Gulhfi AG - General Conditions

(English translation of the binding German version)

A GENERAL ASPECTS

A 1 General Aspects A 1.1 The contract shall be deemed to have been entered into upon receipt of the processor’s written confirmation stating acceptance of the order (confirmation of order). Tenders which do not stipulate an acceptance period shall not be binding.

A 1.2 These conditions shall be valid if declared applicable in the tender or in the confirmation of order or if they are attached to one of these documents. Any conditions stipulated by the customer which are in contradiction to these general conditions for the delivery of coated components shall only be valid if expressly acknowledged by the processor in writing.

A 1.3 All agreements and legally relevant declarations, notifications, etc. of the parties to the contract must be in written form to be valid.

A 1.4 If one of the provisions contained in these general conditions for the delivery of coated components should prove to be wholly or partially invalid, then the contracting parties will replace such provision with a new agreement which comes as close as possible to the legal and economic result of the provision to be replaced.

A 1.5 These conditions apply to work which is carried out by processor according to the customer’s instructions and documents, (such as e.g. drawings, material and work descriptions, parts lists, etc.), using his own or other material at own cost.

A 1.6 Clause 1.2 shall be equally valid for any further provisions which are attached to the tender or the confirmation of order and which are mentioned therein as being applicable. In the event of any discrepancies such further provisions shall prevail over these conditions if they refer to a special circumstance.

A 2 Scope of Delivery and Performance

A 2.1 The processor shall carry out the work in accordance with the technical specifications and in a proper and workmanlike manner.

A 2.2 If in the performance of the contract the processor discovers defects in the work as a result of errors or omissions in the technical documents and information provided by the customer or as a result of defects in the material provided by the customer, then the customer shall remedy any such defects, errors or omissions. Any extra costs incurred by the processor as a result of such defects or as a result of the remedy of such defects shall be for the customer’s account and shall be invoiced in addition to the contract price. The processor shall not be responsible for discovering errors or omissions in the technical documents and information provided by the customer.

A 2.3 If in the performance of the contract the processor discovers shortages in the material, he shall inform the customer forthwith who shall make good the shortage, at no cost to the processor.

A 2.4 Any variations from the agreed upon specification of the work or of the method of performance of such work shall not be admissible unless agreed upon by both parties.

A 3 Tools and Equipment

A 3.1 Shared Tool Costs

A 3.1.1 The procurement of standard tools shall be the responsibility of the processor.

A 3.1.2 Tools made by the processor for the purposes of the contract (hereinafter referred to as „special tools“) shall remain the property of the processor, even if the customer paid part of the costs of the tools. However, if the processor is unable or unwilling to execute any further orders from the customer for processing goods using the „special tools“, to the cost of acquisition of which the customer contributed over 50 %, within a reasonable period of time or at fair and reasonable prices and if the customer has discharged all his obligations to the processor under the terms of the contract or otherwise, the customer shall be entitled upon giving notice in writing and payment of that part of their cost of acquisition the processor had carried to have the „special tools“ transferred to him, whereupon they shall become the customer’s property.

A 3.1.3 The customer shall be entitled to purchase those „special tools“ which were manufactured especially for the customer’s corresponding order within a reasonable period after the completion of the contract during which the processor shall keep the tools in his care, at the longest until expiry of the guarantee period (Clause 13), at a price to be agreed upon.

A 3.2 Customer’s Tools Any jigs, fixtures, templates, cutting tools, measuring instruments, moulds, materials, tools and equipment forwarded to the processor by the customer or paid in full by the customer are the customer’s property and may be used only for performing work for the customer. These items shall be stored, used and maintained in workmanlike conditions by the processor. The costs incurred to repair or replace such items excessively worn or lost shall be borne by the processor where damage or loss is caused by negligent acts or omissions on the part of the processor. The processor undertakes to return such items to the customer on completion or earlier termination of the contract.

A 4 Waste and Quantity

Tolerances In respect of any items which become waste within the agreed tolerance (see Clause B 3), the customer will not be reimbursed for the material costs and the processor will not be reimbursed for the processing costs. For any items which become waste outside of the agreed tolerance, the processor will reimburse the customer for the cost price of the material which is indicated in the order.

