GENERAL SALES AND SUPPLY CONDITIONS

The supplies and services provided by CM Cerliani S.r.l. (hereinafter referred to as thesupplier) to companies, corporate bodies or financial bodies (hereinafter referred to as the purchaser) shall comply with the following conditions:

I. Conclusion of the contract

1. The supply contract, further to eventual modifications, separate agreements or other additional agreements or modification to the contract, only become binding when accepted by the supplier. The supply contract further to eventual modifications, separate agreements or other additional agreements or modification to the contract, declarations relative to its termination and other declarations or notifications shall be in writing unless otherwise foreseen in the present conditions.

2. When the order is issued by the purchaser, or on receipt by the same of the order confirmation from the supplier, or if these documents are not available, on acceptance of the ordered good or services, the purchaser accepts the present General Sales and Supply Conditions. Any other of the purchasers conditions shall not be considered valid by the supplier. These divergent conditions shall not be considered part of this contract , nor with the order confirmation or any other implicit action.

II. Prices

1. The prices stated on the order confirmation shall be considered valid. These prices do not include the relative VAT percentages as foreseen by law or the collection fees. The prices of the goods shall be considered EXW (as stated in the most recent version of Incoterms).

2. For quantities and/or order amounts which are less than the minimum orders foreseen in the price list or offer, the supplier shall have the right to debit a supplement fee for the fulfilment of the order.

3. If the fulfilment of the contract conditions by the supplier should become, before its implementation, excessively expensive compared to the originally agreed upon amount for the counter-services, the supplier may request a revision of the contract conditions to the purchaser, and in the case the two parties do not reach a new agreement, may terminate the contract, with no charges of any nature.

4. In the case the purchaser withdraws from the contract, the supplier reserves the right to debit the same with the costs relative to the study, design, provision of materials, production and all other related costs, up to the date that the written notification of withdrawal is received by the supplier.

III. Delivery Terms / Delays / Planned and Partial Deliveries

1. The delivery terms commence from the order confirmation and in any case not before all details are defined with the purchaser prior to the start of production and, in the case of advanced payment, from when payment is received, in the case of payment by Letter of Credit, from the opening of the same Letter of Credit. In the case where delivery is not foreseen as a temporal period (e.g. 9 weeks) but a specific delivery date is foreseen (e.g. June 1^st), this delivery date shall be postponed in relation to the time which has passed from the order confirmation and the complete definition with the purchaser of all the details required before the start of production and, in the case of payment by Letter of Credit, from the opening of the same Letter of Credit. In the case of payment on notification of goods ready to deliver, further delays due in payment, whether they are due to the purchaser or to the banking system are in no way foreseen by the notification of the of the delivery terms, and are not attributable to the supplier in any way.

2. Unforeseen circumstances during production and other force majeure incidents, further to strikes and other inconveniences in the factory or at the factories of sub-suppliers, further to delivery delays by sub-suppliers, all justify the supplier to extend the delivery term during the duration of the impediment. The supplier shall notify the purchaser as soon as possible with information on the commencing and termination of such circumstances.

3. The purchaser may withdraw from the contract only if the delivery delay, which is proved to be exclusively the fault of the supplier, is more than three weeks from the delivery date term. (see Art III parag.1). All other rights (claims) on delays are regulated exclusively by article VII.

4. If the purchaser has been granted the possibility in relation to the supply of goods, to determine within a certain period (Agreed Period), the delivery date, it shall be the duty of the purchaser to notify the desired delivery date with at least nine (9) weeks advance notice. At the end of the Agreed Period the supplier shall have the right to invoice to the purchase and ship the remainder goods which have not yet been collected.

