Standard Terms and Conditions of Sale – OCTOBER 2004

1. OFFER AND ACCEPTANCE. This writing constitutes an offer or counter‑offer by Voith Turbo Inc. ("VTI") to sell the equipment described herein ("Equipment") in accordance with these terms and conditions. This writing is not an acceptance of any offer made by Purchaser and is expressly conditioned upon Purchaser's assent to these terms and conditions. Purchaser will be deemed to have assented to these terms and conditions when: (a) Purchaser signs and delivers to VTI an acknowledgment copy of any of VTI's sales, quotation, order acknowledgment or invoice forms; (b) Purchaser has received delivery of the whole or any part of the Equipment described herein; or (c) Purchaser has otherwise assented to the terms and conditions hereof. No additional or different terms or conditions will be binding upon VTI unless specifically agreed to in writing. VTI hereby objects to any such additional or different provisions contained in any purchase order or other communication heretofore or hereafter received from Purchaser. This offer expires 30 days from its date, unless goods are subsequently shipped by VTI and accepted by Purchaser.

2. PRICES. All prices listed are payable in United States Dollars. All prices are subject to change without notice, and the price of Equipment on order but unshipped will be adjusted to the price in effect at the time of shipment.

3. TERMS OF PAYMENT. Unless otherwise specified on the face hereof or in VTI's Order Acknowledgment, payment is due, at VTI's option, either upon presentation of shipping documents or 30 days from date of invoice, subject to VTI's approval of Purchaser's credit. VTI may at any time change credit or payment terms or require payment in advance. If, in the judgment of VTI, the financial condition of Purchaser at any time does not justify continuing any terms of payment, VTI may require full or partial payment in advance. Invoices will be dated as of the time VTI is prepared to make shipment. Delays or deferments of delivery, for any reason, whether or not at the request of Purchaser, shall not extend the terms of payment.

Interest will be charged at the rate of l½% per month, or the highest rate permitted by applicable law, whichever is less, on accounts past due. Notwithstanding the above, at its option at any time, VTI may require Purchaser to make payment by irrevocable letter of credit, and may defer shipment or cancel any order if Purchaser does not promptly provide such a letter of credit. Any such letter of credit shall be issued for VTI's benefit by a prime U.S. bank, shall be subject to and governed by the Uniform Customs and Practice for Documentary Credits (ICC Publication No. 400, 1983 Revision), shall provide for payment against VTI's invoice and bill of lading, and shall be in form and substance satisfactory to VTI.

4. TITLE AND SECURITY INTEREST. Until VTI collects in full all amounts owed by Purchaser to VTI for the Equipment, VTI retains title to the Equipment; and Purchaser grants to VTI a continuing security interest in and a lien upon the Equipment and the proceeds thereof (including insurance proceeds), as security for the payment and performance of all present and future obligations of Purchaser to VTI. Purchaser shall execute any and all financing statements and other documents and instruments and do and perform any and all other acts and things which VTI may consider necessary, desirable or appropriate to establish, perfect or protect VTI's title, security interest and lien. In addition, Purchaser authorizes VTI and its agents and employees to execute any and all such documents and instruments and do and perform any and all such acts and things in Purchaser's name and on Purchaser's behalf. Such documents and instruments may also be filed without the signature of Purchaser to the extent permitted by law.

5. TAXES AND OTHER CHARGES. Customs duties are included in the prices specified only if specifically stated, and then only in an amount determined by the rate in effect on the date of VTI's Order Acknowledgment; otherwise customs duties paid by VTI are for Purchaser's account. Any manufacturer's tax, occupation tax, use tax, sales tax, excise tax, value‑added tax, inspection or testing fee, or any other tax, fee or charge of any kind imposed by any governmental authority, on or measured by the transaction between VTI and Purchaser shall be paid by Purchaser in addition to the prices quoted or invoiced. In the event VTI is required to pay any such tax, fee or charge, Purchaser shall reimburse VTI therefor. At VTI's request, Purchaser shall deliver to VTI proof of payment of all such taxes, fees or charges or evidence of exemption therefrom.

