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MEMORANDUM OF UNDERSTANDING

This Memorandum of Understanding, hereinafter referred to as MoU, is made and
entered into in the City of Shenzhen, China by and between:

OMAL SPA, hereinafter referred to as PARTY A
and
MR. HU JIAXIN, hereinafter referred to as PARTY B

RECITALS

WHEREAS,

1. OMAL SPA, hereinafter referred to as PARTY A, is a joint stock company duly
established and existing under the laws of Italy, with its registered office address at via
Ponte Nuovo, n. 11, Rodengo Saiano (BS), Italy;
2. MR. HU JIAXIN, hereinafter referred to as PARTY B, born in Wuhan (Hubei- P.R.C.)
on _________, is a Chinese citizen living in Shenzhen;
3. OMAL SPA and MR. HU desires to establish a new Equity Venture in the Peoples
Republic of China through their respective affiliates.
4. The Parties, prior to the establishment of the Equity Joint Venture, hereinafter referred
to as ComEJV, in Shenzhen, shall enter into this MoU to record their initial
understanding and agreement on the basic issues involved in the establishment of the
new ComEJV. The MoU shall served as the binding agreement governing the
relationship of the Parties until ComEJV is terminated.

NOW, THEREFORE, for and in consideration of the foregoing premises, both parties
hereby agree and stipulate the following:
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1. RECITALS AND ANNEXES

The Recitals and Annexes shall form part of this MoU and shall have the same force and
effect as if set out in the body of this MoU. Accordingly, reference to this MoU shall
include references to its Recitals and Annexes.

2. EJV NAME, LEGAL ADDRESS, BUSINESS SCOPE

2.1. The ComEJV shall have the form of Limited Liability Company, according to the
relevant laws of Peoples Republic of China. The name of ComEJV shall be OMAL
CHINA Co. Ltd, in English; and _______________, in Chinese.

2.2. The legal address ComEJV shall be in ____________ Shenzhen, China.

2.3. The business scope will be the partial assembly and sale of Valves and Attuators.

3. EQUITY INTEREST ALLOCATION AND TRANSFER

3.1. The EJV shall have two shareholders:
A) PARTY A, shall hold 55% of the Equity Interest through its affiliated Italian company;
B) PARTY B, shall hold 45% of the Equity Interest through its affiliated Chinese company,
owned and controlled by him.

3.2. The profits, risks and losses of the Company shall be shared by the Parties in
proportion to their respective capital contributions. Each Party shall not bear the liabilities,
debts, losses or obligations arising from any activities of the other Party.

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3.3. Neither Party shall mortgage, pledge, charge or otherwise encumber all or any part of
its Equity Interest without the prior written consent of the other Party, which consent shall
not be unreasonably withheld or delayed.

3.4. No Party shall sell, assign or otherwise dispose of all or any part of its Equity Interest
to any third party without first obtaining the consent of the other Party, which has the pre-
emptive right, and the unanimous approval of the Board and any necessary approval of the
competent authorities. In case the Parties cannot find any agreement on the Equity Interest
transfer they can decide to terminate the company.

REGISTER CAPITAL AND TOTAL INVESTMENT

4.2. The Register Capital of the company shall be _____US dollars. PARTY A shall
contribute ____US dollars, in cash, representing the 55% of the total Register Capital of
the company. PARTY B shall contribute ____ US dollars, in cash, representing the
remaining 45% of the total Register Capital of the company.

4.3. The Total Investment shall be (7/10 Register Capital), in US Dollar

5. BOARD OF DIRECTORS AND MANAGEMENT

5.1. Unless otherwise provided in this MoU, ComEJV shall have five (5) Board of
Directors, three (3) of which shall be appointed by PARTY A, and the remaining two (2)
shall be appointed by PARTY B. Out from the five (5) Board of Directors, a Chairman and
a Vice- Chairman of the Board shall be appointed.

5.2. PARTY A shall appoint the Chairman of the Board; and PARTY B the Vice
Chairperson of the Board, respectively.
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5.3. The Chairman of the Board shall be the legal representative of ComEJV, however,
may not take actions on behalf of the Company except as specifically authorized and
approved by the Board. If the Chairman of the Board is unable to perform his duties for
any valid reason, the Vice Chairman of the Board shall perform his duties. If the Vice
Chairman of the Board is unable to perform the duties of the Chairman of the Board for
any valid reason, the Board shall appoint another member of the Board of Directors to
perform the aforesaid duties.

