning as in the License Agreement, unless otherwise
F. The value of the Names is largely attributable to the skill and
personal efforts of Lauren in designing. The Company and Lauren now wish to
amend and restate and to set forth in one document their understanding
concerning the services of Lauren in connection with the design of the Royalty
Products and the packaging thereof which will be sold under the Names, and with
respect to any patents of the designs and any copyrights thereon resulting from
Lauren's services. As used herein and in the License Agreement, 'Packaging'
refers to all caps, bottles, containers, boxes, wrappings, labels, tags and any
and all other receptacles and adornments used in connection with the marketing
of the Royalty Products.
IN CONSIDERATION of the foregoing premises and of the mutual
covenants herein contained, the parties hereto, intending legally to be bound,
do hereby agree as follows:
Certain words and terms as used in this Agreement shall have the
meanings given to them by the definitions and descriptions in this paragraph,
and such definitions shall be equally applicable to both the singular and plural
forms of any of the words and terms herein defined.
'Affiliates' shall mean all persons or business entities, whether
corporations, partnerships, joint ventures or otherwise, which now or hereafter
own, or are owned or controlled, directly or indirectly by the Company.
'the Company' shall have the meaning assigned to that term in the
preamble to this Agreement.
'Cosmair' shall have the meaning assigned to that term in recital D
to this Agreement.
'Cosmetic Royalty Products' shall mean those Royalty Products which
are cosmetic preparations, including specifically the ones described under the
caption Cosmetic Preparations in Schedule A annexed to the License Agreement.
'Cosmetics Compensation' shall have the meaning assigned to that
term in paragraph 4(a)(ii) of this Agreement.
'Design Concepts' shall have the meaning assigned to that term in
paragraph 2(b) of this Agreement.
'Design Studio' shall have the meaning assigned to that term in
paragraph 2(d) of this Agreement.
'Final Prototype', shall have the meaning assigned to that term in
paragraph 3(d) of this Agreement.
'Full Priced Royalty Products' shall have the meaning assigned to
that term in paragraph 4(e) of this Agreement.
'Japanese Compensation' shall have the meaning assigned to that term
in paragraph 4(a)(iii) of this Agreement.
'Lauren' shall have the meaning assigned to that term in the
preamble to this Agreement.
'License' shall have the meaning assigned to that term in paragraph
3(c) of this Agreement.
'License Agreement' shall mean the Restated Foreign License
Agreement dated the date hereof between PLC and the Company.
'License Products' shall have the meaning assigned to that term in
recital E to this Agreement.
'Names' shall have the meaning assigned to that term in recital B to
'Net Sales' shall have the meaning assigned to that term in
paragraph 4(d) of this Agreement.
'New Licensed Products' shall mean Licensed Products not marketed as
of the date hereof or, if then existing, for which Lauren develops new Packaging
'Packaging' shall have the meaning assigned to that term in recital
F to this Agreement.
'PLC' shall have the meaning assigned to that term in recital B to
'Promotion Products' shall have the meaning assigned to that term in
paragraph 4(f) of this Agreement.
'Prototype' shall have the meaning assigned to that term in
paragraph 3(d) of this Agreement.
'Regular Compensation' shall have the meaning assigned to that term
in paragraph 4(a)(i) of this Agreement.
'Royalty Products' shall have the meaning assigned to that term in
recital E to this Agreement.
'Semi-Annual Accounting Period' shall have the meaning assigned to
that term in the License Agreement in paragraph 4(b) of this Agreement.
'Sub-licensees' shall have the same meaning assigned to that term in
the License Agreement.
'Territory' shall mean all parts of the world exclusive of the
'U.S.A.' shall have the meaning assigned to that term in recital B
to this Agreement.
'WLL' shall have the meaning assigned to that term in recital C to
(a) At any time or from time to time the Company shall provide
Lauren with a list or lists setting forth those New Licensed Products for which
the Company shall require Packaging. The Company acknowledges that it is
receiving valuable rights from Lauren by virtue of its right to use previously
designed packaging concepts for Licensed Products heretofore primarily marketed
in the U.S.A. It is the intention of each of the parties hereto that the
marketing programs established for Licensed Products will be applied throughout
the world, so as to project a consistent world-wide image. The Company shall
provide Lauren with all pertinent information concerning the desired New
Licensed Products, including the countries where they are intended to be
marketed and the proposed launch dates in each of the countries.
(b) At any time or from time to time within a reasonable
period (consistent with Lauren's and the Company's reasonable schedules),
following receipt by Lauren's and the Company's reasonable schedules), following
receipt by Lauren of the aforesaid list or lists, Lauren shall provide the
Company with a program of suggested, broad design themes and concepts with
respect to the Packaging for such New Licensed Products ('Design Concepts')
which shall be embodied in verbal and/or written descriptions of design themes
and concepts and such other detailed designs and sketches therefor, as Lauren
appropriate. Lauren shall have full discretion with respect to the manner in
which the Design Concepts shall be formulated and presented by Lauren to the
Company. The Company and Lauren shall confer on Design Concepts and shall make
such modifications as are required to meet Lauren's approval.
(c) The Design Concepts, as finally agreed upon, shall be the
basis of the Packaging for any New Licensed Products subject to such changes as
the Company with the approval of Lauren may deem necessary to increase the sales
of said Products. It is understood that local conditions, legal or otherwise,
may require variations on Packaging or with respect to Product formulas from
country to country. The Company shall advise Lauren of any such local conditions
and the consequent required variations, and Lauren shall not unreasonably
withhold or delay his approval thereto.
(d) Lauren may engage such employees, agents and consultants
operating under Lauren's supervision and control (such employees, agents and
consultants collectively, the 'Design Studio') as he may deem necessary and
(e) From time to time while this Agreement is in effect,
Lauren and/or the Design Studio may (i) develop or modify and implement designs
from the Design Concepts or other designs furnished by Lauren or (ii) develop
and implement new designs, which the Company may incorporate into the Packaging
for Royalty Products.
