Heraeus – General Terms of Purchase 2016
1 Scope
1.1 All purchase orders (deliveries of goods and provision of services) of Heraeus(China) Investment Co., Ltd. and of the companies affiliated to it and domiciled in
the People’s Republic of China ("Heraeus") are subject to the following General
Terms of Purchase ("GTP") only , unless otherwise explicitly agreed by relevant
contract parties in written form.
1.2 The GTP will apply to any contract formed in accordance with clause 2 to the
exclusion of all other terms and conditions, including, without limitation, (i) any
general terms and conditions of the supplier which deviate from these GTP andany supplementary provisions in the terms and conditions of the supplier, except
where Heraeus gives its express prior written consent to the applicability of the
supplier’s general terms and conditions, and (ii) any terms and conditions which
are implied by trade, custom, practice or course of dealings. The supplier's
general terms and conditions will also not become part of a contract between
Heraeus and the supplier even if Heraeus, although being aware of the
supplier's deviating or contravening terms and conditions, takes delivery of
goods, accepts services or effects payment for such deliveries or services.
2 Offer and Formation of a Contract
2.1 All orders, agreements and changes shall be binding only if placed orconfirmed by Heraeus in writing. All correspondence must be exchanged withthe purchasing department of Heraeus.
2.2 Orders placed by Heraeus without a time limit for acceptance may be
accepted by the supplier only within fourteen (14) days from the order date. The
supplier shall confirm the orders placed by Heraeus in written form. However,orders will be deemed accepted if the supplier delivers goods or services to
Heraeus in accordance with the orders placed by Heraeus even such orders are
not confirmed by the supplier in written form.
2.3 Quotations are binding upon the supplier who issues the same and shall beirrevocable, unless otherwise expressly agreed in writing.
2.4 In case of any deviation or variance between the supplier's orderconfirmation and Heraeus' purchase order, a contract shall be formed only if
the supplier has expressly advised Heraeus of the deviation and Heraeus has
agreed to such deviation in writing.
2.5 Prices agreed and specified in the purchase order have been fixed following
relevant commercial negotiations between Heraeus and the supplier, who hereby
acknowledges that same are competitive on the national and international market,
remunerative and to its full satisfaction.
3 Examination and Procurement Duties
3.1 Within the scope of its general and special professional knowledge, thesupplier shall examine all drawings, calculations, specifications and otherterms of reference provided by Heraeus to exclude or avoid errors andinconsistencies on its own initiative and shall report to and clarify with Heraeus
all concerns or objections, if any, promptly in writing.
3.2 The supplier is fully liable for the procurement of all subcontracted
materials and for all services which are required for the goods ordered by
Heraeus.
4 Delivery; Supplier's Lien; Security in the Supply Chain
4.1 The period of delivery/performance specified by Heraeus in the purchaseorder is binding. If the purchase order does not specify such period, deliveryof the goods or performance of the service, respectively, shall be effected within
fourteen (14) days after the date of the purchase order. Time is of essence inrelation to the performance of the obligations contained in this clause 4.1.
4.2 If the supplier is unable to comply with the binding period ofdelivery/performance, set forth in clause 4.1, the supplier shall notify Heraeus
promptly and advise a practicable date for the delivery/performance. In addition,
the supplier is committed to notify Heraeus without request of any difficulties indelivery/performance which may arise, for any reason whatsoever, immediately
after such difficulties have come to the supplier's knowledge.
4.3 The supplier is obligated to strictly comply with all instructions andrequirements of Heraeus as regards mode of transport, forwarding agent, andshipping instructions.
4.4 Unless otherwise agreed, all deliveries and services shall be effected DDP"Point of Use" (Incoterms 2010). If delivery is made to construction sites ordirectly to third parties, unloading shall be at the cost and risk of the supplier.
4.5 Partial deliveries, over deliveries or under- deliveries are permissible only withthe express written approval of Heraeus which shall not be unreasonably withheld.
The supplier is committed to attach to each shipment a delivery note exactly
specifying the contents of the shipment, the net weight per item, and the complete
SAP purchase order number of Heraeus.
4.6 The unconditional acceptance by Heraeus of a late delivery or late
performance does not constitute a waiver by Heraeus of any compensatory claims
arising to it from such late delivery or late performance; the foregoing shall apply
until Heraeus has fully settled all payments owed by it for the goods or services
so affected.
4.7 With regard to quantities, weights and dimensions, the figures determined by
Heraeus during its incoming inspection shall prevail and be decisive, unlessotherwise evidenced by the supplier.
4.8 The supplier shall provide reasonable assistance to Heraeus in obtaining
preferential tariffs and other governmental benefits and submit to Heraeus all
supporting records and documents, especially certificates of origin, which are