5. Partial deliveries are permitted, unless this fact is explicitly declared as unacceptable by the purchaser.

6. The delivery terms refer to the date in which the goods are ready for shipping, at the suppliers factory.

IV. Packaging / Shipping / Transfer of Risk

1. Delivery is considered EXW (as foreseen in the most recent edition of Incoterms) from Pavia, Italy.

2. In the case where different delivery conditions have been confirmed by the supplier on the order confirmation such as FCA, CPT or CIP, reference shall always be made to the most recent edition of Incoterms if not otherwise foreseen in these present Conditions. However, even when it has been agreed that the delivery, or part of the same, shall be implemented by the supplier, the latter shall act as mandatory of the purchaser, and the transport shall be effected at the expense and risk of the latter. All eventual costs relating to transport, insurance, licenses, authorisations, customs, supply of documentation or special services, and all expenses related to the same, are at the purchasers expense and shall be invoiced to the same independently from the prices foreseen for the products on the order confirmation (see Art. II) and as a separate item.

3. The packaging material and methods are at the discretion of the supplier, except where particular conditions have been accepted in writing by the supplier in the order confirmation.

4. The packaging, which is disposable, is debited at a forfeit cost of 1% of the total amount of the value of goods and cannot be returned.

5. The costs for the issuing of any special documents which may be required for the country to which the goods are exported are at the purchasers expense.

V. Payments

1. All payments shall be made on one of the accounts indicated by the supplier, according to the conditions stated on the order confirmation, without Undue Deductions (see Art. 5 parag. 4) and without delay. In particular, in regards to advance payments, the payment must be effected as soon as the purchaser receives the order confirmation and/or the pro-forma invoice.

2. On expiry of the agreed payment term, the purchaser shall be considered to be in default. The purchaser is in default due to the delay in payment also in the cases where, (i) there are payment delays on notification that the goods are ready and (ii) for any Undue Deductions made (see Art. 5 parag. 4).

3. In the case of default by the purchaser, and except in the case of specific agreements stated on the order confirmation, the provisions to be considered valid are those foreseen in Legislative Decree n. 231 of 09/10/2002 published in the Official Gazette of the Italian Republic n. 249 of 23/10/2002, and in particular, but not limited to, Art.3 paragraph 1 (The creditor has the right to receive interest on arrears, as foreseen by articles 4 and 5, except in the case where the debtor can demonstrate that the delay in payment of the prices was due to circumstances beyond his control which made it impossible to effect payment.), Art. 4 paragraph 1 (Interest commences automatically from the day following the expiry date for payment.) and Art. 5 paragraph 1 (Except where otherwise agreed between the parties, the interest rate, as foreseen by the present decree, shall be determined as the current interest rate of the main finance instruments provided by the European Central Bank applied to the most recent refinancing operation made on the first calendar day of the semester in question, increased by 7 percentage points. The reference rate in force the first working day of the European Central Bank for the semester in question is applied for the subsequent six months).

4. Undue Deductions are those which are made (i) without a prior Credit Note and/or Authorisation for Deduction issued by the supplier on the specific form or (ii) if the claims have not been decided in court.

5. The supplier may immediately request the payment in the case where he may become aware of a deterioration in the capital or financial situation of the purchaser.

6. The purchaser must specify in the description of payment the Invoice and/or Pro-forma Invoice reference numbers and that of any eventual Credit Notes and/or Authorisation for Deductions issued by the supplier.

VI. Right of Domain

1. The supplier retains all property rights on all goods supplied until he has received full compensation of all rights deriving from the sales negotiation with the purchaser (restricted goods). In the case of current accounts the reserved property is also considered a guarantee for the demand for full payment.

2. If the restricted goods become, in combination, part of a new asset that belongs to the purchaser, it is agreed that the purchaser shall assign to the supplier co-ownership of the new asset, and maintain it free of charge. The suppliers co-ownership of the asset is determined according to the value of the restricted goods in respect to the value of the new asset.

3. The purchaser shall assign , from the time the order is issued, all rights relative to the resale of the restricted goods to his purchasers. If the restricted goods is resold together with goods which do not belong to the supplier, the purchaser shall grant the supplier the rights from this resale for the value of the invoiced restricted goods. If restricted goods are sold which are only partially restricted by the supplier, the part of the rights deriving from the sale, granted to the supplier, shall be calculated according to the suppliers share of the property.

4. The purchaser, on request, shall inform his purchasers of the assignments of rights as foreseen in Art.6 paragraph 3 and issue to the supplier all the information and documents necessary for him to assert his rights towards the third party purchasers.