(f) If the Company wishes to prepare a design or designs for
New Licensed Products, it shall submit to Lauren for his approval the Company's
proposed Packaging designs therefor. Lauren may, with respect to all designs
intended to be incorporated into the Packaging of the New Licensed Products,
review and approve, with
such modifications as he may deem necessary or appropriate, or disapprove, in
either event by notice to the Company, designs prepared by the Company.
(g) The Company shall submit to Lauren for his review and
approval, which approval will not be reasonably withheld or delayed by Lauren,
the Company's proposed media advertising (other than cooperative advertising)
relating to each Licensed Product or Licensed Product line, and the Company's
proposed selection of Promotion Products other than Promotion Products which are
also Licensed Products. All layouts proposed by the Company for cooperative
advertising shall similarly be subject to Lauren's review and approval;
provided, however, that in the event the Company is not as a matter of practice
given an opportunity to review the cooperative advertising due to time
constraints, then the Company shall notify Lauren of those customers with whom
it does cooperative advertising and/or promotions, and the Company shall notify
the same customers of the terms of this Agreement which pertain to said
advertising or promotional materials in the event Lauren objects to any
advertising or promotional material used by any such customer. Lauren may, with
respect to such advertising and Promotion Products, make such suggestions as he
may deem necessary or appropriate, or disapprove, in either event by notice to
the Company. Notwithstanding the foregoing, if the Company makes minor,
non-material alterations in any advertising with respect to a Royalty Product or
Royalty Product line, which advertising has previously been approved by Lauren,
the Company need not resubmit such advertising to Lauren for his review or
(h) Lauren's right of approval under sub-paragraphs (b), (c),
(f) and (g) of this paragraph 2, sub-paragraphs (d) and (e) of paragraph 3 and
sub-paragraph (f) of
paragraph 4 may be exercised personally by Lauren or by the Design Studio. If
Lauren or the Design Studio fails or is unable to exercise such right within
thirty (30) days (fifteen (15) days with respect to sub-paragraph (g) of this
paragraph 2), Lauren shall be deemed to have given his approval to the Company
with respect to the matter as to which his approval was sought or otherwise
(i) All patents and copyrights on designs of the Royalty
Products shall be applied for (where application is desired by the Company) by
Lauren, at the expense of the Company, and shall designate Lauren as the patent
or copyright owner, as the case may be, thereof. All patents, trade secrets or
formulas created by or for the Company for Licensed Products and technical
know-how and licenses (including technical assistance agreements) shall remain
the property of the Company. The Company shall issue such patent and other
licenses as may be necessary to enable the entity to which Lauren renders design
services for Licensed Products in the U.S.A. to market in the U.S.A. the same
Licensed Products as are marketed by the Company in the Territory.
3. Design Legends, Copyright Notice and Licensed Products.
(a) All designs of Royalty Products and Packaging created by
Lauren or the Design Studio, or created by or for the Company and reviewed and
approved by Lauren or reviewed by the Design Studio, or developed by or for the
Company from Design Concepts or subsequent design concepts furnished or approved
by Lauren or furnished or reviewed by the Design Studio, shall be subject to the
provisions of this paragraph 3.
(b) The Company shall cause to be placed on all Packaging
appropriate notice designating Lauren as the copyright or design patent owner
thereof, as the case may be, except that the Company may, with respect to
bottles of 3 oz. or less, omit such notice if the placement thereof shall not be
esthetic in the Company's reasonable judgment (provided, however, that if such
notice is omitted from a bottle, a notice will be placed on the box or other
packaging thereof indicating: 'Packaging and bottle(C) by Ralph Lauren' together
with a date and/or such other similar notice as may be required by law in order
to protect Lauren's proprietary rights). The manner of presentation of said
notices shall be within the discretion of the Company, consistent with good
taste and esthetics, it being understood that placement of said notice on the
bottom of a bottle or lip of a carton shall be acceptable.
(c) Lauren hereby grants to the Company the exclusive right,
license and privilege (the 'License') to use in the Territory the designs
furnished hereunder and all copyrights, if any, therein, and shall execute and
deliver to the Company all documents and instruments necessary to perfect or
evidence such license; provided, however, that all such right, title and
interest therein shall revert to Lauren upon termination of this Agreement and
the Company shall thereupon execute and deliver to Lauren all documents and
instruments necessary to perfect or evidence such reversion. The License shall
be exclusive even as to Lauren, and shall continue for a term of ninety-nine
(99) years, unless terminated in accordance with paragraph 8 hereof.
(d) The Company shall obtain the written approval of Lauren,
acting through Mr. Ralph Lauren individually or a designee of Lauren, of all new
Products, by submitting a Prototype, of each different design or model of a
Licensed Product, including, but not limited to, the type and quality of
materials, colors and workmanship to be used in connection therewith, prior to
any commercial production thereof. In the event that Lauren rejects a particular
Prototype or Prototypes, Lauren shall notify the Company of his reasons for
rejection and to provide the Company with suggestions for modifying the
particular Prototype or Prototypes which Lauren is rejecting. The Company shall
promptly correct said Prototype or Prototypes, resubmit said Prototype or
Prototypes to Lauren and seek Lauren's approval under the same terms and
conditions as set forth herein with respect to the first submission of
Prototypes. As used herein, the term 'Prototype' shall mean any and all models,
or actual samples, of Licensed Products; and the term 'Final Prototype' shall
mean the actual final sample of a Licensed Product upon which the first
commercial production will be based and which has been approved by Lauren prior
to the first commercial production thereof pursuant to this paragraph.
