VÁLLALKOZÁSI SZERZŐDÉS

MVM ERBE Zrt.

Contract for Works

Negotiated public procurement procedure in the subject of

„The procurement of 30 MW electric hot water boiler and auxiliary equipment”

in accordance with EU procedures

BEO/1/2017

VOLUME III

CONTRACT FOR WORKS - DRAFT

Participation phase

2017

CONTRACT FOR WORKS

(DRAFT)

Concluded by and between MVM ERBE ENERGETIKA Mérnökiroda Zártkörűen Működő Részvénytársaság, as the client (hereinafter: the Client), on the one hand, and […], as the contractor (hereinafter: the Contractor) on the other hand, (the Client and the Contractor hereinafter collectively referred to as the Parties and separately as the Party) on the day and in the place written below, subject to the terms and conditions specified herein (hereinafter: the Contract).

Data of the Parties:

Client

Company Name:

MVM ERBE ENERGETIKA Mérnökiroda Zártkörűen Működő Részvénytársaság

Principal Office:

1117 Budapest, Budafoki út 95.

Incorporation No.:

01-10-045821

Tax Registration No.:

14116713-2-44

EU VAT No.:

HU14116713

Represented by:

Name of Bank:

UniCredit Bank Hungary Zrt.

Bank Account No.:

10918001-00000003-34050007

Contract No.:

4000…., 13A401315000 B01

Contractor

Company Name:

Principal Office:

Incorporation No.:

Tax Registration No.:

EU VAT No.:

Represented by:

Name of Bank:

Bank Account No.:

Contract No.:

BACKGROUND

(A)The Client, as the contracting authority, initiated a negotiated public procurement proceeding by publishing a notice at Notice No. ……. in the Official Journal of the European Union/ TED data bank including a call for tender (hereinafter: the Public Procurement Proceeding) in accordance with the provisions of Act CXIII of 2015 on Public Procurement (hereinafter: the Public Procurement Act) for the procurement of a 30 MW electric hot water boiler and auxiliary equipment.

(B)The tender of the Public Procurement Proceeding was awarded to the Contractor. The tender of the Contractor is incorporated herein by reference as Annex No. 2 (Final Tender).

(C)The award criteria of the Final Tender was the most economically advantageous tender.

(D)With regard to the abovementioned, the Public Procurement Proceeding has been carried out and the Contract has been concluded between the Parties in accordance with the relevant provisions of the Public Procurement Act

1. SUBJECT Of THE CONTRACT

The procurement of 30 MW electric hot water boiler and auxiliary equipment.

2. SCOPE OF THE CONTRACT

2.1 The Contractor shall produce and supply the 30 MW electric hot water boiler and auxiliary equipment specified in the Contract and in particular in Annex No. 1 thereof (Technical Specifications for Public Procurement) (hereinafter referred to as Equipment separately, and Equipment collectively) in accordance herewith, shall ensure assembly supervision for the same at the connection points (delivery points), shall participate in the commissioning thereof, shall hold trainings for the operators, shall participate in the trial operation thereof, shall prepare the design documentation and any other document specified in the Contract necessary for the production and installation of the Equipment and deliver the same to the Client. The Client shall pay the contract sum to the Contractor if the Contractor performed the Contract properly in accordance herewith.

3. Schedule of performance

3.1 Final completion deadline: Maximum one hundred sixty (160) days from the signing hereof.

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3.2 The schedule of the performance of the Contract is specified in Section 9 hereof (Schedule, invoicing).

3.3 The Contractor may only perform before the delivery date specified in Section 9 hereof (Schedule, invoicing) upon the prior written consent of the Client.

* to be finalised based on the Final Tender of the winning tenderer.

4. Contract Sum, ADVANCE PAYMENT

4.1 The total contract sum to be paid by the Client to the Contractor is

[AMOUNT WITH LETTERS] Forints + VAT

(HUF [AMOUNT WITH NUMBERS] + VAT),

which is a fixed lump sum.

4.2 The Contract Sum includes the costs and benefits of the Contractor incurring in relation to the Contract, all costs, reimbursements, royalties and other fees, the liabilities assumed against third parties (representatives, subcontractors in particular), costs of obtaining permits and approvals and other expenses of the Contractor incurring in relation to the Contract (including the additional works specified in the Technical Specifications for Public Procurement, but not included in the table for determining the amount of the Contract Sum). The Contractor may not claim any further costs, reimbursements, royalties, fees or expenses, regardless of the grounds thereof.

4.3 The Contract Sum is detailed in the following table:

Item

Amount of Contract Sum exclusive of taxes

(HUF)

30 MW electric hot water boiler and auxiliary equipment (design, production, supervision of assembly, participation in commissioning and trial operation, trainings)

Spare parts (for a one-year operational period)

Total:

4.4 The detailed provisions regarding the payment of the Contract Sum are specified in Section 10 (Payment conditions) of the Contract.

4.5 Advance payment

4.5.1The Client shall pay an advance payment in the amount of thirty (30) % of the Contract Sum specified in the Contract:

[AMOUNT WITH LETTERS] Forints + VAT

(HUF [AMOUNT WITH NUMBERS] + VAT).

4.5.2The Contractor shall submit its pro-forma invoice after the Contract has entered into effect. The Client shall pay the advance payment within thirty (30) calendar days from the receipt of the pro-forma invoice of the Contractor via bank transfer. The payment of the advance payment is conditioned upon the advance payment bond made available to the Client in the amount equivalent to the advance payment. The Contractor shall fulfil such obligation in a manner specified in Subparagraph a) of Paragraph (6) of Section 134 of The Public Procurement Act. The advance payment bond shall be in effect and may be called within thirty (30) days from closing the clearing of the amount of advance payment.

4.5.3The Contractor shall issue the advance payment invoice when the amount of the advance payment has been credited and shall deliver such invoice to the billing address of the Client (specified in Section 10, Payment conditions). The Contractor shall account the amount of the advance payment in the clearing account.

4.5.4The advance payment shall be accounted in the first invoice submitted on the proper performance of the Contract. The Client shall return the advance payment bond to the Contractor after the advance payment has been cleared.

5. OBligations of the Contractor

5.1 General obligations

5.1.1 The Contractor shall comply with all laws, official requirements and the rules of the Client in relation to the Contract during the conclusion and performance of the Contract. The Contractor shall also fulfil all obligations regarding data provision and payment of fees pertaining to the fulfilment of its obligations arising from the Contract.

5.1.2 The Contractor shall refrain from any conduct harming or hurting the reputation of the Client during the performance hereof.

5.2 Provisions regarding the assembly, commissioning and trial operation of the Equipment as well as the trainings

5.2.1 The Contractor shall supervise the assembly of the Equipment at the connection points (at the delivery points) by providing specialists and all materials necessary.

5.2.2 The Contractor shall participate in the commissioning of the Equipment.

5.2.3 The Contractor shall participate in the seventy-two (72) hour trial operation.

5.2.4 The Contractor shall hold a training for the operators of the Equipment (two theoretical training programmes and two sessions for practical training for five persons respectively during commissioning).

5.2.5 The Contractor shall provide continuous on-site supervision during the construction works in normal working hours and shall provide the contact data of the managers in charge for the period outside of working hours to the Client. During the period of commissioning works, the Contractor shall provide an on-site coordinator during the agreed upon commissioning programmes and shall provide the availability of a coordinator on a stand-by basis for other periods.

5.2.6 The Contractor shall ensure on-site coordination during trial operation on a continuous basis.

5.3 General provisions regarding the preparation of documents

5.3.1 The Contractor shall deliver the following documents to the Client within the completion deadlines specified in Section 9 hereof (Schedule, billing) in accordance herewith:

5.3.1.1Licensing documents, design documentation

a) Installation plan,

b) The design documentation in accordance with Decree No. 2/2016. (I. 5.) of the Minister of National Economy (NMG)

c) Certificate of conformity of pressure equipment in accordance with PED (2014/68/EC)

d) Manufacturing licensing documentation for the electric hot water boiler, on-site acceptance test

e) operation manuals in Hungarian language

f) Insulation plans

5.3.1.2Documents regarding installation and commissioning

a) Detailed documentation regarding assembly and documentation necessary for commissioning.

b) Quality Management Plan, which includes the presentation of the preparation of the documentation, the process of quality assurance as well as the schedule of preparation and licensing.