5. The purchaser is obliged to inform the supplier if the restricted goods are subject to distraint or if the suppliers rights are in any way compromised by third parties.

6. If the law in the purchasers country does not contemplate conditional sale as foreseen by Article VI 1-5, but recognises other rights for the protection of the claims (credits) originating from the invoices issued by the supplier, the same rights are reserved to the supplier. The purchaser agrees to collaborate in relation to providing protection of the suppliers property rights or any other substitute right for the protection of restricted goods.

VII. Guarantee

1. The purchasers rights are valid in compliance with the following provisions:

a) If the goods supplied are totally or partially unusable due to defects, the supplier shall eliminate the faults free of charge or, at his discretion, supply further goods free of charge (hereinafter referred to as Specific Supplementary Service). All other eventual costs are at the expense of the purchaser. The supplier shall not be held responsible for damages caused by the normal wear of the product during use.

b) For the performance of the Specific Supplementary Services, the purchaser shall grant the necessary time and circumstances required by the supplier.

c) Further to the principles foreseen in the above items a) and b), for the warranty conditions of the goods reference shall be made to the Warranty Conditions supplied by the supplier.

2. The provision of specific warranties by the supplier shall be made explicitly and indicated as the same: in order to be valid they must be in writing. The purchaser agrees with the supplier that the indications on catalogues, printed matter, advertisements and other general printed information does not represent at any time a case of warranty.

VIII. Use of Software

If the supply volume includes software, whether free of charge or invoiced, the purchaser shall be issued with a non-exclusive and non-assignable license to use the software and the relative documentation. The assignment of sub-licenses is illegal. The purchaser may duplicate, re-elaborate and translate the asset as legally permitted. The purchaser agrees not to remove or modify, the manufacturers information in the Copyright notes, without prior explicit written consent by the supplier. All other rights on the software and documentation, including copies, are reserved to the supplier. In any case, the supplier reserves the right to withdraw the granted rights (license) of use of the software.

IX. Confidentiality

1. The supplier and the purchaser both agree to treat as confidential all technical, commercial, financial and economic information received as a result of their business relations, whether the information is provided directly from the other party or from any other third party. The decisive fact being that this information has been received only in virtue of the business relationship. The purchaser and the supplier agree to maintain all information received from the other party as confidential even after the termination of the supply contract. This obligation does not refer to information that (i) were already known to the receiving party in a legitimate manner with no confidentiality obligations or (ii) are supplied subsequently in a legitimate manner with no confidentiality obligations or (iii) without prejudice to the contract, are and become publicly known or (iiii) has been elaborated in an independent manner by one of the parties and this can be proved. Each party reserves ownership and eventual rights on his own documents or support data which are made available. This information can not be in any way used by the other party to register patents, or to oppose the registration of the same by the other party.

2. Disclosure: the supplier and the purchaser agree to maintain all information received as confidential. No information may be disclosed to third parties of any nature. The supplier and purchaser shall take all precautionary action to guarantee that third parties do not have access to the same information.

3. The purchaser, in the case that he intends to disclose confidential information, must first notify the supplier in writing of the same. The information may be disclosed to third parties only on receipt of written consent from the supplier. In the case where the information must be disclosed to third parties, the same confidentiality obligations shall apply to the same third parties. The supplier and the purchaser assume the responsibility to guarantee that this obligation is respected by their collaborators and all other third parties who may come into contact with the information.

4. The technical information, the documentation and the samples issued by the supplier may not be copied or used by the purchaser, or any third parties, for any reason other than for checking the goods received from the supplier. They shall be immediately returned to the supplier at his request. The purchaser agrees to destroy, in an irretrievable manner, after consulting the supplier, all documents and samples (whatever form of support data) from the moment the business relations are terminated.

5. Penalty Clause: the purchaser agrees, in the case of violation of the obligations foreseen in article IX paragraphs 1-4, to pay a penalty in proportion to the damage caused by such violation. The payment of the penalty does not exonerate the purchaser from all further compliance with the obligations foreseen in the same article.

