BASIC AGREEMENT

Article 1.

It is the intention of the parties in entering into this Agreement that except as expressly agreed by the parties for each case the terms and conditions of this Agreement be applicable to each individual agreement between the parties for sale of the products manufactured by Seller (hereinafter referred to as "Products") which may be entered into subsequent to the date hereof (hereinafter called "Individual Agreement")

Article 2.

(1) Individual Agreement shall be deemed to have been entered into when Seller notifies Buyer in writing the acceptance of the terms of the purchase order sent from Buyer to Seller.

(2) Any acceptance stating terms additional to or different from those in the purchase order shall be construed as a new offer and shall not be binding until accepted in writing by Buyer.

Article 3.

The terms of delivery shall be FOB _________ as defined in the latest International Rules for the Interpretation of Trade Terms (INCOTERMS), unless otherwise agreed in the Individual Agreement.

Article 4.

(1) The payment shall be by an irrevocable confirmed Letter of Credit at sight in favor of Seller opened with a first class bank in Japan.

(2) Currency of payments shall be in United States dollars or such currency as may be mutually agreed upon.

Article 5.

Unless otherwise agreed, Seller shall not make partial shipments.

Article 6.

(1) Seller shall be responsible for packaging the Products in such manner to ensure safe and undamaged delivery customary for export shipments.

(2) Seller shall mark each package of Products with the following shipping mark:

(3) Seller shall at its cost obtain and deliver to Buyer certificates of origin for Products for the purpose of preferential customs duty.

Article 7.

Seller warrants that Products delivered under Individual Agreement conform to the specifications and standards of quality agreed between the parties.

Article 8.

(1) Buyer shall inspect Products upon their arrival at its warehouse in Japan and shall give written notice to Seller within ____ days after their arrival, or, as to latent defects, within _____ days after becoming aware thereof, of any claim that Products do not conform to the specifications or the standards of quality.

(2) Unless otherwise agreed, Seller shall within ___ days from the receipt of such notice ship to buyer free of charge replacements for all Products not conforming to the specifications or the standards of quality.

(3) Buyer may upon its discretion either return Products not conforming to the specifications or the standards of quality at Seller's costs, or keep such Products and pay reasonable price to Seller.

(4) In addition to the above remedy, Seller shall compensate any and all damage suffered by Buyer as a result of defect of Products.

Article 9.

(1) If Seller fails to ship, or fails to make timely shipment of any Products, Buyer may purchase goods of the same kind, in quantity equal to that which Seller so fails to ship, within ____ days after such failure; and Buyer may recover from Seller, as damages, the excess of the price so paid for the substituted goods over the purchase price of Products, plus a sum equal to ____ percent (___%) of such purchase price. Such damage claim will not be recognized unless it is sent to Seller, in writing, not later than ____ days after the purchase of such substituted goods.

(2) The above provision shall be without prejudice to the other rights and remedies which Buyer may have as a result of Seller's failure to make a timely shipment, including but not limited to the right of canceling the order and/or claiming damages.

Article 10.

Above Article 9 shall not apply, and Seller shall not be liable for damages arising from his failure to make or delay in making delivery because of fire, flood, riots, ship shortage, embargoes on freight of any government, accidents, insurrections, lockouts, Acts of God, or any circumstances or other unavoidable cause beyond Seller's reasonable control, provided that Seller shall give Buyer a prompt advice of the occurrence of such event with proper evidence, and provided further that Buyer shall have the right to cancel the order so affected if the shipment thereof is delayed more than ____ days.

Article 11.

Nothing contained in this Agreement shall prevent Seller from selling Products to persons other than Buyer, whether or not such others shall be in competition with Buyer, provided that Seller shall keep on hand at all times stock sufficient to meet all requirements of the Buyer.

Article 12.

Nothing contained in this Agreement shall prevent Buyer from buying goods equivalent or similar to Products from persons other than Seller, whether or not such others shall be in competition with Seller.

Article 13.

(1) All notices to be given hereunder shall be in writing and sent by airmail to the following addresses or to such addresses as are notified in writing by the parties. If either party has changed its address, a written notice thereof shall be given to the other party.

For Seller:

For Buyer:

(2) All notices shall be deemed to have been given on the day when such notice is received by mail.

Article 14.

This Agreement shall become effective on the date first above written and shall remain in force for a period of five (5) years. Unless either party gives to the other party, at least three (3) months before the termination of this Agreement, written notice of intention to terminate, the term of this Agreement shall be extended for a period of five (5) years; and the same shall apply to each of the subsequent five (5) year periods.

Article 15.

This Agreement and Individual Agreement shall be governed by the laws of Japan.