(e) Approval of any and all Prototypes as Final Prototypes
shall be in the sole discretion of Mr. Ralph Lauren, individually, or a designee
of Lauren. The Licensed Products thereafter manufactured and sold by the Company
shall strictly adhere, in all respects, including, without limitation, with
respect to materials, color, workmanship, designs, dimensions, styling, detail
and quality, to the Final Prototypes approved by Lauren.
(f) The Company shall comply with all laws, rules, regulations
and requirements of any governmental body which may be applicable to the
manufacture, distribution, sale or promotion of Licensed Products,
notwithstanding the fact that Lauren may have previously approved a conflicting
item or conduct. The Company shall advise
Lauren to the extent any Final Prototype does not comply with any such law,
rule, regulation or requirement.
(g) It is the intention of the parties that Lauren and/or
senior executive personnel of the Design Studio and senior executives of the
Company shall meet no less than twice each calendar year at mutually convenient
places and dates to review all areas of product creation and promotional themes
and to discuss and pursue in good faith the resolution of problems encountered
by either party in connection with this Agreement.
4. Lauren's Compensation.
(a) As full compensation for the services and License, the
Company shall pay to Lauren sums equal to the following: the 'Regular
Compensation', the 'Cosmetics Compensation' and the 'Japanese Compensation', all
of which shall collectively be referred to as the 'Compensation'.
(i) The 'Regular Compensation' shall be equal to [***]
percent [***], of the 'Company's Net Sales' excluding that portion of Net
Sales attributable to (i) Cosmetic Royalty Products or (ii) sales of
Royalty Products to or in Japan.
(ii) The Cosmetics Compensation shall be equal to the
following percentages of the Company's Net Sales of Cosmetic Royalty
Products (excluding those made to or in Japan) for the calendar years
Calendar Year Royalty Percentage
1986 and 1987 [***]
1989 and thereafter [***]
(iii) The 'Japanese Compensation' shall be equal to [***]
percent [***] of the Company's Net Sales to or in Japan; provided,
however, that prior to the time the Company shall commence sales of
Royalty Products in Japan, Lauren and the Company shall negotiate in
good faith and agree upon an appropriate launch period during which the
Japanese Compensation shall be waived by Lauren.
(b) The Regular Compensation, the Cosmetics Compensation and
the Japanese Compensation shall be payable as follows: With respect to each
'Semi-Annual Accounting Period' (being the 6-month period ending June 30 and
December 31 of each year during the term of this Agreement, except that the
first Semi-Annual Accounting Period shall be the period from the date hereof
through June 30, 1985) the entire Regular Compensation, Cosmetics Compensation
and Japanese Compensation for such Semi-Annual Accounting Period shall be paid
on or before the fifteenth day of the third month next following the end of such
Semi-Annual Accounting Period.
(c) [Intentionally omitted]
(d) The term 'Net Sales' as used herein shall mean the gross
sales made by the Company and its Affiliates and Sub-licensees to (i) retailers
or to ultimate consumers (as in the case of accommodation sales to their
respective employees and to others) of Full-Priced Royalty Products excluding
amounts received for shipping charges and sales, excise or other taxes which are
collected by them, and less all allowances, discounts, returns and bad debts and
(ii) to wholesalers which are not Affiliates or Sub-licensees of
Full-Priced Royalty Products excluding amounts received for shipping charges and
sales, excise or other taxes which are collected by them, and less all
allowances, discounts, returns and bad debts. Net Sales shall be calculated on
the basis of the local currency in which said Net Sales are made. The term 'bad
debts' as used in this sub-paragraph shall mean accounts receivable of the
Company and its Affiliates and Sub-licensees arising from the aforesaid sales of
Full-Priced Royalty Products which have not been paid within 120 days after the
due date; provided, however, that if any bad debt is subsequently collected,
then, and in such event, the amount thereafter collected on account of such bad
debt shall, upon collection, be included in the Company's Net Sales for the
period collected. Sales of Licensed Products between the Company and its
Affiliates and Sub-licensees (or persons, firms, corporations or businesses with
rights to use the Names on Licensed Products outside the Territory), or between
said Affiliates and Sub-licensees, shall not be included in the calculation of
the Company's Net Sales, provided such sales are made solely for the purpose of
(e) The term 'Full Price Royalty Products' as used herein
shall mean all Royalty Products except (i) display materials, samples and
dummies and (ii) Promotion Products.
(f) The term 'Promotion Products' shall mean Royalty Products
which are sold to retailers (x) at a price yielding less than the mark-up or
profit margin generally realized by the Company, its Affiliates or Sub-licensees
(as the case my be) upon the sale by them to retailers of Royalty Products (y)
to enable such retailers to re-sell such products to ultimate consumers in
conjunction with the sale by such retailers to ultimate
consumers of other Royalty Products (which are not Promotion Products), and (z)
for the purpose of promoting the sale of such other Royalty Products; provided,
however, that notwithstanding the foregoing if the Cost of Goods (as hereinafter
defined) to the Company or its Affiliates or Sub-licensees (as the case may be)
of a Royalty Product is not greater than [***] percent [***] of the price at
which such product is sold by them to retailers, then, and in such event, such
Royalty Product shall not be deemed a Promotion Product. The 'Cost of Goods' of
a Royalty Product shall include and consist of (i) the variable costs of
materials (including packaging, components, chemicals) and all other
manufacturing costs directly traceable to the production of units of the Royalty
Product, (ii) all direct labor costs, and (iii) an appropriate allocation of all
fixed costs consisting of all manufacturing costs and overhead not traceable to
specific units of production (such as rent, heat, plant manager, etc.), all in
conformity with normal industry practice. The Company shall sell or give away
products which are not Royalty Products in conjunction with Royalty Products
only with Lauren's prior approval (or with the approval of PLC under the License
Agreement given pursuant to paragraph 4.6(f) thereof), to be exercised in his
sole discretion. Sales of such products shall nevertheless be subject to
compensation payments pursuant to this paragraph 4 unless otherwise agreed by
Lauren and the Company or unless such promotional products are purchased from
licensees of Lauren and PLC in transactions from which Lauren and PLC will
derive their full compensation and royalty (as the case may be) fees or unless
the Cost of Goods of such products to the Company or its Affiliates or its
Sub-licensees (as the case my be) is greater than [***] percent [***] of the
price at which such products are sold by them to retailers. Upon Lauren's
request, Lauren and the Company shall review periodically the
Company's promotional practices hereunder, and should said review reveal that
the Company is deriving excess profits on sales of non-Royalty Products, Lauren
and the Company shall negotiate in good faith an appropriate compensation to be
paid in connection with said sales.
