General Terms of Delivery

All products supplied by damko Ventiltechnik GmbH und Co. KG (referred to below as the Seller) to the company named on the front page of the contract (referred to below as the Purchaser) are subject to the following General Terms of Delivery unless explicitly agreed otherwise in writing:

§ 1 Scope of Terms

1. The deliverables, services and offerings of the Seller will be provided exclusively in accordance with these General Terms of Delivery, which will also apply to future business dealings even if no explicit agreement to this effect is made. At the latest upon receipt of the goods or services, these terms will be deemed to have been accepted.

2. Terms of business set by the Purchaser or any third party will not be applicable, even if the Seller has not specifically objected in this instance. Any counterclaims made by the Purchaser with reference to his terms of business or terms of purchase are hereby refuted. Even if the Seller refers to a communication containing or referring to the Purchaser's or a third party's terms of business, this does not imply any acceptance that such terms are valid.

§ 2 Offer and establishment of contract

1. Offers made by the Seller are provisional and non-binding. In order to have legal effect, offer acceptance and all orders must be acknowledged by the Seller in writing or by telex.

2. Details provided by the Seller regarding the goods or services to be supplied (e.g. weight, dimensions, utility value, load-bearing capacity, tolerances and technical data) and the Seller's representation of these (e.g. diagrams and illustrations) are to be taken only as approximations unless suitability for the contractually intended use requires exact conformance. These are not guaranteed characteristics, but rather descriptions or characterizations of the goods or services. Standard commercial deviations, deviations owing to statutory requirements or technical improvements, and the replacement of components with parts of equal value are permissible, provided they do not adversely affect suitability for the contractually intended use.

3. Members of the Seller's sales staff are not authorized to enter into verbal incidental agreements or to give verbal assurances that go beyond the scope of the written contract.

4. The Seller retains ownership or copyright in all offers and estimates provided, and in all diagrams, illustrations, calculations, brochures, catalogues, models, tools, and other documents and aids made available to the Purchaser. The Purchaser is not permitted, without the Seller's express consent, to make these items or their content available to third parties, to disclose them, or to use or reproduce them himself or through a third party. At the request of the Seller, the Purchaser must return these items to the Seller in their entirety and destroy any copies made, if they are no longer required by the Purchaser in the course of normal business, or if negotiations do not lead to a contract.

§ 3 Prices and payment

1. Unless stated otherwise, the Seller agrees to be bound by the prices quoted in his offers for 30 days from the offer date. Unless otherwise specified in writing, the prices quoted are ex works and do not include any sales, use, consumption, value added or similar taxes or duties. The Purchaser is to pay these taxes direct, if legally permissible, or to reimburse the Seller for them if the Seller has to pay them. On request, the Purchaser is to make available a tax exemption certificate or proof of payment of taxes.

2.  Additional goods and services supplied will be charged separately.

3. Unless otherwise agreed, prices are ex works from the Seller's head office in Schaafheim and include corrosion protection. Any packaging will be charged separately by individual agreement.

4. If the agreed prices are based on the Seller's list prices and delivery is not to be made until more than four months after the contract is signed, the Seller's list prices in effect at the time of delivery will apply (minus any agreed percentage or fixed-sum discount).

5. Invoiced amounts are payable in full within 30 days unless otherwise agreed in writing. The date of payment is to be defined as the date of receipt by the Seller. If the Purchaser fails to pay by the due date, the outstanding amount on the due date will accrue interest at base rate plus 8% per annum; this does not affect the Seller's right to impose a higher interest rate and further damages in the event of default.

6. If, after the contract is signed, the Seller becomes aware of circumstances that are likely to significantly reduce the Purchaser's creditworthiness, and that put at risk payment by the Purchaser of the Seller's open claims arising from the relevant contractual relationship, the Seller has the right to withhold outstanding deliveries of goods or services until advance payment or a guarantee is received.

§ 4 Solvency

In signing the contract, the Purchaser gives an assurance that he is solvent and in a position to pay for the products ordered.

§ 5 Delivery and delivery time

1. Deliveries are made ex works from the Seller's head office in Schaafheim.

2. Deadlines and dates proposed by the Seller for delivery of goods and services are approximate only, unless a firm deadline or date has been promised or agreed. If the contract covers shipping, delivery deadlines and dates relate to the time of handover to the forwarding agent, carrier or other third party contracted to provide transport.

