General Terms And Conditions of the Company ROTORCOMP VERDICHTER GmbH

1. Applicability And General Provisions

1.1. These general terms and conditions (hereinafter "the Terms") shall apply exclusively to all business conducted between ROTORCOMP Verdichter GmbH (hereinafter "ROTORCOMP") and the customer, including sales and deliveries, services (e.g. installation, maintenance, repair and training). Deviating provisions, in particular adverse terms and conditions of the customer, shall only be considered agreed in case of their explicit written confirmation of ROTORCOMP. The Terms shall also apply, if ROTORCOMP, being informed of adverse or deviating terms and conditions of the customer, delivers and/or performs without reservation.

1.2. The Terms shall apply only vis-à-vis companies (enterprises) and public law entities.

1.3. In current business relations, the Terms in their version as amended from time to time shall apply without explicit reference to all future agreements of the parties, in particular in case of verbal orders including follow-up- and call-off orders.

1.4. Electronically processed or transferred business statements of ROTORCOMP such as order confirmations, invoices, credit notes, statements of account and reminders, are valid and binding without bearing a signature.

2. Offer And Conclusion Of Contract

2.1. Offers of ROTORCOMP are made without obligation and under reservation of self supply, unless otherwise agreed in writing. Orders shall become binding upon written confirmation, unless the ordered merchandise or service is delivered or invoiced. The confirmation of the receipt of an electronic order (email) does not constitute the acceptance of the order. However, the confirmation of receipt can be combined with the acceptance of the order. In case of orders made in the electronic trade, the text of the contract shall be stored by ROTORCOMP. Upon demand, it shall be send to the customer by email together with the Terms. The parties dispense with the applicability of the provisions of Sec. 312e, para 1, sentence 1, fig. 1-3 German Civil Code concerning duties in electronic trade.

2.2. The description of a good or service given by ROTORCOMP shall be deemed its agreed condition and quality. ROTORCOMP shall only be liable for public statements, in particular in advertising, if ROTORCOMP has caused the statement and if the customer's purchase decision has actually been influenced by it. Statements, including specifications of performance, measurement, weight and further quality descriptions, but also drawings and illustrations, given in catalogues, brochures, pricelists and other publications or in documents belonging to the offer are – within the scope of the usual in the trade – approximately correct and insofar of limited relevance only. Any such statement constitutes a quality guarantee only, if explicitly indicated as such in writing. References to DINstandards (German Industrial Standard) are only made for description purposes and do not constitute a quality-guarantee, unless explicitly agreed.

2.3. ROTORCOMP reserves the right for technical changes of goods without prior announcement, provided that such changes are usual in the trade and their acceptance can be reasonably expected from the customer. In case of technical changes in a running line, the customer cannot claim the refitting of goods already delivered.

2.4. Property- and copyrights (in particular the rights for reproduction and distribution) in illustrations, drawings, calculations and further documents, the customer receives from ROTORCOMP in connection with the offer, shall remain with ROTORCOMP. Except for the case of a mutually designated resale, such documents may not be disclosed to third parties and shall be returned to ROTORCOMP upon demand, if the contract fails or becomes void.

2.5. The customer is liable for the correctness of documents to be procured by him, such as patterns and drafts. If ROTORCOMP infringes the industrial property rights of a third party by manufacturing goods according to drafts, patterns or other descriptions of the customer, the customer shall indemnify ROTORCOMP against any claim of the holder of these rights.

3. Prices And Payment Conditions

3.1. The prices given by ROTORCOMP in offers and pricelists are net prices. They do neither include value added tax nor other taxes, customs duty, fees or governmental charges connected with the purchase of the relevant good by the customer. Packaging, postage, freight and transport insurance shall be invoiced separately. Confirmed prices are only valid upon purchase of the confirmed amount. Deliveries and services not included in the offer (e.g. in case of subsequent changes of the order) shall be invoiced additionally.