5.3.1.3Other documents to be delivered during the performance of the Contract

a) The operating and maintenance manual in Hungarian language in two (2) hard copies and in two (2) copies on a data storage media (in an editable format, for example docx, xlsx, dwg, dxf).

b) The records made in the course of the factory inspections, tests and the CE certificate of individual units upon delivery.

5.3.2 The Contractor shall deliver the documents in an electronic format suitable for the purpose of commenting by the Client and the materials corrected after the commenting of the Client in two (2) hard copies (in addition to the number of copies to be submitted to the authorities) and in two (2) copies on CD to the contact person of the Client in charge of technical issues. All documents delivered to the Client shall be suitable for commenting in terms of length, format, content and elaboration.

5.3.3 The data storage media delivered by the Contractor shall be free of computer viruses and other malicious software.

5.3.4 If the Client considers any document to be unsuitable for commenting due to its length, format, content or elaboration, the Contractor shall correct such document and shall deliver the corrected version to the Client within five (5) calendar days from the receipt of the notice of the Client.

5.3.5 The Client shall comment on the documents if they are suitable for commenting in terms of their length, format, content and elaboration, within fifteen (15) calendar days from the receipt thereof, may negotiate with the Contractor at its own discretion, and shall return the documents supplied with comments to the Contractor. The Client is not required to make any comments.

5.3.6 The Contractor shall implement the modifications within five (5) working days from the receipt of the comments without charging any fees or reimbursements and shall deliver the modified documents to the Client. The Contractor shall advise on the comments of the Client. Two commenting phases are possible regarding each document (commenting phase: if the documents are considered to be unsuitable for commenting due to their length, format, content or elaboration and, therefore, are returned to the Contractor for correction). If the Client cannot accept the document after the second commenting phase, this event shall be considered the default of the Contractor and the Client may claim penalty for default, unless otherwise specified by the Contract.

If the Client does not make any comments, the documents shall be deemed to have been accepted by the same, on the condition that the Client shall certify the acceptance of the documents after the fifteen (15) calendar days deadline with a certificate of performance or other statement accepting the performance of the Contractor (especially with a certificate of performance recorded in SAP system).

If the Contractor implemented the modifications specified in the comments of the Client and, therefore, the Client certifies the acceptance of the document with a certificate of performance or other statement accepting the performance of the Contractor (especially with certificate of performance of the Client recorded in SAP system), the documents shall be deemed to have been accepted by the Client.

5.3.7 During the preparation of the documents, the Contractor shall examine all documents and data provided by the Client as well as the comments of the Client made on the documents and shall call the Client’s attention to any mistakes, inaccuracies, ambiguities, deficiencies and provisions not in compliance with Hungarian laws, as well as relevant official requirements and directives. The Contractor shall be liable for damages arising from failing to inform the Client of the abovementioned.

5.3.8 The Parties expressly confirm that the Contractor warrants, guarantees and is liable for the compliance of the documents with the requirements specified hereunder and for the suitability thereof for the purpose of the Contract and to achieve the result wished to be achieved by the Client, regardless of whether the Client commented or advised on the documents or inspected or controlled the performance of the Contractor to prepare documents in any other manner.

5.3.9 If the purpose of the documents is to obtain the approval of any third parties, with special regard to obtaining permits, the warranty obligation of the Contractor is expressly extended to the failure of obtaining such permits for a reason within the Contractor’s control. In such case the Contractor shall make the correction, modification, amendment or repeated preparation of the documents without charging any further costs or claiming any reimbursements.

5.3.10 The Contractor represents and warrants that the documents have been prepared by persons with appropriate authorisations, qualifications, expertise and knowledge necessary for the performance of the activities, examinations and surveys serving as the basis for preparing the documents.

5.4 Quality Management Plan

5.4.1 The Contractor shall submit the quality assurance and quality control documentation related to the performance hereof and submitted in the tender of the Contractor (hereinafter: Quality Management Plan) to the Client for the approval of the same within thirty (30) calendar days from the entry into effect of the Contract.

5.4.2 The Contractor shall fulfil its obligations arising herefrom in accordance with the Quality Management Plan approved by the Client on the condition that the Contractor may not be relieved from its obligations arising from the Contract should the Contractor fail to fulfil its obligations arising herefrom by fulfilling its obligations in accordance with the Quality Management Plan.

5.5 Design Documentation

5.5.1 The Client shall approve the design documentation, with special regard to the Location and connection of equipment.

5.5.2 The Contractor shall perform the design works in relation to the performance of the Contract necessary for the implementation, licensing, operation and maintenance of the works or services designated by the Client as the purpose of design and shall prepare the design documentation based on the same and deliver it to the Client, with special regard to the documents specified in Subsection 5.3.1 of the Contract.

5.5.3 The design documentation shall include technically feasible, constructible, practicable and reasonable solutions and shall be suitable to satisfy the requirements of the Client for its intended purpose, with special regard to the satisfaction of the special needs and requirements regarding the heating plant in Észak-Buda (for example arrangement of partial units), as well as the achievement of the result wished to be achieved by the use of the design documentation.

5.5.4 The Contractor confirms that it has examined the requirements specified in the Contract, the relevant provisions of laws, official requirements and official directives, as well as the technical design documentation applicable for design delivered by the Client, with special regard to the requirements and calculations of design prior to the commencement of the design work.

5.5.5 The Parties shall cooperate during the design and the Client shall answer the questions of the Contractor submitted in writing. The Contractor guarantees, warrants and shall be liable for the accuracy and suitability of the design documentation prepared by the same, as well as the data, solutions, details and calculations included in the design documentation, and especially for compliance with the documentation provided by the Client and the laws applicable to design.

5.5.6 The rights arising from breach of contract caused by the defect of the design may be exercised, regardless whether the Client commented or advised on the designs, or accepted the performance of the design task of the Contractor in any other manner, with special regard to warranty and guarantee obligations arising from the Contract, until rights may be exercised resulting from the default of the works or services implemented based on the design.

5.5.7 The Contractor shall correct the mistakes, inaccuracies, ambiguities, deficiencies and provisions not in compliance with Hungarian laws in the designs prepared by the same at its own cost and expenses.

5.6 Licensing and licensing documents

5.6.1 Unless otherwise specified in the Contract, MVM Észak-Budai Fűtőerőmű Kft. shall notify the building authorities and shall obtain the permits, by using the documents and statements prepared by the Contractor (with special regard to the licensing documents listed in Subsection 5.3.1 hereof). MVM Észak-Budai Fűtőerőmű Kft. shall perform the abovementioned activities on its own behalf.

5.6.2 The Contractor shall deliver the statements and documents necessary for the notifications, permits and approvals required for the performance hereof in appropriate format and with a proper content.

5.6.3 The Contractor shall cooperate in the proceedings initiated to obtain the permits and approvals, and shall prepare and obtain the data and documents necessary for the submission of missing documents and shall deliver the same to the Client.

5.6.4 The Contractor shall take all actions required by the Client, with special regard but not limited to providing powers of attorney and consents and approvals within the control of the Contractor in order to advance the licensing proceeding.

The quality assurance programme of the production and the procurement in relation to production

5.6.5 The Contractor represents that it has examined the requirements specified in the Contract, the applicable provisions of laws, official requirements and directives as well as the documentation applicable to production and the procurement in relation to the same provided by the Client prior to the production of the Equipment and the procurement in relation to the same.

5.6.6 The Contractor shall be ensure for conformity of the production and procurements related to the same necessary for the performance hereof, with special regard to the materials, devices and commercial products used during production, with the conditions specified in the relevant permits.

5.6.7 The Contractor may only deviate from a condition specified in a permit applicable to production and the procurement related to the same if the particular permit has been modified in accordance with the applicable laws. The Contractor shall prepare the documents necessary for the modification of the permit and shall deliver them to the Client.

The Contractor shall present the production phases in the on-site acceptance test programme. The Client may designate the production phases during the implementation of which it wishes to be present on the place of production in order to carry out a “During Production Inspection”.

The Contractor shall indicate the quality control and setback points in the Quality Assurance Plan during which an inspection, official approval or data exchange between the Contractor and the Client, and, if applicable, between the Contractor and the designer engaged by the Client is necessary.

The Contractor shall carry out quality assurance inspections during production, which shall include the inspection of the quality requirements set for the materials and the elements comprising the same which have been procured, used and incorporated into the products.