A 5 Technical Documents

A 5.1 Brochures and catalogues are not binding unless otherwise stipulated. Particulars stated in technical documents shall only be binding if they have been explicitly guaranteed.

A 5.2 Each contracting party retains all rights to the technical documents it handed over to the other party. The party receiving such documents recognises these rights and shall not – without the prior written consent of the other party - make these documents available to any third party in whole or in part, nor use them for purposes other than those for which they were handed over.

A 5.3 The processor shall be provided with the necessary technical documents such as drawings, samples or sequences of operations, treatment and inspection procedures.

A 5.4 On completion or earlier termination of the contract, unless otherwise agreed, each party shall immediately return the technical documents to the other party which it received from said party.

A 6 Regulations in the Country of Destination and Safety Devices

A 6.1 At the latest when placing the order the customer must draw the processor’s attention to the regulations and norms which apply to the execution of deliveries and services, to operating procedures and to the prevention of illness and accidents.

A 6.2 In the absence of any agreements to the contrary, the deliveries and services shall correspond to the regulations and norms at the processor’s registered office or the applicable CE norms. Additional or other safety devices shall also be delivered to the extent that this has been explicitly agreed upon.

A 7 Price

A 7.1 Unless agreed otherwise in writing, all prices shall be deemed to be ex works of the processor, excluding packing, in freely disposable Swiss francs and without any deduction whatsoever.

A 7.2 Any and all additional charges such as, but not limited to, freight charges, insurance premiums, fees for export, transit, import and other permits, as well as for certifications, shall be borne by the customer.

A 7.3 The customer shall likewise bear any taxes, fees, levies, customs duties and the like which are levied out of or in connection with the contract or shall refund them to the processor against adequate evidence if the processor became liable to pay them.

A 7.4 The processor reserves the right to adjust the prices if a sliding price has been agreed.

A 7.5 In addition, an appropriate price adjustment shall apply if the delivery time is subsequently extended due to any reasons stated in Clause 12.3 or if the nature or the scope of the agreed deliveries or services has changed or any documents provided by the customer did not conform to the actual circumstances or were incomplete.

A 8 Terms of Payment

A 8.1 Payments shall be made according to the agreed terms of payment at the processor’s domicile, without any deductions for cash discount, expenses, taxes, levies, fees, duties or the like. If no date of payment is agreed upon in writing, payment shall be due thirty (30) days after delivery.

A 8.2 The obligation to pay shall be deemed to have been discharged insofar as the amount due is at the processor’s free disposal at its domicile.

A 8.3 The dates of payment shall also be observed if processing of the orders is delayed or prevented for reasons beyond the processor’s control or if post-delivery work proves to be necessary but does not prevent the use of the processed items.

A 8.4 If the customer does not comply with the agreed dates of payment, he shall be liable, without reminder, for interest with effect from the agreed date on which payment was due, at a rate depending on the normal interest conditions at the customer’s domicile, but not less than four per cent (4 %) over the current discount rate of the Swiss National Bank. The right to claim further damages is reserved.

A 9 Packing

A 9.1 Where the contract so provides, the processor shall ensure that the processed goods are packed appropriately for dispatch after completion of the order. The costs of packing will be charged separately to the customer. Any packaging and transport equipment provided by the customer shall be returned to the customer at his expense.

A 9.2 Delivery of materials, tools, work pieces, etc. to the processor for the purpose of processing and delivery from the processor to the customer or to a third party designated by the customer shall be carried out in all respects for the account and at the risk of the customer, unless stipulated otherwise.

A 10 Dispatch, Transport and Insurance

A 10.1 Any special instructions regarding dispatch, transport and insurance are to be communicated to the processor in good time. Transport is carried out for the account and at the risk of the customer.

A 10.2 Complaints in connection with dispatch or transport are to be addressed immediately to the last freight carrier by the customer upon receipt of deliveries or freight documents.

A 10.3 Insurance to cover damages of any kind is the responsibility of the customer.

A 11 Transfer of Risk

Risk passes to the customer at the latest upon departure of the deliveries from the processor’s works. If dispatch is delayed at the request of the customer or for other reasons for which the processor is not responsible, then risk shall pass to the customer at the point in time originally scheduled for the goods to be dispatched from the processor’s works. From this point in time onwards the deliveries shall be stored and insured for the account and at the risk of the customer.

