PURCHASE CONTRACT - smlouvy.gov.cz

TEPl/aSNY Bf«40

"Provision of original spare parts for major outage and operation of Siemens SGT-1000 (V64.3A) combustion turbine"

Buyer's registration No.

CZ46347534

Seller's registration No.

HRB6684

PURCHASE CONTRACTTeplárny Brno, a.s.

registered office represented by:

ID No.:DIČ:Banking information: Account number:

Okružní 828/25, 638 00 Brno - Lesná Mgr. Petrem Hladíkem, Chairman Ing. Petr Fajmon, MBA, Více Chairman

46347534 CZ46347534 Komerční banka, a.s.32606-621/0100

registered in Commercial Register administered by Regional Court in Brno section B, file 786

Contact persons: in business matters:

in technical matters:

of the one part, hereinafter referred to as the "Buyer

and

SIEMENS AKTIENGESELLSCHAFT

Registered office: Wittelsbacher Platz 2, 80333 MünchenID No.: HRB6684, WEEE-Reg.nr DE23691322bank details: Commerzbank München, GermanyAccount number: 221321300, BLZ 70040041, SWIFT COBADEFF700,

IBAN DE17700400410221321300acting through: Dirk Janz, Karsten Rehnisch, Hagen Zebisch.registered in Commercial Register administered by Regional Court in München section B file 6684

of the other part, hereinafter r^erred to as the "Seller"

concluded pursuant to § 2079 et seq. of Act No. 89/2012 Coll., Civil Code, the followingPurchase Contract ("the Contracť'):

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DEFINITIONS, GENERAL REFERENCES

1. Definitions

"Affiliate": means in relation to a party, any company, corporation or other legal entity (hereinafter in this definition referred to as an "entity") which directly or indirectly: (a) is controlled by such party; or (b) controls such party; or (c) is controlled by an entity which directly or indirectly controls such party. For the purposes of this definition (i) an entity is directly controlled by another entity if such other entity holds shares, quotas or voting rights carrying in the aggregate fifty per cent (50%) of the votes exercisable at shareholder meetings (General Meetings).

"Applicable Laws": Any present or future requirement, instruction, direction, permit, consent, authorization, rule of law issued by any Competent Authority, which is or becomes legally binding including but not limited to any precedents or judgments of the competent courts.

"Change Order" as detailed in Clause XV(2)

"Competent Authority": Any local, national or international agency, authority, department, inspectorate, minister, ministry or public or statutory person (whether autonomous or not), union having jurisdiction in or over this transaction; the country where the power plant is located.

"Delivery" as detailed in Clause V(3)

"Amount of interest for late payment" as defined in Clause IX

"Delivery Date": The date stated in Clause 11(2)

"Equivalent Operating Hours (EOH)": the result of calculation of equivalent operating hours determined in conformity with the newest regulations for calculation of equivalent operating hours, which the Buyer receives from its manufacturer of original equipment (OEM).

"EOH Calculation" is specified in Annexe No. [10] hereto.

"Escalated Price": is a net price adjusted in conformity with the Escalation Formula as specified in detail in Appendix to the Contract.

"Original Equipment Manufacturer" or "OEM": Siemens AG as a manufacturer of the Gas Turbine.

"Escalation Formula": a formula specified in Appendix to the Contract, by which the net price is adjusted for the period from the basic date until the date of the respective invoice. Any change of the Escalation Eormula will be always approved by the Buyer.

"EZS and EPS": Electronic Security System and Electronic Fire Protection

"Force Majeure" as defined in Clause

"Intellectual Property Right": Any copyright, patent, registered design, design right, trade mark, trade name, trade secret or any application for any of the foregoing or any other intellectual property right.

"Lead Time": The lead time as specified in [Appendices 1-9].

"Major Outage" is a comprehensive examination and disassembly of the Gas Turbine for the purpose of replacement of all worn or damaged parts or equipment assemblies by the seime identical ones in terms of their function. The interval and the scope of activities are specified by manufacturer's maintenance and servicing instructions.

"Normal Carriage" shall mean transportation by road.

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"Other Parts" as defined in Clause VI(2.2)

"Termination Fee": the fee in the amount of EUR Buyer's termination for convenience as per Clause XI(4)

2. Conflicting Provisions

|to be paid by Buyer to Seller in case of (i)

In the event of any conflict between this document and any Appendices hereto, the terms and provisions of this document, as amended, shall prevail (meaning the later document shall have priority over the earlier one). If the priority of the documents cannot be determined based on time, then several documents forming part of this Contract are to be taken as mutually explanatory of one another and in the case of ambiguities or discrepancies within or between such parts the same shall be explained and adjusted by the mutual agreement of the parties. The text of the Contract shall have priority over the text of the Appendices.

Clause I. Subject-matter of the Contract

1. The subject-matter of this Contract is the supply of original spare parts by the Seller for the Siemens SGT-1000 (V64.3A) combustion turbine, i.e. the existing Buyer's equipment, serial No. 800 365 ("the Gas Turbine") for the Major Outage scheduled at 75,000 EOH and 100,000 EOH only (hereinafter the 'MO").

The Seller shall supply the following:

a) Turbine blades, i.e. row 1-3 for MO after 75,000 EOH, rows 1-4 for MO after 100,000. EOH as listed in Appendix 5 and Appendix 6.

b) Material for assembly of blades, i.e. rows 1 - 3 for MO after 75,000 EOH, rows 1 - 4 for MO after100,000 EOH as listed in Appendix 1 and Appendix 2. The assembly material for the rows of turbine blades will be in addition to the unused material in stock that remained after the previous MO. The material will be used where possible during the upcoming MOs with regard to the standards of the OEM. A stocktaking and update exercise will be undertaken before each MO by the Seller.

c) Reassembly material and replacement material, i.e. the material specified based on the experience of the OEM and the operator (Buyer). This involves those parts of the Gas Turbine regularly replaced during a MO. A list of reassembly and replacement material for MO after 75,000 EOH is specified in Appendix No. [3a] of the Contract. A list of reassembly and replacement material for MO after 100,000 EOH is specified in Appendix No. [3b] of the Contract.

d) Consignment warehouse parts, i.e. a list of components of daily maintenance and parts for repairs without the necessity of any major disassembly of the machine. A list of consignment warehouse parts is provided in Appendix 4 of the Contract.