6. DELIVERY. All prices hereunder are F.O.B. point of shipment unless otherwise stated in VTI's Order Acknowledgment or on the reverse side hereof. Unless otherwise agreed in writing, delivery of Equipment to any carrier constitutes delivery to Purchaser; thereafter, regardless of shipping terms or freight payment, all risk of loss or damage in transit shall be borne by Purchaser. VTI reserves the right to make delivery in installments, unless otherwise expressly stipulated herein; all such installments to be separately invoiced and paid for when due per invoice, without regard to subsequent deliveries. Any deliveries not in dispute shall be paid for regardless of other controversies relating to other delivered or undelivered merchandise. Delay in delivery of any installment shall not relieve Purchaser of its obligations to accept remaining deliveries. Method and route of shipment shall be at the discretion of VTI unless Purchaser shall specify otherwise; any additional expense of the method or route of shipment specified by Purchaser shall be borne entirely by Purchaser. Purchaser shall bear all costs of bags, barrels, boxes, pallets or other containers used to ship Equipment sold hereunder. No shipping containers may be returned to VTI unless such return is accepted in advance by VTI in writing and unless all return freight is prepaid by Purchaser.

7. CLAIMS. Purchaser shall inspect the Equipment immediately upon arrival and immediately file with the delivering carrier claims for loss or damage during transportation; VTI must be notified immediately in writing of any such claims. All other claims must be made in writing to VTI within ten days from receipt of the Equipment. Purchaser's failure to give such notice shall constitute unqualified acceptance of all shipments made prior to VTI's receipt of Purchaser's notice of claim, and shall constitute a waiver of all such claims by Purchaser. VTI shall not be responsible or liable for any damage due to improper storage or handling prior to installation and start‑up. Purchaser shall provide VTI with an opportunity to inspect all Equipment with respect to which a claim is made, either at Purchaser's or VTI's premises. VTI shall not credit Purchaser for any Equipment or parts returned to VTI or any costs incurred by Purchaser for the repair thereof, as the case may be, without VTI's prior written consent therefor, nor shall VTI be responsible for any such Equipment or parts.

8. DELAYS. All delivery dates are approximate. VTI shall not be liable for any damage as a result of any delay or failure to deliver due to any act of God, act of Purchaser, embargo or other governmental act, regulation or request, fire, flood, accident, sabotage, strike, slowdown or other labor difficulties, war, riot, delay in transportation, defaults of common carriers, inability to obtain necessary labor, materials or manufacturing facilities or, without limiting the foregoing, any other delays beyond VTI's control. In the event of any such delay, delivery date(s) shall be extended by a time at least equal to the period of the delay and its consequences, or VTI, at its sole discretion, may cancel this contract without liability to the Purchaser. If delivery of any Equipment sold hereunder is delayed beyond any guaranteed delivery period for reasons solely within VTI's control and such unexcused delay is the sole reason for a material delay in Purchaser's scheduled start-up of such delayed Equipment, then VTI, at its option, shall either permit Purchaser to rescind this contract or pay to Purchaser, as liquidated damages and not as a penalty, 0.1% of the price payable under this contract for such delayed Equipment for each business day of such delay, starting with the business day following the end of the guaranteed delivery period and ending the day before delivery is made; provided, however, that in no event (a) shall an unexcused delay in delivery of any component of Equipment not substantially necessary for start-up of such Equipment give rise to liquidated damages or (b) shall such liquidated damages exceed 5% of the price payable under this contract for such delayed Equipment. For any such unexcused delay in delivery, Purchaser and VTI agree that rescission or liquidated damages, calculated in accordance with this Section 8, constitute a fair and adequate remedy in light of their commercial expectations and the allocations of risk between them. Purchaser's exclusive remedy for VTI's inability to deliver shall be, at VTI's option, rescission of this contract or liquidated damages for unexcused delay, calculated in accordance with this Section 8. Delivery shall be timely made if the Equipment is shipped or notification of VTI's readiness to ship has been given to Purchaser before the expiration of the delivery period.