5. Foreign Currency and Reports.
5.1 The Company shall pay (or cause to be paid) the
Compensation due hereunder pursuant to Article 4 in New York in United States
currency in accordance with Lauren's instructions. If payment of Compensation on
sales is made to Lauren in the United States (not directly from the country in
which the sales were made) in United States currency, the conversion of foreign
currency to United States dollars shall be at the prevailing exchange rate at
Manufacturers Hanover Trust Company, New York, New York at the close of business
on the last day of the Semi-Annual Accounting Period for which such Compensation
payment is made. In the case of payments of Compensation made directly from the
country in which Full-Priced Royalty Products are sold, remittances of
Compensation to Lauren in United States currency shall be made by converting the
currency upon which Net Sales are calculated at the prevailing exchange rate at
a leading bank in such country normally used by the Company or its Affiliate or
Sub-licensee as a depository at the close of business an the due date of payment
or on the payment date if prior to the due date of payment. Lauren will
cooperate, at the Company's expense, in preparing, filing and executing any
documents or instruments required by the Company to convert the funds into
United States currency or to transfer such funds to Lauren (as the case may be)
in the United States. It is the intention of the parties hereto that the
calculation of Compensation due to Lauren shall be based upon a conversion to
United States dollars from the local currency in
which the sales of Royalty Products are made without regard to any intermediary
currency transactions. It is also the intention of the parties hereto to
eliminate any speculative activity of either party which my be undertaken to the
detriment of the other with respect to the exchange rates.
5.2 In countries where foreign remittances of royalties or
compensation are prohibited or partially restricted, Compensation shall be paid
locally to a bank account in such country specified by Lauren. If foreign
remittances are only partially restricted, Lauren and PLC (pursuant to the
License Agreement), on the one hand, and the Company on the other hand, shall
share equally the total proceeds (whether monetary or non-monetary) permitted to
be remitted from any such country (Lauren's and PLC's combined share (including
compensation and royalties paid locally) not to exceed the Compensation and
Royalty payments to which they are entitled pursuant hereto and to the License
Agreement). The Company shall confer with Lauren at the latter's request in
order to discuss available alternative procedures, to the extent practicable and
permitted by law which would permit the payment of Compensation in the United
States. The Company will cooperate, at Lauren's expense, in preparing, filing
and executing any documents or instruments required by Lauren to convert the
funds into United States currency or to transfer such funds to Lauren in the
5.3 Lauren and the Company shall jointly decide whether a
program for the sale of Licensed Products should be undertaken or continued in
any country which prohibits the payment of royalties or compensation both
internally and externally.
5.4 The Company shall use diligent efforts to provide Lauren,
within seventy-five (75) days of the end of each of the first and third calendar
quarters of each calendar year, with informal statements of Net Sales by country
in the local currency during each such quarter ended in order that Lauren may
have the opportunity to protect Compensation remittances from currency
5.5 The Company shall prepare, maintain and furnish to Lauren
such records and reports as are required pursuant to Article 6 of the License
Agreement. Submission of the required records and reports to PLC pursuant to the
License Agreement shall be deemed to have been furnished to Lauren unless Lauren
requests separate submissions.
6. Operating Expenses.
The Company shall, provided its written consent shall have been
obtained in advance, reimburse, advance or pay directly any and all costs and
expenses for travel outside of New York City, reasonably incurred by Lauren, the
Design Studio or any authorized designee of Lauren, in connection with
performance of the services and supplying of the designs rendered and created
pursuant to paragraph 2.
7. Death or Incapacity of Lauren.
In the event Lauren dies or becomes incapacitated, the Design
Studio, or if the Design Studio is not then in existence, Lauren's authorized
designee, or such entity or person as is responsible for the overall creation of
marketing and design philosophy of Ralph Lauren products, shall perform the
obligations of Lauren hereunder and the Company shall accept the services of the
Design Studio or such designee, entity or person, and, accordingly,
assume the expenses of the Design Studio, designee, entity or person as provided
in paragraph 6. The Company shall pay all amounts required under paragraph 4 to
Lauren or his heirs, successors or assigns.
This Agreement shall continue in full force and effect until
terminated in one of the following ways, but in any event shall terminate upon
termination of the License Agreement being executed simultaneously herewith:
(a) By Lauren, in the event that (i) any Compensation is not
paid by the Company when due, and such failure to pay is not cured within ten
(10) days following notice to the Company of such failure (unless such payment
is disputed by the Company in good faith, in which event the time to cure a
failure to make payment shall begin after the rendition of an unappealable final
judgment by an arbitration panel or a court of competent jurisdiction, (ii) the
License Agreement being executed simultaneously herewith is terminated pursuant
to the provisions of paragraph 10.1(a) thereof, (iii) there shall be a
substantial breach by the Company of any other material provision of this
Agreement, including specifically its obligations under paragraph 2(g), which
breach shall not have been cured within ninety (90) days after Lauren shall have
given the Company notice of the same, then, and in any of such events, at the
option of Lauren or the Design Studio or Lauren's heirs, successors or assigns,
this Agreement shall immediately terminate, and, subject to paragraph 8(c), all
rights of the Company in and to the designs furnished hereunder and all
copyrights and design patents therein shall terminate.