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requested by Heraeus for this purpose.
4.9 If any payment instruments, shipping documents, certificates of origin orsales tax vouchers are missing, improper or incorrect, Heraeus reserves the rightto refuse acceptance of the goods at the supplier's cost and risk.
4.10 If the supplier has agreed to carry out the installation or assembly, or in theabsence of any agreement stating otherwise, the supplier shall bear all necessary
expenses, such as travel expenses or tooling charges, unless otherwise agreed.
4.11 No contractual liens and reservations of title remains with the supplier, unlessexpressly agreed in a separate written agreement between Heraeus and the
supplier.
4.12 The supplier shall give all organizational instructions and take allorganizational measures, in particular in the areas of property protection, securityof business partners, personnel and information, as well as in the areas of
packaging and transport, which are required to ensure security in the supply chain,for example by adopting the requirements of internationally accepted initiatives on
the basis of the WCO SAFE Framework of Standards (especially AEO). The
supplier shall protect its deliveries of goods to and the performance of its services
for Heraeus against unauthorized access and manipulation and shall have suchdeliveries and services performed by reliable personnel only. The supplier shallobligate any subcontractors commissioned by it to give corresponding instructions
and to take corresponding measures.
4.13 The supplier represents and warrants that the goods (i) correspond with
their description and any applicable specifications, drawings, samples anddescriptions; (ii) are of satisfactory quality and fit for any purpose held out by the
supplier or made known to the supplier by Heraeus expressly or by implication,and in this respect Heraeus relies on the supplier’s skill and judgement; (iii) if the
supplier is responsible for design of items, the supplier warrants that all items
delivered under the order will be suitable for use by Heraeus, including installation
by Heraeus in its ultimate products, will be free from defects in design, material
and workmanship and shall remain so for a period of at least 12 months after
delivery and acceptance by Heraeus unless otherwise stipulated under the order;(iv) comply with all applicable statutory and regulatory requirements relating to the
manufacture, packaging, storage, handling and delivery of the goods; and (v) do
not contain any substances which are restricted by Directive 2011/65/EU(RoHS), that the substances which are contained in the goods and its use(s)are either already registered or not subject to registration in accordance with
the Regulation (EC) No. 1907/2006 (REACH) and, if necessary, that an
authorisation in accordance with the REACH Regulation has been granted. The
supplier shall prepare the safety data sheet pursuant to Annex II of the REACH
Regulation, if required, and provide them to Heraeus. If the goods delivered
are to be classified as dangerous goods within the meaning of the applicableinternational rules, standards and guidelines, the supplier must notify Heraeus
thereof no later than on the date of the order confirmation.
4.14 Heraeus retains title to, and ownership of, any and all items, such as
substances, tools, materials and other items, which are provided by it to the
supplier for manufacturing purposes. As long as they are not processed, anysuch items must be stored separately and insured at replacement value against
loss and destruction at the supplier's cost. The processing, blending or
combining (further processing) of any such items by the supplier is made on
behalf of Heraeus. The same applies to the further processing by Heraeus of thegoods delivered to it, so that Heraeus is deemed to be the manufacturer andobtains ownership of the product so manufactured.
4.15 Title to, and ownership of, the goods shall be transferred to Heraeus
unconditionally upon delivery and regardless as to whether the purchase pricehas been paid. If, in the individual case, Heraeus accepts an offer from the
supplier for the transfer of ownership of goods which is conditional upon
payment of the purchase price, the supplier's reservation of title shall lapse upon
payment of the purchase price of the goods at the latest. In such case,
Heraeus is authorized to use or resell the goods in the ordinary course ofoperation or business also prior to the payment of the purchase price.
5 Force Majeure
If a force majeure event occurs, being an event which cannot be foreseen,
avoided or overcome (including but not limited to unforeseeable natural disaster;
fire; flood; strike; lockout; government action or any other event that impairs,
delays or stops the production and carriage of products or makes the production
and carriage of products unreasonable), the obligations of the affected party forexecuting the contract during the period when such force majeure event
continues will be suspended. The party, who alleges being affected by a force
majeure event, shall immediately notify the other party after the occurrence ofsuch force majeure event, take proper measures to reduce or eliminate theimpact and use best efforts to resume its performance of the obligations as soon
as possible. If, as a result of a force majeure event, supply and/or delivery of thegoods has been delayed for more than eight (8) weeks, or the force majeure
event which prevents one party from performing its obligations has continued formore than eight (8) weeks and is still continuing, either party shall have the rightto terminate the contract, without being held liable for any loss or damage
suffered by the other party as a result.
For the avoidance of doubt, the supplier’s own procurement risk shall not be
deemed as a force majeure event hereinunder.
6