9. STORAGE. If the Equipment is not shipped within fifteen (15) days after notification to Purchaser that it is ready for shipping, for any reason beyond VTI's reasonable control, including Purchaser's failure to give shipping instructions, VTI may store such Equipment at the Purchaser's risk and expense in a warehouse or yard or upon VTI's premises. During any period of delay or deferment requested by Purchaser, Purchaser shall pay all handling, transportation and storage charges at the prevailing commercial rates upon submission by VTI of invoices therefor.

Purchaser may not obtain any delay or deferment of delivery unless VTI agrees thereto in writing. In no event will VTI agree to any such delay or deferment unless Purchaser establishes good and sufficient cause therefor, to the satisfaction of VTI, and unless Purchaser agrees in writing to terms acceptable to VTI. No period of delay or deferment at the request of Purchaser may exceed 60 days.

10. CHANGES. VTI may at any time make such changes in design and construction of Equipment as VTI deems appropriate, without notice to Purchaser. VTI may furnish suitable substitutes for materials unobtainable because of priorities or regulations established by governmental authority or nonavailability of materials from suppliers.

No order may be altered by Purchaser except upon terms and conditions acceptable to VTI, as evidenced by VTI's written consent. In the event Purchaser requires and VTI agrees to any change in the Equipment, VTI may, in its sole discretion, adjust the order or the prices specified to compensate VTI for any increases in cost to VTI, and may likewise adjust the specified delivery schedules to compensate for any increases in the time required to manufacture or procure the Equipment.

11. LIMITED WARRANTY. VTI warrants to Purchaser that the Equipment manufactured by VTI and supplied hereunder: (a) conforms to the dimensions and specifications of VTI's standard products as described in VTI's catalog, quotation, Order Acknowledgment or on the face hereof, or, if different from the foregoing, to Purchaser's print dimensions, tolerances and material specifications, if provided to and accepted in writing by VTI; and (b) is free from defects in materials and workmanship. VTI's obligation in this paragraph 11 is limited, however, at its option to a refund of the purchase price or the repair or replacement of any Equipment which VTI, in its sole discretion, deems nonconforming or defective within the period given on the face hereof or, if not specified, before the earlier of 6 months from the first date of operation or 9 months from the date of shipment. Such credit, repair or replacement shall be VTI's sole obligation and Purchaser's exclusive remedy hereunder and shall be conditioned upon VTI's receipt of notice of any nonconformity within 10 days after receipt of shipment or, as the case may be, notice of any alleged defect within 10 days after its discovery and, at VTI's option, return of such Equipment to VTI, F.O.B. its factory.

VTI's warranty hereunder applies only to Equipment which is properly installed, operated and maintained in accordance with VTI's instructions and operating manuals and under normal conditions and proper supervision.

Equipment or components supplied by VTI hereunder which are obtained by VTI from a third party supplier are not warranted by VTI in any way, but VTI agrees to assign to Purchaser any warranty rights in such Equipment or components that VTI may have from the original manufacturer or third party supplier.

Any description of the Equipment, whether in writing or made orally by VTI or its agents, samples, models, bulletins, drawings, diagrams, engineering sheets or similar materials used in connection with Purchaser's order are for the sole purpose of identifying the Equipment and shall not be construed as an express warranty except as otherwise set forth in this paragraph 11. Any suggestions by VTI or its agents regarding use, application or suitability of the Equipment shall not be construed as an express warranty unless confirmed to be such in writing by VTI.

12. COMPLIANCE WITH LAWS. VTI certifies that the Equipment was produced in compliance with all applicable requirements of sections 6, 7 and 12 of the Fair Labor Standards Act, as amended, and all regulations and orders of the United States Department of Labor issued under section 14 thereof.

13. IMPROPER PAYMENTS. Purchaser certifies that it, its agents and employees have not made any undisclosed or improper payments of any nature whatsoever to any of VTI’s agents or employees in connection with this sale.

14. RETURNS. Equipment may be returned to VTI only when Purchaser obtains in advance VTI's written permission, signed by duly authorized personnel of VTI. Returned Equipment must be securely packaged and reach VTI without damage. Any cost incurred by VTI to put Equipment in marketable condition will be charged to Purchaser.