X. Other

1. The supplier will save and elaborate all data referring to persons and the company during all commercial transactions. All laws which govern and protect his Privacy shall be complied with. All information can be supplied to third parties by the supplier, without notifying the purchaser and without his consent, only if this information is necessary for the normal implementation of commercial relations.

2. Total or partial abstention or if the party does not avail themselves in time of any right relating to this present supply contract does not represent a waiver on this or any other right.

3. The invalidity or ineffectiveness, original or which may occur over time, of any regulation of the present conditions, does not jeopardise the validity of the remaining regulations.

4. The location for the implementation of the supply is the location from where the delivery is made, that is Pavia, Italy. The location for fulfilment of payment is Pavia, Italy.

5. The contractual relations are governed by the Italian law. The application of the international convention for the sale of goods is expressively excluded.

6. In all cases of controversy, the Italian text version shall be valid for the interpretation of this present contract

7. The competent court is the Court of Pavia, Italy. The supplier reserves the right to start legal proceedings also at the legal authorities at the location of the purchasers registered offices.

1. General

The present warranty conditions govern the contractual relationship between CM Cerliani S.r.l. (herinafter referred to as the supplier) and the counter-party (hereinafter referred to as the purchaser) in his capacity of purchaser of the product.

The present general warranty conditions are binding for both parties and represent an integral part of the offer which are considered as accepted by the purchaser with the issue of the order.

2. Product Conformity

The supplier agrees to supply the purchaser with the ordered products and for which he has issued the relative order confirmation, according to the functional specifications, the construction design and the specific requests of the purchaser (hereinafter referred to together as Functional Specifications), previously agreed and approved in writing by the supplier.

If construction designs or specific requests are not presented by the purchaser, the Functional Specifications shall be considered as the correct functioning of the product, in the conditions in which it is supplied EXW (in the most recent version of Incoterms), on the sewing machine for which the product has been foreseen by the supplier (of which the written information of the supplier shall be evidence).

The information presented on catalogues, prospectuses or other illustrative or advertising material supplied by the supplier, further to the features of samples sent to the purchaser by the supplier, are intended as indicative. The supplier reserves the right to make any modifications at any time to the product which he may deem necessary, on the condition that the same do not decrease the performance of the product, without the obligation of having to notify the purchaser of the modifications.

3. Product Defect Claim

In the case the purchaser should discover defects and non conformity of the product in relation to the order confirmation, or any non-implementation of the Functional Specifications (hereinafter referred to together as Product Defects), he shall notify immediately the supplier on finding the defects and, in any case, within eight days of the same. The supplier is no longer held responsible for the warranty if the defects are not notified within one year from the delivery date.

The Product Defects are limited only to the product defects which are the result of errors in the design, the materials or the construction which are attributable to the supplier. For the warranty to be applicable the purchaser must be able to prove to have used the products correctly, carried out correct maintenance and storage and not to have made any modifications or repairs or to have tampered with the same.

The supplier shall not be held responsible for any damage which originate from the normal wear of the product during its working life.

The disputed goods must be kept at the disposal of the supplier. The shipping costs for the return of the goods will only be reimbursed if the return of the goods is requested by the supplier.

Proof of the existence of defects or conditions of non-conformity of the product must be provided by the purchaser.

Action must be taken in any case within one year from the delivery of the goods.

4. Elimination of defects

In the case that the purchaser makes a claim for Product Defects, found on the supplied product, the supplier must check the existence of the same.

If the same are confirmed and in fact the responsibility is attributable to the supplier, the latter must foresee the replacement of the pieces or, at his discretion, the re-processing/repair of the same at his expense and at his factory (hereinafter referred to together as Supplementary Specific Services). All other eventual costs are at the expense of the purchaser.

Exceptionally and if the time and/or economic convenience (saving on transport costs or lower personnel costs at the purchasers factory) should warrant the same, the supplier and the purchaser can decide each time whether the re-processing/repair can be carried out at the purchasers factory, and the technical conditions are such as to allow the same.

In order for the supplier to carry out the Supplementary Specific Services, the purchaser shall grant him the time required.