(Clause 11(a) - (d) shall mean collectively "the original spare parts")

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2. Specification of the original spare parts

2.1 Turbine blades2.1.1 Turbine blades for MO after 75,000 EOH

2.1.2. Turbine blades for MO after 100,000 EOH

1.

2.

3.4.5.6.

7.8.

Turbine blade design will be in conformity with the current existing standards of the OEM of SGT- 1000 (V64.3A) turbine and originality of products will be marked by an identification mark of the manufacturer on the respective Turbine blade and in the documentation to the respective Turbine blade. The Seller will keep complete documentation of history of demounted blades and will make it available to the Buyer at any time. Title to the Blades demounted during MO after 75,000 EOH will become the Seller's property. The Buyer will provide the Seller with the used first and second stage blades of stator and rotor blades demounted from the machine during Major Outages in 2009, which are specified in Appendix No. 11 hereto.

After Major Outage after 100,000 EOH the Buyer will have two complete sets of used first stage and second stage stator and rotor blades one set removed from the Gas Turbine during the MO after75,000 EOH and the other set being removed from the Gas Turbine during the MO at 100,000 EOH. The two complete sets of used first stage and second stage stator and rotor blades are detailed in Appendix No. [llj.

2.2 Material for blade assembly

The Seller undertakes to supply original material for reassembly of Turbine blades in accordance with Clause 1.1(b).

2.3 Reassembly and replacement material

The Seller will provide original material for reassembly and original material for replacement of parts damaged by the disassembly in accordance with Clause 1.1(c). The reassembly and replacement material will be in addition to the unused material that remained, or will remain, as the case may be, from the previous MO. The residual material will be used during upcoming MOs, where possible with regard to the standards of the OEM. The list of these materials will be reviewed and updated before

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each MO by the Seller. All newly supplied materials must meet the updated and valid standards of the SGT-1000 (V64.3A) OEM. Undamaged and unused material with a price greater than EUR 1,000 will be taken back by the Seller, and the costs for its acquisition will be deducted (individual replacement parts or sets thereof).

2.4 Consignment warehouse parts

The Seller will provide the parts detailed in Clause 1.1(d) during the effectiveness of the requirements referenced in point 2.4.1 hereof. All material in the consignment warehouse must meet the SGT-1000 (V64.3A) OEM's updated and valid standards.

2.4.1 Conditions for establishment and running of the consignment warehouse

In order to establish a consignment warehouse the Buyer will detach premises in the building which the Buyer owns, in particular in Červený mljm premises. These premises will be further used by the Buyer, therefore they will not be rented to the Seller and the Seller will not have an obligation to pay rent for these premises. The premises will be guarded, secured (EZS and EPS), and insured at Buyer's cost. The Seller will deliver the consignment warehouse parts intended for storing in the consignment warehouse and will store them in the space provided by the Buyer, and Buyer will do respective stocktaking. The Buyer will have the right to take consignment warehouse parts from the warehouse as the Buyer may need. The Seller will subject to receiving Buyer's request replenish the taken spare part within the delivery time stated in Appendix No. 4. The conditions for taking of consignment warehouse parts from the consignment warehouse, their registration, and payment of their price are stated in Appendix [No. 7] of the Contract.

The Seller's obligation to operate the consignment warehouse and ensure fulfilment of all requirements related to its operation, unless this Contract is ended early pursuant to Clause XI, for a period of (a) 10 (ten) years from the date when this Contract takes effect, or (b) within 6 (six) months after the performance of the MO at 100,000 EOH, depending on which happens first. The period of effectiveness of the obligation to operate the consignment warehouse may be extended by the parties hereto, but up to a maximum of 3 (three) years. Such extension shall be subject to a written agreement between the parties hereto.

Clause II. Time and place of performance

1. The place of performance is customer's plant Červený mlýn at Cimburkova 2, Brno, hereinafter referred to as "PČM".

2. The Seller will deliver the original spare parts within the following periods and deadlines ("the Delivery Date"):

1. First stage stator blades - 30 days before the date of the Major Outage after 75,000 EOH and 30 days before the date of the MO after 100,000 EOH at the latest.

2. First stage rotor blades - 30 days before the date of the Major Outage after 75,000 EOH and 30 days before the date of the MO after 100,000 EOH at the latest.

3. Second stage stator blades - 30 days before the date of the Major Outage after 75,000 EOH and 30 days before the date of the MO after 100,000 EOH at the latest.

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4.

5.

6.

7.

8.

9.

10.

Second stage rotor blades - 30 days before the date of the Major Outage after 75,000 EOH and 30 days before the date of the MO after 100,000 EOH at the latest.Third stage stator blades - 30 days before the date of the Major Outage after 75,000 EOH and 30 days before the date of the MO after 100,000 EOH at the latest.Third stage rotor blades - 30 days before the date of the Major Outage after 75,000 EOH and 30 days before the date of the MO after 100,000 EOH at the latest.Fourth stage stator blades - 30 days before the date of the Major Outage after 100,000 EOH at the latest.Fourth stage rotor blades - 30 days before the date of the Major Outage after 100,000 EOH at the latest.Material for blade assembly - 30 days before the date of the Major Outage after 75,000 EOH and 30 days before the date of the Major Outage after 100,000 EOH at the latest.Material for blade reassembly and replacement material - 30 days before the date of the Major Outage after 75,000 EOH and 30 days before the date of the Major Outage after100,000 EOH at the latest.

3. The Buyer declares that as of 1 April 2015 the number of equivalent operating hours of the combustion turbine is 69,947 EOH.

4. The Buyer assumes that the Major Outage after 75,000 EOH will commence on 21 March 2016. The Buyer shall notify the Seller in writing of the exact date of the MO after 75,000 EOH at least 3 (three) months before that date. The exact date of the Major Outage after 100,000 EOH will be reported in writing by the Buyer to the Seller at least 12 (twelve) months prior to such final commencement date The parties hereto have agreed that the MO after 75,000 EOH will be commenced at the latest in 2017, and the MO after 100,000 EOH will shall be commenced in 2026 at the latest.

