The Parties agree that all the orders requested by the Purchaser and confirmed by Seller with an order confirmation (below “Orders” or “Order”), are ruled by the following terms.

COMMERCIAL PART

1. Terms of the contract

Based on the article 1326 of the Italian Civil Code, the purchase order (which must specify the intended use of the Fabrics and all its production processes), has the status of a contractual offer (Purchase Offer). The Purchase Offer, even if undertaken by agents or employees of the Seller, does not imply the acceptance from the Seller, until the Purchaser receives the official Order Confirmation (either by fax or email).

Within 10 working days from receipt of the purchase offer, the Seller can confirm the Order, via order confirmation, or notify any additional requests, at the end of which it can confirm the Order. Following acceptance by the Seller, the contract is considered stipulated.

Any modifications after stipulation of the contract shall be agreed between the Parties in writing. In the absence of a reply from the Seller the Purchase offer expires after 10 working days.

The terms are calculated according to the ordinary calendar, unless specified otherwise. Terms that expire on a Saturday or on a public holiday, recognised as such by the law, are extended to the following working day.

2. Standard Piece

All Sales made by a purchase offer from the Purchaser are made keeping as a reference the Standard Piece provided with the data sheet and any laboratory analysis, delivered by the Seller to the Purchaser.

Purchaser carries out all the necessary tests on the Standard Piece to verify the suitability of the fabrics the Purchaser wishes to order and the use, for which they are intended.

Unless written changes agreed between the Parties, the same Standard Piece and relative fabric data sheet will be the reference for the subsequent reorders for: appearance, handling/touch, colour for which the fabric is intended. The above-mentioned characteristics are understood to refer to the Standard Piece that has not undergone further treatments. The Purchaser has to previously inform the Seller of any matching Fabrics/designs/colours differing from one another in terms of weight and/or composition.

The costs sustained by the Seller for the Standard Piece will be paid by the Purchaser with separate invoicing.

In case of reorders of Fabrics for which a Standard Piece already exists, it may be necessary to carry out further industrialisation tests due to external causes such as changes in raw materials/dyes which could affect the final result.

3. Raw Fabric commitments

Based on the article 1326 of the Italian Civil Code, the purchase order of the raw fabrics has contractual value (so-called Purchase Offer). The Purchase Offer, even if undertaken by agents or employees of the Seller, does not imply the acceptance from the Seller, until the Purchaser receives the official Order Confirmation (either by fax or email).

Within 10 working days from receipt of the purchase offer, the Seller can confirm the Order, via order confirmation, or notify any additional requests, at the end of which it can confirm the Order. Following acceptance by the Seller, the contract is closed at the following conditions:

• The raw fabrics’ commitments must be ordered within 6 months from the date of the order confirmation
• If they won’t be ordered within this time the Seller will proceed with the billing and shipment of the fabric.

Any modifications after stipulation of the contract shall be agreed between the Parties in writing.

4. Prices

The Seller notifies the Purchaser of the sample and production prices of the selected fabrics by also giving the relative minimum quantities per Article/variation and the validity expiry. The Seller has the right to vary them, at any time, due to supervening industrialization/production costs.

Any variations in the characteristics of the Fabric or the production process, requested by the Purchaser and after the Order confirmation, automatically suspends the Order to allow further verification of prices and delivery times;

the Order will be then re-confirmed. In case the Seller already started the production process the terms of art. 12 of this contract will be applied.

5. Terms of payment

The terms of payment are agreed between the Parties in each Order and relative Order confirmation.

The Purchaser cannot, for any reason, suspend or delay payments.

In case of missing payment or delay, it will be immediately due as stated by art. 1186 of the Italian Civil Code. In the case of deliveries made in several stages

the payments run from the date of each invoice. The payment has always to be made directly to the office of the Seller, unless agreed otherwise. Once the deadline has been exceeded without the Purchaser having fulfilled the payment, the Seller has the right to temporarily suspend all the deliveries based on the art. 1460 of the Civil Code and act according to the art. 1454 (and following ones) of the Civil Code. In any case, to the interest accrual runs automatically from the day immediately (of which D.lgs 231/02) after the payment deadline, until the final payment.

