The Outline of   "Know-How"

1.0
I N T R O D U C T I O N

The TOTAL KNOW-HOW TECHNOLOGY is comprised of 2 different major
contents. One is a group of technical theories to produce the most comfortable
Three(3)-Dimensional SPHERICAL Undergarments in the world, and the other
is "Marketing and Sales Strategies", in order to achieve successful sales results.
The Technical Theories partially belonging to the Industrial Properties are
guaranteed and legally protected by the governments of the countries concerned
under PATENTS and UTILITY MODELS. The Industrial Properties cover
a 3-Dimensional Spherical cutting and sewing Method as the first of its kind
in the world


The technical theories consist of a number of Patented and Non-Patented
vital components. The basic technical theories of the KNOW-HOW technology
belonging to the Industrial Properties are patented and legally protected in
15 different countries, however, KNOW-HOW also includes Non-Patented
vital and precise DATA indispensably necessary for actual manufacturing
and marketing of the KNOW-HOW products. The vital and precise data not
included in the patents but belonging specifically to KNOW-HOW are the
Primary Cutting Ppatterns with full details of decided dimensions and size
specifications, and a group of modified pattern theories to make adequate
pattern variations in conformity to the kinds of fabric to be used. Also not
included in the patents are the realistic and "UNIQUE" Marketing Methods,
accompanying other pertinent technical information, practical drawing materials
necessitated, and unique sales strategies for the "SUCCESSFUL" sales of
KNOW-HOW products.

To give a realistic and objective view of the unlimited business opportunities
of the KNOW-HOW technology, one of the successful outcomes of the actual
actual KNOW-HOW Contracts realized in Japan in 1980 between MADISON
and Wacoal, will be disclosed at the conclusion of this document. Wacoal with
its world-wide subsidiaries is one of the largest manufacturers in the world,
specializing in women's undergarments of the highest quality.

2.0
GROUP OF THEORIES OF ULTIMATE SEWING TECHNIQUES
FOR PROVIDING SPHERICAL FUNCTIONALITY AND SUPERB FIT
ACHIEVING BEAUTIFUL BODY LINES

The KNOW-HOW provides a total theory for manufacturing and marketing
of 3-Dimensional SPHERICAL Undergarments, which wrap the two buttocks
of the hips individually. As a result of MADISON's unique "KNOW-HOW"
technology, "Full-Functional Undergarments" can be produced, featuring
"Attractive High-Leg" contours, a "Superb Fit and Natural Wearing Comfort",
whilst representing "Beautiful Feminine Shapes" and masculine desired body
lines. A good Fit is achieved and slipping and loosening of the undergarment
does not occur despite various body movements.

The Ultimate Technology for "Undergarments" has finally been produced.
KNOW-HOW's unique "PULL THEORY" based on the SPONTANEOUS
DEVIATION EFFECT achieves Spherical Functionality, a perfect Fit and
a beautiful body line for any style of garment made under the KNOW-HOW
technology.

3.0
D E T A I L S O F K N O W - H O W

3.1
DISCLOSURE OF PATENTS

The introduction of the "KNOW-HOW" technology into the Japanese market
has brought about a "PANTY Revolution". The technical theories provide a
comprehensive 3-Dimentional Spherical Cutting/Sewing method for producing
perfectly Spherical Undergarments, such as; women's underwear/girdles,
men/children's briefs, men/women/children's swimwear, women's tenniswear,
bodysuits, dancewear, leotards, skating panties, athletes'shorts, running shorts
boxer shorts, and other tight outergarments for sportswear. These technical
theories can fully utilize the inherent properties and features of traditional
knitted fabrics and various "Two-Way Fabrics" composed of stretchable yarns
developed to provide a smooth fit in varying sizes, shapes, and contours of
the human body which includes complex "IRREGULARITIES". Thanks to
the "KNOW-HOW" technology, slipping or loosening of the undergarment
is eliminated, despite "Bending or Stretching" of the waist and other various
movements of the body. Natural wearing comfort and functionality are fully
assured from the viewpoint of human body engineering, also represention
of attractive bodylines of individuals are enhanced.