5. The Seller is not in default of performing its duties stated in the provisions of Clause II. 2. hereof in the case of a Force Majeure event disallowing delivery of the subject-matter of purchase.

Clause III. Purchase price

1. Buyer shall accept and pay for all original spare parts supplied by Seller under this Contract in accordance with Clause 1(1). The purchase price is stipulated by agreement of the contracting parties pursuant to the provisions of Section 2 et seq. of Act No. 526/1990 Coll., on prices, as amended as the highest admissible price as follows:

1.1. The purchase price for the supply of turbine blades for MO after 75,000 EOH amounts to lexcl. VAT and is documented in Appendbc [No. 5] to this Contract.

1.2. The purchase price for the supply of turbine blades for MO after 100,000 EOH amounts to Id. VAT and is documented in Appendbc [No. 6] to this Contract.

1.3. The purchase price for the supply of material of assembly of turbine blades row 1 to 3 for MO after 75,000 EOH amounts to ^^^^^^^|excl. VAT) and is documented in Appendix 1 to this Contract.

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1.4. The purchase price for the supply of material for assembly of turbine blades row 1 to 4 forMO after 100,000 EOH amounts VAT and is documented inAppendix 2 to this Contract.

1.5. The purchase price for the supply of material for reassembly and replacement for MO after75,000 EOH amounts excl. VAT and is documented in Appendix 3a tothis Contract.

1.6. The purchase price for the su 100,000 EOH amounts ti 3b to this Contract.

jly of material for reassembly and replacement for MO after pxcl. VAT and is documented in Appendix No.

1.7. The purchase price for supply of consignment warehouse parts amounts to EUR 0,00 excl. VAT and is documented in Appendix 4 to this Contract.

1.8. Total purchase price excluding VAT is EUI (in words: EUR Ten million eight hundrec fifty four Euro).

anlunded to EUR|

orty seven thousand one hundred and

2. The Seller will charge and the Buyer will pay for securing of the availability of Consignment Warehouse parts in the consignment warehouse an annual fixed lump sum starting from the 2'’<* year after Effective Date in the amount of EUR^^^^^r the duration of existence of the Seller's obligation to operate the consignment warehouse pursuant to Clause 1(2.4.1) hereof the prices of Consignment Warehouse parts taken by a contracting entity will be charged by the Seller and the Buyer will pay them according to the amount of the unit price specified n Appendix No. 4 - List of Consignment Warehouse Parts.

3. a) VAT according to valid and effective legal regulations will be added to the price pursuant to Clause in. as of the day of performed taxable supply. The Total purchase price and any other amounts to be paid to Seller under the Contract includes all taxes, charges, duties, fees, imposts and tariffs imposed on Seller by any taxing authority within Germany with respect to the transactions under this Contract at the Effective Date.

The Total purchase price excludes any taxes, charges, duties, fees, imposts and tariffs of any kind imposed on Seller by any taxing authority outside Germany with respect to the transactions under this Contract.

b) Any increases in any taxes, charges, duties, fees, imposts and tariffs that precede the Effective Date of this Contract by 28 (twenty eight) days as well as any other change in the Applicable Laws following the Effective Date shall be understood under the provisions of Clause XV(5).

c) In the event Seller or its subcontractors remit such taxes or charges directly to such taxing authority or authorities for any reason whatsoever such remittances shall be for the account of Buyer and shall be paid upon submission by Seller to Buyer of invoices thereof.

4. The purchase price will be valid minimally to 12/2016. In the years to follow, i.e. from 2017 onwards, the prices will be adjusted according to the Escalation Formula depending on inflation; the Escalation Formula is stated in Appendix 8 to the Contract.

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5. The contracting parties have agreed that if the Seller (provider of taxable supply) becomes an unreliable payer pursuant to the provisions of Act No. 235/2004 Coll., on value added tax, as amended, or the Seller requests payment for the taxable supply to another account than the account published by the tax administrator, the Buyer (recipient of the taxable supply) will be entitled to apply a special way of securing of tax according to Section 109a of the above Act. The recipient of the taxable supply will pay a part of the payment for the taxable supply corresponding to the amount of the value added tax directly to the tax administrator with local and subject-matter jurisdiction.

Clause IV. Method of purchase price settlement

1. The Total purchase price for the original spare parts will be settled in accordance with the payment schedule forming Appendix 9 to this Contract.

2. The payment for provision of the consignment warehouse parts will be paid always by 15 January of each calendar year until expiry of this Contract.

3. Payment of all invoices is 30 days of delivery of the invoice to the Buyer except as otherwise provided in this Contract. Buyer shall make payment by wire transfer to the account of the Seller as mentioned in Seller's respective invoice as Seller shall designate by written notice to Buyer. All invoices shall be paid in Euro. Payment shall be deemed accomplished upon credit on Seller's appointed bank account. Any payment shall be made free and clear of any deduction for taxes, assessments or other charges.

4. The invoice is a tax document and must meet all requirements pursuant to Act No. 235/2004 Coll., on value added tax, as amended.

The Buyer has the right to return the tax document to the Seller before the due date without getting in default of payment if it contains incorrect data, if any of the required items is missing, or if the copy of the handover report is missing. The new maturity period starts to run on the day of delivery of the corrected document to the Buyer. Thereafter, the payment of such disputed amount shall be deferred until such dispute has been resolved to the satisfaction of Buyer and Seller. Any dispute which is not resolved by mutual agreement shall be resolved in accordance with Clause XV(6). If there is a dispute about any amount invoiced by the Seller the amount not in dispute shall be promptly paid as described in this Clause IV and shall not be retained by Buyer.

5. Any payment, which has not been paid on the date when such payment has become due and payable shall be made with interest for delay at the statutory rate (Clause IX(1)), from the date due to the date of the payment received.

The Buyer shall not be obliged to pay any amount disputed in good faith pursuant to Clause IV(4) but any such disputed amount which is ultimately agreed or determined pursuant to Clause XV(6) to have been payable prior to the actual date of payment shall be paid with interest for delay, at the statutory rate (Clause IX(4)), calculated from the due date for payment pursuant to Clause IV(3), as if it had not been disputed, to the date of actual payment.