15. PATENTS, TRADEMARKS AND COPYRIGHTS. To the best of VTI's knowledge, the design and construction of the Equipment (except as the result of incorporating a design or modification in the Equipment at Purchaser's request) does not infringe any valid United States patent. VTI shall indemnify Purchaser and its customers against any final judgment awarded in any suit against Purchaser or its customers to the extent that such judgment is based upon a finding that VTI breached the foregoing representation, provided that Purchaser, in writing, promptly notifies VTI of the commencement of such suit and the assertion of the claims on which such suit is based, and affords VTI the opportunity, at VTI's option and expense, to settle and defend such suit and claims. If VTI elects to defend any such suit and claims, Purchaser agrees to give VTI all information, assistance and authority VTI deems necessary to do so. This paragraph sets forth, with respect to infringements, VTI's exclusive liability to Purchaser, its successors, assigns and customers and users of the Equipment. In no event shall VTI's liability hereunder exceed the amount of the judgment on the infringement action.

Notwithstanding the foregoing, VTI shall not be responsible for any compromise or settlement made without its written consent, or for infringements of combination or process patents covering the use of the Equipment in combination with other products or materials not furnished by VTI. The sale of Equipment hereunder may in no way be construed as an inducement by VTI of any infringement by Purchaser.

As to any Equipment furnished by VTI to Purchaser manufactured in accordance with drawings, designs, instructions or specifications proposed or furnished by Purchaser or any claim of contributory infringement resulting from the use or resale by Purchaser of Equipment sold hereunder, VTI shall not be liable, and Purchaser shall indemnify VTI and hold VTI harmless from and against any and all loss, liability, damage, claim or expense (including but not limited to VTI's reasonable attorneys' fees and other costs of defense) incurred by VTI as a result of any claim of patent, trademark, copyright or trade secret infringements, or infringements of any other proprietary rights of third parties.

16. INSTALLATION AND OPERATION OF EQUIPMENT; INDEMNIFICATIONS. Purchaser shall install, operate and maintain the Equipment, and shall require its employees and agents to operate the Equipment, in compliance with VTI's instructions and operating manuals and under normal conditions, safe operating procedures and proper supervision. Except as otherwise provided herein, VTI is not responsible for providing or installing any guards or safety devices, whether or not required or recommended under the Occupational Safety and Health Act or the safety regulations of any jurisdiction. This remains the responsibility of Purchaser. Purchaser shall provide, install and use, and shall require its employees and agents to use, all such guards and safety devices and shall maintain such guards and safety devices in proper working order. In the event Purchaser shall fail to do so, Purchaser shall indemnify and hold VTI free and harmless of and from any and all claims, liabilities and obligations with respect to any personal injuries or property damage directly or indirectly related to the operation or use of the Equipment. Purchaser shall also notify VTI promptly, and in any event not later than 10 days after Purchaser has notice or knowledge thereof, of any accident or malfunction involving the Equipment resulting in any personal injury or property damage and shall cooperate fully with VTI in investigating and determining the causes of such accident or malfunction. In the event Purchaser fails to give such notice to VTI or to cooperate with VTI, Purchaser shall indemnify and hold VTI free and harmless of and from any and all claims, liabilities and obligations relating to such accident or malfunction.

17. EXCLUSION OF CONSEQUENTIAL DAMAGES AND DISCLAIMER OF LIABILITY; PURCHASER'S INDEMNITY. VTI's liability with respect to breaches of warranty shall be limited as provided in Section 11 hereof. With respect to other breaches of this contract, VTI's liability shall in no event exceed the price paid for the part, unit or component of the Equipment on which the claim is based. VTI SHALL NOT BE SUBJECT TO AND DISCLAIMS: (1) ANY OTHER OBLIGATIONS OR LIABILITIES ARISING OUT OF BREACH OF CONTRACT OR OF WARRANTY, (2) ANY OBLIGATIONS WHATSOEVER ARISING FROM TORT CLAIMS (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ARISING UNDER OTHER THEORIES OF LAW WITH RESPECT TO EQUIPMENT SOLD OR SERVICES RENDERED BY VTI, OR ANY UNDERTAKINGS, ACTS OR OMISSIONS RELATING THERETO, AND (3) ALL CONSEQUENTIAL, INCIDENTAL AND CONTINGENT DAMAGES WHATSOEVER. Without limiting the generality of the foregoing, VTI specifically disclaims any liability for penalties (including administrative penalties), special or punitive damages, damages for lost profits or business, revenues or goodwill, loss of use of Equipment or any associated equipment, cost of capital, facilities or services, downtime, shut‑down or slowdown costs, spoilage of material, or for any other types of damage to property or economic loss. All the limitations and disclaimers contained in this paragraph and in the rest of this contract shall apply to claims of Purchaser's customers or any third party asserted by Purchaser against VTI for indemnity or contribution, as well as direct claims of Purchaser against VTI.