3.2. In case of an increase of prices, the higher listed price shall prevail the agreed price, if the goods are delivered later than four months after contract date for reasons in the responsibility of the customer, unless the goods have already been invoiced and paid for.

3.3. The purchase price shall be payable net without deductions within seven days of the invoice date. Deviating periods for payment will be shown in the invoice. Payments have been made exclusively to ROTORCOMP. ROTORCOMP reserves the right to request prepayment.

3.4. The acceptance of bills of exchange and cheques requires the consent of ROTORCOMP and is only deemed as payment, if these documents can be cashed in successfully. Provisions and charges shall be borne by the customer.

3.5. If the customer gets in default with due payments, ROTORCOMP is entitled to retain deliveries of other orders of the customer. As far as payment of delayed amounts is effected, ROTORCOMP may deliver retained goods as appears fair with regard to further delivery commitments (Sec. 315 German Civil Code).

3.6. If the customer does not meet his obligation to pay (e.g. if he does not cash in a cheque or bill of exchange) or if the customer is in danger of insolvency or declared bankrupt, ROTORCOMP is entitled to accelerate maturity of the whole claim for payment immediately, disregarding the period of accepted bills of exchange. Moreover ROTORCOMP shall then be entitled to retain due deliveries until receipt of prepayment or securities. If ROTORCOMP does not receive prepayment or securities after giving the customer an appropriate deadline, ROTORCOMP may withdraw from the contract with regard to goods and services not yet delivered. In such case, all claims of the customer concerning these goods and services shall become extinct. Instead of declaring the withdrawal from the contract, ROTORCOMP may also claim damages or assert its rights from the retention of title according to fig. 8 hereinafter.

3.7. Any offsetting by the customer with claims neither accepted by ROTORCOMP, nor established by declaratory judgement shall be excluded. Any right of retention or any other right of the customer to refuse performance shall be excluded, unless it derives from the same contract as the related claim of ROTORCOMP. Each single order shall be considered a separate contract. A notice of defect, of which kind ever, does not entitle the customer to retain payment, unless the defect is undisputed, accepted by ROTORCOMP or established by declaratory judgement.

4. Delivery Terms And Acceptance

4.1. Dates and terms of delivery or performance stated by ROTORCOMP are only roughly binding unless a set date has been confirmed. Stated delivery terms commence with the dispatch date of the written order confirmation, however not before the customer has procured required documents, release declarations, permissions, prepayments or other advance performances.

4.2. Goods shall be deemed delivered within a set period, if they leave the works or warehouse of ROTORCOMP or if readiness for dispatch is announced to the customer within the term. Within the scope of reasonableness, ROTORCOMP is entitled to partly delivery. If acceptance of the completed work is required, the date of inspection and secondarily the date of announcement of readiness for inspection shall be relevant, except for a case of justified refusal of acceptance.

4.3. In case of force majeure and unpredictable events such as war, riots or strikes which materially impede performance or delivery, ROTORCOMP will be entitled to catch up on performance or delivery after the impediment ceases. If the delivery is delayed for more than four months, the customer will be entitled to reject delivery and to withdraw from the contract. The customer shall have no further rights or claims because of non-performance or late delivery, even if said impediments occur, after the delivery term has expired or ROTORCOMP was in default.

4.4. In case of expiration of binding terms of delivery or performance, the customer shall be entitled to set an appropriate period for delivery or performance and to withdraw from the contract after futile lapse of the extension. Damages for delay shall be excluded, unless ROTORCOMP has acted intentionally or with gross negligence. If the default has been caused by ROTORCOMP intentionally or with gross negligence, the customer shall be entitled to a lump sum compensation of 0.5% of the net price for each complete week of default, however not more than 5% of the net price. ROTORCOMP reserves the right to compensate the lower actual damage caused by default, if proof is supplied.

4.5. If the customer should get in default of acceptance, starting one month after announcement of readiness for dispatch, ROTORCOMP will charge him 0.5% of the invoiced amount for each month to compensate storage costs. The customer is free to prove and compensate lower storage costs, while ROTORCOMP may prove and claim higher damage caused by default of acceptance.