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"ProxAsion of original spare parts for major outage and operation of Siemens SGT-1000 (V64.3A) combustion turbine"

6. In case Seller is entitled to suspend any delivery or performance of any other obligation under this Contract in accordance with Clause XI(2) then any payment due after shall be effected upon Seller's written notice out of an irrevocable documentary letter of credit (hereinafter L/C) which shall;

(i) be advised and confirmed by a Czech bank one (1) month prior to scheduled Delivery; and(ii) be established by Buyer in favor of Seller for pa3mient of the purchase price of the

respective deliveries; and(iii) have a validity of at least 13 months; and(iv) allow part shipment by air / sea / road; and(v) be payable to 100% against presentation of commercial invoice and shipping documents

and records of the handover of the delivery to the Buyer

Seller's obligations under this Contract, shall only be in force after receipt of accepted L/C or accepted Contract Amendment thereto.

All expenses incurred in connection with the establishment, advice, confirmation and operation of such L/C shall be for the account of the Buyer.

The Contracting Parties hereby agree on a ban on reassignment and pledging of the Seller's receivables owed by the Buyer based on this Contract. The Seller is therefore neither authorised nor permitted to reassign any receivables based on this Contract to a third party, nor may the Seller pledge them. If this ban is violated, the Seller shall pay the Buyer a contractual penalty equal to the receivable transacted with at variance with the provisions in the previous sentence.

Clause V. Handover and acceptance of the original spare parts

1. The Seller undertakes to hand over the original spare parts to the Buyer within the deadliness according to Clause II of this Contract and the Buyer undertakes to accept the original spare parts, if they are free of defects.

2. Together with the original spare parts the Seller will be bound to hand over to the Buyer all documents regarding the original spare parts which is a condition for acceptance of original parts by the buyer.

3. Delivery of the original spare parts supplied under this Contract shall be made DDP Site (Incoterms 2010). Legal and equitable title to the original spare parts or component thereof shall pass from Seller to Buyer upon full payment of their purchase price. Risk of loss of the original spare parts shall pass from Seller to Buyer upon Delivery. Any Delivery or transportation hereunder shall be made by Normal Carriage. Buyer and Seller agree that the Contract Price does not include any storage cost. Buyer may request different forms of transportation pursuant to a Change Order under Clause XV(2).

In the event that Buyer is unwilling or unable to timely receive any parts to be delivered by the Seller, Seller shall give Buyer written notice thereof and request the Buyer in writing to instruct within reasonable time how to proceed with the respective part(s). Failing such instruction given within reasonable time Seller shall be entitled to store the respective part at the expense of the Buyer by choosing one of the following options;

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"Provision of original spare parts for major outage and operation of Siemens SGT-1000 (V64.3A) combustion turbine”

(i) store the relevant parts to be delivered (DDP Incoterms 2010) in a storage location in Brno, or

(ii) place the relevant parts into the storage location of a manufacturing, warehousing or repair facility in the Czech Republic,

In the event that Buyer exercises its right stipulated in the previous paragraph, the parts in question shall not be handed over but Seller will be entitled to the purchase price of the parts. Following the storage of the parts Seller shall inform Buyer in writing about the place of storage of the parts and shall enable Buyer to take over the parts at the storage location.

4. Both parties will make and sign a written handover report of handover and acceptance of the original spare parts.

5. The Seller will be entitled to hand over the original spare parts before the date stated in this Contract.

6. In the event that approvals, permits or licences are required at PČM. Buyer shall be responsible for obtaining all necessary approvals, permits and licenses from Competent Authorities including any import and export licenses. Notwithstanding any other provision herein, the obligation of Buyer to effect any payment under this Contract shall not be affected by any delay or failure to secure or renew, or by the cancellation of any such necessary approvals, permits or licenses.

Clause VI. Guarantee

1. In no case shall this Contract be interpreted that the warranties granted hereinafter refer to any parts or services not supplied or provided by the Seller under this Contract or in connection with it.

2. The Warranty has been agreed upon as follows:

2.1 Seller warrants that the Turbine blades provided to Buyer under Clause I(l)(a), including any Turbine blade repaired or replaced by Seller under this Turbine blade warranty, will be free of defects in workmanship and material until the earlier of:

If during this warranty period any Turbine blade fails to comply with the above warranty. Buyer shall promptlynotify Seller in writing (in accordance with Clauses 3 and 4 below) of the defect within the above period and Seller shall at its option and expense and as its exclusive remedy, either:

repair; orreplace the defective Turbine blade with a new or used Program Part; orin case the Seller is unable to repair or to replace the defective Turbine blade the Seller willprovide Buyer a discount in the form of a credit note for the defective Turbine blade.

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Any Turbine blade replaced pursuant to this Clause shall be deemed to have a scrap value of 0 € and shall be returned by Buyer to Seller along with free and clear title thereto if Seller so requests.

2.2 Seller warrants that the Material for assembly of blades provided to Buyer under Clause I(l)(b) and the Reassembly material and replacement material provided to Buyer under Clause I(l)(c) (collectively "the Other Parts"), including any Other Parts repaired or replaced by Seller under this Other Parts warranty (including parts from the consignment store), will be free of defectsin workmanship and material until the earlier of:

If during this warranty period any Other Part fails to comply with the above warranty. Buyer shall promptly notify Seller in writing (in accordance with Clauses 3 and 4 below) of the defect within the above period and Seller shall at its option and expense and as its exclusive remedy, either:

repair; orreplace the defective Other Part with a new or used Other Part, orin case the Seller is unable to repair or to replace the defective Other Part the Seller will provide Buyer a discount in the form of a credit note for the defective Other Part.

Any Other Part replaced pursuant to this Clause shall be deemed to have a scrap value of 0 € and shall be returned by Buyer to Seller along with free and clear title thereto if Seller so requests.

2.3 Seller warrants that during the Term of the Contract, unless delayed due to Force Majeure or any act or omission by Buyer or Buyer's subcontractors. Seller shall deliver any Turbine blades and Other Parts within the Lead Time and at the Delivery Date.

If the actual Delivery timedue to reasons solely attributable to Seller, exceeds the Lead Time or the Delivery Date then Seller shall pay to the Buyer, as Seller's sole liability and Buyer's exclusive remedy, liquidated damages for such delayed item. Such liquidated damages shall be 0,5% of the Escalated Price of the delayed item per full day of delay up to a maximum amount of € 7.500,00 per week from the date when the Lead Time of items of that Purchase Contract or the Delivery Date expired until the actual date of Delivery.

