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Neb Instructions

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SECRET INSTRUCTIONS FOR NEB
The President of NEB places great importance on the proposed license and distribution agreement with MBC. He considers penetration of the Japanese market critical to maintaining NEBís leading market position in the world. In particular it is essential that the agreement assure NEB brand products full access to MBC repair and replacement and wheel aftermarket sales networks.
The President of NEB believes that MBCís distribution network could never be duplicated by MBC at any price and its long-term access to the network must be assured. Eventually, NEB would like to acquire this network from MBC, but the President knows this can only be discussed after many years of close cooperation with MBC. The license and distribution agreement is a first step in establishing a close NEB/MBC alliance in Japan. NEB would like to have as long a license and distribution term as possible.
NEB believes that MBCís know-how and patents are five to ten years out of date. However, MBC has the only facilities in Japan for the production of MBC brand products (using NEB know-how) which are suitable and available (Asahi has the only other suitable facilities in Japan) and local production will greatly reduce the cost of NEB products and ensure greater sales in the Japanese market.
NEB is willing to license its world class technology to MBC for the production of NEB brand Products and for inclusion in the production of MBC brand Products. NEB would like a royalty of 5% of Net Sales on NEB brand Products which use the technology but would agree to 3% of Net Sales, if necessary. NEB wishes to obtain a grant-back license for any improvements in know-how and patents developed by MBC using NEBís technology.
On NEB brand products produced by MBC for distribution in Japan, NEB would like 7% of Net Sales but would agree to as little as 5% of Net Sales. In order to

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