4.6. The compliance with a term of delivery or performance is subject to the customer's observance of his contractual duties. Upon demand of ROTORCOMP, the customer is obligated to declare in writing the completion of necessary preparatory work and his readiness to accept delivery. His refusal will cause default of acceptance.

4.7. Deliveries of ROTORCOMP will be made ex works. If the parties agree on a different type of delivery, the following shall apply: ROTORCOMP will decide on the kind and means of dispatch, the transportation route, the forwarding agent, the carrier, the kind and scope of required securities and the packaging at its sole discretion after due assessment of the circumstances. Due diligence provided, ROTORCOMP shall not be liable for losses or damages during transport. If required, ROTORCOMP will insure the consignment at the customer's expenses against theft, breakage and other damages from transport, fire or water and further insurable risks.

5. Passing Of Risk

5.1. The risk of fortuitous loss or deterioration shall pass to the customer upon delivery ex works. If the parties agree on a different type of delivery, the risk shall pass to the customer upon handing over of the goods to the carrier, the forwarding agent or the collecting person, even if the consignment is free or free at customer's address. If the transport is executed by ROTORCOMP, ROTORCOMP shall bear the risk until delivery at the place of receipt. These stipulations shall also apply in case of partly deliveries.

5.2. Notwithstanding his rights in fig. 6, the customer is obligated to accept delivered goods except for the case of essential defects. The customer is obligated to assert transport defects directly vis-à-vis the forwarding agent, the carrier and the insurance companies and to inform ROTORCOMP.

6. Warranty

6.1. The customer is obligated to examine the goods upon receipt with due care. He shall make notes on all discernible defects, false amounts or false goods on the delivery note or consignment note immediately upon receipt of the goods. He shall inform ROTORCOMP in writing no later than five working days after receipt and in any case before processing or installation of the defect or false goods. Failure to inform ROTORCOMP of defect or false goods will be deemed as approval. The customer shall bear the burden of proof for all requirements for a claim arising from a defect, in particular the defect itself, the time of its ascertainment and the filing of a respective complaint in due time.

6.2. If the delivered goods are installed by ROTORCOMP, the customer shall declare acceptance of the completed work immediately on the spot. In case of refusal, acceptance will be deemed declared, if the customer puts the delivered and installed goods in operation. The customer shall give notice of discernible defects of the installation while the engineer or representative of ROTORCOMP is present. Except for hidden defects, claims based on defects shall be excluded after acceptance of the installation.

6.3. The warranty period shall be two years for rotary screw compressors and else twelve months commencing with the passing of risk according to fig. 5. If the customer purchases the products for resale (possibly after processing), the warranty period shall be prolonged until resale, however not more than six months. Defects resulting from unsuitable or improper use, false or improper installation or operation by the customer or by third parties, natural wear and tear, false or negligent treatment, use of unsuitable means of operation, improper storage and climatic, chemical, electrochemical or electrical influences shall be excluded, unless caused by a fault of ROTORCOMP. The same shall apply to defects resulting from the non-observance of directions for installation, operation and maintenance, improper changes or repairs by the customer or third parties, influences of parts manufactured by third parties and continued operation despite the occurrence of obvious defects. In case of disregard of directions for installation or operation or in case of omission of recommended or required maintenance work, the customer shall bear the burden of proof that a damage has not been caused by such disregard or omission. The regulations on the limitation of action concerning the right of recourse against the supplier according to Sec. 479 German Civil Code shall not be affected.

6.4. The warranty is limited either to rectification (repair) or the replacement of the good at the discretion of ROTORCOMP, which shall be free of charge and, within the European Union and the European Economic Area, free of transport costs. In case of replacement, the title in the defect good shall pass to ROTORCOMP, as soon as ROTORCOMP accepts the complaint. Additional expenses deriving from obstructed access to the good or insufficient workspace or delivery outside the territory of the European Union or the European Economic Area shall be borne by the customer. If the customer should receive faulty instructions for installation, he can only claim the delivery of faultless instructions, provided that the fault hinders a proper installation.