A 12 Delivery Time for Processing / Flat-Rate Compensation for Damages

A 12.1 The delivery time for processing the order shall start as soon as the contract is entered into, the main technical points have been settled, payments due with the order have been made, any securities agreed upon have been provided and any official formalities required have been completed. The delivery time shall be deemed to have been complied with if the processed items are ready for dispatch in the processor’s works on the date the delivery time expires.

A 12.2 It is a requirement for compliance with the delivery time for the customer to have discharged his contractual obligations.

A 12.3 The delivery time shall be extended by a reasonable period of time (a) if information required by the processor for performance of the contract is not received in time or if the customer makes subsequent modifications, thereby causing a delay in the processing of the order; (b) if hindrances occur which the processor cannot prevent despite exercising due care, regardless of whether they occur with the processor, the customer or a third party. Such hindrances shall include but not be limited to epidemics, mobilization, war, revolutions, serious breakdowns in operations, accidents, labour conflicts, late or deficient delivery by subcontractors, the need to scrap important work pieces, actions or omissions by any state authorities or public bodies, natural catastrophes, acts of God. (c) if the customer or third parties are behind schedule with work they have to execute or if the performance of the customer’s contractual obligations, in particular compliance with the agreed terms of payment, is delayed.

A 12.4 The customer shall be entitled to claim compensation for delayed completion of the order in so far as it can be proven that the delay was caused by the processor and that the customer suffered a loss as a result of such delay. If substitute material can be supplied to accommodate the customer, the latter shall not be entitled to claim compensation for delay.

A 12.5 Compensation for delayed delivery shall not exceed a half per cent (½ %) for every full week’s delay and shall in no case whatsoever altogether exceed five per cent (5 %) of the price of the respective processing contract. No compensation at all shall be due for the first two (2) weeks of the delay.

A 12.6 After reaching the maximum damages for delayed delivery, the customer shall grant the processor a reasonable extension of time in writing. If a delay exceeding the above-mentioned extension of time for which the processor is responsible results in a situation which is economically unacceptable to the customer, the latter shall be entitled to withdraw from the contract against payment to the processor for that part of the order which has already been completed.

A 12.7 If a precise date is agreed upon instead of a delivery time, then this shall be equivalent to the last day of a delivery time; Clauses 12.1 to 12.6 shall be applicable by analogy.

A 12.8 Any delay in completion of the order shall not entitle the customer to any claims other than those explicitly stipulated in Clauses 12.4 to 12.6. This limitation shall, however, not apply to unlawful intent or gross negligence on the part of the processor, unless unlawful intent or gross negligence attaches to persons employed or appointed by the processor to perform its obligations.

A 13 Warranty Period (Guarantee Period)

A 13.1 The guarantee period amounts to twelve (12) months. It begins upon dispatch of the deliveries from the processor’s works or upon any acceptance of deliveries and services agreed in writing or, if the processor also assumed responsibility for assembly, upon completion thereof. If dispatch, acceptance or installation is delayed for reasons beyond the processor’s control, the guarantee period shall end no later than eighteen (18) months after notification that the goods are ready for dispatch.

A 13.2 The guarantee period for replaced or repaired parts will last either until the original guarantee expires or it starts afresh and lasts six (6) months as of replacement, completion of the repair or acceptance. The longer of these two periods shall apply.

A 13.3 All the processor’s obligations under guarantee shall expire no later than twentyfour (24) months from the beginning of the original guarantee period.

A 13.4 The guarantee shall expire prematurely if the customer or third parties carry out inappropriate modifications or repairs or if the customer, should a defect occur, does not immediately take all appropriate steps to limit the damage and give the processor the opportunity to remedy such defect.

A 14 Liability for Defects in Material, Design and Execution

A 14.1 If requested to do so by the customer in writing, the processor shall at his option repair or replace as quickly as possible all parts of the processor’s deliveries which it can be proven became defective or unusable due to faulty material, a flawed design or faulty workmanship before the expiry of the guarantee period. Replaced parts shall become the processor’s property. The processor shall bear the costs accruing in his works for repairs or reprocessing in accordance with Clause 13. If it is not possible to carry out such repairs or reprocessing in the processor’s works or if it involves unreasonable expenses, the processor will bear the costs for the corresponding repair or reprocessing which occur outside his works to such extent as such costs are reasonable under the circumstances prevailing. All additional costs shall be charged to the customer.