Seller's aggregate liquidated damages payments pursuant to this Clause 2 shall not exceed €2.000.000 over the Contract Term.

2.4 Warranties and remedies set forth in this Clause VI(2) and Seller's obligations arising there from are conditional upon:

1. Buyer's receipt, handling, storage, operation and maintenance, of any Turbine blades Other Parts and the Gas Turbine, being in all material respects in accordance with the terms of the instruction manuals and operating criteria and procedures provided to Buyer by the Seller (the "Operation Instructions") as well as in general accordance with good industry practice and if the Operation Instructions are silent in accordance with the instruction manuals and operating criteria and procedures provided by the OEM.

2. the failure of the Program Part and Other Part in question is not due to any collateral damage caused by the failure of some other item, piece, part or equipment;

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"Provision of original spare parts for major outage and operation of Siemens SGT-WOO (V64.3A) combustion turbine”

3.

4.

any accidental damage to PCM having been repaired consistent with the Selleťs or OEM's reasonable recommendations;the use of any Program Parts and Other Parts having been discontinued after Buyer has realized or was in a position to realize that their further use poses a risk of material damage.

The Buyer undertakes for the purpose of implementing corrective measures to enable the Seller providing without cost upon the Seller's request and based on the Buyer's operational capabilities:

a) working access to the non-conforming parts including disassembly and re-assembly of the Gas Turbine;

b) reasonable access to the Gas Turbine and operating and maintenance data, including access to the control system and associated data for monitoring purposes.

Under no circumstances shall Seller have any responsibility/liability under warranty or otherwise for any parts, materials or services provided by any entity other than itself, its subcontractors or its agents.

The chosen remedy pursuant to points 2.1 and 2.2 hereof shall be executed by the Seller no later than 14 days from Seller's receipt of Buyer's notification of the defect unless the parties agree otherwise.

2.5 The warranties set forth in this Clause VI(2) are exclusive and are in lieu of all other warranties whether statutory, express, or implied (including all warranties of merchantability and fitness for a particular purpose, and all warranties arising from course of dealing or usage of trade). The remedies set forth in this Clause by correction of non<onformities in the manner and for the period of time provided shall constitute Seller's sole liability and Buyer's exclusive remedies for failure of Seller to meet its warranty obligations whether claims of Buyer are based in contract, in tort (including negligence, willful misconduct and strict liability), or otherwise.

3. The Buyer will be bound to claim defects in writing with the Seller. The Buyer will send the notification (claim) to the Seller's email address stated in Clause 4 below. Sending of a claim by e-mail to Seller's e-mail address stated for official reception of e-mails or data box will be also regarded as a written claim. The claim must include a description of defects or their manifestations.

4. Seller's contact details for reporting of claimed defects are as follows:e-mail:mobile phone No.:Phone number: fax:

5. The Seller will not be responsible for defects on the subject of the contract caused by a natural disaster or inexpert intervention by the buyer or a third party.

6. The Seller declares that the subject-matter of performance of this Contract has no legal defects and that by performing the subject-matter of performance no rights of third parties will be infringed.

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"Provision of original spare parts for major outage and operation of Siemens SGT-1000 (V64.3A) combustion turbine”_______

Clause IX. Liability for damage and contractual fines

1. In the case of failure to observe the maturity date, the contracting parties agree on an interest on late payment with its annual rate corresponding to the Government Decree No. 351/2013 Coll., as

amended.

2. Neither Buyer, Seller nor its suppliers, agents, directors. Affiliates, employees or subcontractors and their respective employees will under any circumstances be liable under any theory of recovery, whether based in contract, in tort (including negligence, willful misconduct and strict liability), under warranty, or otherwise, for any indirect, special, incidental or consequential loss or damage whatsoever; loss of profit or loss of use of Buyer's material, equipment or PČM., loss of power, cost of purchased or replacement power, loss of data and information, increased costs of any kind, including but not limited to capital cost, fuel cost and cost of purchased or replacement power or claims of customers of Buyer.

3. The parties expressly agree that the remedies provided herein are exclusive and that under no circumstances shall the total aggregate liability of Buyer or Seller, as the case may be, its suppliers, agents, directors. Affiliates, employees or subcontractors and their respective employees during a given Contract Year under any theory of recovery, whether based in contract, in tort (including negligence, willful misconduct and strict liability), under warranty, indemnity or otherwise exceed 50% (fifty percent) of tire Contract Price paid in the present Contract Year, or with regard to events occurred after expiry of the Term exceed 50% (fifty percent) of the Contract Price paid to the Seller in the last Contract Year prior to expiry of the Term or termination of the Contract.

Parties further expressly agree that under no circumstances shall the total aggregate liability of Buyer or Seller, as the case may be, its suppliers, agents, directors. Affiliates, employees or subcontractors and their respective employees under any theory of recovery, whether based in contract, in tort (including negligence and strict liability), under warranty, indemnity or otherwise exceed [50%] (fifty percent) of the Contract Price.

4. Each party shall be obliged to use reasonable endeavours to mitigate any damage for which the other party is responsible under or in connection with this Contract and liability of the parties shall cease with the expiry of the warranty period specified in Clause VI(2).

5. Unless Seller elects otherwise. Buyer shall waive any and all liens/security interests with respect to any Turbine blade or Other Part removed by the Seller under this Contract and shall do everything necessary to effectuate such waiver, and shall indemnify and hold harmless Seller from and against any loss or damage Seller may incur as a result of any liens/security interests being asserted against such Turbine blade or Other Part. Buyer shall provide Turbine blades and Other Parts, which are removed hereunder, to Seller with complete identification in accordance with instructions furnished by Seller. Any transportation costs associated with the return of such removed Turbine blade or Other Part shall be the responsibility of Seller.

6. In every contract in connection with PČM and prior to the transfer to a third party of any item, part or equipment delivered by the Seller, the Equipment or PČM or the transfer of any interest in above objects Buyer shall obtain written assurances from its contracting party or, as the case may be, the transferee of limitation of and protection against liability in favor of the Seller, its directors.