3.  The Seller may – notwithstanding his rights arising from default by the Purchaser – ask the Purchaser to extend delivery and service deadlines, or to postpone delivery or service dates by the length of time for which the Purchaser fails to fulfil his contractual obligations to the Seller.

4. The Seller accepts no liability for failure to deliver or delays in delivery where these are caused by force majeure or other events, unforeseeable at the time the contract was signed, for which the Seller bears no responsibility (e.g. operational stoppages of any kind, material or energy supply problems, transport delays, strikes, legal lockouts, labour, energy or raw material shortages, difficulties in obtaining the necessary official permits, action by the authorities, or failure of a supplier to deliver, deliver correctly or deliver on time). In so far as such events significantly impede or completely prevent delivery of the goods or services by the Seller and the impediment is not merely temporary, the Seller has the right to withdraw from the contract. If the impediment is temporary in nature, the delivery or service deadlines are to be extended or the delivery or service times postponed by the period of impediment plus a reasonable restart time. If, as a result of the delay, the Purchaser cannot be expected to accept delivery of the goods or services, he may withdraw from the contract by sending immediate notice in writing to the Seller.

5. The Seller is entitled to make partial deliveries only if

(a) the Purchaser is able to use the partial delivery for the purpose agreed in the contract,

(b) delivery of the remaining goods ordered is guaranteed, and

(c) no significant additional expenditure or extra costs are thereby incurred by the Purchaser (unless the Seller is willing to assume such costs).

6. If the Seller falls behind schedule with a delivery or service, or if for whatever reason it proves impossible for him to execute a delivery or service, the Seller's liability to pay damages is limited in accordance with section 8 of these General Terms of Delivery.

§ 6 Place of supply, shipping, packaging, transfer of risk, acceptance

1. The place of supply for all obligations arising from the contractual relationship is Schaafheim unless otherwise specified. If the Seller is also responsible for installation, the place of supply is the place at which installation is to take place.

2. The shipping method and packaging are at the due discretion of the Seller.

3. On handover (deemed to be when loading begins) of the deliverables to the forwarding agent, carrier or other third party contracted to provide shipping services, the risk passes to the Purchaser. This also applies if partial deliveries are to be made or the Seller has agreed to provide other services (e.g. shipping or installation). If shipping or handover is delayed owing to circumstances for which the Purchaser is responsible, the risk will pass to the Purchaser with effect from the day on which the Seller is ready to ship and informs the Purchaser of this fact.

4. Warehousing costs after transfer of risk are to be borne by the Purchaser. If the Seller provides storage, the warehousing costs will be 0.25% of the invoice value of the deliverables to be stored per elapsed week. The Seller reserves the right to impose and provide proof of additional or lower warehousing costs.

5. Only at the express request and expense of the Purchaser will the Seller insure the shipment against theft, breakage, transport, fire and water damage, and other insurable risks.

6. If acceptance is necessary, the purchased goods will be deemed to have been accepted when

(a) delivery and, if the Seller is also responsible for installation, installation is complete,

(b) the Seller has informed the Purchaser of this fact, making reference to the implied acceptance under this section of these General Terms of Delivery, and has asked the Purchaser to accept the goods,

(c) 12 business days have passed since delivery or installation, or the Purchaser has started using the purchased goods (e.g. has put the supplied equipment into operation or has installed the supplied parts and put the equipment as a whole into operation) and six business days have passed since delivery or installation, and

(d) the Purchaser has failed to accept the goods within this time for reasons other than a defect notified to the Seller that makes it impossible to use the purchased goods or significantly impedes their use.

§ 7 Warranty

1. The warranty period is one year from the time of delivery or, if acceptance is required, from the time of acceptance.

2. The delivered goods are to be examined carefully immediately after delivery to the Purchaser or his designated third party. They will be deemed to have been approved unless obvious defects or other defects that became apparent upon immediate, careful examination are reported to the Seller by fax or in writing within seven business days of delivery, or otherwise within seven business days of the defect's discovery or its becoming apparent to the Purchaser in the course of normal use of the goods without closer examination. A defect report by means of telecommunication, and by e-mail in particular, is not sufficient to meet the deadline. At the Seller's request, the rejected goods are to be returned to the Seller carriage free. If the defect report is justified, the Seller will reimburse the Purchaser for the costs of the cheapest shipping method; this will not apply if such costs are increased because the goods are at a location other than their place of intended use.