In the event of delayed or non-payment, any penalties that may be agreed between the Parties will also be applied.

Unless different agreements between the parties, specifically in case of payment in instalments, the sale is subject to the retention of title until the payment of the last instalment (based on art. 1523 of the Civil Code).

6. Deliveries

The delivery terms are agreed between the Parties and specified in the order confirmation. In case of modification of the initial Order, a new delivery date will be greed by the Parties.

The piece delivered will be rolled up open width on a cardboard tube with all due diligence, protected by appropriate standard packaging, with the right side of the Fabric inside the roll. Unless agreed otherwise, the Seller fulfils its obligation to deliver the Products by making them available to the Purchaser at its warehouse, on the day and at the time agreed with the Purchaser. The Products travel at the risk of the Purchaser.

If the Purchaser collects the Products more than 15 days after the confirmed delivery date or, if subsequent, the date on which the Products are made available, the Seller will have the right to charge the Purchaser for a refund for the storage expenses.

The shipment costs are sustained by the Purchaser unless agreed otherwise. Delays or unexpected events must be promptly communicated from the Seller to the Purchaser so the parties can agree on who to manage the event. In case of no specific agreement, the Purchaser gives a 10 working days tolerance on the order.

7. Protection of intellectual property

If the Purchaser requests, in a Purchase Order, a Product characterised by a design supplied directly by the Purchaser, over which it holds the intellectual property, it has to inform the Seller about this circumstance who won’t have the right of reproducing, imitating or disclosing the design in any future production for itself or for third parties.

In the above-mentioned case, it is understood that the Purchaser holds the legitimate right to use the design which it requests to be reproduced, undertaking all relative risks and responsibilities, consequently the Seller is relieved of any liability, claim, complaint, or action of third parties connected with the rights of ownership/use of the design.

If the Seller sells to the Purchaser Products characterised by a particular pattern/design/model, developed by the Seller or coming from its own archive and/or over which the seller holds an intellectual property right (below the “design”), the Seller remains the owner of the intellectual property rights on the Original Design. However, The Parties can agree in writing, and for a limited period of time, the exclusive right of the Purchaser to purchase, from the Seller, Products on which the Pattern is affixed, with a exclusivity agreement.

In any case, the Purchaser is forbidden to: – reproduce, deposit, modify, copy or take inspiration from the Design, acting directly or via third parties – disclose any technical information on the Design – have the Design reproduced/copied by third parties – sell or otherwise use the Design for uses other than those resulting from the supplies made directly by the Seller, also with reference to Products different from those supplied by the Seller, unless agreed otherwise in writing between the Parties – carry out any other action damaging to the intellectual property right of the Seller and its economic interests relating to it.

The technical know-how used by the Seller to produce the Products and/or the Pattern is the result of research and development activity by the Seller and therefore constitutes secret information of a strictly confidential nature which is the property of RF Roberto Fantoccoli 1975 Srl.

The Seller is not required to inform the Purchaser of its know-how. If, in any case, the Purchaser obtains knowledge of said know-how, it is forbidden to use it or cause it to be used in relations with third parties, or disclose it to third parties, even beyond the duration of this contract, likewise it is forbidden to behave in any way that may have the effect of harming the right of RF Roberto Fantoccoli 1975 Srl to commercially exploit said technical know-how.

8. Defects and Complaints

Visible or evident defects are all the imperfections that can be eye-spotted on fabrics at the time of delivery and may cause prejudice to the finished garments.

Differences between the technical data sheet and the actual standard piece that can be spotted only with technical systems or during/after the production process (allowed and considered by the technical data sheet) are considered non-visible defects.

In any case, the intrinsic characteristics of the Fabric specified in the Fabric data sheet and/or in any risk analysis of the Fabric and evaluated based on the Standard Piece cannot be considered defects.