Liquidated Damages

6.1 In the event that the supplier defaults in the timely performance of its
duty to deliver/provide a service, Heraeus may claim liquidated damages at therate of 0.5% of the aggregate order value for each commenced calendar weekof the supplier's default, but no more than 5% of the aggregate order value.
Heraeus is entitled to directly deduct such liquidated damages for delay indelivery from its payment. Without prejudice to the above entitlement of Heraeus,
if the supplier has been in delay in delivery (which is not due to the Heraeus’s
fault) for more than 30 days, Heraeus has the right to terminate the contract. The
supplier shall fully indemnify Heraeus against all losses incurred by Heraeus(including but not limited to the difference between the price for procuring
substitute products from a third party and the price of the goods under the relevant
specific contract). This shall not apply if the supplier furnishes valid proof that thedefault was caused by an event of force majeure.
6.2 The liquidated damages pursuant to clause 6.1 shall be incurred as soon as
the supplier defaults in delivery. The liquidated damages are immediately due forpayment.
6.3 Heraeus may assert the liquidated damages in addition to its claim for
performance of the supplier's duty to deliver. If Heraeus accepts the supplier's
delayed performance, Heraeus may claim the liquidated damages even if it has
not expressly reserved this right at the time of receipt of delivery. Heraeus shalldeclare the reservation of its right to assert the liquidated damages no later than
the time of its final payment of the delivery concerned.
6.4 The assertion of any further damage by Heraeus shall not be excluded.
7

Claims for Defects; Recourse and Product Liability; Insurance

7.1 The supplier is responsible for the perfect condition of the goods
delivered and the services provided and for the existence of warranted
characteristics. The supplier is in particular responsible for the conformanceof the goods and services to the state of the art, to the generally accepted
technical and occupational health and safety regulations of public authorities
and trade associations, and for the compliance of the goods and services
with all applicable laws.
7.2 Heraeus' inspection is limited to defects which become apparent upon outward
examination of the goods during the incoming inspection and to defects whichbecome apparent during quality control by way of random sampling (suchas wrong delivery and short delivery, for example). Above and beyond theforegoing, it depends on the feasibility of such an inspection in the ordinary
course of business, with due regard to the circumstances in the individual case.
Heraeus' duty to give notice of defects which are discovered later remains
unaffected.
7.3 The statutory provisions on material defects and defects of title shallapply, except as otherwise provided herein below.
7.4 If the supplier, within the scope of subsequent performance of thecontract, remedies a defect by rectification or by delivery of a fault free product,
the statutory warranty periods will commence to run again.
7.5 If the supplier defaults in its duty of subsequent performance of thecontract within a reasonable time period fixed by Heraeus without having
the right to refuse such subsequent performance, Heraeus is entitled toitself remedy, or cause to be remedied by any third party, the defect at thecost of the supplier and to claim from the supplier an advance payment of
the costs thereby incurred.
7.6 All costs arising to Heraeus from the supplier's delivery of defective goods
or provision of defective services, especially travel and transport expenses,
labor and material costs, and the costs of an incoming inspection exceeding
the usual scope, shall be borne by the supplier. Any costs incurred by the
supplier for the examination and rectification of defects (including any removal
and installation costs) shall be borne solely by the supplier even if it turns outthat there was actually no defect. Heraeus shall be liable to pay damages tothe supplier for unjustified claims for remedy of a defect only if Heraeus hasrecognized, or grossly negligent failed to recognize, that no defect existed.
7.7 The supplier is obligated to indemnify and hold Heraeus harmless fromand against any and all product liability claims, and from any loss ordamage arising therefrom, if and to the extent that such claims are attributable
to a defect in the goods delivered/manufactured or the services provided by
the supplier. If the cause of the loss or damage is within the responsibility ofthe supplier, the burden of proof shall rest on the supplier. The suppliershall compensate for also any and all costs and expenses to the extent of the
supplier’s indemnity obligation, including the costs of bringing an action or thecosts generated by a product recall. Heraeus will inform the supplier of thescope and content of such product recall to the extent practicable andreasonable.
7.8 The supplier commits also to take out and maintain a product liability
insurance with adequate coverage and to furnish proof of the existence of suchinsurance to Heraeus upon request.
8