(b) By the Company, in the event that (i) Lauren makes an
assignment for the benefit of creditors or is adjudged in any legal proceeding
to be voluntarily or involuntarily bankrupt, (ii) the License Agreement being
executed simultaneously herewith is terminated pursuant to the provisions of
paragraph 10.1(b) thereof, or (iii) there shall be a substantial breach by
Lauren of any other material provision of this Agreement, which breach shall not
have been cured within ninety (90) days after the Company shall have given
Lauren notice of the same.
(c) Subject to the provisions of paragraph 10.5 of the License
Agreement, for the Post-Termination Period referred to in paragraph 10.4 of the
License Agreement, the Company, its Affiliates and its Sub-licensees may
continue to sell Royalty Products which were in inventory, in process, or for
which written orders had been received from customers, as of the date of
termination of this Agreement. Upon the conclusion of the Post-Termination
Period, all rights and interests in and to the designs furnished hereunder and
design patents therein and all copyrights licensed hereby shall belong to and be
the property of Lauren, and the Company, its Affiliates and its Sub-licensees
shall have no further or continuing right or interest therein.
(d) The Company acknowledges and admits that there would be no
adequate remedy at law for its failure to cease the manufacture or sale of
Royalty Products at the termination of the Disposal Period and the Company
agrees that in the event of such failure, Lauren shall be entitled to relief by
way of temporary or permanent injunction and such other and further relief as
any court with jurisdiction may deem proper.
(e) For the purposes of sub-paragraphs (a) and (b) of this
paragraph 8, a breach of this Agreement shall be deemed to be cured if the
course of conduct or omission comprising or causing such breach is timely
brought to an end whether or not the effects of such prior conduct or omission
(f) The exercise by either party hereto of any of the
foregoing rights of termination shall not constitute a waiver of other rights
and remedies available to such terminating party, including, unless otherwise
specifically provided herein, any right to damages; provided, however, that
neither Lauren nor the Company shall be entitled to damages in the event this
Agreement terminates as a result of the termination of the License Agreement due
to a default by the Company under paragraph 8.2(e) of the License Agreement or
by PLC under paragraph 8.1(e) of the License Agreement. The failure by either
party to insist upon the strict performance of any provision hereof shall not
constitute a waiver by such party of its right to strict performance of such
provision in the future nor shall a waiver of any right hereunder on any
occasion constitute a waiver of such right on any other occasion.
All notices or other communications required or contemplated
hereunder shall be in writing and shall be deemed given when transmitted by
telex (with confirmed answerback) or delivered in person or fifteen (15) days
after sent, postage prepaid, by registered mail, as follows:
(a) if to the Company, addressed as follows:
Centre Eugene Schueller
41, Rue Martre
92117 Clichy Cedex, France
Attention: Directeur Juridique et Financier
Telex: 613088 CELER
with a copy to:
John F. Flaherty, Esq.
Gibney Anthony & Flaherty
420 Lexington Avenue
New York, New York 10170
(b) if to Lauren or the Design Studio, addressed as follows:
Ralph Lauren Design Studio
1107 Fifth Avenue
New York, New York 10028
Telex: 420747 POLOFAS
with a copy to:
Mark N. Kaplan, Esq.
Skadden, Arps, Slate,
Meagher & Flom
919 Third Avenue
New York, New York 10022
Anyone entitled to notice hereunder may change the address to which notices or
other communications are to be sent to it by notice given in the manner
10. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties hereto.
(a) Lauren may assign his right to receive compensation under
(b) The Company may assign its rights and obligations under
this Agreement only (i) to a transferee of substantially all of its business or
assets and upon the express assumption of all of the Company's obligations
hereunder by such transferee or to a successor to the Company's business by way
of merger, consolidation or other business combination or (ii) to an Affiliate,
in which case the Company shall remain liable hereunder.
12. Arbitration and Equitable Remedies.
12.1 Any controversy, claim or dispute arising out of or relating to
this Agreement or breach thereof, except with respect to an application pursuant
to paragraph 12.2 hereof, shall be settled by binding arbitration in accordance
with the rules of the International Chamber of Commerce, by three arbitrators
selected in accordance with such rules, and judgment upon any award so rendered
may be entered in any court having jurisdiction thereof. The arbitration shall
be held in New York, New York. Notice of arbitration shall be sufficient if made
or given in accordance with the provisions of article 9 hereof.
12.2 In the event of a breach or threatened breach of this
Agreement, any party hereto shall have the right, without the necessity of
proving any actual damages, to obtain temporary or permanent injunctive or
mandatory relief, it being the intention of the parties that this Agreement be
specifically enforced to the maximum extent permitted by law.
13. Relationship of Parties.
This Agreement shall not create nor be considered to create the
relationship of master and servant, principal and agent, partnership or joint
venture between the parties hereto, and neither party shall be liable for any
obligation, liability, representation, negligent act or omission to act on the
part of the other except as expressly set forth herein.
14. Governing Law.
This Agreement shall be construed and governed in accordance with
the internal laws of the State of New York without regard to choice of law
15. Entire Agreement.
This Agreement contains the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and may not be
changed or terminated orally. No modification or waiver of any of the provisions
hereof shall be valid unless signed by a party to be charged therewith.