A 14.2 If the value of the item to be processed by the processor exceeds the price of the processing contract, the processor’s liability to provide compensation as described in Clause 13 shall be limited to the price of the processing contract.

A 15 Liability for Guaranteed Properties

A 15.1 Only those properties which are designated specifically as being guaranteed in the order confirmation or specifications shall be deemed to be guaranteed properties. This guarantee shall end no later than the expiry date of the guarantee period. If an inspection test has been agreed upon, this guarantee shall be deemed to have been complied with if proof of the relevant properties is provided on the occasion of such test.

A 15.2 If the guaranteed properties are not complied with or are only partly complied with, the customer shall first of all have a right to immediate repair by the processor. The customer must grant him the necessary time and opportunity to do so.

A 15.3 If this repair is not successful or is only partly successful, the customer shall have a right to the compensation agreed upon for such event or, if no such agreement was stipulated, to an appropriate reduction of the price. If the defect is so serious that it cannot be repaired within a reasonable period of time and if the deliveries or services cannot be used for the notified purpose or can only be used to a significantly reduced degree, the customer shall have the right to refuse acceptance of the defective part or, if a partial acceptance cannot reasonably be expected of the customer from an economic point of view, to withdraw from the contract. In such event the processor can only be obliged to reimburse those amounts which he was paid in respect of the parts affected by the withdrawal from the contract.

A 16 Limitation of Liability

A 16.1 Exclusions from liability for defects

A 16.1.1 Defects which it cannot be proven arose as a result of faulty material, a flawed design or faulty workmanship but which occurred for example as a result of natural wear and tear, inadequate maintenance, disregarding operating instructions, excessive load, chemical or electrolytic influences, assembly or installation work not carried out by the processor or for other reasons for which the processor is not responsible shall be excluded from the processor’s guarantee and liability.

A 16.1.2 The processor’s obligations with respect to guarantee and liability shall be limited in all cases to the claims explicitly mentioned in Clauses 13 to 15 and the processor shall only be obliged to provide compensation for the direct costs of the measures listed. The processor shall not under any circumstances be liable for any indirect or consequential damages such as production downtimes, loss of use, loss of orders, loss of profit and any other indirect or consequential damages. This limitation on liability, however, does not apply to unlawful intent or gross negligence on the part of the processor, unless unlawful intent or gross negligence attaches to persons employed or appointed by the processor to perform its obligations. Furthermore, these limitations on liability do not apply if they are contrary to mandatory law.

A 16.2 Deliveries and Services from Sub-Contractors In respect of deliveries and services from sub-contractors which are stipulated by the customer the processor will only assume a guarantee within the limits of the obligations under guarantee of the respective sub-contractors.

A 16.3 Liability for Accessory Obligations The processor shall only be liable with respect to claims made by the customer invoking inadequate advice and the like or invoking a breach of any accessory obligations in the event of unlawful intent or gross negligence.

A 16.4 Liability in Relation to Delivery or Processing of Medical Implants If medical implants are delivered or processed, the processor refuses any liability with respect to the medical suitability of the said implants and liability shall be explicitly limited to the correct execution of the order specified by the customer and the use of the specified materials.

A 16.5 Exclusivity of the Claims under Guarantee The customer shall have no rights or claims due to defects in material, design or execution or due to the absence of guaranteed properties other than those rights and claims stipulated explicitly in Clauses 13 to 16.4.

A 16.6 Exclusivity in relation to Consultancy Services In terms of Consultancy Services, Gulhfi AG will make recommendations and suggestions to support Customer’s demands in technical and commercial aspects. All those activities will be performed only under Customer’s responsibility and Gulhfi AG shall not be liable for or responsible for any consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses, or losses in connection with these activities. Nor shall be liable for any claim or demand against Gulhfi AG by any third party.