The PATENTED technologies include a basic pattern configuration theory
and technical theories relating to the "Effect" invariably produced when cut
pieces of fabric are stitched together, plus other technical theories clarifying
the "Relationship" between the fabrics to be used and leg and waist elastic
rubber attachments (including stretchy-lace leg and waist band), ensuring
a perfect three-dimensional spherical undergarment, when the human body
is wrapped therein. Therefore, there are many significant technical theories
developed by KNOW-HOW to produce functional and good fitting garments,
representing beautiful body lines. PATENTS include the following:

1. The deviation effect theory of twisting knitted fabrics.

2. The theory of pulling the central bottom portion of the derriere.

3. The curving-in theory.

4. The theory of individually wrapping the two buttocks of the hips.

5. The theory of holding the waistline horizontal (refering to the
upper edge of the undergarment).

6. The theory of beautifully and comfortably wrapping the hips with
the undergarment having deeply curved-in high-cut front contours,
without causing slipping or loosening of the undergarment.

7. The theory of giving an esthetic appearance to the hips.

8. The theory of obliquely cutting the upper ends, both right and
left sides of the front and rear panels.

9. The theory of determining the cutting position and angle of
obliquity at both right and left edges of front/rear panels.

10. The theory of utilizing the effect of stretchable knitted fabrics.

11. The spherical triangular 3-piece, 3-dimensional sewing theory.

12. The inguinal groove relaxing theory.

13. The theory as to the fit of spherical garments to the human skin.

14. The theory of stitching of the hip bottom portion for preventing
undergarment seams from showing through outerwear.

15. The theory of eliminating the loosening of fabric at the bottom of
the gluteal cleft and the crotch.

16. The theory of curved and recessed "Deviation" at the gluteal cleft
between the buttocks, provided by the "Elastic" rubber leg attachment
and by "Pulled Effect" at the central bottom of the derriere which
comes out when the "Deviatedly-cut" rear and crotch panels are
sewn together. Consequently, gentle and beautiful hem curves
will be created, maintaining constant "Spherical" coverage of the
lower buttocks despite varying front cuts.

These theories are all combined into a perfect "3-Dimentional SPHERICAL
STRUCTURE" adoptable for all types of hip-wrapping undergarments.

3.2
OTHER TECHNIQUES NOT INCLUDED IN THE PATENTS

There are other vital and precise technologies not included in the Patents but
belonging specifically to the "KNOW-HOW" technology. The following are
theories related to the patterns for the undergarments to be produced.

1. Eighty-Eight (88) primary PATTERNS are absolutely needed for sample
making and manufacturing products based on the new 3-DIMENTIONAL
SPHERICAL TECHNOLOGY, showing detailed actual dimensions and
size specifications of pattern sections, and providing detailed and precise
curved lines of S, M, L and LL sizes, and precise size-wise pitch differences
at various sections of the pattern, along with full details as to "HOW" the
"Perfect Spherical Shapes" are to be made by sewing and attaching each
pattern piece.

2. Theories and techniques for preparing " Modified Patterns " for the
application of these patterns. These are actually needed for producing
various products based on the KNOW-HOW at the sewing factory.

3. Theories and delicate techniques for the "Universal Application" of
the primary patterns to "Spherical Garments" having a portion for
wrapping the lower buttocks and to prepare garments from modified
patterns. Such buttocks-wrapping garments include leotards, body
suits, supporters, swimwear, dancewear, tenniswear and sportswear
and like undergarments and outergarments.

There are also other comprehensive theories and techniques ranging from
cutting and sewing to sales. These include the following:

4. Technical theories for tube-knitted fabric cutting.
5. Theory of differentiated merchandizing for New Products.
6. Total marketing theory for unique sales strategies.
7. Checking theory prior to the decision-making for introducing New
Products into the market.
8. The packaging theory for Spherical Underwear.
9. Display theory for Spherical Underwear.
10. Advertising and P.R./ Publicity theories for Spherical Underwear.
11. Distribution theory.
12. New business planning and developing theories.
13. Sales technique theory.