The Contractor shall inspect and document the compliance of the used materials and semi-finished products with the quality requirements with destructive and non-destructive material inspections specified in the material inspection plans, shall inspect the quality of production with the inspections, examinations and tests specified in the “During Production Inspection” plans, and shall inspect the quality of finished products with the tests, inspections and examinations specified in the final production programme.

During Production Inspection

The Client may carry out During Production Inspections upon notice of each inspection on the places of production on the date of the productions, production phases and control as well as setback points specified in the on-site acceptance test programme.

During the During Production Inspection, the Client may evaluate the progress according to the schedule specified herein.

The Contractor shall ensure that the Client is accompanied properly on the places of production.

If the During Production Inspection of a particular Equipment failed due to a reason within the Contractor’s control and, therefore, further During Production Inspections are needed, the Contractor shall reimburse the Client for the costs of accommodation, food, insurance, transport and daily fee of the persons participating in the repeated During Production Inspection on behalf of the Client in a number equivalent to the number of persons participating in the previous inspection.

The on-site acceptance test and the on-site acceptance test programme

The Client may participate in the on-site acceptance test of the particular Equipment on the place designated by the Contractor at the costs and expenses of the Contractor. The place of the inspection shall be suitable for carrying out the on-site acceptance test of the particular Equipment.

The Contractor shall prepare the on-site acceptance test programme based on the procurement QA and QC documentation.

The Client may amend the on-site acceptance test programme with the steps suggested by the same. The Contractor may only deny the acceptance or execution of such amended programme if one of the steps included therein cannot be executed safely or cannot be executed without damaging the particular Equipment.

The Contractor shall perform the inspections certifying the quality of production, and those specified by the Client and any other tasks specified in the quality assurance programme for the purpose of the on-site acceptance test, shall document the same in the specified manner, shall present the certifying documents to the Client and shall prepare the Equipment for on-site acceptance test in the condition specified in the on-site acceptance test programme.

The following steps of inspection shall be carried out during the on-site acceptance test of a particular Equipment:

1.the visual inspection of the entire Equipment,

2.checking the contractual data based on the operation manuals,

3.certifying the technical requirements specified in the Contract based on the measurement programme specified in the on-site acceptance test programme.

In order to carry out the inspection of the operation manuals forming part of the on-site acceptance test programme, the entire operation manual shall be available with the following minimum content:

1.summary front page with names and Uniform Product Codes,

2.manufacturing statements,

3.designs of the Equipment with connector dimensions, with exploded or assembly view,

4.list of components with providing the quality of materials, indicating the type of required document,

5.inspection documents of the particular elements,

6.the records of the inspections carried out in the production equipment,

7.user instructions

8.instructions for assembly, management and maintenance,

9.instructions for commissioning.

The Contractor shall inform the Client of the planned date of the on-site acceptance test of a particular Equipment at least fifteen (15) days prior to the commencement of such inspection in writing.

The purpose of the on-site acceptance test is to determine whether the particular Equipment comply with the requirements specified in the Contract and can be delivered to the site of the Client. Such inspections, however, may not be construed as the final acceptance of the particular Equipment by the Client or the acceptance of performance.

The specialists of the Contractor and the Client shall carry out the on-site acceptance test jointly.

The Contractor shall provide all reasonable tools, help and assistance to the specialists carrying out the on-site acceptance test in order to carry out the same, without claiming any fees from the Client.

The on-site acceptance test shall be recorded in writing in Hungarian in two (2) counterparts. The record shall be signed by both Parties. A particular on-site acceptance test is deemed to be successful if the Client qualifies the particular Equipment to be suitable to be delivered to the shipping address of the Client in the record of the on-site acceptance test.

The Contractor may only initiate the delivery of a particular Equipment to the site of the Client if the on-site acceptance test of the particular Equipment has been carried out successfully. If the Client fails to participate in the on-site acceptance test of a particular Equipment in spite of the express prior written notice of the Contractor, the Contractor may only initiate the delivery of a particular Equipment to the site of the Client upon delivering the documentation regarding the successful on-site acceptance test of the Equipment to the Client and upon the express consent of the Client on the condition that the consent of the Client may not be construed as the final acceptance of the particular Equipment or as the acceptance of performance.

The successful on-site acceptance test, or if the Client or its representative inspected or examined the particular Equipment in any other manner and accepted the same, does not void or restrict the right of the Client to inspect and examine the particular Equipment after it has been delivered to the Client’s site or it has been delivered from its place of production or country of origin, and, if necessary, to refuse to accept the particular Equipment and to accept performance.

The successful on-site acceptance test does not relieve the Contractor from its guarantee obligation, from its obligation of warranty for defects or from any other obligation of the Contractor arising from the Contract or compelled by laws.

If, during the on-site acceptance test, the test of a particular Equipment could not be carried out entirely, and, therefore, a repeated on-site acceptance test shall be carried out, the Contractor shall reimburse the Client for the costs of accommodation, food, insurance, transport and daily fee of the persons participating in the repeated on-site acceptance test on behalf of the Client in a number equivalent to the number of persons participating in the previous test.

The Contractor shall supply the Equipment to the Client within the deadlines specified in the Contract.

The Contractor shall ensure that the Client is accompanied properly on the place of factory inspection and the place of the on-site acceptance test.

Requirements of assembly works

5.6.8 The Contractor shall comply with the regulations pertaining to the site specified in Annex No. 4 hereof on the site of MVM Észak-Budai Fűtőerőmű Kft.

5.6.9 The Contractor will assign an assembly coordinator for the supervision of the on-site assembly of the Equipment delivered to the site of MVM Észak-Budai Fűtőerőmű Kft.. The assembly coordinator shall be responsible for the following:

–the professional coordination of the assembly works during the on-site assembly, including quality management issues.

–Participation in the delivery of the Equipment to the Client, management of any arising problems.

–Monitoring the proper progress of the assembly works, taking the necessary actions.

–Cooperation with the Client and other persons engaged by the same hereunder.

–Professional management of the issues of delivery, lifting, craning and other special issues.

–Cooperation in the preparation of the plans of execution and assembly organisation of the assembly processes, taking into Contract Sum the circumstances of the location and including checking implementation of assembly works.

–Participation in the daily and weekly cooperation meetings for the assembly works.

–Checking the availability of the Equipment on the site necessary for installation, and, if necessary, taking immediate action for the supply of missing parts or the replacement of damaged or broken parts.

–Participation in organising the daily work and cooperation with other persons engaged by the Client.

5.6.10 The obligations of the assembly coordinator (other than its obligations compelled by law):

–Compliance with all relevant laws, official requirements as well as the requirements of the Contract and the design documentation.

–Ensuring the completeness of the documentation of Equipment, the storage of the same and the delivery of modifications to the Client.

–Updating the on-site documentation according to the progress of assembly (with red markings).

–Management of the written entries of the Client in relation to problems in quality or quantity.

5.6.11 Execution and documentation of the inspection of assembly:

–The Contractor shall carry out the inspection and documentation of the following mechanical settings prior to commissioning: pipe support adjustment, checking stress-free mounting, pressure test, filling lubricants, etc.

–The commissioning tests may only commence if the Client has accepted the completion of assembly and has carried out the relevant inspections successfully, including the technical review and the work safety inspection and if the defects or deficiencies listed during the technical and work safety review have been corrected and the work safety permit has been obtained.

5.7 Methods of delivery, requirements of delivery, transfer of ownership, risk management

The Equipment will be delivered with DDP conditions (MVM Észak-Budai Fűtőerőmű Kft., H-1037 Budapest, Kunigunda útja 49.), insurance included, delivered to the site, in accordance with INCOTERMS® 2010 after their successful on-site acceptance test.

The particular Equipment shall be delivered to the site of the Client within the deadlines specified in Section 9 hereof (Schedule, billing).

Further conditions of delivery to the site of the Client are incorporated herein by reference as Annex No. 5 (Conditions of delivery).

7. The ownership right of the Equipment (including the spare parts) will be transferred to the Client following the delivery of the same to the site of MVM Észak-Budai Fűtőerőmű Kft., upon the signing of the certificate of performance. In spite of the transfer of ownership rights of the Equipment, it is the Contractor’s duty to manage any risks during the supervision of assembly, participation on the commissioning and trial operation and during trainings until the completion of successful commissioning (conditioned upon a final record of commissioning).