The tolerance on defects in the Fabrics are specified in the Fabric data sheet and/or in any risk analysis performed on the Fabric.

If the Seller declares in advance that the fabric is characterised by specific research and innovation, the tolerances and the discounts will be specifically communicated by the Seller.

If the Parties agree that the Fabrics are defective, the Purchaser is entitled to choose one of the following options:

• return the pieces for reprocessing (if possible) or replacement, within a term agreed between the Parties

• gree with the Seller a discount on the price of the defective Products
• if the non-fulfilment is crucial, the order can be cancelled limited to the part of the Order concerning the Products affected by the defects. The part of the order already supplied cannot be cancelled.

The Parties agree that compensation for any damage/indemnification to be sustained by the Seller cannot in any case be higher than the price agreed between the Parties for the defective Fabrics subject of the Order.

The Purchaser is required to accept, prior to use, the characteristics of the Fabrics supplied and their suitability for the intended use, carrying out normal checks on the external characteristics and the technical requirements.

The Purchaser is required to notify defective Fabrics in writing (either by fax or email). Said notification must be prompt and complete (i.e. accompanied by sample and photographs, etc.) so that the complaint can be easily understood.

Any notification due to notified defects have to be communicated in writing within 8 days from the date of delivery of the Products to the Purchaser.

The Purchaser is required to indicate the defects found on the Fabric without damaging the Fabric. The disputed pieces must be provided with their original identification tags, and they must not be cut. In the case of inspection of the fabrics by the Purchaser, or by a third party on his behalf, prior to delivery, the accepted Fabrics are understood to be without visible defects and no further complaints can be made concerning the Fabric.

If the Seller authorises in writing to keep manufacturing the fabric, it will be liable for any or further damage to the fabric; but if the Seller has not explicitly authorised to keep manufacturing the fabric, the Purchaser will be responsible for it.

Unless agreed otherwise between the Parties, the Fabrics subject of the complaint must remain available to the Seller for 15 working days, from the notification. During this period the Fabrics will be kept by the Purchaser with all due diligence, and will be available to carry out all and any examinations necessary. If the Seller challenges the existence of the defects notified by the Purchaser, the Parties have to agree on a certified Laboratory and/or Inspection Centre to perform the relative joint checks, agreeing also on the relative timescale.

9. Inspection of fabrics

If, as mentioned at the end of art. 8, objections are raised concerning the existence of the defects subject of the complaint and the Parties are not able to solve by mutual agreement, the Seller and Purchaser will agree on a certified laboratory, selected by mutual agreement, from among those normally used by RF Roberto Fantoccoli 1975 Srl and accredited by ACCREDIA for the specific test.

The costs of the laboratory tests will be sustained by the losing Party according to the results of the chemical/physical examinations.

If, as mentioned at the end of art. 8, objections are raised concerning the existence of the defects subject of the complaint and the Parties are not able to solve by mutual agreement, the Seller and Purchaser agree on a visual examination of the piece with a fabric inspection machine that can be jointly carried out in a department within the factory/premises of the Seller or Purchaser or, alternatively, by an Inspection Centre, in any case in the presence of a representative of each of the Parties. In this case, the Parties agree that the examination will necessarily be performed by an Inspection Centre able to document the procedures followed, making them available to the Parties also before the inspection is performed.

Specifically, the Parties agree that each Fabric piece inspected must be uniquely identified by Article number, design, colour and piece number.

The Article examined by the Inspection Centres must be accompanied by its data sheet and by the Standard Piece to evaluate design, colour, handling/touch and appearance, in addition to any document certifying agreements between the Parties, so that each parameter examined corresponds to the quality required of the Products and their end use.

The length of the piece at delivery must be checked, allowing for a measurement a tolerance as established in art.11 of this document.

The fabric inspection of the piece, length and width and its evident defects included, must be performed within the times agreed (as established in the last subsection of art. 9), by notification, numbering, and immediate identification of the defects according to the defect record list accepted by the parties.