3. If the goods are found to have material defects, the Seller is initially obliged and entitled to choose within a reasonable time frame whether to rectify the defects or supply replacement goods. Should this fail, i.e. should rectification or replacement prove impossible or unreasonable, or be refused or unduly delayed, the Purchaser may withdraw from the contract or reduce the purchase price accordingly.

4. If a defect is the Seller's fault, the Purchaser may seek damages under the conditions set out in section 8 of these General Terms of Delivery.

5. If there are defects in components made by other manufacturers, and the Seller cannot eliminate these because of licensing rights or for practical reasons, the Seller has the option of either asserting his warranty claims against the manufacturers and suppliers on behalf of the Purchaser or assigning these claims to the Purchaser. In the case of such defects, warranty claims against the Seller, subject to the other conditions of and in accordance with these General Terms of Delivery, exist only if judicial assertion of the aforementioned claims against the manufacturers and suppliers was unsuccessful or has no prospect of success, for instance because of insolvency. For the duration of the legal dispute, the statute of limitations will not apply to the relevant warranty claims by the Purchaser against the Seller.

6. The warranty is voided if the Purchaser modifies the goods or has them modified by a third party without the Seller's consent, thereby making it impossible or unreasonably difficult to rectify the defect. In any case, the Purchaser is to bear any additional rectification costs resulting from such modifications.

7. Any delivery of used goods agreed with the Purchaser in exceptional cases is excluded from any and all warranties.

§ 8 Liability for damages when at fault

1. Irrespective of the legal basis, the Seller’s liability to pay damages, especially those arising from impossibility of performance, default, defective or incorrect delivery, breach of contract, breaking of obligations during contract negotiations, and illegal acts, in so far as such liability is a question of fault, is limited in accordance with this section 8.

2. The Seller is not liable

(a) in the event of simple negligence on the part of its corporate bodies, legal representatives, employees or other agents, or

(b) in the event of gross negligence on the part of its non-executive employees or other agents, provided that no breach of obligations essential to the contract is involved. Particularly essential to the contract is the obligation to provide timely and faultless delivery and, where applicable, installation, as are the duties of consultation, care and custody designed to allow the Purchaser to use the goods in accordance with the contract, and to prevent substantial injury or damage to the Purchaser, third parties or the Purchaser's property.

3. Insofar as the Seller is liable to pay damages for whatever reason under section 9.2 of these General Terms of Delivery, such liability will be limited to damage that the Seller foresaw at the time of signing the contract as a possible consequence of a breach of contract, or that, applying due care and diligence, he should have foreseen, given the circumstances of which he was or should have been aware. Indirect damage and consequential damage resulting from defects in the goods will moreover only be reimbursable if such damage is typically to be expected when the goods are used as intended.

4. In cases of simple negligence, the Seller’s liability for personal injury and damage to property other than the goods supplied is limited to EUR 5,000,000.00 per incident, even if a breach of obligations essential to the contract is involved.

5. The aforementioned exclusions and limitations of liability are equally applicable to the corporate bodies, legal representatives, employees and other agents of the Seller.

6. If the Seller provides technical information or acts as a consultant, and such information or consultation falls outside the scope of the services he has a contractual obligation to provide, this will be done free of charge and excluded from any liability.

7. The restrictions listed in this section 8 do not affect the Seller’s liability for intentional acts, his liability for guaranteed characteristics, or his liability for death, bodily injury or health damage under the German Product Liability Act (Produkthaftungsgesetz).

§ 9 Reservation of title

1. The goods supplied (reserved title goods) remain the property of the Seller until all his current and future claims against the Purchaser are met, including all balances owing on open accounts. If the Purchaser is in breach of contract, and especially if he is in arrears with the payment of a debt, the Seller has the right to repossess the reserved title goods, having first set a reasonable deadline for payment. The transport costs associated with repossession are to be borne by the Purchaser. If the Seller repossesses the reserved title goods, this constitutes withdrawal from the contract. Likewise, it constitutes withdrawal from the contract if the Seller impounds the reserved title goods. The Seller may make use of repossessed reserved title goods. The proceeds of such use will be offset against the amounts owed to the Seller by the Purchaser, after the Seller has deducted a reasonable sum to cover the costs of use.

2. The Purchaser must handle the reserved title goods with care. At his own expense, he must insure them adequately at replacement value against fire, water and theft damage. If servicing and inspection is required, the Purchaser must have this work carried out on schedule and at his own expense.