6.5. If the rectification of a defect fails and the customer chooses to withdraw from the contract, any additional claim for damages shall be excluded. If he chooses to claim damages, the good will remain with the customer, if reasonable. In that case, the damage will be calculated as difference between purchase price and value of the faulty good, unless ROTORCOMP has caused the breach of contract fraudulently. The customer can claim damages only under the provisions of Sec. 7.

6.6. Warranty obligations can only arise, if the installation of the good has been executed competently. The warranty extinguishes immediately, if the delivered good is changed by unauthorized persons or by the installation of parts manufactured by third parties, unless the reported defect has not been caused by such changes. The warranty also extinguishes, if the customer disregards instructions for the installation and operation and thereby causes a defect.

6.7. Warranty obligations will lapse, if the customer, after having informed ROTORCOMP of the defect, does not ensure that ROTORCOMP gets the required time and access to the good, to carry out the necessary inspections, repairs and replacements, even if the good is firmly installed. Provided that ROTORCOMP will get immediately informed of a defect, the customer shall have the right to rectify that defect himself or by a third party and to claim compensation of the necessary expenses from ROTORCOMP only in urgent cases of jeopardized security of men, to avert excessive imminent damages or if ROTORCOMP is in default with the rectification of the default.

7. General Liability Limitations

7.1. As far as the liability of ROTORCOMP is not limited or excluded according to fig. 7.3 and 7.4, ROTORCOMP shall be liable for all damages which are caused by negligent breach of primary duties or essential collateral duties, in the observance of which the customer may rely on and which are important to attain the purpose of the contract (cardinal duties). ROTORCOMP shall also be liable in case of lack of guaranteed qualities and for damages caused by members of the board of directors and executives of ROTORCOMP by intentional or gross negligent breach of collateral duties, which do not belong to the cardinal duties (simple collateral duties).

7.2. Notwithstanding the liability constituted in fig. 7.1, ROTORCOMP shall not be liable for damages caused by slight negligence. In case of damages caused by employees or agents of ROTORCOMP by gross negligent conduct, the compensation shall be limited to the payment of the manufacturer's liability insurance of ROTORCOMP, which covers an amount of € 500,000.00 for each occurrence of damage. If this insurance coverage is not or not completely provided to the benefit of the customer, ROTORCOMP shall be directly liable up to an amount of € 500,000.00. Any further liability is excluded in these cases.

7.3. If the customer does not inform ROTORCOMP about the risk of unusual damages, which exceed the scope of usual damages and which are not foreseeable for ROTORCOMP and if this risk is known or recognizable to the customer, the liability of ROTORCOMP shall be limited to € 500,000.00.

7.4. ROTORCOMP shall not be liable for lost profit, not realized savings, damages resulting from claims of third parties, further indirect or consequential damages and for the loss of stored data, unless ROTORCOMP has a liability based on principles of reliance. ROTORCOMP shall only be liable for the reconstruction of data, if the customer takes care that lost data can be reconstructed with reasonable effort.

7.5. The preceding exclusions and limitations of liability shall apply respectively in cases of precontractual or non-contractual liability. They do not apply with regard to damages caused by personal injury, with regard to claims according to Sec. 1 and 4 of the German Product Liability Law and in case of inability or impossibility of performance.

7.6. As far as the liability of ROTORCOMP is limited or excluded, the personal liability of executives, employees, representatives and agents of ROTORCOMP shall also be limited or excluded.

7.7. The customer's claims for compensation shall become statute-barred with the expiration of the warranty period according to fig. 6.3, however not later than six months after the claim arises, unless the claim is based on fraudulent conduct or on the German Product Liability Law.

8. Reservation Of Title

8.1. All goods supplied by ROTORCOMP shall remain property of ROTORCOMP until complete settlement of claims for payment against the customer including accessory claims (current account settlement). Cheques and bills of exchange shall only be deemed as payment, if accepted and cashed by the drawee.