Provisions of this Agreement are severable, and if any provision
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
then such invalidity or unenforceability shall affect only such provision, or
part thereof, in such jurisdiction and shall not in any manner affect such
provision in any other jurisdiction, or any other provision in this Agreement in
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
18. Termination of Prior Agreement.
This Agreement supersedes a prior design and consulting agreement
made and dated as of November 22, 1976 (executed on June 30, 1978) between the
Company (as successor to the rights of respectively, Cosmair and WTL) and
Lauren, and the rights, duties and obligations of the parties from this date
forth shall be governed by this Agreement; provided that the Company's
obligations prior to this date shall continue to be governed by
the prior design and consulting agreement. The Company shall cause Cosmair to
remit compensation with respect to sales of Licensed Products made prior to this
date as required thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
or caused the same to be executed by a duly authorized officer as of the lst day
of January, 1985.
By: /s/ Marc de Lacharriere
Date: October 8, 1985
/s/ Ralph Lauren
Ralph Lauren, individually and doing business
as Ralph Lauren Design Studio
Date: October 8, 1985
Centre Eugene Schueller
41, Rue Martre
92117 Clichy Cedex
As of January 1, 1985
Mr. Ralph Lauren
1107 Fifth Avenue
New York, New York 10028
Polo Fashions, Inc.
40 West 55th Street
New York, New York 10019
Reference is made (i) to a restated foreign license agreement (the
'License Agreement') dated January 1, 1985 between L'Oreal S.A., a corporation
organized under the laws of France (the 'Licensee'), and The Polo/Lauren
Company, a New York limited partnership (the 'Licensor'), which License
Agreement is being executed simultaneously herewith and (ii) a foreign design
and consulting agreement (the 'Design Agreement') dated as of January 1, 1985
between Ralph Lauren ('Lauren') individually and doing business under the name
Ralph Lauren Design Studio, and Licensee, which Design Agreement is being
executed simultaneously herewith. The License Agreement and the Design Agreement
are hereinafter, at times, referred to collectively as the Agreements.
In order to induce the Licensee to enter into the Agreements and to
perform the obligations imposed on the Licensee thereunder, the Licensor has
requested Lauren and Polo Fashions, Inc., a New York corporation ('PFI'), to
confirm to the Licensee certain representations, warranties, covenants and
acknowledgments, which representations, warranties, covenants and
acknowledgments have previously have been made to the Licensor by Lauren and
NOW, THEREFORE, the parties hereto agree as follows:
1. Lauren and PFI, jointly and severally, hereby make the following
representations and warranties to Licensee, which are confirmatory of the rights
received by the Licensor under various agreements (the 'Transfer Agreements')
among the Licensor, Ricky Lauren and Mark N. Kaplan as trustees under an
Agreement dated September 21, 1976 (the 'Trustees'), Lauren and PFI each of
which shall be deemed to be independently material and relied upon by the
Licensee, regardless of any investigation made or information obtained by the
(a) As of November 12, 1976, PFI was the registered owner of,
and Lauren had consented to the use of his name in connection with the
registration of, the trademarks (i) 'Polo (with design) by Ralph Lauren',
United States Patent Office Registration No. 978,166 covering certain
products in U.S. Class 39, (ii) 'Ralph Lauren' (and Polo Player Design),
United States Patent Office Registration No. 984,005 covering certain
products in U.S. Class 39, (iii) 'Chaps by Ralph Lauren', United States
Patent Office Registration No. 1,016,955 covering certain products in U.S.
Class 39 and (iv) 'Polo by Ralph Lauren' covering certain products in U.S.
Class 26. PFI and Lauren, by written instrument duly executed by them in
favor of Licensor, have given their consent and agreement to interpose no
objection to the registration, use and licensing of the foregoing
trademarks, the Names and all other names and marks which either or both
(or any business entity which is now or hereafter owed or controlled,
directly or indirectly, by either or both of them), may hereafter develop
or own (except such other names and marks as are not used in connection
with any fashion related product) in connection with the manufacture
and/or distribution and sale of Licensed Products, as contemplated by the
(b) Licensor has the full right, power and authority to
execute and deliver, and perform the terms of, the License Agreement and
the consummation of the transactions contemplated by the License Agreement
will not violate any agreement to which Licensor, Lauren or PFI is a party
or by which they, it or he may be bound;
(c) Without limiting the generality of the last preceding
subparagraph, Licensor has the full right to grant the License and neither
Licensor, Lauren nor PFI is a party to or bound by any agreement in
conflict with the License Agreement or with any provision thereof. Except
as may be provided in the Agreements, neither Licensor, Lauren nor PFI has
granted to any other person, firm, corporation or business any right,
license or privilege to use the Names or associated
crests, symbols, logos or identifying marks, or any crest, symbol, logo or
identifying marks which would be confusingly similar thereto in connection
with any Licensed Product, or which would have the effect of infringing
upon the exclusivity of the License granted to Licensee under the License
2. In further confirmation of their prior transfer of rights to
Licensor, Lauren and PFI, jointly and severally, covenant and agree with
Licensee as follows:
(a) Lauren and PFI will not, and will not permit any business
entity owned or controlled by them to, grant any person, firm, corporation
or business (other than Licensee) any right, license or privilege to use
in the Territory the Names or associated crests, symbols, logos or
identifying marks or any name, crest, symbol, logo or identifying mark
which would be confusingly similar thereto in connection with any Licensed
Product, or which would have the effect of infringing upon the exclusivity
of the License granted to Licensee under the License Agreement;
(b) Lauren and PFI hereby confirm Foreign Licensor's authority
to appoint Licensee as its attorney-in-fact to apply for and register, in
accordance with the provisions of the Agreements, in the name of Licensor,
in any part of the Territory all trade names and trademarks which make use
of the Names or are associated therewith as applied to Licensed Product.