A 17 Non-Performance, Defective Performance and the Consequences

A 17.1 In all those cases of defective performance or non-performance not explicitly regulated in these conditions, in particular if the processor is so late in starting with the execution of the deliveries and services that it is unforeseeable that he will complete the work in due time, or if it is clearly foreseeable that execution will be in breach of the contract due to a fault for which the processor is to be held responsible or if deliveries or services were executed in such a manner that they are in breach of the contract and the processor is to blame, the customer shall be entitled to grant the processor an appropriate additional period of time with regard to the respective deliveries or services, warning the processor that he will withdraw from the contract if the processor fails to comply. If this additional period of time passes unused and the processor is to blame, the customer may withdraw from the contract with respect to those deliveries and services executed in such a manner that they are in breach of contract, or with respect to those deliveries and services the execution of which it is clearly foreseeable will be in breach of contract, and demand reimbursement of the corresponding portion of payments already made.

A 17.2 In such a case the provisions contained in Clause 19 shall apply with regard to any claim to compensation on the part of the customer and the exclusion of further liability and the claim to compensation for damages is limited to ten per cent (10 %) of the contractual price of the deliveries and services which are the subject of the withdrawal from the contract.

A 18 Termination of Contract by the Processor

A 18.1 If unforeseen events cause substantial changes in the economic significance or the content of the deliveries or services or have a substantial effect on the processor’s work, or if it subsequently proves impossible to perform the work, the contract will be adjusted appropriately. If this is unreasonable from an economic point of view, the processor shall have the right to terminate the contract or the respective parts of the contract.

A 18.2 Should the processor wish to make use of his right to terminate the contract, he must notify the customer immediately as soon as he realises the extent of the consequences of the event, even if an extension of the delivery date was initially agreed upon. In the event of termination of the contract, the processor shall have a right to payment of the deliveries and services already executed. The customer shall have no right to claim compensation for damages based on such termination of contract.

A 19 Exclusion of Further Liability for the Processor

Any cases of breach of contract and their legal consequences and any claims of the customer, regardless of which legal grounds are invoked, are dealt with conclusively in these conditions. In particular all claims to compensation for damages, abatement, annulment of the contract or withdrawal from the contract which are not listed are excluded. Under no circumstances shall the customer have a claim to compensation for damages which did not occur to the delivery item itself, such as in particular production downtimes, loss of use, loss of orders, loss of profit or any other indirect or consequential damages. This exclusion of liability shall not, however, apply to unlawful intent or gross negligence on the part of the processor, unless unlawful intent or gross negligence attaches to persons employed or appointed by the processor to perform its obligations. For the rest, this limitation on liability shall not apply if it is contrary to mandatory law.

A 20 Mutual Right of Recourse

A 20.1 If persons are injured or third party property is damaged due to culpable actions or omissions on the part of the customer or the processor or their auxiliary personnel and if – based thereon –- claims for compensation to damages are raised against one of the parties which the other party was culpable in causing, the party against which claims are raised for damages for which the other party is to blame shall have a right of recourse against the other party.

A 20.2 The damages which can be claimed based on this right of recourse depend on the injured party’s statutory legal claims and the amount of compensation for damages which the party causing the damages is obliged to pay. The party which requests indemnification from the other party will grant the latter the right to participate in court proceedings and in any negotiations for a settlement and to contribute for its part as far as possible to a limitation of the damages.

A 21 Assembly

If the processor also assumes the task of assembly or of supervising assembly, then the general conditions of assembly of SWISSMEM (Swiss Mechanical and Electrical Engineering Industries) shall apply.

A 22 Copyright

If the processor draws up detailed documentation based on general processing notes or general specifications provided by the customer, these shall be the sole property of the processor. The customer shall have no claim to surrender of these documents – except in special emergencies or in bankruptcy proceedings in respect of the processor. If the documents are handed over, the customer must pay for them.

A 23 Confidentiality

The parties undertake to treat as confidential all documents and information which are not accessible to the public and which they may receive from the other party or which they already received prior to the conclusion of a contract; they likewise undertake not to allow third parties access thereto and only to use such documents and information for the purpose for which they were handed over or disclosed. The duty of secrecy shall lapse if such documents and information become known to the public through no fault of the party which received the documents or information or if the party which received them can prove that it already had such documents and information at its disposal prior to disclosure by the other party. This duty of secrecy shall apply for a period of five (5) years, beginning on the date of the conclusion of the contract. If a special confidentiality agreement was entered into, this shall take precedence over the present provision.

