The two 2.1cch Power 'Ilerine were manufactured by MicroTurbines Energy Co. before the end of 2018. Micro'Iurbines Energy Go. still performed the contract. hoping that negotiations with the Buyer would ultimately be satisfying. The turbines were transported by sea, and were delivered near Banyuls on 13 March ENE. at which time the tariff of 20.5% had to be paid by MicroTurbines Energy Go. However, before the contract could be completed. the turbines had to pass an acceptance test. in real conditions. And the engineers of MicroTurbines Energy Co. were required to take part in installing the turbines. respecting all relevant specifications, to make sure they would function properly. Unfortunately. the tests carried out on 23 August 2019. at the end of construction of the plant, when the turbines are finally operational. show that there is a problem. The turbines are not faulty in themselves. But the engineers of MicroTurbines Energy Go. realized that the discharge of water [the volumetric flow rate of water that is forced by the chute through the turbines) is too important: the aqueduct is too wide, and the reservoir is too high. The turbines were not built to tolerate such pressure and such a high flow. The engineers of MicroTiurbines Energy Co. did not have any precise idea of the global layout of the power plant, since they were only specifically in charge of installing the turbines and making sure they were functioning as specified. The engineers of JP Dupond 'TPCl did not have information about the fact that there was a limit to discharge tolerated by the turbines. and it was too late to alter design of the plant. The result of this is that, although the turbines could indeed produce electricity as required, they would be under such stress beyond their working specifications that they would very probably break down within 5 years of service. The engineers of both companies agreed on that figure. As early as in early March 2016. while preparing its participation in the tender process, JP Dupond TPCI had contacted MicroTurbines Energy Co.. Ltd to enquire about a potential delivery of two 2.1ccr'R Power Turbines to be included into the plant. should the contract be awarded to JP Dupond TPCI. The fact that JP Dupond TPCI wanted to include the two 2.1ccr'R Power Turbines in a hydro power plant was clear. but the specifications of the site. including discharge and size of the water chute, were not disclosed. MicroTurbines Energy Co.. Ltd made no statement about the capability of the turbines to operate in view of these specifications. since they had no knowledge of them. but they did not issue any warning either. MicroTurbines Energy Co.. Ltd just relied on the fact that JP Dupond TPCI had access to the online catalog. and assumed that failure to discuss the water discharge specifications meant that the engineers of JP Dupond TPCI were aware of the limitations and were sure they would not bea problem. When they found out about this problems. the local authorities in Banyuls made it clear the selection of the winner of the tender had taken into considerations the fact the bidder announced that the turbines used would last longer than those used by competitors in other bids. The councilor in charge of the project. Mr. Gilbert. made it clear that the City would refuse the plant as is, and would sue JP Dupond TPCl for unsatisfactory completion of the works. On 29 September 2019. the leading daily newsfeed on renewable energy, the Renewable Daily News. published a report about the problem in the hydro power plant. accusing the companies involved of poor engineering design. and the City of throwing away taxpayers' money. In the end. Mr. Gilbert from Banyuls City Council requested that JP Dupond TPC] asked for the installation of two new Power Turbines. of higher capacity. that would be fit for the specifications EXHIBIT 1 SALES AGREEMENT Whereas the City of Banyuls (Banyuls) took the decision in 2010 to become a fully self-sustainable community as far as the production and consumption of energy is concerned within the next ten years; Whereas an important element in Banyuls's green energy strategy to satisfy the local energy demand exclusively by renewable sources is the construction of a pump hydro power plant to be able to equalize imbalances in the supply and demand of wind and solar energy by the use of hydro power; Whereas Banyuls has invited tenders for the construction of a pump hydro power plant with a potential to produce 600 MW to support its strategy; Whereas JP Dupond TPCI SA has participated in the tender and won; Whereas one of the important considerations for awarding the tender was be to minimise the risk of having to rely on energy produced by non-renewable sources by providing a largely uninterrupted supply of hydro energy; Whereas MicroTurbines Energy Co., Lid has recently released its new and innovative Francis Turbine 2.1cc/R, which due to its characteristics complies with the requirements and considerations as set out in the tender; The following agreement is concluded: Article 1: PARTIES Seller: MicroTurbines Energy Co., Ltd, 3rd Floor North, Montang Building, Jinhua, Zhejiang, China ("SELLER">); and Buyer: JP Dupond TPCI SA, 13 Rue Sherlock, Paris, France ("BUYER">); Collectively referred to as "the Parties". Article 2: SELLER'S OBLIGATIONS22 of 25 EXHIBIT 9 Email From: JP Dupond TPCI SA spcomcememlupundtpchf Sent: 24 August 2010, 10:02 am. To: MicroTurbines Energy Co. Ltd