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employees, agents, suppliers and subcontractors (the "Protected Entities") at leeist equivalent to that afforded Seller, under the Contract

Buyer shall indemnify and hold harmless Protected Entities against any liabilities incurred by Protected Entities in excess of those that would have been incurred had the Buyer complied with its obligation arising out of the preceding paragraph.

Clause X. Confidentiality

1. The contracting parties undertake to keep confidential all facts regarding performance of the Contract and other facts, particularly those having the character of business secrets (including drawings, documents and any other information), which they obtain by their own activities when performing the Contract or which are disclosed by the other party, whereas this stipulation will remain effective even after expiry of the Contract.

2. The contracting parties undertake to keep all these facts confidential, not to use them for their financial or other benefits, not to use them for the benefit or needs of other persons and not to disclose them to third parties without prior written approval of the other party and not to use the information for other purposes than to perform this Contract. The confidentiality obligation will not be applied to the facts that were known to the public at the time of making of this Contract or that became known to the public by the decision of the entitled party or otherwise without the Contract being breached by the other party. Buyer shall indemnify and hold Seller harmless for any liability suffered by Seller as a result of Buyer's disclosure to third parties or improper use of the information.

3. This Confidentiality obligation shall not apply to information which:

(i) is public knowledge at the at the date of receipt or thereafter becomes public knowledge without breach of this confidentiality undertaking,

(ii) is already in the possession of the other party at the date of receipt or has thereafter been legally obtained from others,

(iii) is independently developed by the other party or by its employees who had no access to the information received hereunder, or

(iv) that became known to the public by the decision of the entitled party or otherwise without the Contract being breached by the other party,

(v) that either partyis required to make public or provide to third parties in order to comply with legislation.

Clause XL Termination of the Contract

1. The contracting parties may terminate the Contract by withdrawing from it in cases of a major breach of the Contract as stated in Article XI(2) of this Contract, or in the cases expressly stated in the Applicable Law The withdrawal shall be effective as of the moment when the withdrawal notice is delivered to the other party.

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2. A serious breach of the Contract occurs in the following cases only:a) if Seller is in breach of any material provision of the Contract or of legislation, and Seller has

not commenced cure of such breach within thirty (30) days after receipt of written notice from Buyer of such breach,

b) if Buyer fails to pay any amount due and payable to Seller within thirty (30) days after Seller's written notice.

c) if Buyer having failed to perform any of its material obligations under this Contract or a Change Order and Buyer has not commenced cure of such breach within twenty (30) days after receipt of written notice from Seller about his intention to terminate this Contract.

In the event of b) and c) Seller may at its option suspend its obligations under the Contract. In the event the Seller suspends its obligations Buyer shall pay the Seller any additional costs and expenses incurred resulting from such suspension.

Either party may withdraw from this Contract if a the other party is declared bankrupt or if insolvency proceedings conducted against the other party are halted due to insufficient assets or of the other party enters liquidation or files a request for its own liquidation.

For the avoidance of doubt, the Seller shall not be considered to be in breach of a provision of this Contract to the extent payment of liquidated damages are foreseen as remedy of such breach and Seller is not in default of payment of such liquidated damages.

3. The contracting parties will be entitled to terminate the Contract also in the case that the Force Majeure circumstances prevent implementation of the supply for more than six (6) months, then either party may terminate the Contract without further or continuing rights or obligations hereunder except as referred to in Clause XV(17) (Survival), and without prejudice to any and all accrued rights to which either party is already entitled at the date of such termination.

If Buyer elects to terminate this Contract pursuant to Article XI(2) upon Buyer's instruction Seller shall transfer title to and deliver any Turbine blades and Other Parts that have been paid for by the Buyer in full whether said items are in possession of the Seller or in the possession of its suppliers or subcontractors at the time of termination.

If Seller elects to terminate this Contract pursuant to Clause XI(2),

(i) Seller shall stop all activities under the Contract and place no further orders or subcontracts,

(ii) Buyer shall promptly pay the Seller for all original spare parts provided and all reasonable termination cost, if any, from subcontractors upon submission of Seller's invoice,

(iii) Buyer shall pay for any other cost or liability which was reasonably incurred by the Seller but as maximum the Termination Fee under this termination, and

Upon Buyer's instruction Seller shall transfer title to and deliver any Turbine blades and Other Parts that have been paid for in full whether said items are in its possession or in the possession of its suppliers or subcontractors at the time of termination.

4. If Buyer elects to terminate this Contract pursuant to Clause XI(2), Seller shall be entitled to retain or receive only those amounts paid or payable hereunder at the time of termination. Upon such termination. Seller shall stop work on the terminated portion of this Contract and shall place no further orders with subcontractors.

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(i) Seller shall stop all activities under the Contract and place no further orders or subcontracts,

(ii) Seller shall pay to the Byuer for any other cost or liability which was reasonably incurred by the Buyer but as maximum the Termination Fee under this termination

No further rights, remedies, duties or obligations shall exist between the parties with respect to this Contract except for those that expressly survive per Clause XV(17).

Buyer may, after the first 6 (six) years after the Effective Date and upon 30 (thirty) days written notice to Seller, at its sole option, terminate this Contract, at any time for Buyer's convenience subject to complying to the terms of this Clause XI(4).

Clause XII. Licence agreement, anticorruption clause

1. Licence AgreementIf Buyer transfers goods (hardware and/ or software and/ or technology as well as corresponding documentation, regardless of the mode of provision) delivered by Seller or works and services (including all kinds of technical support) performed by Seller to a third party Buyer shall comply with all applicable national and international (re-) export control regulations. In any event of such transfer of goods, works and services Buyer shall comply with the (re-)export control regulations of the Federal Republic of Germany, of the European Union and of the United States of America.Prior to any transfer of goods, works and services provided by Seller to a third party Buyer shall in particular check and guarantee by appropriate measures that:

(a) There will be no infringement of an embargo imposed by the European Union, by the United States of America and/ or by the United Nations by such transfer, by brokering of contracts concerning those goods, works and services or by provision of other economic resources in connection with those goods, works and services, also considering the limitations of domestic business and prohibitions of by-passing those embargos;

(b) Such goods, works and services are not intended for use in connection with armaments, nuclear technology or weapons, if and to the extent such use is subject to prohibition or authorization, unless required authorization is provided;

(c) The regulations of all applicable Sanctioned Party Lists of the European Union and the United States of America concerning the trading with entities, persons and organizations listed therein are considered.