Lauren and FFI will cooperate with Licensee in all manners and respects,
but at Licensee's expense, to enable Licensee to obtain the aforesaid
registrations, and Lauren and PFI will execute any further agreements,
documents and instruments as may be necessary to effect the same;
(c) Lauren and PFI will not at any time disclose to any
person, firm, corporation or business (other than to the licensee with
respect to Licensed Products in the United States of America, if required
in connection with a program for the Licensed Products there) any
confidential information (including, without limitation, customer lists)
concerning the conduct of the business and affairs of Licensee or of any
subsidiary or affiliate of Licensee which they may acquire except as may
be required pursuant to law and then only upon advance notice to Licensee;
(d) Lauren and PFI shall protect, indemnify and save harmless
Licensee and each of Licensee's officers, directors, employees and agents
against any and all liabilities, claims, damages, penalties, causes of
action, costs and expenses, including reasonable attorneys' fees, arising
out of the breach or material inaccuracy of any of the representations,
warranties, covenants and agreements of (x) Licensor contained in the
License Agreement or (y) Lauren or PFI, contained in this letter.
Licensee shall have the right in its discretion, and with counsel of its
own choosing, to take any action, legal or otherwise, in its own name
and/or in the name of Lauren or PFI, at Licensee's discretion, to protect
any trade name or trademark covered by the License from infringement,
counterfeiting or passing off. prior to taking any such action, Licensee
shall advise Licensor of its intention to commence the proposed action and
thereafter, at Lauren or PFI's request, shall promptly furnish Lauren
and/or PFI with copies of relevant documents and Lauren and PFI advised of
developments relating to the action. Lauren and PFI shall cooperate with
Licensee, and if requested, shall join in as a plaintiff in any such
action with counsel designated by Licensee. Any legal expenses incurred in
the prosecution of such action shall be borne by, and any money recoveries
received in such action, shall belong to, Licensee (subject only to the
rights, if any, of Licensor to a royalty on any such recovery as expressly
provided in the License Agreement);
(e) Lauren and PFI acknowledge that the Current Names have
established prestige and good will in the field of fashion apparel and
that it is of major importance to Licensee that the high standards and
reputation of the Current Names be maintained. Neither Lauren nor PFI will
take action which will be likely to injure or damage the reputation for
high quality which has come to be associated with the Current Names.
Licensee shall not be entitled to damages by reason of Lauren's or PFI's
breach or default of their obligations under this subparagraph (e) and
Licensee's sole remedy under the Agreements shall be to terminate the
Agreements pursuant to the provisions thereof.
(f) Lauren and PFI believe and intend that they have
transferred and assigned to Licensor all rights required by Licensor to
enable Licensor to fully perform its obligations under the License
Agreement. Nevertheless, in confirmation thereof, if Lauren or PFI or any
entity owned or controlled by them now has or may hereafter acquire any
right or interest in or to any of the Names and if such right or interest
is required to or should properly be owned by Licensor under the License
Agreement or to otherwise fully perform Licensor's obligations thereunder,
then, and in such event, the following provisions shall apply:
(i) Lauren and PFI shall promptly transfer and assign
such right and interest to Licensor, without cost or expense to
Licensee, and (ii) for the purpose of the License Agreement and
Licensee's rights thereunder, such rights and interests shall be
deemed to be the property of Licensor (whether or not they are
actually assigned or transferred to Licensor as provided in clause
(g) If Lauren or PFI hereafter register any new Name in any
part of the world, they will promptly thereafter advise Licensee of the
(h) Lauren will not permit his name to be used by any
Unaffiliated Third Person as the designer or creator of a line of clothing
or any other line of fashion related products owned, manufactured or
distributed by such Unaffiliated Third Person, unless such Unaffiliated
Third Person agrees, for the benefit of Licensee, that neither Ralph
Lauren's name or the name of Ralph Lauren as part of a trade name or
trademark used for or in connection with such line of clothing or other
line of fashion related products will be used in the Territory by such
Unaffiliated Third Person (or by any person licensed or authorized by him)
for a line of Licensed Products or in connection with the sale,
distribution or promotion thereof. The term 'Unaffiliated Third Person'
shall mean every person and business entity except Licensor, the Trustees,
Lauren, PFI and each business entity owned or controlled directly or
indirectly, by them; and
(i) In further confirmation of their prior transfer of rights
to Licensor, (i) Lauren and PFI do hereby join in each of the covenants
and agreements of Licensor contained in the License Agreement (including,
without limitation, the covenants and agreements of the Licensor set forth
in paragraphs 2.2, 8.1, 10.4 and 14 of the License Agreement) and (ii)
Lauren and PFI expressly consent to all of the other terms and conditions
of the License Agreement and will deliver such documents and take such
action as may be reasonably requested in order to enable Licensor to fully
carry out the intent and accomplish the License Agreement.
3. Licensee acknowledges that, except as set forth in paragraph 1
hereof, Lauren and PFI have not represented to Licensee that Licensor, Lauren or
PFI have any trademarks, trade names or other rights or interests in or to the
Names or that persons other than Licensor, Lauren or PFI have no such
trademarks, trade names or other rights or interests. If Licensee uses any Name
as a trademark, trade name or product name for a Royalty Product without
registration of the same (except as may be necessary to establish its use in
commerce) Licensee will protect, defend and save harmless Lauren and PFI from
and against any claim of third persons for infringement, counterfeiting or
passing off against Lauren or PFI arising out of the use of such unregistered
Name provided that (x) neither Lauren, PFI nor Licensor shall have
misrepresented to Licensee their rights or interests in or to such Name whether
in this letter, in the License Agreement or any other instrument, and (y) such
claim shall not arise by reason of any action taken by Lauren, PFI or Licensor
in breach of any obligation they may have to Licensee whether arising under this
letter, the License Agreement or any other instrument.
4. In the event of a breach or threatened breach of any of the
covenants of Lauren or PFI contained in this letter, Licensee shall have the
right, without the necessity of proving any actual damages, to obtain temporary
or permanent injunctive or mandatory relief in a court of competent
jurisdiction, it being the intention of the parties to this Agreement that the
covenants and agreements of Lauren and PFI hereunder be specifically enforced to
the maximum extent permitted by law.