Re: Inquiry re 2.1ccr'R Power turbine Dear Ms. Emily, I must be the bearer of bad news, and tell you we have a serious problem here in Banyuls, concerning those two turbines you delivered. It turns out that they will not function acceptably. The tests that were run yesterday by your engineers, and then by ours, take us to the same conclusion: the turbines are too weak and too small for our power plant. This is extremely disappointing. All the more so as we have already made full payment to you, and that we are facing dire consequences if the works on the plant fall behind schedule. The City of Banyuls, our client, is very demanding of us, and has made clear that deadlines must be respected. However. I am hoping you will take reasonable measures within your power to remedy this situation. Therefore I invite you to consider the possibility of replacing the unsatisfactory turbines with bigger capacity models from your catalog. If you were to agree to this. and if you could guarantee that you will be able to deliver them within a month, my company is ready to forsake all claims it has against your company for the improper performance of our Agreement. I find this to be a very reasonable solution to this accident. Failing an amicable solution, we would not hesitate to bring your company to justice and call upon it to indemnify us of any penalties we could suffer for not meeting the delivery date with our client. Sincerely, / Cathy Mercer JP Dupond TPCI SA 13 Rue Sherlock Paris. France T: (+33)146690041 Email: procurement@Dupondtpci.fr DupondTPCI.fr (b) it could not reasonably have avoided or overcome the event or its consequences, THEN the parties are bound, within a reasonable time of the invocation of this Clause, to negotiate alternative contractual terms which reasonably allow for the consequences of the event. Article 21: DISPUTE RESOLUTION 1. This Sales Agreement shall be governed by the law of the People's Republic of China, exclusively. 2. Any dispute arising out of this contract, including the existence, validity, interpretation, performance, breach or termination thereof shall be referred to and nally resolved by a court of law seated in Europe. Article 22: MSCELLEANOUS 1. This document contains the entire agreement between the Parties. 2. SELLER's general conditions of sale do not apply to the present Agreement. The parties hereto understand and agree to abide by the terms and conditions as set forth in this Agreement: 5o agreed in Geneva on 19 November 2th? : For the SELLER, For the BUYER, Mr Yuan Jiaiun. CEO Mr Claude Gant. Head of Procurement of this plant: instead of 2.1cch turbines, the plant could use 3.9cctR turbines fmm the same supplier, and the problem would be solved. The idea of Mr Gilbert is that JP Dupond TPGI has a claim against MicroTurbines Energy Co, Ltd for the delivery and installation of two replacement turbines due to the non-conformity of the turbines delivered. I{Zine of the important features of the Power Turbine built by MicroTurbines Energy Co., Ltd is that they are supposed to be extremely resistant: these characteristics justify the high price which is 1G% above that of any other comparable water turbine of equivalent output. MicroTurbirtes Energy Co., Ltd make a defense by saying they never guaranteed that the turbines sold were adapted to the specific design of the plant, on which they were not consulted, and of which they had no specific knowledge. When the two companies realize that they are not going to be able to find an amicable solution to these problems, they accept that litigation will be necessary to vindicate their rights. MicroTurbines Energy Co., Ltd take the initiative, and send JP Dupond TPCI notice that they are initiating litigation involving the twu companies before the commercial court of Berlin Germany. Go 15 March 2021'], the commercial court of Berlin receives the official notice that starts the procedure. A serious problem then arises. The German judge in charge of preparing the dispute for its hearing in court has a doubt about the jurisdiction of French courts. She makes the argument that the contract is poorly drafted, and that article 21.2 of the Agreement does not make sense and cannot be applied. Considering the invalidity of that contractual term, the judge thinks that it is probable that the courts of the People's Republic of China should have jurisdiction on the dispute. This issue needs to be discussed at the very start of the trial by the commercial court of Berlin. EXHIBIT 4 Email From: JP Dupond T PCI 5A {We Sent: 3 August 2D1T, 11:32 am. To: MicroTurbines Energy Co. Ltd Sent: 24 July 201?, 11:23 am. To: JP Dupond TPCI SA Re: Inquiry re 2.1cc.