5. Effecting Product Defect Claims

The following procedure must be rigorously followed for the claims of product defects:

a) the purchaser shall timely (see Art 3) notify the supplier in writing of any Product Defects, found on the product and indicate at least:

-the product code

-the number of pieces which have been detected with Product Defect

-the number of pieces in the lot to which the pieces with Product Defect belong and for which there is uncertainty of the presence of Defects

-the sales invoice number as issued by the supplier relative to the pieces in question

-detailed description of the Product Defects detected.

b) the supplier shall inform the purchaser in writing whether he is to return only some of the faulty pieces as samples (b1) or all and only the faulty pieces (b2), or the entire lot of products delivered (b3).

The supplier shall in any case send the purchaser the Authorisation for Return Delivery form duly filled in and signed.

c) the purchaser shall proceed with returning the goods paying attention to re-use the original packaging. Any damage caused to the product due to incorrect packaging, during return transport to the supplier shall be the exclusive responsibility of the purchaser, and all repair or scrapping costs will be at his expense. In the b1 option, the samples shall be returned to the supplier with a Pro-forma Invoice stating samples with no commercial value and on the same Pro-forma Invoice a minimum value shall be indicated which is valid for customs purposes only.

In the b2 and b3 option the pieces shall be returned by the purchaser to the supplier with a Pro-forma Invoice which states the exact product code, the product description and the value, in the same currency which was used on the sales invoice, The description must be return of faulty goods under warranty and the subject issuing the return invoice must be the same as that indicated on the sales invoice.

On the return packaging, together with the transport documents, the purchaser must provide a visible copy of the Authorisation for Return Delivery form sent by the supplier.

Non-compliance with any of these instructions will mean the supplier is not able to collect the package. In any case, the acceptance of the returned package, does not imply any admission to the defect of the product by the supplier, or the presumption of acceptance to provide Supplementary Specific Services free of charge.

d) in the b1 option the supplier shall examine the returned samples and, if he confirms the claim, he shall issue an Authorisation for Return Delivery as for the procedure for b2 or b3.

He will otherwise send the samples back to the purchaser on request by the same.

e) for option b2 and b3 the supplier shall provide a new supply of pieces which conform in quantity and to the conditions foreseen in the original supply.

The supplier agrees to proceed as quickly as possible with the implementation of the Supplementary Specific Services.

It is the decision of the supplier whether to re-process/repair or replace all the pieces with a new lot.

At any moment, except where the results prove that the cause of the faulty product is attributable without doubt to the supplier, the same is authorised to invoice the purchaser with the Supplementary Specific Service costs.

f) alternatively to options b1, b2 and b3, the supplier and purchaser may agree to re-process/repair the pieces at the purchasers factory.

In this case the supplier will issue a Debit Authorisation form to the purchaser, after agreeing on the following:

- the number or maximum number of hours required for the re-processing/repair

- the cost per hour recognised to the purchaser which shall be the minimum between the minimum company hourly cost foreseen for a general blue-collar worker (unspecialised) according to the Italian National Mechanics Contract (CCNL) in force at the date of re-processing and the minimum company hourly cost according to the national contract relating to the sector of the purchaser, in force at the date or re-processing.

- payment terms

In the case of re-processing at the purchasers factory, the purchaser assumes all responsibility of the high-quality result of the re-processing/repair and any eventual irreparable damage and exonerates the supplier from all further responsibilities originating from the defect in question or caused by the same re-processing/repair operations.

The supplier shall issue a Credit Note in which he shall expressively refer to the Debit Authorisation.

6. Responsibilities of the supplier

In any case the supplier can under no circumstance be considered responsible for damages related to the supply. Under no circumstance can compensation be requested from the supplier except for the return of the product at the same sales price as the supplied product.

In particular, no costs can be debited to the supplier relative to:

-disassembly, assembly of the product or the groups it is inserted into

-start-up testing of the product or the groups it is inserted into

-damage to company image originating directly or indirectly, from supplies which do not comply with the order

-all that which is not explicitly foreseen in the present conditions.

7. Official Language

In all cases of controversy, the Italian text version shall be valid for the interpretation of this present contract

8. Competent Court