Infringement of Third Party Proprietary Rights

The supplier warrants that no patent rights or other proprietary rights of any
third party are infringed by or in connection with the supplier's delivery of goods
or provision of services, and the supplier will, upon first written request,
indemnify and hold Heraeus harmless from and against any and all claims
which are asserted or entered against Heraeus by any third party on accountof the infringement of a patent or other property right. The supplier will
reimburse Heraeus for all necessary costs and expenses arising to Heraeus
out of or in connection with such third party claims. Irrespective of the foregoing,
Heraeus shall be entitled to enter with any third party into agreements on the
alleged infringementofpropertyrights,especially compromise
settlement agreements, also without the consent of the supplier.

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9 Prices and Terms of Payment
9.1 The prices specified in the purchase orders are binding. These prices
include any and all services and ancillary costs (such as packaging fees etc.).
9.2 All Invoices must specify the SAP purchase order number of Heraeus,
the exact description and quantity of the goods delivered or services provided,
and the price per unit or quantity. All invoices must be sent to the address
specified in the purchase order. Payment by Heraeus shall not be due until
Heraeus' receipt of a correct and complete invoice.
9.3 Unless otherwise agreed, the agreed prices become due and payable withinsixty (60) calendar days after full performance of the delivery and/or service (aswell as acceptance, if applicable) and receipt of a proper invoice.
9.4 Heraeus may, without limiting any other rights or remedies it may have, set
off any amount owed to it by the supplier under the contract against any amounts
payable by it to the supplier under the contract and/or any otheragreement/contract between Heraeus and the supplier.
10 Industrial Property Rights and Know-How; Confidentiality
10.1 All right, title and interest in and to any models, samples, drawings, software,
documentations and other records as well as all right, title and interest in andto any materials, tools, production and testing equipment and know-how
disclosed or released by Heraeus to the supplier shall remain vested solely in
Heraeus. Any such items, information and documents must be treated asconfidential and may not be transmitted to any third party, unless with theexpress prior written consent of Heraeus and such third party is bound by
the same obligations of confidentiality.
10.2 All items, information and documents set forth in clause 10.1 must be
returned to Heraeus, without request, immediately upon performance of thecontractual obligation or when they are no longer needed by the supplier. Anyother use or disposal, whether in fact or in law, and/or any direct or indirect
exploitation of such rights, items and documents by the supplier or any third
party is expressly prohibited.
10.3 In the case of research, development, construction, engineeringor other contracts covering the elaboration of a solution to a technicalproblem, all right, title and interest in and to any inventions made by the
supplier in performing the contract as well as any patents to be applied for,already applied for, or granted on such inventions shall vest exclusively in
Heraeus. The same shall apply to any new technical know-how which does
not belong to the state of the art. At the request of Heraeus, thesupplier will exploit inventions which are made by its employees. The
supplier agrees and undertakes to notify Heraeus in writing of any such newtechnical know-how or employee invention within a period of six (6) weeks.
The supplier agrees that at any time and from time to time hereafter, it will upon
written request take any and all steps and execute, acknowledge and deliver
any and all further instruments and assurances necessary or expedient in orderto vest any patents or copyrights or copyright licenses and interests more
effectively in Heraeus.
10.4 A party (“receiving party”) shall keep in strict confidence all technical andcommercial know-how, specifications, inventions, processes or initiatives which
are disclosed to the receiving party by the other party (“disclosing party”), its
employees, agents or sub-contractors, and any other confidential information
concerning the disclosing party’s business, its products or its services which thereceiving party may obtain. The receiving party shall only disclose suchconfidential information to those of its employees, agents or subcontractors whoneed to know the same for the purpose of performing the receiving party’s
obligations under the contract, and shall ensure that such employees, agents or
subcontractors shall keep such information confidential. Any reference topurchase contract or order of Heraeus or to the relationships existing between
Heraeus and the supplier with respect to advertising materials produced by the
supplier or to the communications to third parties by the supplier shall be
previously approved by Heraeus in writing.
11 Cancellation and Termination
11.1 Heraeus may cancel purchase order(s) or any portions thereof for any
reason by written notice prior to delivery. Cancellation shall be effective upon
the supplier’s receipt of the written notice from Hereaus, or thereafter upon thedate specified in such cancellation notice. The supplier shall cease operation on
subject purchase order(s) in accordance with the cancellation notice. Heraeus
will have no liability for cancelled purchase orders other than as set forth inclause 11.2.
11.2 In the event of a cancellation under clause 11.1, upon provision of therelevant documents and proofs by the supplier supporting the amounts of its
costs incurred in connection with the cancelled purchase order prior to theeffective date of the cancellation (but only to the extent that the supplier cannot,
by using reasonable endeavors, reduce or mitigate them), Heraeus will pay the
supplier for such reasonable costs, and the supplier will deliver to Heraeus(unless otherwise directed by Heraeus’ purchasing department) all completedparts, parts in process, all components procured on account of subject
purchase order(s), and any tooling and equipment owned by Heraeus.
11.3 Heraeus may terminate the contract immediately and withoutcompensation to the supplier by giving the supplier notice to that effect if at any
time: (a) the supplier commits a material or persistent breach of the contract, (b)the supplier becomes insolvent or bankrupt, makes an involuntary arrangementwith its creditors during liquidation process, enters into administration or go into
liquidation, or a receiver or other security holder is appointed over all of any partof the supplier’s assets or undertakings; or (c) in the circumstances set out inclauses 5, 6.1 and 12.2.