10. Return of goods

Within 15 calendar days from notification as per article 9 or receipt of the results of any joint inspections, according to art. 8 and 9, having certified the right of the complaint, the Seller can authorise the returns of the Products in writing or, if possible, propose the correction of the Products giving a specific timescale.

The returned piece delivered will be rolled up open width on a cardboard tube with all due diligence, protected by appropriate standard packaging, with the right side of the Fabric inside the roll.

If the returned Fabrics are damaged, the Buyer is responsible for the damage to the Seller. If not previously agreed between the Parties, the return of Products will not entail automatic recognition of the responsibility of the Seller for the defect and therefore will not entitle the Purchaser to issue a debit note. In any case, any acceptance by the Seller of a non-authorised return or authorised only to carry out test on the disputed Products, will not entail automatic recognition of the responsibility for the defect on the part of the Seller.

11. Tolerances on quantities

The tolerances permitted with respect to the quantities of each Order and for each quality and design (which shall be collected by the Purchaser paying the full agreed price), are the following:

– Up to 500 mt: +/- 8%

– 501 to 1,000 mt: +/- 5%

– 1,001 to 5,000 mt: +/- 2% (50 mt minimum and 35 mt minimum for silk fabrics)

– over 5,000 mt: +/- 1% (100 mt minimum)

The length of the individual piece must be measured before any production process (e.g. steaming, decatizing, etc.) and before having cut the Fabric for laboratory tests or other purposes. If the piece has been cut, the cut quantities have to be compensated to the Seller.

Between the length invoiced and the length supplied, the Purchaser will accept a minus tolerance of 1% for woven Fabrics and minus 2% for warp stretch Fabrics, without prejudice to the tolerance established for the quantities supplied. Different tolerances will be agreed between the Parties.

12. Cancellations and modifications

Requests for cancellation or modifications of Orders by the Purchaser will be evaluated by the Seller according to the state of progress of the work. If the Seller accepts the cancellation of one or more Orders, the Purchaser will compensate the costs sustained by the Seller for the raw materials and, if the Fabrics have already been produced or are undergoing production, the relative production costs.

13. Applicable law

All the agreements between the Parties, are governed in all their aspects by the Italian law. The Parties have to refer any disputes arising from this Agreement and/or from the Orders between them to the court of Como, including disputes concerning the validity, interpretation, performance and termination of the Contract/Orders.

14. Duration

This Agreement is valid and effective from the date of signing thereof and will have a ten years validity.

However, the “Protection of intellectual property” will remain fully effective also after termination of this contract for any reason.

15. Privacy – EU n. 2016/679 e D.Lgs. 196/03 196/03

The Parties agree on the treatments of personal data by committing to the respect of the regulations regarding data protection – D.Lgs. 196/03. 196/03.

16. General agreements

Any changes to this contract have to be agreed in writing and signed by both Parties, otherwise they will be considered invalid. This contract cannot be transferred to third parties without a written acceptance between the Parties, not even in case of sale of business unit, merger or split of the business.

The Parties are not allowed to use the logo/brand name of the other without a written agreement.

DEFINITIONS

1. « Fabrics »/ »Fabric” or “Product”/”Products” or ”Article”/”Articles” mean the finished Fabrics subject of the Orders.

2. “Standard Piece” means the first piece of Fabric produced by industrial production process; therefore, it can be reproduced; it is deemed to be a sample piece pursuant to art. 1522 par. 2 of the Italian Civil Code and provides a reference for the Fabric supplies.

Swatches, cuts pre-prints, prototypes, lengths for fashion shows or for press and media purposes, independently of the length, are not considered “Standard pieces”, but “sample pieces” ONLY and the Seller cannot guarantee the industrial reproducibility of them.

3. Technical Data Sheet All the Standard Pieces will be supplied with the fabric technical data sheet including all technical details to highlight the standard parameters of the Fabric and the parameters that the Purchaser may request, sustaining any additional costs.

The Purchaser, after acknowledgment of the technical data sheet in all its sections, can decide on his own responsibility whether to use the proposed Fabric on the basis of the intended use.