If required to enable authorities or Seller to conduct export control checks. Buyer, upon request by Seller, shall promptly provide Seller with all information pertaining to the particular end Buyer, the particular destination and the particular intended use of goods, works and services provided by Seller, as well as any export control restrictions existing.Buyer shall indemnify and hold harmless Seller from and against any claim, proceeding, action, fine, loss, cost and damages arising out of or relating to any noncompliance with export control regulations by Buyer, and Buyer shall compensate Seller for all losses and expenses resulting thereof.

2. Anti-comiptionBoth parties agree to comply with all applicable anti-corruption laws or regulations in connection with this Contract. Each party or any person or entity acting on its behalf shall not commit any illegal or

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unlawful act in connection with this Contract, in particular each shall not make any payments or provide anything of value to any person or government entity that would be considered improper or illegal under the law of the Czech Republic or Seller country or any other law that may apply to either party.

Clause XIII. Protection of information

1. Subject to Clause XV(18) below, pursuant to Act No. 106/1999 Coll., on free access to information, as amended, and in conformity with the provisions of Section 147a of Act No. 137/2006 Coll., on public procurement, as amended, the Buyer has the duty to publish the whole content of this Contract including its alterations and amendments, the amount of the actually paid price for the subject-matter of purchase, and a list of Seller’s subcontractors. The Seller declares that it is aware of the fact that the provision of this information is not regarded according to the said Act as a breach of a business secret and it undertakes to provide the Buyer with cooperation when making a list of subcontractors as is required by the provisions of Section 147a of Act No. 137/2006 Coll., on public procurement, as amended.

2. Seller may, at its own expense, defend or at its option settle any suit or proceeding brought against Buyer if such suit is based on an allegation that any Turbine blade. Other Parts or any of the processes used by Seller in connection with Turbine blades and/or Other Parts supplied by Seller hereunder or use thereof for its intended purpose, constitutes an infringement of any Intellectual Property Right in Buyer's and Seller's countries. Any such obligation is dependent upon Seller having being notified promptly in writing and given authority, information and assistance in a timely marmer for the defence of said suit or proceeding.

Seller shall pay the damages and costs awarded in any suit or proceeding so defended. Seller shall not be responsible for any settlement of any suit or proceeding made without its prior written consent.

If the Turbine blades. Other Parts or processes used by Seller in connection with Turbine blades and/or Other Parts supplied by Seller hereunder are held to constitute an infringement of an Intellectual Property Right as a result of such a suit or proceeding defended by Seller, Seller shall at its option and its own expense, either:

(i) procure for Buyer the right to continue using said Turbine blade. Other Part or process;(ii) perform replacements with substantially equivalent non-infringing Turbine blade. Other

Part or processes; or(iii) perform modifications to achieve non-infringement.

Seller will have no duty or obligation to Buyer under this Clause 12 to the extent that the Turbine blade. Other Parts or any of the processes used by Seller in connection with the Turbine blade and/or Other Part supplied by Seller hereunder are:

(!) supplied according to Buyer's design or instructions wherein compliance therewith has caused Seller to deviate from its normal course of performance,

(ii) modified by Buyer or its contractors after Delivery, or(iii) combined by Buyer or its subcontractors with items not furnished hereunder and by

reason of said design, which resulted in infringement of third parties' rights.

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In addition, if by reason of such design, instruction, modification or combination, a suit or proceeding is brought against Seller, Buyer shall protect Seller in the same manner and to the same extent that Seller has agreed to protect Buyer under the provisions of this Clause XUI.3 .

This Clause XIII.3 is an exclusive statement of all the obligations of the parties, relating to direct or contributory infringement of Intellectual Property Rights and of all the remedies of Contract Parties relating to any claims, suits, or proceedings involving Intellectual Property Rights.

Buyer acknowledges and agrees that Seller and its Affiliates have a considerable investment in its intellectual property rights and technology associated with the Gas Turbine, Turbine blades and Other Parts. Buyer therefore agrees not to take any action, either directly or through an Affiliate, which would infringe or violate Seller's or its Affiliates' rights in its patents, trademarks, copyrights or other intellectual property. Buyer further agrees to use its best efforts to ensure that its suppliers, contractors and other agents do not take any action inconsistent with Seller's or its Affiliates' Intellectual Property Rights.

Clause XIV. Subsequent impossibility to perform ('"Force Majeure")

1. Seller shall not be liable for failure to perform any obligation or for a delay in performance resulting from or contributed to by any cause beyond the reasonable control of Seller, its subcontractors, agents or suppliers including acts of God, acts of civil or military authority; acts of war whether declared or undeclared; acts (including delay, failure to act) of any Competent Authority, civil disturbance, insurrection or riot, sabotage, terrorist acts, fire, inclement weather conditions beyond local statistics, earthquake, flood, strike, work stoppage under employment or supervision of the other party, embargo, fuel or energy shortage, major equipment breakdown or accident in shipping or transportation.

2. In the event of a delay in performance caused by Force Majeure, the date of Delivery or time for performance of the work shall be extended by a period of time reasonably necessary to overcome the effect of such delay.

3. Termination regarding Force Majeure is detailed in Article XI(3) above.

Clause XV. Final provisions

1. The Contract shall not be assigned by either party without the prior written approval of the other party, which consent shall not be unreasonably withheld. Any purported assignment without such prior written consent shall be null and void.

2. This Contract may be altered only by written amendments marked eis amendments (including serial numbers) and shall only be effective when signed by representatives of both contracting parties. Change Orders shall also only be effective when signed by representatives of both contracting parties.

Seller may change original spare parts supplied without additional compensation from Buyer if this does not adversely affect the quality, properties, warranties, the technical soundness of the Gas

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"Provision of origmal spare parts for major outage and operation of Siemens SGT-1000 (V64.3A) combustion turbine"

Turbine the recommendations of the OEM, Lead Time or Delivery Date or the operability of the Gas Turbine. Seller shall confirm to Buyer the serial numbers of any original spare parts changed.