12 Heraeus Code of Conduct
12.1 Supplier hereby commits to Heraeus to comply with all legally binding rules
and regulations, in particular with all applicable laws for the protection of faircompetition, all export and import prohibitions in force, all applicable customs
and tax regulations as well as all applicable legal regulations for the protectionof the environment, and not to offer, promise, or grant any benefits to employees
of Heraeus as consideration for the preferential treatment in the procurement of
products or services ("bribery"), to ban forced and child labor, and to ensure forits own staff payment of wages in accordance with all applicable labor laws,
appropriate working hours, safety at work and a non-discriminating working
environment and, in the case of subcontracting, to also bind its subcontractors
by the foregoing provisions.
12.2 Heraeus may terminate this Contract without notice in the event that
Supplier commits a breach of its obligations set forth in the preceding para-graph.
Supplier commits to pay liquidated damages in the amount of 10% of the ordervalue to Heraeus in the case of bribery, violation of the applicable laws for theprotection of fair competition, or violation of the applicable labor laws governing
the payment of wages, if the bribery or violation is to the detriment of Heraeus.
13 Miscellaneous
13.1 The place of performance for all payments between Heraeus and the
supplier is the registered place of business of Heraeus.
13.2 These General Terms of Purchase and any agreement between Heraeus
and the supplier shall be governed by and construed in accordance with thelaw of the People’s Republic of China, without giving effect to its conflict of law
provisions and without giving effect to the UN Convention on Contracts for
the International Sale of Goods (CISG).
13.3 Heraeus and the supplier will first attempt to settle all their legal andtechnical disputes through negotiation. If no compromise can be reached, thenthe people’s court at Heraeus’ jurisdiction, shall be the competent courts for all
legal actions that may arise between the parties.
However, Heraeus shall be entitled to bring, at its sole discretion, an action
against the supplier also at the supplier's place of business or at the place ofperformance.

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