4.0
V A L U E O F K N O W - H O W

It is our earnest desire and hope that undergarment industries throughout
the world correctly understand/recognize these epoch-making inventions
created and already industrialized in Japan with tremendously "Fruitful"
outcomes in the consumer market, and pay due respect to the rights of the
patentee. We wish that companies and individuals engaged in the under-
garment industry will utilize this KNOW-HOW for both their own and the
consumers' sakes, being based on the spirit of fairness and understanding
for mutual benefit. If "Properly and Wisely Utilized" in the future by
International Undergarment Manufacturers, Distributors, Planning Firms
and Fashion Designers, the KNOW-HOW will no doubt provide better
products for consumers all over the world.

What matters most in business is to offer consumers "BETTER" products at
reduced costs. Properly selected fabrics will make fashionable sophisticated
goods. The KNOW-HOW can present undergarments of such quality as is
suited to the targeted class of consumers, or to super-sophisticated products,
or to high quality name-branded goods. In any instance, the "KNOW-HOW"
will mature into "Attractive Products" widely acceptable to the consumers.
All KNOW-HOW products are to share such "Similar" positive features as
"Perfect Functionality", "Natural Fit", and "Wearing Comfort" to represent
beautiful body lines.

4.1
GENERAL MARKETING THEORIES CONSIDERED TO CREATE
A GREAT COMMERCIAL "HIT" IN THE CONSUMER MARKET

In order to win popularity, a commercial product must have the following
vital features:

1. The product must be effective and its obvious effectiveness should,
first and foremost, be from the view point of functionality, and
furthermore contain psychological and esthetic value and effects.

2. Price meeting public expectation.

3. Being made known to the public through advertising and publicity.

4. To be manufactured and sold by firms with already well established
and high standing reputations.

5. Containing properties and/or outstanding effectiveness, which can
easily be checked and acknowledged by the public.

6. Not to cause loss or damage to wholesalers and/or distributors
due to discount for competition.

7. Giving a "Sense of Superiority" to those having the product, or
an assured "Feeling" that they have the same reputable product
in common.

8. Ability to satisfy curiosity and to bring a person to acknowlege
his or her desire, wanting for better products.

9. Having an effect or advantage that will obviate the unconscious
dissatisfaction, grievances or complaints of the public.

10. Being obtainable by the majority of the public with little effort.

11. To be capable of capturing a "Wide Market Share" by realizing
various ranges of quality products. When marketing to the more
affluent consumer, the products can be made more sophisticated
in appearance and to be a higher standard.

12. The products must contain "Outstanding Elements" to be advertised
and publicized easily, in order to create a tremendously "BIG HIT".
There should exist clearly noticeable elements in the products to
be accepted by the consumer with the contented agreement, saying
"YES" to what is being presented in advertisings and publicities.
The method of causing this motivation, however, should be easily
obtainable.

13. Being able to easily and effectively motivate the public for them
to come to "Feel Like Having" the very product advertised.

14. Having "Apparent Features" that will attract attention by "Word
of Mouth".

15. Being "Picturesque", creating a "Series of Stories" to motivate
consumers buy the product.

16. Containing "Unique and Striking" characteristics and features to
attract attention when introduced into the market.

As the KNOW-HOW includes all the above sixteen(16) vital features, it has
abundant information to create and market "Superb Products". The results
of the KNOW-HOW contracts made with the leading Japanese companies
in the past l4 years have been proving all the above in reality.

For the realization of production and sale of the "KNOW-HOW" products,
total "KNOW-HOW" technology (including Industrial Properties Patented
and other technologies covered by the Utility Model) must be opened and
licensed under an agreement based on the spirit of fairness/share/care,
mutual concession and co-operation. In Japan, the initial royalty payment
to the "KNOW-HOW" is 10.- yen per piece for Panties and Briefs. More
than 300 million yen has been invested in researching into the Consumer
Markets of the World, Studying, Planning, and Developing the total
"KNOW-HOW" technologies, and also in obtaining the PATENTS &
Utility Models in Japan and 14 foreign countries, and in maintaining them
with annuities required. The "Investment" includes the overall costs for
the preparation and production of necessary information and materials of
vital importance, including marketing packages in regard to unique sales
of the "KNOW-HOW" products.