Supervision of assembly, participation in commissioning and trial operation

The Contractor shall perform the works regarding the delivery of particular Equipment, the supervision of their assembly, the participation on their commissioning and trial operation and the holding of trainings specified in the Contract and in Annex No. 1 hereof in particular (Technical Specifications for Public Procurement) within the completion deadline specified in Section 9 hereof (Schedule, billing).

Under this Contract, all examinations, measurements, tests, go live operations of the software, and fine-tunings are qualified as commissioning following the installation of the particular Equipment into its final place of destination and the final assembly thereof.

In the case of unified works created from several separate parts, complex tests shall be conducted regarding the Equipment after the successful tests of the individual elements. Successful commissioning is conditioned on the successful completion of tests of the individual elements and the complex tests.

The works to be performed during installation and commissioning include the related construction works in the places of installation of the particular Equipment in accordance with Annex No. 1 hereof (Technical Specifications for Public Procurement) including specifically the demolition of the Equipment currently in operation, on-site assembly and welding works, electric control process and architectural works and the installation of the new Equipment.

The successful completion of installation and commissioning is conditioned upon the fulfilment of the requirements regarding the individual tests and operability inspections specified in Annex No. 1 hereof (Technical Specifications for Public Procurement), on the proper operation of the Equipment in accordance with the requirements specified hereunder and upon the operation of the Equipment in a manner verifiable by the operational and maintenance personnel of the Client.

The commissioning of an Equipment shall qualify as successful, if the Client considers the commissioning of the same to be successful in the final record of commissioning signed by both Parties.

The performance of the Contract is conditioned upon the successful commissioning in accordance with the Contract.

The successful commissioning of a particular Equipment, the signing of the final record of commissioning certifying successful commissioning by the Client, the participation of the Client on the commissioning and the supervision of the same by the Client does not relieve the Contractor from any guarantee obligations, obligations of warranty for defect and any other obligations arising herefrom or compelled by laws.

5.8 The work safety, security, fire protection and environmental protection code on the site of MVM Észak-Budai Fűtőerőmű Kft. and the rules of access to and conduct in the site

The Contractor acknowledges that it will perform the Contract or a part thereof on the site of the heating plant operated by MVM Észak-Budai Fűtőerőmű Kft. (hereinafter: Heating Plant) and, therefore, MVM Észak-Budai Fűtőerőmű Kft. may restrict the performance hereof at any time unilaterally for reasons in relation to the operation of the Heating Plant, without any further explanation.

5.8.1 The Contractor confirms that it is familiar with the work safety, security fire protection and environmental protection code applicable on the site of the Heating Plant incorporated herein by reference as Annex No. 4 and the rules of access and rules of conduct pertaining to the site, and agrees to be bound by the same, including any modifications thereof communicated to the Contractor in any manner from the date of such communication during the entire performance hereof. The Contractor acknowledges that the Client may modify the operational and work rules pertaining to the site of the Heating Plant at any time unilaterally.

5.8.2 The Contractor confirms that it has assessed and familiarised itself with the technical and physical characteristics of the Heating Plant and the site thereof as well as the operational and work rules pertaining to the site of the Heating Plant specified in Annex No. 4 hereof that may affect the fulfilment of the obligations of the Contractor arising herefrom in relation to accessing the Heating Plant, transportation to and stay on the site, working, assembly or delivering to the place of destination prior to the commencement of the performance hereof.

5.8.3 The Contractor confirms that the rules specified in Annex No. 4 hereof pertaining to the site of the Heating Plant do not hinder or render impossible the fulfilment of the obligations of the Contractor, except for the rights of the Client/Heating Plant specified in this Section and they do not incur any extra costs, or that the Contractor called the Client’s attention to such circumstance prior to the conclusion hereof, or if the Contractor is subsequently informed of such circumstance (including the operational and work rule modified by the Client following the conclusion hereof), the Contractor will call the Client’s/Heating Plant’s attention to such circumstance immediately, but no later than within ten (10) working days.

5.9 Engagement and replacement of subcontractors and representatives

9. A business entity qualifying as subcontractor pursuant to laws shall be qualified as a subcontractor under this Contract. All persons taking part in the fulfilment of the obligations of the Contractor arising herefrom either directly or indirectly qualify as representatives, including, but not limited to the subcontractors and specialists in accordance with laws, except for the Client and the persons engaged by same outside of the Contract in relation to the performance of the same either directly or indirectly.

9. The Contractor will engage subcontractors and representatives based on its statement during the performance of its obligations arising herefrom.

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9. The Contractor shall indicate the subcontractors and the representatives in the List of Subcontractors incorporated herein by reference as Annex No. 3 and shall make a statement at latest upon the signing hereof whether the subcontractors are subject to any exclusionary reasons specified in the applicable laws (including the reasons specified by the Client and those compelled by law).

9. If the replacement of the subcontractor or any other representative is not prohibited by laws or the Contract, the Contractor may replace them on the condition that the Contractor shall report all engagement of subcontractors that were not indicated in its tender (including the subcontractors replacing previously designated ones). At the same time, the Contractor shall make a statement whether the subcontractor is subject to any exclusionary reasons specified in the applicable laws (including the reasons specified by the Client and compelled by law). Parallel to the replacement of the subcontractor or the representative, the Contractor shall deliver the modified List of Subcontractors incorporated herein by reference as Annex No. 3 to the contact person of the Client in charge of technical issues. The Parties shall approve the engagement of the subcontractor or representative after the statement of acknowledgement of the replacement of subcontractors or representatives has been issued by the Client.

9. Those subcontractors and representatives whose engagement was qualified as a determining factor in the public procurement process upon evaluating the tenders shall cooperate during the performance of the obligations of the Contractor. In this case, the engaged subcontractor or representative organisation may only be replaced in the cases of legal succession, when the new organisation may be considered as the legal successor of the subcontractor or representative presented in the proceeding in all relevant circumstances taken into Contract Sum upon assessment, with special regard to the staff assessed in accordance with Subparagraph b) of Paragraph (3) of Section 76 of The Public Procurement Act. The person of the specialist determining upon evaluation may only be replaced with the consent of the Client and if a new specialist with the same values with regard to all circumstances taken into Contract Sum when such assessment has been presented.

9. The Contractor shall be held liable for damages arising from the work of the subcontractors and representatives, as if such work had been performed by the Contractor.

9. The Contractor shall be liable for damages arising from the work of subcontractors or representatives engaged without the consent of the Client (including other persons engaged by the subcontractors and representatives engaged by the Contractor directly), as if such damage had not occurred without the engagement of the subcontractors engaged without the consent of the Client and the representatives engaged indirectly.

* Will be finalised based on the Final Tender of the winning tenderer.

5.10 Additional works

5.10.1 The Contractor shall perform the works forming part of the Contract (with special regard to the works specified in Annex No. 1 hereof [Public Procurement Technical Specifications]) or the documentation serving as the basis for the conclusion of the Contract (with special regard to the tender of the Contractor), but not taken into account in the determination of the Contract Sum and all works without which the works may not be implemented in a condition fit for use in accordance with present function (hereinafter: Additional Works). The Client may demand the performance of Additional Works at any time.

5.10.2 The Contractor may not claim Contract Sum for the additional works and may not claim the reimbursement of extra costs occurring in relation to the performance of the additional works on the condition that the Client shall reimburse any certified and reasonable costs of the Contractor that were not foreseeable upon the conclusion of the Contract. The Contractor may not claim any reimbursements in relation to the Additional Works regardless of the legal ground thereof.

5.11 Extra works

5.11.1 The Contractor shall perform the works not forming part of the Contract (with special regard to works not included in the technical specification) and not included in the documentation serving as the basis of the conclusion hereof (with special regard to the tender of the Contractor), ordered subsequently by the Client that are necessitated by modification of designs in particular as extra works (hereinafter: Extra Works).

The Client may request the performance of Extra Works at any time. The Contractor shall submit a written proposal on the Extra Works within five (5) calendar days from the submission of the order for Extra Works. Such proposal shall include the detailed budget, the commencement and completion deadlines and all other information specified by the Client. The Contractor may only commence the performance of the Extra Works when the written consent of the Client has been obtained.

The Client shall prepare a detailed Bill of Materials regarding the particular Extra Works (in the case of Equipment and materials, by presenting the bill of sale) and shall deliver the same to the Client for approval. If the Extra Works affect any deadlines specified herein, the Parties may modify such deadlines with mutual consent.