3. The Purchaser may use the reserved title goods and resell them in the normal course of business, provided he is not in arrears. However, he must not mortgage the reserved title goods or transfer them by way of security. The Purchaser's claims for payment against his buyers arising from any resale of the reserved title goods, along with any claims by the Purchaser against his buyers or a third party in respect of the reserved title goods on another legal basis (especially claims arising from illegal acts and insurance claims), including all balances owing on open accounts, will be assigned by the Purchaser to the Seller in their entirety by way of security. The Seller will accept this assignment.

4. If the reserved title goods are sold to a third party in the course of a business takeover, the Purchaser will assign to the Seller, by way of security, the resulting claim for the purchase price arising from the business takeover, as well as any claims by the Purchaser against the buyer of the business or a third party on another legal basis (especially claims arising from illegal acts and insurance claims) in the amount of the Seller's open claims for the purchase price and work performed (including all balances owing on open accounts). The Seller will accept this assignment.

5. The Purchaser may, on the Seller's behalf, collect these claims assigned to the Seller on the Purchaser's account in his own name, so long as the Seller does not rescind this authorization. The right of the Seller to collect such claims himself remains unaffected; however, the Seller will not assert the claims himself and rescind the authorization to collect so long as the Purchaser meets his payment obligations in an orderly manner.

6. If, however, the Purchaser is in breach of contract inasmuch as he is in arrears with the payment of a debt, the Seller may require the Purchaser to disclose to the Seller details of the claims assigned and the debtors concerned, to inform the debtors concerned of the assignment, and to hand over to the Seller all the documents and information that the Seller needs in order to assert the claims.

7. Any processing or reconstruction of the reserved title goods by the Purchaser is always undertaken on the Seller's behalf. If the reserved title goods are processed together with other items not belonging to the Seller, the Seller acquires joint title to the newly created goods, in proportion to the value of the reserved title goods (final invoice amount including VAT) compared to the other constituent items at the time of processing. In other respects, the same provisions apply to the new item resulting from processing as to the reserved title goods.

8. If the reserved title goods are inseparably combined or mixed with other items not belonging to the Seller, the Seller acquires joint title to the newly created goods, in proportion to the value of the reserved title goods (final invoice amount including VAT) compared to the other constituent items at the time of combining or mixing. If the reserved title goods are combined or mixed in such a way that the Purchaser's item is to be regarded as the principal constituent item, the Purchaser and the Seller have already agreed that the Purchaser will transfer to the Seller a proportionate share of the title to the item. The Seller accepts this transfer. The Purchaser will hold the resulting sole title or joint title to the item for the Seller.

9. In the event of impoundment of the reserved title goods or other intervention by a third party, the Purchaser must point out that the Seller holds the title and immediately notify the Seller in writing, so that the Seller can assert his title rights. In so far as the third party is unable to reimburse the judicial or extra-judicial costs incurred by the Seller in this connection, the Purchaser will be liable for such costs.

10. At the Purchaser's request, the Seller is obliged to release the guarantees to which he is entitled, in so far as their realizable value exceeds the value of the Seller's open claims against the Purchaser by more than 10%. In so doing, however, the Seller may choose which guarantees are to be released.

§ 10 Concluding provisions

1. At the Seller' discretion, the place of jurisdiction for any disputes arising from the business relationship between the Seller and the Purchaser will be either Schaafheim or the Purchaser's head office location. For claims against the Seller, Schaafheim is the sole place of jurisdiction. The compulsory statutory provisions regarding sole places of jurisdiction remain unaffected by this provision. This agreed place of jurisdiction applies only to business relationships with purchasers who are business owners, trading companies, legal entities established under public law, or investment funds governed by public law.

2. The relationship between the Seller and the Purchaser is governed exclusively by the laws of the Federal Republic of Germany. The United Nations Convention on Contracts for the International Sale of Goods dated 11 April 1980 (CISG) does not apply.

3. To cover any omissions that the contract or these General Terms of Delivery may contain, the contracting parties will be deemed to have agreed upon such provisions as have the same legal effect as those they would have adopted in line with the economic objectives of the contract and the purpose of these General Terms of Delivery had they been aware of the omissions. 10.4 Should any provision of these General Terms of Delivery or other agreements be or become invalid, the validity of all other provisions and agreements will not be affected.

Schaafheim, December 2009