5.0
CURRENT SITUATION OF KNOW-HOW
WITH SPECIFIC REFERENCE TO WACOAL,
A LEADING JAPANESE MANUFACTURER

On June 20th, 1980, as the result of negotiations for six(6) months, the
Patents/Utility Models applicant, Mr.Kenji Hashimoto, the president of
Madison International Marketing,Inc. made an agreement for the Spherical
Panties "KNOW-HOW" technology with WACOAL, at that time, the
top undergarment manufacturer for high quality womens' underwear and
lingerie in Japan. The "KNOW-HOW" contract was duly finalized through
the courtesy of Sumitomo Corporation of Japan as an agent for Madison's
sub-licensing to Wacoal. The fundamental rights of obtaining registration
of the Japanese and International PATENTS and Utility Models remained
clearly in the hands of Mr.Hashimoto.

The agreement, under the above "KNOW-HOW" Contract, granted to
Wacoal, the licensee, a "Non-Monopolistic Right" to manufacture and sell
only Womens' Panties in Japan for a limit of 5(five) years, with the flexible
terms and conditions for extention at a later date. Foreign markets were not
included. The "KNOW-HOW" products other than "Panties", such as Girdles,
Bodysuits, Leotards, Dancewear, Skating outer/inner panties, Tennis outer
and inner panties, Swimwear, and Mens'and Children's briefs were left aside
pending, subject to separate negotiations.

Disclosed under this agreement were the details of all technical theories and
pertinent informative materials belonging to the "KNOW-HOW", which
included the confidential technical details belonging to the rights to obtain
registration of the patents & utility models that had not yet been open to the
public. Merchandising and marketing information/materials for launching
new spherical products were deservedly disclosed.

WACOAL, with its wide range of manufacturing activities and traditions,
possesses "The Central Research & Development Laboratory" in Kyoto Head
Quarters, where hundreds of technical staff are pursuing new technologies
everyday. Why did Wacoal obtain the license? Why did Wacoal introduce the
KNOW-HOW technology belonging to an outsider, through the courtesy of
Sumitomo?

Mr. K. Fujiniwa, Senior Representative of WACOAL, was quoted as saying
to a newspaper reporter, Mr. K. Hashimoto, and Sumitomo Corporation that
"For us, WACOAL,to adopt the system of new technical theories/techniques
developed by MADISON's Mr. K. Hashimoto, an outsider, will be totally in
conflict with ALL the Wacoal's PANTIES and waist/hips wrapping products
traditionally being manufactured and commercially marketed at present. Indeed,
the introduction of Mr.Hashimoto's "3-Dimentional SPHERICAL Cutting and
Sewing theory INTO Wacoal's products is "A Daring Denial" of the goods
presently provided by Wacoal. Nevertheless, we CAN NOT ignore its VITAL
importance and inevitable values for the TRUE growth and development of
WACOAL. Yes, there are technologies we HAVE TO learn and purchase from
the outsider, the third party."

In the following year, in Spring of 1981, Wacoal inaugulated an allout
campaign to introduce and promote a new product, the "HIP FIT", into the
market with an advertisement stating, "We have thoroughly studied the hips
3-Dimentional Spherical cutting and sewing method has been, for the first
time, adopted into Wacoal's underwear. The "HIP FIT" panties are easy and
comfortable to wear, giving "Smooth Fit" to complex body curves/undulation
despite various body movements".

The next year saw the birth of a big hit, "SHAPE PANTS", a unique and new
type of support panty, followed by "CROSSCUT GIRDLE" and improvements
by the KNOW-HOW in all Wacoal products: bikinis, hipsters, and briefs. This
trend developed into "NOODY" and further into "TEDDY BODY". So now
describing the situation herein, a reality of the "KNOW-HOW" in WACOAL
indicates the unlimited business opportunities in your country, for you to take.



Introduction to Madison's Know-How
Unique Features and Characteristics
The Outline of "Know-How"
Theoretical Background/Current Situation of "Know-How"