-"R Power turbine Dear Ms Mercer, Thank you very much for your email of 21 July 2131'? and the interest in buying two of our latest 2.1cclR Power turbine. We have indeed seen the various reports about JP Dupond 's impressive projects over the past years. Therefore, we were not surprised when you contacted us enquiring about the availability of 2.1cclR Power turbines for your new development. Their output is 300 MW. The sort of your request asking for an EXW, however. came as a surprise. Normally, we take care of transportation for our foreign clients, for obvious reasons: we are used to working with a trusted carrier to ship our machines to Europe, and we think it better if we are the ones dealing with the Chinese authorities for clearing out the goods for export. In your case, taking into account Dupond's outstanding reputation in the area of construction and to show you our interest in entering into a long-term mutually beneficial relationship we are willing to make an exception from our general approach. Thus. we will gladly supply you with the 2 machines at a discounted price. We note. and that should not come as a surprise to you, that the installation of the turbines can only be made under the supervision of our engineers. That supervision is included in the price quoted. The basic conditions would be as followed: Price: 13.00D,DOD USD per turbine; to be picked up at our premises. Completion and collection by Dec. 3, 2013. The purchase would be based on our general conditions which you can nd on our webpages. Sincerely, Ms Emily Sales department MicroTurbines Energy Co. Ltd 3rd Floor North. Montang Building, Jinhua. Zhejiang, China P: (0)146 9346359 MicroTurbinesbiz EXHIBIT 2 Email From: JP Dupond TPCI SA 41W} Sent: 21 July 201?, 10:04 am. To: MicroTurbines Energy Co. Ltd Sent: 9 September 2017, 11:32 a.m. To: MicroTurbines Energy Co. Ltd Re: Inquiry re 2.1cc/R Power turbine Dear Ms. Emily, Thank you very much for your new quote. We agree with the new price you are offering. It seems to us a reasonable compromise, given it is a DDP sale. You made valid arguments. I understand your reluctance to take further risks. However, our lawyers have reviewed the ICC Hardship Clause 2003 and they find it to be too general. They suggest that paragraph 3 of the clause should be abandoned, and our contract should only include paragraphs 1 and 2. As far as your problem with jurisdiction is concerned, we could find it acceptable to make the clause a little more flexible, giving both companies more liberty in case a dispute happens between us. Of course, this seems a very unlikely event, but if we are already accepting to use the domestic law of China for the contract, we cannot accept to make that same concession for the place were a dispute would be solved. I will, indeed, be attending the Berlin fair in October. I suggest we meet there and draft the contract, and then our CEOs could sign the deal within the following days. Sincerely, Cathy Mercer JP Dupond TPCI SA 13 Rue Sherlock Paris, France T: (+33)146698041 Email: procurement@Dupondtpci.fr DupondTPCI.frEXHIBIT 10 Email From: MicroTurbines Energy Co. Ltd Sent: 24 February 2020, 11:23 a.m. To: JP Dupond TPCI Notice of litigation Dear Sir or Madam, This email is to put your company JP Dupond TPCI officially on notice that we are rejecting all claims it has presented to us. We have decided that we would bring this dispute to court, since we have failed to find any amicable way of settling it with your representatives. We are appalled at your lack of good faith in not recognizing that the error was made by you, and that we should not have to pay for it. I am very much afraid that we have no other choice but to bring an action against JP Dupond TPCI, in a court of law of the Republic of Germany, in Berlin. Sincerely, Ms Hui Hui LEE Head of legal department MicroTurbines Energy Co. Ltd 3rd Floor North, Montang Building, Jinhua, Zhejiang, China P: (0)146 9346359 MicroTurbines.bizEXHIBIT '7 From: MicroTurbines Energy Co. Ltd Sent: 22 December 2013, 9:03 am. To: JP Dupond TPCI SA Sent: 23 December 2018, 11:32 a.m. To: MicroTurbines Energy Co. Ltd Re: Inquiry re 2.1cc/R Power turbine Dear Ms. Emily, I am doing very well, thank you. I hope that you are doing well, too. We agree that your idea is better indeed than having to take apart the turbines in France if they turn out not to fit through the doors or through the roof. I understand your reluctance to start transportation under those circumstances. However, I am comfortable with the idea that the turbines will be shipped in parts and finally assembled in France. Therefore I invite you to proceed as suggested. I have to insist that you keep the initial deadline, and that your respect the date agreed. As you know, our schedule is quite tight, and Mr Gilbert, the councilor of the City who is in charge of supervising the works, is not a man to let the deadline slip easily without raising a lot of problems. Sincerely, Cathy Mercer JP Dupond TPCI SA 13 Rue Sherlock Paris, France T: (+33)146698041 Email: procurement@Dupondtpci.fr DupondTPCI.fr1. The SELLER undertakes to produce and deliver to the buyer two Power Turbine 2.1ch'R of 300 MW power each, with the further characteristics as specied in detail in Annex A, and to install the said turbines on site, otherwise following WCOTERM DDP; 2. The SELLER undertakes to organize transport of the goods and delivery in France, in Banyuls, by the end of March 2MB, as decribed in Incoterm DDP {2020}; It...) Article 3: BUYERS OBLIGATION 1. The BUYER undertakes to purchase said turbines from the SELLER at the price agreed in the present AGREEMENT ; i...) Article 4: PURCHASE PRICE 1. The purchase price for each of the turbines is determined to be 19,5,00 euros (nineteen million and ve hundred thousand