5.4. Each member of the Board of Directors shall be appointed for a term of four years and
may serve consecutive terms if duly re-appointed.

6. SUPERVISORS

The company shall have two (2) Supervisors. One (1) Supervisor shall be appointed by
PARTY A. The other Supervisor may be appointed by either Parties.

7. MANAGEMENT

7.1. The Company shall adopt a management system comprised of Management Personnel,
who within the limits of powers fixed by resolution of the Board, shall be responsible for
the day-to-day operations of the Company, and shall report to and be under the leadership
and direction of the Board. The Management Personnel shall be headed by one (1)
General Manager and one (1) Deputy General Manager.

7.2. The General Manager shall be nominated by PARTY B; and the Deputy General
Manager by PARTY A, respectively.

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7.3. The term of the office of the General Manager and the Deputy General Manager shall
be 3 years, subject to reappointment for the furtherance of the term.

8. PERSONEL

ComEJV shall start recruiting employees upon the establishment of the company. The
hiring and dismissal of employees shall be subject to the authority and approval of the
Board.

9. AUDITOR

The Board shall appoint a Certified Public Accountant or an Independent Accounting Firm
duly registered in China, to serve as Auditor of ComEJV.

10. JOINT VENTURE TERM

10.1. The initial term of the EJV shall be 30 years, commencing from the date the business
license was issued, unless otherwise terminated or further extended as provided herein.
10.2. The EJV may be dissolved in the events stated by Article 90 of the Implementing
Rules and Regulation of the Law of Peoples Republic of China on Sino-Foreign Joint
Ventures. In addition, ComEJV may likewise be dissolved in cases of irremediable
disagreement between the Parties in the the event of change of the shareholders or
shareholders number of shares.

12. OTHER AND OPERATIVE ISSUES OF THE JOINT VENTURE

The parties shall jointly discuss and decide the other important and /or operative issue of
the Joint Venture.
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13. REGISTRATION PROCEDURE OF THE NEW COMPANY

13.1. PARTY A shall entrust a consultant company to obtain the companys new business
license and to provide whatever is necessary for the establishment of the company.
13.2. The consultant company shall be DEZAN SHIRA & ASSOCIATE Lts., with office
address at Suite 2503/2504, 25/F Modern International Building, 3038 Jintian Road, Futian
CBD, Shenzhen, 518000, P.R. China.
13.3 Within three months after the signing this MoU, the Parties shall communicate to
DSA all the necessary information needed in order to proceed with the registration process.

14. GOVERNING LAW AND SETTLEMENT OF DISPUTES

14.1. The validity, interpretation and implementation of these Articles and the rights and
obligations of the Parties created hereunder shall be governed by and subject to Chinese
laws, excluding, for the sole purpose of these Articles, are the laws of the Hong Kong
Special Administrative Region and the Macau Special Administrative Region.
14.2. In the event a dispute arises between the Parties, in connection with the interpretation
or implementation of these Articles, the Parties shall attempt, in the first instance, to
resolve any dispute through friendly consultations.
14.3. If the dispute is not resolved through friendly consultation, within sixty (60) days,
commencing from the date the first service of notice has been served to the Parties, the
dispute shall be submitted for binding arbitration to China International Economic and
Trade Arbitration Commission (CIETAC) in Shenzhen.
14.4. The arbitration shall be conducted in accordance with CIETACs arbitration rules
effective at the time of the submission for arbitration.
14.5. The Parties shall each select one (1) arbitrator of any nationality. The arbitrators
appointed by the Parties shall then jointly appoint a presiding arbitrator, who shall not be
of Chinese and Italian nationality.
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14.6. Should the arbitrators appointed by the Parties fail to appoint a presiding arbitrator as
aforesaid within one (1) month of their own appointment, CIETAC shall select a person
with recognised international experience who shall not be of Chinese or Italian nationality
to be the presiding arbitrator.
14.7. The arbitration proceedings shall take place and be recorded in English.
14.8. During the period when a dispute is being resolved, the Parties shall in all other
respects continue their performance of these Articles.

15. LANGUAGE

This Agreement shall be written in English and it is signed in two copies. Each Party shall
keep one copy.
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IN WITNESS WHEREOF, this Memorandum of Understanding is agreed by the Parties on
the day and year first written above.

Signed:


OMAL SPA MR. HU JIAXIN