8.2. The customer is obligated to handle the reserved goods with care and to insure their new value at his own expense against fire, water, theft and vandalism. The customer shall hand over the insurance policy for inspection to ROTORCOMP on request. The customer declares to assign his claims against the insurance company and ROTORCOMP accepts the assignment. ROTORCOMP declares to re-assign these claims to the customer under the condition precedent that the title in the reserved goods passes to the customer because of a complete settlement of all claims for payment of ROTORCOMP. The customer shall take care of all necessary maintenance or inspection services at his expense.

8.3. The customer shall be entitled to process and sell reserved goods in the normal course of business. Any processing and adaptations of reserved goods by the customer shall be effected on behalf of ROTORCOMP. If such processing or adaptation is effected with goods which are not the property of ROTORCOMP or if the reserved goods are inseparably connected or mingled in any other way with other goods, ROTORCOMP shall acquire the co-ownership of the new or single chattel in the ratio of the invoice value of the reserved goods to the value of the other goods at the time of processing.

8.4. If the value of reserved goods according to fig. 8.1 and 8.3 permanently exceeds the amount of the secured claim by more than 20% (limit of cover), ROTORCOMP shall release reserved goods of the respective value on request of the customer. The choice of the goods to be released is at the discretion of ROTORCOMP.

8.5. The reserved goods shall be valuated according to their market prices or stock exchange prices. In the absence of such price, the purchase price shall be decisive. If no purchase price can be determined, the manufacturer price shall be decisive.

8.6. The customer is not entitled to pledge the reserved goods, to assign them by way of security or to sell them by sale-and-lease-back-agreement. In case of seizure of reserved goods or other means of debt enforcement by a third party, the customer shall immediately inform ROTORCOMP and to enable ROTORCOMP to take legal action according to Sec. 771 of the German Civil Procedure Code. The customer shall compensate any connected expenses of ROTORCOMP, if they cannot be recovered from the third party.

8.7. The customer shall hereby assign his claims arising from the resale of the reserved goods to ROTORCOMP by way of security for all claims for payment against the customer including accessory claims. In case of co-ownership, the customer's claim is assigned pro rata. ROTORCOMP accepts the assignment.

8.8. The customer will not be entitled to resale the reserved goods, if he agrees with the purchaser on a prohibition of assignment of his claim for payment, unless his claims for payment of the resold goods will become assets on current account. In such case, the customer shall assign these current account assets to ROTORCOMP according to Sec. 8.7. After balancing the current account, these assets shall be replaced by the confirmed balance, which will be deemed assigned to ROTORCOMP in the amount equal to said assets on current account.

8.9. The customer shall remain entitled to assert the assigned claim.

8.10. If the realizable value of the assigned claims permanently exceeds the amount of the secured claim by more than 20% (limit of cover), ROTORCOMP shall reassign claims of the respective value on request of the customer. The choice of the claims to be reassigned is at the discretion of ROTORCOMP.

8.11. ROTORCOMP shall have the right to realize the given securities and to revoke the customers authority to process and resale the reserved goods and to assert the assigned claims only, if the customer is in default with his payments, is in danger of insolvency, ceases payments or is declared bankrupt.

8.12. In each of the cases mentioned in fig. 8.11, the customer shall immediately inform ROTORCOMP about name and address of the debtors of the assigned claims to submit all documents necessary to assert the claims. The customer shall also inform the debtor immediately of the assignment by way of security.

8.13. ROTORCOMP is entitled to withdraw from the contract and to claim the return of the reserved goods, if the customer gets in default with his payments or infringes any of his duties stipulated in this fig. 8. When asserting the preceding security interests, ROTORCOMP is entitled to enter the property and buildings of the customer and to take possession of the reserved goods or property assigned by way of security and to transfer such goods and property to a different place.