euros} ; 2. The purchase price covers all of the operation agreed in the present AGREEMENT, including transportation costs, insurance, handling, and installation of turbines on site. 3. The purchase price shall be paid in three installments of 13,00,0 euros each, the rst installment being paid two months after conclusion of the present AGREEMENT, the second installment being paid six months after that, and the last installement being paid after successful acceptance test of the turbines after installation on site. i...) Article 11 : FAILURE TO PERFORM OEIJGATIONS 1. SELLER shall not be responsible for lost shipments or delays in delivery not within the control of the SELLER such as missed ights, weather delays, failure of third party service, or equivalent situations which constitute Force majeure in the sense of Article 79 of the United Nations Convention on Contracts for the International Sale of Goods (193!\" (CISGL 2. (1) A party to a contract is bound to perform its contractual duties even if events have rendered performance more onerous than could reasonably have been anticipated at the time of the conclusion of the contract. (2) HOWEVER, where a party to a contract proves that: {a} the continued performance of its contractual duties has become excessively onerous due to an event beyond its reasonable control which it could not reasonably have been expected to have taken into account at the time of the conclusion of the contract; AND that 11 Claimant, JP Dupond TPCI SA, is a market leader in France in building hydro power plants. It operates throughout Europe, and is well known for the quality of its designs. Its engineers have gained a reputation for creating hydro power plants conforming to the highest environmental standards. It is headquartered in Paris, France. Respondent, I'incroTurbines Energy Co., Ltd, is a world-renowned producer of premium water turbines. It has delivered two of its newest 21ch191 Power Turbines to Claimant for including into Banyuls Pump Hydro Power Project. It is headquartered in Zhejiang, China. Banyuls is a commune of 41,600 people situated on the coast of the Mediterranean, at the foot of the Pyrenees mountain range in France. For the last ten years Banyuls has moved towards transformation in a sustainable community, including its adoption of a Sustainability Plan for 2030. The main project to make the city wholly sustainable is to fully switch to renewable energy. In 2011) the City Council of Banyuls decided to implement a "no-carbon\" energy-strategy. A cornerstone in that strategy was the construction of a pump hydro power plant. Its primary purpose was to make the availability of renewable energy largely independent from the weather conditions which affect the production of wind and solar energy. In times of overproduction the excess energy produced by the wind turbines and solar panel is used to pump the water from the neighboring sea into an upper reservoir in the mountains. From there, the water is then released again to the sea through a chute, powering the turbines of the power plant whenever the demand exceeds the supply of green energy produced by the wind turbines and the solar panels. By being able to store a considerable amount of excess energy at times of overproduction and to release energy promptly when needed, the power plant plays an important role in stabilizing the local Banyuls energy grid. In January 2016, the Council of Banyuls invited tenders for the construction of the pump hydro power plant and its reservoir: JP Dupond TPCI participated in the process and submitted a bid. On 15 July 2017, JP Dupond TPCI was awarded the contract. One of the reasons for its selection was JP Dupond TPCI's reputation for meeting high ecological standards, as was demonstrated from the fact that they would be using hydro pumps manufactured and designed by MicroTurbines Energy Co., the newly developed, innovative, and energy-efficient 2.1cci'R Power Turbine. The use of that turbine allowed for a more environmentally-friendly design of the plant: its increased efficiency guaranteed that the system would produce enough electricity with only the use of two turbines. These machines are more expensive than average market prices of competitors [more or less 10% more expensive) but much more efcient. According to the information provided by MicroTurbines Energy Co., this new modd of hydro turbine, due to its design and the materials used, allowed for longer life and a 25% gain in efficiency. This was an important consideration since generally such turbines, being under a lot of stress, will be out of service and beyond repair in 2{] years in average conditions, give or take 2 years. And the extra efficiency allowed the plant to function with 2 turbines instead of 3, therefore reducing its ecological footprint. Therefore, an Agreement was reached between JP Dupond TPCI and MicroTurbines Energy Co. [see Exhibits, infra), after an exchange of emails [see Exhibits, infra] through which the terms of the contract were negotiated. The Agreement was formally concluded on 19 November 2017. As per the contract, a first installment was paid by the Buyer on 19 January, and a second one on 19 July of the year 2013. EXHIBIT 5 From: MicroTurbines Energy Co. Ltd Sent: 3 September 201?. 00:42 am. To: JP Dupond TPGI SA