If the representations of Lauren herein contained are not true and
correct in any material respect or if there shall be a substantial breach by
Lauren of any of its covenants hereunder, which breach shall not have been cured
within ninety (90) days after Licensee shall have given Lauren notice of same,
such misrepresentation or breach shall be deemed and shall constitute a breach
of the Design Agreement, and Licensee shall have the right, in addition to any
and all rights and remedies that Licensee has against Lauren by reason of the
same, to (i) terminate the Design Agreement and/or (ii) set off any and all
damages, costs, expenses, losses, and other injuries sustained by Licensee by
reason of such misrepresentation or breach against any sums payable by Licensee
under the Design Agreement, except as otherwise provided in this letter or under
the Design Agreement.
5. In all instances where Lauren has a right of approval herein,
such right may be exercised personally by Lauren or by the Ralph Lauren Design
Studio. If Lauren or the Ralph Lauren Design Studio fails or is unable to
exercise such right within thirty (30) days (by informing Licensee whether
Lauren grants or withholds his said approval) Lauren shall be deemed to have
given his approval to Licensee with respect to the matter as to which his
approval was sought.
6. Licensee covenants and agrees with Lauren and PFI, as follows:
(a) Licensee will not disclose to any person, firm,
corporation, or business any confidential information concerning the
conduct of the business and affairs of Lauren or PFI which Licensee may
(b) It is understood that Licensor, Lauren and PFI assume no
liability to Licensee or third parties with respect to the performance
characteristics of the Royalty Products, and Licensee will protect,
defend, indemnify and save harmless, Licensor, Lauren and PFI, their
officers, employees and agents, against any and all liabilities, claims,
damages, penalties, causes of action, costs and expenses, including
reasonable attorneys' fees and disbursements, for product liability or
breach of warranty claims of third persons arising out of the use of such
Products by such third persons.
7. All notices, approvals or other communications required under or
contemplated by this Letter shall be in writing and (x) if given to Licensee,
Licensor or Lauren shall be delivered in the manner provided in the Agreements,
and (y) if given to PFI shall be transmitted by telex (with confirmed
answerback) or delivered in person or sent, postage paid, by registered or
certified mail, return receipt requested. as follows:
Polo Fashions, Inc.
40 West 55th Street
New York, New York 10019
Telex: 420747 POLOFAS
with a copy to:
Mark N. Kaplan, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
8. All terms used in this Letter Agreement shall be defined for the
purposes hereof as provided in the Agreements unless otherwise expressly defined
9. This Letter Agreement supersedes a prior letter agreement made
and dated November 22, 1976 (executed an June 30, 1978) among Cosmair, Inc. (as
successor to the rights of Warner/Lauren Ltd.) and Lauren and PFI and the
rights, duties and obligations of the parties from this date forth shall be
governed by this Letter Agreement.
Very truly yours,
By: /s/ Marc de Lacharriere
READ AND AGREED TO:
/s/ Ralph Lauren
POLO FASHIONS, INC.
By: /s/ Peter Strom
[LETTERHEAD OF POLO RALPH LAUREN CORPORATION-VICTOR COHEN]
September 16, 1994
VIA FEDERAL EXPRESS
Centre Eugene Schueller
41, rue Martre
92117 Clichy Cedex, France
Attn: Directeur Juridique et Financier
Re: Foreign Design and Consulting Agreement
dated January 1, 1985 ('Design Agreement')
We hereby give you notice that Ralph Lauren will, at a closing which
we anticipate will take place on or shortly after October 1, 1994 (the
'Closing'), assign his rights and obligations under the Design Agreement
(including the right to receive compensation thereunder) to Polo Ralph Lauren
Enterprises, L.P., a Delaware limited partnership, in which Mr. Lauren will own
the controlling interest. Mr. Lauren will continue to perform the services set
forth in the Design Agreement on the terms set forth therein.
We will give you further notice promptly after the Closing
concerning the effective date of the assignment and all necessary information
regarding the party to which future correspondence, accountings and payment
should be directed.
Kindly indicate your acknowledge and consent to the consummation of
the proposed transaction described above by executing the enclosed copy of this
letter in the place provided and returning it to us in the enclosed Federal
Express envelope at your earliest convenience.
Very truly yours,
/s/ Victor Cohen
on behalf of Ralph Lauren
By: /s/ P. Simoncelli
Name: P. Simoncelli
Date: September 28, 1994
[LETTERHEAD OF L'OREAL]
October 25, 1994
POLO RALPH LAUREN CORPORATION
650 Madison Avenue
New York, NY 10022
Attn: Mr Victor COHEN,
Vice-President and General Counsel
Re: Your letter of September 16, 1994 - Foreign Design and Consulting Agreement
dated January 1, 1985 ('Design Agreement').
Further to your above-referred letter, we are pleased to confirm our consent to
the proposed transaction described therein (we enclose herewith such letter
countersigned on our side), subject however that:
1/ As announced by Mr Cohen on behalf of Ralph Lauren, Mr Ralph Lauren
undertakes to continue to personally perform the services set forth in the
Design Agreement on the terms set forth therein;
2/ 'Polo Ralph Lauren Enterprises, L.P., or any successor or assignee to its
rights and duties under the Design Agreement, will in any and all events
(i) be able to provide us with the said services of Lauren as provided in
the Design Agreement, and (ii) be controlled by Lauren or by the person(s)
or entity which controls the Polo/Ralph Lauren trademarks or by an
affiliate of such person(s) or entity'.
Very truly yours,
/s/ P. Simoncelli
P.S.: This letter supersedes our former letter dated September 28, 1994, with
same object in reference.