5.12 Completeness

5.12.1 The Contractor shall comply with all of its obligations arising herefrom and shall be liable for the proper performance of its obligations, the compliance of performance, the suitability of the performance for the purpose of the Contract and for the achievement of the objectives wished to be achieved with the Contract.

5.13 Compliance with the instructions of the Client

5.13.1 During the performance hereof, the Contractor shall comply with the instructions of the Client. In the case of an inappropriate and unreasonable instruction of the Client, the Contractor shall call the Client’s attention to such circumstance in writing.

5.13.2 If the Client maintains its instruction in a written statement in spite of the notice of the Contractor, the Contractor shall perform the works in compliance with such instruction at the risk of the Client, unless the execution of the instruction would lead to a violation of laws or official decisions or would damage to life and limb and to the property of third parties.

5.14 Representations of the Contractor regarding the conclusion of the Contract

5.14.1 The Contractor represents that it is a business association validly existing in accordance with the laws of the country of its principal office, which holds the authorisations and consents necessary to sign the Contract and to fulfil the obligations arising herefrom (with special regard to authorisations compelled by laws and specified by company documents) and the Contract will give rise to lawful, valid and enforceable obligations for the Contractor.

The Contractor represents that it holds all permits and other licences necessary for pursuing its activity and all professional experience that is required to pursue its activity at an appropriate standard.

5.14.2 The Contractor represents that there are no proceedings pending for designating liquidators, administrators or any similar persons regarding the Contractor, no decisions ordering bankruptcy proceedings, liquidation and other insolvency proceedings against it has been initiated, no receiver has been appointed and no resolutions have been made regarding voluntary liquidation proceedings or other proceedings aiming to dissolve the Contractor.

5.14.3 The Contractor represents that it is not aware of any circumstances that would presumably lead to bankruptcy proceedings, liquidation or other insolvency proceedings initiated against the Contractor.

5.14.4 The Contractor represents that it holds the economic, financial and human resources necessary for the performance hereof, that the economic and financial standing thereof is stable, and that the Contract Sum specified herein providers sufficient funds for fulfilling its obligations arising herefrom and will cover the costs necessary for the performance hereof and the expected profit of the Contractor. The Contractor also represents that it is not aware of any facts exceeding normal business risks, affecting its own or direct or indirect owners’ operation or financial situation that would hinder or render impossible the performance hereof.

5.14.5 The Contractor represents that no third parties have any rights (with special regard to intellectual property rights) that would hinder the ownership, right, or claim of the Client acquired in accordance herewith (title warranty) and agrees to indemnify and hold the Client harmless against any and all claims of third parties in relation to such rights.

5.14.6 The Contractor represents that it holds licences of the software used for the performance hereof.

5.14.7 The Contractor agrees to comply with its abovementioned representations and other obligations assumed hereunder during the entire term hereof. The Contractor also agrees to inform the Client immediately of any changes affecting its representations or obligations and shall ascertain that the Client received such notice within five (5) calendar days from the sending of the same. Failure to fulfil the obligation to give notice will constitute a material breach of the Contractor. The Contractor shall inform the Client in writing immediately especially if it cannot fulfil its payment obligations to its creditors, it is threatened by insolvency and if a bankruptcy proceeding, liquidation proceeding or voluntary liquidation proceeding has been initiated against it.

5.14.8 The Contractor represents that it has foreseen upon the conclusion hereof that a possible consequence of its breach is a damage of the properties of the Client/Heating plant, especially of properties located on the site of the Heating Plant and the loss of profit resulting from reduction of electric energy and thermal energy production.

5.14.9 The Contractor agrees and undertakes that:

a) It will not pay or charge costs in relation to the performance of the Contract which arise in relation to a company not fulfilling the conditions specified in Subparagraph k) of Paragraph (1) of Section 62 of The Public Procurement Act and that are suitable to reduce the revenue of the Contractor subject to taxes.

b) It will make its ownership structure transparent and available to the Client during the entire term hereof and will inform the Client immediately if any legal persons or entity with personal rights granted by national law acquires a share exceeding twenty-five (25)% of the Contractor directly or indirectly with regard to which the conditions specified in Subparagraph k) of Paragraph (1) of Section 62 of the Public Procurement Act are fulfilled or the Contractor acquires a share exceeding twenty-five (25)% in a legal person or entity with personal rights granted by national law with regard to which the conditions specified in Subparagraph k) of Paragraph (1) of Section 62 of the Public Procurement Act are fulfilled.

5.15 Provision of spare parts

5.15.1 The Contractor shall, especially within one (1) year from the date the statement of the Client certifying the proper performance of the Contractor was issued, supply the spare parts necessary for operation to the Client in a quality in compliance with the requirements specified in the Contract.

5.15.2 The Contractor represents that it is aware of the fact that a failure to supply the spare parts may give rise to a significant amount of damages for the Client.

6. OBLIGATIONS OF THE CLIENT

6.1 General obligations of the Client

6.1.1 The Client shall pay the Contract Sum in accordance with the Contract.

6.1.2 The Client shall provide the places of performance of the work necessary for the performance of the Contract to the Contractor on the site of the Heating Plant with the conditions specified in the Contract and the internal policies of the Heating Plant to a reasonable extent.

6.1.3 The Client may inspect the work of the Contractor on the site of the Heating Plant at any time, and may inspect the work of the Contractor outside of the same in accordance herewith. The Contractor will not be relieved from any liabilities if the Client does not make any comments during the inspection or if the Client does not exercise its right of inspection.

6.1.4 The Client shall deliver the information requested reasonably by the Contractor to an extent necessary for the performance hereof and within a reasonable period of time (unless otherwise specified in the Contract) and shall perform the site inspection requested by the Contractor in relation to the performance hereof for the purpose of becoming familiar with the site of the Heating Plant prior to the commencement of the performance hereof on the site of the heating Plant by complying with the other conditions specified in the Contract within reasonable limits.

6.1.5 Should the Client fail to provide the information reasonably requested by the Contractor or to ensure the site inspection requested by the Contractor in relation to the performance hereof for the purpose of becoming familiar with the site of the Heating Plant prior to the performance hereof, the Contractor shall inform the Client of such circumstance in writing, indicating the requested, but not provided information, the purpose of the site inspection and the consequences of the performance based on the failed inspection and the incomplete information.

6.2 The Client’s requirements and the provision of other data

6.2.1 The Client shall deliver the following documents and data available to the same to the Contractor necessary for the performance of the Contract:

· …,

· ….

6.2.2 The Contractor may only use the documents and data provided by the Client for the purpose of fulfilling its obligations arising from the Contract and to a degree necessary for the same and may not disclose the same to unauthorised third parties taking into Contract Sum the obligation to keep business secrets in confidence.

6.3 Services provided by the Client/Heat Plant

The Client/Heat Plant shall ensure the fulfilment of the following conditions for the performance hereof:

· The delivery of the internal policies of the Heating Plant if requested by the Contractor,

· Consultation possibility,

· Ensuring the conditions of on-site surveys,

· Holding a review panel discussions for the assessment of the plans,

· Carrying out the licensing proceeding specified in the Contract as the obligation of the Client,

· In the case of the fulfilment of the conditions of granting access, the provision of access rights to the site of the Heating Plant,

· The delivery of the construction site, the provision of a ribbon and signposts for the confinement of the construction site,

· Regarding the commissioning and the proper implementation of the trial operation, and regarding the personnel and the required means and the quantity of other energy carriers:

…..

6.3.1 If any of the abovementioned conditions are not fulfilled or not properly fulfilled, the Contractor shall notify the Client immediately in writing. If the Contractor fails to notify the Client, the Contractor shall be held liable for damages arising therefrom.

6.4 Licensing

6.4.1 Unless otherwise specified in the Contract, the Client/Heating plant shall carry out the notifications and licensing proceedings necessary for the performance hereof, on the condition that the Contractor shall prepare the documents necessary for carrying out the licensing proceedings and notifications, unless otherwise specified by the Contract.

7. Performance

7.1 The Contractor shall be deemed to have fulfilled its tasks specified in the Contract if all obligations thereof have been fulfilled properly and the Client has issued the certificate of performance recorded in SAP system regarding the tasks of the Contractor specified in the Contract.