A 24 Jurisdiction and Applicable Law

A 24.1 The place of jurisdiction for both the customer and the processor shall be Winterthur. The processor shall, however, be entitled to sue the customer at the latter’s registered office.

A 24.2 The legal relationship between the customer and processor shall be governed by Swiss substantive law.

SPECIAL PART B Coating Orders with Material Supplied by the Customer

B 1 Deliveries of Materials

B 1.1 Any material or semi-finished products to be supplied by the customer shall be delivered within the time agreed upon. The customer shall bear the risk of loss or damage, providing that the processor is not responsible for this in any way.

B 1.2 As soon as possible after receipt of the material delivered by the customer, the processor shall subject the same to a reasonable visual examination and shall inform the customer forthwith of any defects in or damage to such material or shortages which were apparent upon such inspection. However, the responsibility for correct delivery of the material to be processed remains with the customer and the processor shall not assume any liability for inspections not carried out properly or not carried out in full. The customer shall replace such defective or damaged material or shortages within a reasonable period of time after such notification or shall decide on any further action to be taken to remedy the deficiency.

B 1.3 At the request of the customer and in accordance with the respective written agreement, the processor shall insure the material at the customer’s expense for the period of time during which it is in the processor’s possession against those risks stated by the customer. The costs of the insurance shall be invoiced to the customer in addition to the contract price.

B 2 Inspection and Acceptance

B 2.1 The processor shall inspect the processed items before dispatch as far as is normal practice. If the customer requests further testing, this has to be agreed upon in writing and paid for by the customer.

B 2.2 The customer shall inspect the processed items within a reasonable period of time and shall immediately notify the processor in writing of any shortfalls and/or any defects identifiable on such inspection. The processor shall reprocess free of charge any work pieces which do not correspond to the binding documents in respect of the execution of the order, insofar as this is possible. If the work pieces cannot be reprocessed, the processor must process new work pieces delivered by the customer. The processor shall be liable for the additional transport costs incurred thereby.

B 2.3 The customer shall have no further claims against the processor in relation to defects in processed items.

B 2.4 The customer shall be entitled to carry out inspections during the processing work at the processor’s premises during normal working hours upon reasonable notice.

B 2.5 Conducting an inspection for acceptance shall require a special written agreement.

B 2.6 The processed items shall be deemed to have been accepted even if an inspection agreed upon cannot be carried out on the date scheduled due to reasons beyond the processor’s control or if the customer refuses to grant acceptance without being entitled to do so or if the customer refuses to sign an acceptance report which corresponds to the facts or if the customer uses the processed items.

B 3 Waste

B 3.1 If the material supplied by the customer for processing becomes unusable for reasons for which the processor is responsible, the customer shall, unless otherwise agreed, replace such material at his own expense if the material to be replaced does not exceed five per cent (5 %) of the quantity supplied. This shall also apply to higher waste ratios if the processor was not culpable in causing the damage.

B 3.2 If the waste ratio exceeds five per cent (5 %) or the percentage agreed upon in writing and the processor was culpable in causing the damage, the customer shall supply the replacement material to the processor at cost price. The cost price of materials is to be stated in the order.

B 4 Ownership of the Goods to be Processed

B 4.1 Any material supplied to the processor by the customer shall remain the property of the customer. The processor shall store the material at his own expense, keeping it separate and in accordance with common practice. The material shall be used for the performance of the respective contract and for no other purpose.

B 4.2 Unless otherwise agreed in writing, the benefit and risk in respect of the material supplied shall remain with the customer during the processing work.

B 5 Processor’s Lien and Right of Retention

If the customer does not discharge his obligations to pay, the processor has the right to retain the processed goods until the processing price has been paid in full and further to claim a lien in respect of the material to the extent of payments not received in order to cover the expenditure which occurred as a result of failure to pay.

B 6 Applicable Law

The parties are fully aware that CISG (the United Nations Contract for the International Sale of Goods) does not apply to contracts for the delivery of goods to be manufactured or produced if the processor does not have to procure the raw materials required for the manufacture or production of such goods by itself.

(Version dated 01 February 2017)