9. Copyrights and Industrial Property Rights

9.1. The customer shall neither imitate or copy the products of ROTORCOMP nor order such imitations or copies. He acknowledges that the products of ROTORCOMP are protected against imitation and copy by patent rights and other industrial property rights. The infringement of these rights is liable to criminal prosecution and will result in claims of ROTORCOMP for damages and injunctive relief.

9.2 In case the delivery of ROTORCOMP includes system software subject to licence, ROTORCOMP grants the customer a non-exclusive right to use the software as released at the time of delivery only in connection with the delivered hardware and only after complete payment of the invoice concerning that delivery. This right may only be transferred together with the delivered hardware. ROTORCOMP will submit licence regulations for user software separately. The customer shall install and use software only within the limits of the granted licence.

9.3. The customer acknowledges that software may contain or embody trademark-rights, know-how and other intellectual property and that these rights are hold by ROTORCOMP or its supplier. Working papers submitted in training courses are protected by copyright and may neither partly nor wholly by duplicated without the explicit written consent of ROTORCOMP.

9.4. The customer shall inform ROTORCOMP immediately, if claims arise against him because of an alleged infringement of an industrial property right in the country to which the respective good has been delivered by ROTORCOMP. ROTORCOMP will either meet or contest the claim or settle the dispute at its discretion. The customer shall grant ROTORCOMP any reasonable support in the defence of the claims. ROTORCOMP will indemnify the customer from all payment obligations established by declaratory judgement or by settlement with the approval of ROTORCOMP including the costs of proceedings. The customer authorizes ROTORCOMP to decide on the means of defence and on settlement negotiations and will grant ROTORCOMP the required power of attorney.

9.5. If ROTORCOMP arrives at the conviction that a product might become subject of a claim for infringement of industrial property rights, ROTORCOMP shall be entitled – at its discretion - - to acquire a licence enabling the customer to continue the use of the product; - to replace or alter the product as far as reasonable and required to avoid the infringement of industrial property rights; - to take back the product or parts thereof and to reimburse the purchase price or a respective proportion of it, after deduction of an adequate user fee.

9.6. No obligations of ROTORCOMP shall be incurred, if claims of third parties arise because software, hardware or other goods or parts thereof become modified or connected with software or data of the customer or third parties.

10. Prohibition Of Use And Export Restrictions

10.1. The customer shall not use any product of ROTORCOMP in connection with the operation or maintenance of - a plant or facility using nuclear power, - facilities of mass transportation, - facilities for the supervision or monitoring of airspace or aircrafts. This ban does not apply to flight simulators.

10.2 The delivered goods are destined to be used and retained in the country of delivery and shall not be exported from there without permission. The customer acknowledges that the export of the delivered goods including the technical information provided with the delivery may be restricted by the export regulations of Germany and other countries, in particular of the United States of America. If ROTORCOMP approves export, the customer shall be obligated to abide with the relevant export regulations.

11. Concluding Terms And Provisions

11.1 German law shall apply exclusively. The Convention of the United Nations for the International Sale of Goods (CISG) shall not apply.

11.2. The place of performance for all claims deriving from the business relation with the customer shall be Germering (near Munich, Germany). However, the place of performance for supply commitments of ROTORCOMP shall be the place of the work or warehouse from where the goods are delivered according to the determination of ROTORCOMP.

11.3. Place of venue for all disputes arising between the customer and ROTORCOMP in connection with their contractual relation shall be Munich/Germany (Landgericht München I), provided that the customer is a public law entity or a Kaufmann (merchant) according to Sec. 1 – 3 of the German Commercial Code or has a comparable status according to the law at the place of his business. Each party is free to the take legal action at the general place of venue of the other party.

11.4. Any invalidity of a provision of the Terms shall not affect the validity of the other provisions.

11.5. All previous general terms and conditions of ROTORCOMP shall hereby become void.

11.6. The Terms have also been recorded in German. In case of doubt, the German version shall prevail.

TERMS AND CONDITIONS OF PURCHASE ROTORCOMP GMBH