7.2 If the Contractor did not perform properly in the discretion of the Client, the provisions of the Contract and the relevant laws pertaining to faulty performance shall be applied.

8. Partial performance

8.1 The Contractor may perform its obligations specified in the Contract with the conditions and schedule specified in the Contract. The schedule is specified in Subsection 9.2 hereof. The Contactor shall inform the Client in writing of the performance of the particular partial task. The Client shall inspect the proper performance of the Contractor within fifteen (15) days from the receipt of the notice of the Contractor and shall inform the Contractor in writing within fifteen (15) days from the inspection of the acceptance or rejection of the performance of the partial task.

8.2 The Client will issue a certificate of partial performance of the task in accordance with Subsection 9.2. The date of the Contractor’s partial performance shall be the date specified in the written statement of the Client accepting the partial performance issued in accordance with the abovementioned.

8.3 In the statement regarding the rejection of the performance of the partial task, the Client shall justify such rejection by listing the defects and other reasons for the rejection and shall set an additional deadline for the performance of the partial task. In the case of the rejection of the performance of the partial task and the setting of an additional deadline for performance, the Client may exercise its rights arising from the Contract, with special regard to claim liquidated damages for delay, liquidated damages for default and may also claim damages in excess of the liquidated damages.

8.4 If the Contractor fulfilled the conditions for the proper performance regarding the partial task within the additional deadline, the Contractor shall inform the Client in writing of such performance. The Client shall inspect the performance of the partial task and shall inform the Contractor within fifteen (15) days from the date of such inspection of the rejection or acceptance of the performance of the partial task.

8.5 Unless otherwise specified in the Contract, the Client may be entitled to full use following the acceptance of the performance of the partial task to the degree determined during the acceptance of performance.

8.6 The certificate of the partial performance of the Contractor only justifies the eligibility of the Contractor for the payment of the interim invoice, and may not be construed as the Client’s acceptance of the Contactor’s obligations regarding the partial task and other obligations specified in the Contract. In addition to the acceptance of the performance of the partial task, the Client expressly reserves its right to cancel the contract and exercise its rights arising from the Contract in the case of the default or the breach of the Contractor.

8.7 The Contractor confirms that the Client’s acceptance of the performance of a partial task does not relieve it from fulfilling all of its obligations arising from the Contract and does not restrict the Client from exercising its rights in the case of the default of the Contractor or if the Contractor fails to perform any other tasks. The Contractor also confirms that its services are indivisible, with the exception of the legal consequences pertaining to delay.

8.8 Until the successful completion of the operational acceptance process (until the issuance of the certificate of performance), the risks and hazards occurring in relation to performance shall be borne by the Contractor. If the Contractor performs partially, the risks of hazard only pass to the Client regarding the partial performance accepted with the certificate of performance, if the property being the subject of the partial performance is delivered to the Client. In the case of operational acceptance, the Client shall set the date of the operational acceptance upon giving notice to the Contractor and shall also invite the concerned parties.

Payment Schedule, Billing

8.9 The Contractor may issue an invoice after the following partial tasks have been performed (partial performance) and accepted by the Client.

8.10 The following completion deadlines are deadlines secured by liquidated damages for delay.

No.

Task

Deadline

% of Contract Sum (%)

Value of services performed (HUF)

Advance payment accounted

(HUF)

Amount to be paid

(HUF)

0.

Advance payment

Within thirty (30) calendar days from the receipt of the pro-forma invoice

30

-

-

1.

Supply of the Equipment

… days from the conclusion of the Contract

50

2.

Supervision of assembly, participation on commissioning and trial operation, holding trainings (supply of spare parts)

… days from the conclusion of the Contract

20

-

Total:

9. Payment conditions

9.1 The Client shall fulfil its payment obligations in accordance with Paragraphs (1), (5) and (6) of Section 135 of the Public Procurement Act and Paragraph (1)-(2) of Section 6:130 of Act V of 2013 on the Civil Code (hereinafter: the Civil Code).

9.2 The Parties agreed to accept partial performances regarding the services to be provided in accordance herewith, therefore, the invoice shall be issued in compliance with Section 57 of Act CXXVII of 2007 on Value Added Tax.

9.3 The Client will issue a certificate of performance of the completed tasks printed from SAP system.

The Client shall issue the record of technical certificate of performance after performance (in the case of the proper performance of the Contractor) and shall deliver the same to the Contractor in compliance with the deadline specified by the act regulating the issuing of invoices (within fifteen [15] days from performance).

9.4 The invoice shall be issued within fifteen (15) calendar days from performance.

9.5 One copy of the invoice issued for the name and address of MVM ERBE Zrt. (1117 Budapest, Budafoki út 95.) shall be sent to the address of Nemzeti Üzleti Szolgáltató Zrt. (7031 Paks, Pf.152.) and the original/a copy of the certificate of performance signed by the Client shall be attached thereto.

9.6 The invoice will be paid via bank transfer, on the thirtieth (30th) calendar day following the receipt of the invoice. Should this day fall on a day-off, holiday, non-work day, or bank holiday, the invoice will be paid on the subsequent banking day.

9.7 In order to have the invoice paid within the deadline, the invoice shall

· include the number and responsible clerk of the Contract,

· include the name, tax registration number and principal office of the Contractor and the Client,

· include the bank account number of the Contractor where the amount of the invoice shall be paid,

· comply with the applicable laws,

· comply with the requirements specified in Section 169 of Act CXXVII of 2007 on Value Added Tax regarding format and content,

· include the TESZOR number in accordance with the content of the Contract,

· include the number of the SAP certificate of performance,

· have the original record of technical certificate of performance and SAP certificate of performance signed by the Client attached as an attachment of invoice.

9.8 The amount of the invoice will be paid to the bank account specified in the Contract or to an account verifiable in the effective company information database. If the submitted invoice does not indicate the bank account specified in the Contract or an account verifiable in the effective company information database, or if the Contractor submits a request to modify its bank account number, the payment of the invoice may be suspended until the Contractor can provide conclusive evidence that the bank account number is true.

9.9 In the case of an invoice not submitted in accordance with the Contract, Nemzeti Üzleti Szolgáltató Zrt. may return the invoice without payment, without the legal consequences of late payment.

9.10 The rate of late payment fee to be paid after late payments occurring for a reason within the Client’s control shall be the equivalent of the rate of current central bank base rate.

9.11 The late payment fee will be calculated from the first day following the payment deadline specified in the Contract.

9.12 The Client shall be relieved from the obligation to pay late payment fee if it excuses its delay.

9.13 The Contractor may only assign its claims arising from the performance hereof to a third party with the prior written consent of the Client.

The Bonds of the Contract

Upon the entry into effect of the Contract, the Contractor shall provide a performance bond to the Client to secure the claims arising from the failure to perform the Contract in accordance with Paragraphs (2) and (4) of Section 134 of the Public Procurement Act in one of the manners specified in Subparagraph a) of Paragraph (6) of Section 134 of the Public Procurement Act The amount of the performance bond shall be five (5) % of the Contract Sum exclusive of taxes. The Performance Bond shall be in effect for thirty (30) days from the issue date of the record of the successful trial operation. The Client may enforce its claim for liquidated damages for default against the Client from the performance bond and may enforce its remaining claims for liquidated damages for default exceeding the amount of the performance bond in any other manner.

For the period of warranty, the Contractor shall provide a Warranty Bond to the Client to secure the claims arising from faulty performance in accordance with Paragraphs (3) and (4) of Section 134 of the Public Procurement Act in one of the manners specified in Subparagraph a) of Paragraph (6) of Section 134 of the Public Procurement Act. The Contractor shall provide the warranty bond to the Client at latest upon the issue date of the of the record of the successful trial operation of the Equipment in the amount of five (5) % of the Contract Sum exclusive of taxes. The Warranty Bond shall be in effect for thirty (30) days from the expiry date of the warranty period.

If the warranty obligation is extended for a period exceeding the warranty period (…. months in accordance with Subsection 13.2 of the Contract), the warranty bond shall be in effect until the warranty obligation ceases regarding all parts of the Equipment.

The Client shall examine the guarantees and the insurance bonds previously. Such guarantees and bonds may only be obtained from banks and insurance companies with a Hungarian branch office.