3. This Contract is made in 4 counterparts of which the Buyer receives 2 and the Seller 2 as well.

4. This Contract comes into force and effect on the day it is signed by authorized representatives of the contracting parties ("the Effective Date").

5. In the event changes in the relevant Applicable Laws occurred after the date preceding the Effective Date of the Contract by 28 days. Seller, to the extent this affects the fulfilment of any obligation in connection with this Contract shall be entitled to an adjustment to the Contract's terms and conditions regarding the affected obligation(s) of the Contract only and such adjustment shall be agreed by the parties by Change Order. Seller shall take reasonable effort to minimize such cost and/or expenses and shall document such cost towards Buyer. TTie parties shall be entitled to an adjustment of the Contract's terms and conditions in the event of delays, other than delays caused by a breach of its obligations under this Contract and such adjustment shall be agreed by the parties based on Change order.

6. In the case that a dispute occurs during performance of this Contract or in direct connection with it, the contracting parties undertake to settle such dispute amicably by negotiation. If they fail to settle the dispute amicably by negotiation, the dispute will be placed for decision before the Czech court having material jurisdiction. The court having local jurisdiction for possible judicial proceeding is a court in Prague, Czech Republic.

7. The legal relationship of the contracting parties is governed by the law of the Czech Republic excluding the application of the Vienna Convention on the Law of Treaties and conflict regulations. If the Contract or these Conditions do not contain respective regulation, the rights and duties of the parties will be governed by Act No. 89/2012 Coll., Civil Code, as amended. The contracting parties expressly exclude application of Section 1726, 1728, 1729, 1740(3), 1757(2) and (3), 1950 of the Civil Code. The contracting parties declare that they do not have against each other a position of a weaker party.

8. Non-Waiver

Any failure of any party to enforce any of the provisions of this Contract or to require compliance with any of its terms at any time the Contract is in effect shall in no way affect the validity of this Contract, or any part hereof, and shall not be deemed a waiver of the right of such party thereafter to enforce any and each such provision.

9. Set-off

Payments under this Contract shall be made without any deduction or set-off whatsoever, except for the respective claim with which set off is made has become final and absolute (res judicata).

10. Subcontractors.

The Seller is entitled to use for the fulfilment hereof subcontractors. A change of a subcontractor is conditioned on prior written approval from the Buyer, who shall not refuse to grant it unless it has a legitimate serious reason.

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11. Independent Contractor

Seller is employed as an independent contractor to perform the Contract. Seller may employ and shall pay such workers as it may require for the performance of the Contract.

12. Successors and Assigns

This Contract shall be binding upon and inure to the benefit of the parties hereto, their successors and permitted assigns.

13. Third Party Rights

Except as otherwise expressly provided in this Contract, nothing in this Contract shall be construed to create any duty to, standard of care with respect to or any liability to any person who is not a party to this Contract.

14. Severability

In case provisions of this Contract shall be or become invalid (or in case of a gap), the validity of the remaining provisions of this Contract shall not be affected, provided it can be assumed that the parties would have entered into the Contract anyway. Instead, the invalid provision or the gap in this Contract shall be filled by a legally permissible provision that shall conform to the largest extent possible to the parties' intention or, in case of a gap, would have conformed to the parties' intention considering the purpose and intent of this Contract, if they had detected the gap on conclusion of the Contract.

15. Notices

Any written notice, direction, instruction, request, or other communication required or pemaitted under this Contract, including payment invoices from Seller to Buyer, shall be deemed to have been duly given on the date of receipt, and shall be served personally or by fax or by mail to the party to whom notice is to be given at the respective address set out below.

BUYER:

Attention:Tel:Fax:

SELLER:

Attention:Tel:

Teplárny Brno A.S.Okruzni 25, 638 00 Brno, Czech Republic Ing. Petr Fajmon, MBA

Siemens AGPower Generation Services Division Siemensdamm 50,13629 Berlin, Germany Mr. Hagen Zebisch

16. Complete Cont:

This Contract, including all Appendices attached hereto, constitutes the complete agreement between the parties as of the date of the Contract, and supersedes any and all agreements made or dated prior thereto.

All correspondence previously interchanged between the parties as well as other document previously signed by the parties shall service interpretation purposes, if necessary.

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17. Survival

The provisions of Clauses IV, VI, XIII, IX, X, XI, XV, of this Contract shall survive the expiration or other termination of the Contract.

18. The following appendices form an integral part of this Contract:

Appendix No. 1 Appendix No. 2 Appendix No. 3a Appendix No. 3b Appendix No. 4 Appendix No. 5 Appendix No. 6 Appendix No. 7

Appendix No. 8 Appendix No. 9 Appendix No. 10 Appendix No. 11 Appendix No. 12

- List of material for reassembly of blades row 1 to 3.- List of material for reassembly of blades row 1 to 4.- List of reassembly and replacement material for MO after 75,000 EOH.- List of reassembly and replacement material for MO after 100,000 EOH.- List of consignment warehouse parts- List of turbine blades for MO after 75,000 EOH- List of turbine blades for MO after 100,000 EOH- Conditions for taking of spare parts from the consignment warehouse, their

registration, and payment of their price- Escalation formula- Payment schedule- EOH calculation- Spare parts from MO 2009- Purchase contract in English language

Appendices No. 1-7 contain sensitive commercial information of the Seller, specifically prices of parts and materials, and shall be deemed confidential information for the purposes of Act No. 137/2006 Coll., on public procurement and accordingly shall not be published for the purposes of Act No. 137/2006 Coll.TTie Term of the Contract shall commence on the Effective Date, and unless terminated early pursuant to Clause XI shall expire the earlier of either (a) 13 (thirteen) years from the Effective Date or (b) after the performance of the MO at 100.000 EOH provided that in the event that 13 (thirteen) years from the Effective Date the MO at 100.000 EOH still has not been performed, the Term of the Contract will be extended by a maximum 3 (three) years provided in no event shall the Term exceed 16 (sixteen) years from the Effective Date. The duration of the extension shall be subject to mutual agreement of the parties.

19. The contracting parties declare that they conclude this Contract as a free act, that they have carefully read the Contract, they understand its content in witness whereof they attach their signatures below.

Mgr. Petr Hladík Chairman

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