Purchaser shall indemnify VTI against any and all losses, liabilities, damages and expenses (including, without limitation, attorneys' fees and other costs of defending any action) which VTI may incur as a result of any claim by Purchaser or others arising out of or in connection with the Equipment sold hereunder and based on defects not proven to have been caused solely by VTI's negligence.

18. TECHNICAL INFORMATION. Any sketches, models, samples or designs submitted by VTI shall remain the property of VTI, and shall be treated as confidential unless VTI has indicated in writing a contrary intent. Purchaser shall not, without the express written consent of VTI, use or disclose such sketches, models and samples, or any design or production process or techniques revealed thereby.

19. PURCHASER'S PROPERTY. Any property of Purchaser placed in VTI's custody for performance of this contract is not covered by insurance, and no risk is assumed by VTI in the event of loss or damage to such property by fire, water, burglary, theft, civil disorder or any accident beyond the reasonable control of VTI.

20. MANUALS, BROCHURES, INSTRUCTIONS. Any and all operating manuals, instructions, brochures, warnings or the like concerning the Equipment supplied hereunder shall be written in the English language and are supplied as an aid to Purchaser and are not represented to be accurate, complete or sufficient. Purchaser warrants that it will accurately translate such manuals, instructions, brochures or warnings to appropriate languages and dialects so that its employees and all third party users of the Equipment will be properly informed of all the contents thereof. Purchaser will indemnify and hold harmless VTI against all liabilities and expenses (including attorney fees) arising out of the use of the Equipment by Purchaser or a third party in any case where Purchaser fails to make available adequate warnings, labels, manuals and instructions concerning the proper and normal use of the Equipment.

21. SEVERABILITY. If any provisions of these terms and conditions of sale shall be deemed illegal or unenforceable, such illegality or unenforceability shall not affect the validity and enforceability of any legal and enforceable provision hereof, which shall be construed as if such illegal and unenforceable provision(s) had not been inserted herein.

22. VTI'S REMEDIES. In the event that Purchaser fails to make any payments when due, fails to take delivery at the specified time or destination or, by any action or inaction, prevents or frustrates any delivery or any shipment to effect delivery, or otherwise defaults in the performance of these terms, VTI may cancel or terminate the Contract of Sale. In the event of any such cancellation or termination, Purchaser shall pay to VTI (a) the prices specified for all Equipment completed prior to such cancellation or termination; (b) the amount of VTI's expenditures and financial obligations in connection with all unfinished Equipment, including without limitation, any cancellation charges paid by VTI or for which VTI may be liable with respect to commitments made by VTI in connection with the Equipment; and (c) the amount of VTI's loss of profits, as determined by VTI, arising out of such cancellation or termination. The rights and remedies of VTI hereunder are not exclusive but are in addition to any other rights and remedies which shall be available to VTI under applicable law.

23. WAIVER. No waiver by VTI of any default hereunder shall operate as a waiver of any other default or of the same default on a future occasion.

24. GOVERNING LAW. This contract and these terms and conditions shall constitute the entire agreement between VTI and purchaser, and shall be governed by and construed according to the internal laws of the state of Pennsylvania and of the United States of America (without reference to principles of conflicts of laws). The rights and obligations of the parties hereunder shall not be governed by the provisions of the 1980 U.N. convention on contracts for the international sale of goods.