Provisions regarding tax clearance

9.14 If the Contract is performed properly, the payment will be subject to Section 36/A of Act XCII of 2003 on the Rules of Taxation, in accordance with which the Client may only pay the amounts in the case of a payment exceeding a monthly two hundred thousand Forints (HUF 200 000) exclusive of taxes, without a money retention obligation, if

· the Contractor presents, delivers or sends a clean tax certificate issued within thirty (30) calendar days from the actual payment date, or

· the Contractor is listed in the list of taxpayers on the date of the payment.

9.15 The laws pertain to all payments made based on contracts concluded between the contracting authority and the winning tenderer in accordance with the Public Procurement Act in relation to the performance of public procurement proceedings, contracts concluded between the winning tenderer and the subcontractors in accordance with the Public Procurement Act, as well as contracts concluded between contractors in contractual relationship with the subcontractors in accordance with the Public Procurement Act.

9.16 The money retention obligation does not pertain to value added tax.

9.17 The Client only agrees to pay the invoices that comply with laws.

10. LiABILITY for the performance of the contract and the breach thereof

10.1 Unless otherwise specified by the Contract or the applicable law, the Contractor shall fulfil its obligations arising herefrom with the highest degree of care reasonably expected from an expert undertaking performing its work in accordance with the good practices of the sector and other applicable practices.

10.2 Unless otherwise specified by the Contract, the liability of the Contractor for breach and its obligation to pay damages is subject to the relevant provisions of the Contract and the applicable laws on the condition that the Contractor shall compensate the Client for any damage caused by the breach of its confidentiality obligations arising herefrom, by infringing the intellectual property rights of the Client or a third party, by its intentional or grossly negligent conduct, by causing bodily harm, damage to life or limb, as well as criminal actions, and shall fully indemnify the Client and hold it harmless against any claims of any third parties.

10.3 Unless otherwise specified by the Contract, the Contractor shall fulfil its payment obligations arising from the breach of contract within thirty (30) calendar days from the receipt of the notice of the Client.

11. LIQUIDATED DAMAGES

11.1 Liquidated damages for breach

11.1.1 In the case of breach of contract, the Contractor shall pay liquidated damages and damages in excess of the liquidated damages. The amount of the Contract Sum exclusive of taxes shall serve as the basis of the liquidated damages.

11.1.2 Types and rates of liquidated damages:

1. in the case of a delay, and in the case of delays in relation to the interim completion deadlines and final deadline specified in Subsection 9.2 hereof, liquidated damages shall be paid at a rate of 0,5 % of the amount of the Contract Sum exclusive of taxes for each day in default, but not exceeding 15% of the amount of the Contract Sum exclusive of taxes, which becomes due and payable upon performance without a separate notice;

1. in the case of faulty performance, liquidated damages shall be paid in the amount of 10% of the amount of the Contract Sum of the partial task subject to faulty performance exclusive of taxes;

1. in the case of non-performance, liquidated damages shall be paid in the amount of 20% of the amount of the Contract Sum of the partial task not performed exclusive of taxes;

1. penalty for defective functionality regarding the electric hot water boiler in accordance with Annex No. 1/A hereof;

1. penalty for beach of obligation of availability regarding the electric hot water boiler in accordance with Annex No. 1/B hereof.

11.1.3 Maximum amount of liquidated damages: the total amount of liquidated damages specified in Subsection 12.1.2 may not exceed twenty (20) % of the amount of the Contract Sum exclusive of taxes.

11.1.4 Besides paying liquidated damages for delay and default, the Contractor shall also fulfil its obligations arising from the Contract. The Client may also enforce its warranty and guarantee claims besides enforcing its claims for liquidated damages for faulty performance.

11.1.5 If the Contractor shall pay liquidated damages in accordance with the Contract, the Client shall give a notice to the Contractor. Such notice shall include the amount of the liquidated damages to be paid and the events giving rise to the obligation to pay liquidated damages as well as the deadline for paying such amounts. The Client may set-off the due amounts of liquidated damages from the Contract Sum or any claims of the Contractor against the Client.

11.1.6 The Client may claim damages in excess of the liquidated damages.

11.1.7 The interim completion deadlines specified in Subsection 9.2 are subject to the obligation to pay liquidated damages.

12. Guarantee and warranty for defects

12.1 The Contractor shall assume warranty for the fulfilment of its obligations specified herein. In relation to its guarantee and warranty obligations, the Contractor confirms that it has performed its task specified in the Contract in compliance with the conditions specified in the Contract and the applicable laws and official requirements.

12.2 The period of warranty shall be …. months from the issue date of the record of the successful completion of the trial operation of the Equipment to be incorporated.

12.3 If a period of warranty for defects is compelled by laws regarding the fulfilment of the obligations of the Contractor specified in the Contract that is longer than the warranty period specified in the Contract or a further mandatory period of warranty for defects is compelled by laws, then this longer period of warranty or warranty for defects shall be applied and the Client may exercise its rights regarding guarantee and warranty for defects compelled by laws parallel to exercising its rights arising from the Contract.

12.4 Upon the notice of the Client, the Contractor shall immediately commence the correction of the defect without a separate charge within the deadline agreed upon by the Parties. All costs arising in relation to correction shall be borne by the Contractor. If the Contractor fails to correct the defect or fails to perform the works omitted within the reasonable deadline, the Client may have such works carried out at the costs and expenses of the Contractor with a third party.

12.5 During the period of guarantee or warranty for defects, if the defect is corrected on the site of the Heating Plant, the Contractor may commence the correction under the circumstances specified by the Client, not restricting the guarantee and warranty undertakings of the Contractor and shall cooperate in the correction of the defect in accordance with the conditions specified by the Client.

12.6 At the end of the guarantee period, the Parties will inspect the site and will record all defects, if any, in writing and the deadlines of the correction thereof based on the guarantee. After the inspection, if the Contractor corrected all defects, the Client will issue the Final Acceptance Certificate, and by issuing it, the guarantee period may be deemed to have been closed from the date it has been issued under this Contract.

12.7 The Client may exercise its rights arising from guarantee obligations and obligations of warranty for defects as well as from the guarantee and warranty in relation to intellectual property (with special regard to designs) in accordance with the provisions hereof regarding intellectual property and design.

13. INSURANCE

13.1 The Contractor shall take out insurance regarding a minimum of fifty million Forints (HUF 50 000 000) /insurance event and a liability insurance regarding supply activity with a minimum limit of one hundred and fifty million Forints (HUF 150 000 000)/ year or shall extend the existing liability insurance accordingly to the date of signing hereof, and shall maintain such insurance policies in effect from the effective date of the Contract until the termination hereof.

13.2 The acceptance of the certificates and insurance policies by the Client does not relieve the Contractor from any liability and may not be construed as releasing the Contractor’s from its obligation to maintain insurance in compliance with the requirements specified herein during the term hereof.

13.3 The Contractor shall ensure that the required insurance policies are available in their entire amount and with their entire coverage during the term hereof.

13.4 The insurance policies specified herein shall be taken out from insurance companies of proper quality. Neither the Client, nor the Contractor or the representative engaged by the same may violate the provisions of the insurance policies specified herein or may contribute to the same.

13.5 The insurance specified herein does not affect the liability of the Contractor unless otherwise specified expressly and does not hinder the Contractor from fulfilling its obligations assumed hereunder.

14. INTELLECTUAL PROPERTY

14.1 Intellectual property contained in the services

14.1.1 The Client acquires royalty-free, non-exclusive, unrestricted, worldwide and perpetual right to use, utilize and enjoy benefits the intellectual property developed by the Contractor not in relation to the performance hereof, but used for the same and appearing in the same (intellectual property contained in the services).

14.1.2 The licence of the Client shall cover the adaptation, modification, transformation and further development of the intellectual property contained in the services, the adaptation, modification, transformation and development of the same by third parties, as well as the recording on visual and audio recordings and copying with computer or to an electronic data storage media.

14.1.3 In relation to the intellectual property contained in the services, the Contractor assumes full title warranty and related guarantee during the entire protection period of the intellectual property contained in the services. In the framework of the abovementioned, especially, to avoid the suspension of the performance of the Contract and the right of use of the Client, the Contractor will immediately indemnify the Client and shall take all measures to avert any hindrances to the rights of the Client and to relieve the Client from all burdens, and shall compensate the damages, expenses and encumbrances of the Client in relation to the intellectual property contained in the services in the scope of the title warranty and guarantee immediately, and the amounts of any damages, compensations as well as the amounts of compensation for unjust enrichment and similar amounts.

14.1.4 The Contractor shall defend the Client in any legal actions initiated against the same in relation to the intellectual properties contained in the services by any courts or arbitration courts upon the request of the client, and shall make all reasonable efforts for a successful outcome in accordance with the Client’s interests.

14.2 Intellectual property related to design

14.2.1 The provisions hereof pertaining to the created intellectual property contained in the services shall be applied to the property rights of the design documentation to be prepared in relation to the performance hereof with the following deviations.

14.2.2 The property rights of the design documentation to be prepared in relation to the performance hereof shall be held by the Contractor, with the following restrictions.

14.2.3 The Client may use the design documentation prepared by the Contractor for the implementation of the works or a part thereof to be implemented in accordance with the Contract, with special regard to the preparation of the working drawings without any restrictions, and may multiply, record in visual recordings and may copy the same with a computer or to an electronic data storage media for the same purpose.

14.2.4 The Client may multiply the design documentation and deliver the same to the contractors cooperating in the implementation of the works or a part thereof for the purpose of selecting and tendering contractors.

14.2.5 The Client may deliver the design documentation to the contractor cooperating in the implementation of the works or a part thereof for the purpose of using the same in relation to the implementation of the works or a part thereof. If the modification of the design documentation is necessary for the implementation of the works or a part thereof with special regard to further design, the Client may only perform the further design or have the same performed in relation to the further design or implementation of the works or a part thereof, on the condition that the further design is only possible in relation to the works specified in the design documentation or a part thereof.

14.2.6 The Client may deliver the design documentation for the purpose of data provision in relation to the adaptation, further design of the implemented works or the implementation of new works or the adaptation of the existing works to third parties or authorities for inspection. The Client may transform the works implemented based on the design documentation or a part thereof or have the same transformed without limitations and may use or adapt the design documentation during such adaptation without any limitations.

14.2.7 In excess of the rights of the Client specified above, the design documentation may only be used upon the prior written consent of the Contractor.

14.2.8 In the case of works implemented in deviation of the design documentation, the Contractor may only be held liable for the parts of the works implemented in relation to the design documentation.

14.2.9 The Contractor may only use solutions protected by intellectual property rights during design and may only indicate intellectual property protected by intellectual property rights in the design the use of which have been approved by the Client previously. The Contractor shall provide the name of the licensee of the intellectual property rights to the Client and shall deliver the data pertaining to the intellectual property right to the same. The Contractor shall make all efforts on behalf of the Client so that the Client may acquire right to use for the solution protected by intellectual property rights except for the payment of the Contract Sum to be paid for the intellectual property right.

14.2.10 The Contractor assumes title warranty and guarantee in relation to the intellectual properties indicated in the design and used without the express prior written consent of the Client during design for the performance hereof and will compensate all damages, expenses and encumbrances of the Client arising in relation to such intellectual properties immediately, and the amounts of any damages, compensations as well as the amounts of compensation for unjust enrichment and similar amounts.

14.2.11 The Contractor shall defend the Client in any legal actions initiated against the Client in relation to the intellectual properties by any courts or arbitration courts upon the request of the Client, and shall make all reasonable efforts for a successful outcome in accordance with the Client’s interests.

15. SUSPENSION

15.1 The Client may unilaterally suspend the performance of the Contractor in part or in total at any time upon a prior written notice. The notice shall include the date, extent and manner of suspension, whether the suspension is for a definite or indefinite term as well as the further actions to be taken by the Contractor, if any.

15.2 The Client is not obliged to justify the suspension.

15.3 In the case of a suspension, the Contractor shall

a)suspend performance from the date specified in the notice, to an extent and in a manner specified in the same;

b)inform the persons engaged in the performance by the Contractor immediately, and, if necessary, suspend the contracts concluded with such persons on the condition that the Contractor shall be liable for all damages arising from a delay in giving notice of the suspension;

c)assign the work to the persons engaged in the performance of the Contract by the Contractor in accordance with the notice, and order and purchase any properties in relation to the performance of the Contract;

d)take all security, property and work safety actions necessary for the immediate continuance of the performance of the contract as a result of the suspension and following the same, and

e)fulfil its obligations specified in the Contract not affected by the suspension of performance.

15.4 In the case of the total suspension of performance, if the period of suspension exceeds thirty (30) calendar days, the Client and the Contractor shall commence negotiations based on the notice of either Party within fifteen (15) calendar days regarding the next actions to be taken.

15.5 If the Contract is suspended for a reason within the Contractor’s control, the Contractor is entitled to the Contract Sum of the works performed properly and accepted by the Client until the date of suspension. The Contractor may not claim any further reimbursements in relation to the suspension, regardless of the ground of such claim.

15.6 The Client may withdraw the suspension of the Contract with a written notice at any time and instruct the Contractor to continue the total or partial performance of the Contract. The Contractor shall continue the performance of the Contract from the date specified in the notice, as well as to an extent and in a manner specified in the same.

15.7 If the performance of the Contractor is suspended, the deadlines applicable to the performance of the Contractor will automatically be extended with the period of the suspension, unless agreed upon otherwise by the Parties.

15.8 The Contractor may not suspend the performance of the Contract unilaterally, except for force majeure events.

16. Modification of the contract

16.1 The Contract may only be modified in writing with the mutual consent of the Parties and in accordance with the provisions of the Public Procurement Act.

The modification of the data, contact persons and the subcontractors of the Contractor may not be construed as the modification of the Contract on the condition that the modification of the data and contact persons is only applicable after the Party modifying such data and contact persons informed the other Party in accordance herewith, in writing. The modification of the subcontractor(s) or representative(s) specified in Subsection 5.14.4 initiated by the Contractor may not be construed as the modification of the Contract either.

17. Termination of the contract

17.1 General provisions

17.1.1 The Contract may be terminated with termination for breach by either Party, by the cancellation of the Client or the termination for convenience by the Client in the cases and under the conditions specified in this section.

17.1.2 The Parties may only terminate or cancel the Contract in the cases and with the conditions specified herein and may not invoke any other general or special right of termination or cancellation under the applicable law.

17.2 The general right of termination of the Client

17.2.1 The Client may terminate the Contract in part or in total without any justification (termination for convenience) and may cancel the same, unless prohibited or restricted by laws (cancellation). The Client shall give notice to the Contractor of such circumstances. The notice shall include the date, extent and manner of termination or cancellation and the actions to be taken by the Contractor in relation to the termination or cancellation.

17.2.2 The date of termination for convenience or cancellation shall be the date specified in the notice by the Contractor in such cases.

17.2.3 The Contractor shall act in accordance with the instructions of the Client following the receipt of the notice of termination for convenience or cancellation and shall take all reasonable actions to avoid costs arising from termination or cancellation or to reduce the same to the minimum.

17.2.4 The Contractor shall prepare a proposal within five (5) working days from the receipt of the notice of termination for convenience or cancellation and shall deliver it to the Client. Such proposal shall include the preservation of the condition of the works already completed and the reimbursement and other claims of the Contractor.

17.2.5 The Client will decide on such proposal within fifteen (15) days if possible and shall ensure the satisfaction of the accepted reimbursement and other claims accepted.

17.2.6 The parts of the Contract performed prior to the termination for convenience or cancellation may not be affected by the termination for convenience or cancellation, unless otherwise specified expressly by the Client.

17.2.7 The parts of the Contract not subject to termination for convenience or cancellation shall be performed in accordance with the provisions hereof.

17.2.8 In the case of the termination for convenience or cancellation of the Contract by the Client, the Client shall pay the Contract Sum of the obligations fulfilled by the Contractor in accordance herewith and accepted by the Client until the date of termination for convenience or cancellation to the Contractor. The Contractor may not claim any further amounts in relation to the termination for convenience or cancellation specified herein, regardless of the ground of such claims.

17.3 The right of termination for breach of the Client

17.3.1 The Client may terminate the Contract with immediate effect (termination for breach) or, terminate the same in part or in total with immediate effect at its own discretion if not prohibited or limited by laws (cancellation with immediate effect), if the Contractor fails to perform the Contract properly, including especially:

a) If the Contractor defaults with any of its obligations arising from the contract, relevant laws, official requirements or the relevant practice in the sector (including if it becomes obvious before the completion deadline that the Contractor will default with performance);

b) If the Contractor fails to fulfil any of its obligations arising from the contract,