Contract No. ………….. for band electricity delivery for the coverage of losses in the transmission system during the year 2017 for the period

from 01.09.2017 to 30.09.2017

concludedon the following day, month and yearpursuant to the relevant provisions of Act No. 458/2000 Coll. On business conditions andthe performance of the State Administration in the energy sector and amending certain laws (Energy Act),as amended, and in accordance with the provisions of § 1746, Paragraph 2 of Act No. 89/2012 Coll., The Civil Code, as amended

(Hereinafter referred to as the "Contract")

Business ID: Tax ID:

Registered in:

Represented by:

Bank details:

ACER code (according to Article II, Par. 10):

(Hereinafter referred to as the "Supplier")

and

ČEPS, a.s.

Elektrárenská 774/2

101 52 Prague 10

Business ID: 25702556 Tax ID: CZ25702556

Registered: in the Commercial Register held by the Municipal Court in Prague, Section B, File 5597

Represented by: Ing. Jan KalinaChairman of the Board

Ing. ZbyněkBoldiš, Member of the Board

Bank details: KB, a.s., Prague 1, Account No.: 193312670277/0100

(Hereinafter referred to as the "Contractor")

(Hereinafter referred to collectively as the "Contracting Parties")

Article I.

Introductory Provisions

  1. The Contracting Parties declare that the basic purpose of this Contract is to ensure the supply of electricity by the Supplier to cover losses in the transmission system (hereinafter referred to as the "TS") operated by the Contractor. The Contracting Parties conclude this Contract in the knowledge that the Decree of the Energy Regulatory Office (hereinafter referred to as the "ERO") No. 408/2015 Coll. On the electricity market rules applies to it, as also do the pricing principles for activities in the operation of electricity market and the execution of certain other provisions of the Energy Act, as amended (hereinafter referred to as the "Decree").
  2. The Supplier declares that it is an accounting entity and that it is capable of providing electricity to cover losses in the transmission system in the amount agreed in this Contract.
  3. All definitions and termsusedinthis Contract shall be interpreted specifically within the meaning of the relevant provisions of Act No.458/2000 Coll. On business conditions and public administration in the energy sector and amending certain laws (the Energy Act), as amended (hereinafter referred to as the "Act"), implementing the regulations of the Act and the Decree.
  4. This Contract is concluded between the Contracting Parties in writing and is signed by both the Contracting Parties on the same document, following reaching full and unconditional agreement to its entire contents, including all of its requirements. Thereby the Contracting Parties in the process of negotiating this Contract have nullified the applicability of the provisions of § 1740, Paragraph 2, the second sentence of Act No. 89/2012 Coll., The Civil Code, as amended (hereinafter referred to as "the CC") concerning the acceptance of an offer and additionally also the provisions of § 1740, Paragraph 3, the first sentence of the CC concerning changes made to the offer based on insubstantial amendments or variations to the offer. Therefore the Contracting Party making the offer in regard to this Contract, in accordance with § 1758 of the CC, precludes the acceptance of the offer by the other Contracting Party in any form other than in writing and signed by both the Contracting Parties on the same document and, in accordance with § 1740, Paragraph 3, the second sentence of the CC, also thereby expressly precludes the acceptance of the offer in regard to this Contract if it includes any amendment or variation.

Article II.

Subject of the Contract, its scope, the time and place of its performance

  1. The subject of this Contract is:

a)the Supplier's obligation to supply electricity to the Customer to cover the losses of electricity in the TS based on an agreed output, amount and timing (MWh) (hereinafter referred to as the "supply of electricity") as defined in this Article,

b)the Contractor’s obligation to take delivery of the electricity pursuant to this Contract.

c)the Contractor's obligation to pay the price in accordance with this Contract for the supply of electricity, pursuant to Article III of this Contract.

  1. The Contracting Parties agree that, in accordance with this Contract, the electricity to cover losses shall be delivered by the Supplier in the base load (band) with 20 MW output during each business hour during the period between 01.09.2017, 00:00 midnight to 30.09.2017, 24:00 (midnight) CET/CEST.
  2. The annual amount of the electricity supply for the period of the effectiveness of this Contract is 14400MWh. The monthly amount of the electricity supply corresponds to the number of business hours during the calendar month.
  3. Defined in accordance with this Contract as the period of performance of the delivery of the agreed annual amount of electricity is the period from 01.09.2017, 00:00 (midnight) to 30.09.2017, 24:00 (midnight) CET/CEST.
  4. The location of the delivery of the electricity is the electricity system of the Czech Republic (hereinafter referred to as the "ES").
  5. The Contracting Parties are required to register the agreed amount of the delivery for the entire period of the performance in accordance with this Article in the Central Information System of the Market Operator (hereinafter referred to as the "CS OTE") of OTE, a.s. (hereinafter referred to as "OTE") in accordance withChapter 9 of the Business Terms and Conditions for power engineering of OTE,as amended and effective.
  6. The Contracting Parties are required to utilise the following indicators for the identification of the owner of the domestic daily diagram (hereinafter referred to as the "DDD") pursuant to Paragraph 6 of this Article and the consequent pairing: EAN:8591824010204 (Contractor) and EAN (Supplier).
  7. The agreed amounts of the electricity supply in accordance with this Contract are binding for both the Supplier and the Contractor in relation to OTE.
  8. The values of the actual electricity consumed by the Contractor are not the subject of the payment for the delivery of electricity. Therefore the Contractor pays a total final price for 14400 MWh, paid on a monthly basis throughout the term of the Contract, whereby each monthly payment is defined by the number of business hours in a given month multiplied by the price in accordance with Article III of this Contract, unless the Contractor's obligation for consumption, pursuant to Point 1c) of this Article, is influenced by any circumstance of force majeure within the meaning of Article VIII. thereof. In this case, the total monthly payment for the given calendar month in which the circumstance of force majeure occurred shall be reduced proportionately by the number of business hours affected by the circumstance of force majeure to the total number of business hours in the given month.
  9. Pursuant to EU Regulation No. 1348/2014 (REMIT) the Contracting Parties are obliged to report this Contract to the Agency for the Cooperation of Energy Regulators (ACER).

Article III.

Price

  1. The price per 1 MWh of electricity supplied by the Supplier to the Contractor in accordance with Article II. of this Contract is CZK (in words: Czech crowns) exclusive of VAT.
  2. The price is equal to the successful bid resulting from the Tender for a Supplier of electricity to cover losses in the transmission system in the years 2017 and 2018 that was announced by the Contractor on 24th October 2016.

Article IV.

Invoicing and payment

  1. The Contracting Parties have agreed that the price for the electricity supplied in accordance with this Contract by the Supplier to the Contractor shall be paid by a bank transfer of the amount corresponding to the price for the supply of electricity, in accordance with Articles II. and III. of this Contract, from the Contractor's account to the Supplier's account. The banking details of both Contracting Parties are listed in the heading of this Contract. If there should be any change in the banking details of either of the Contracting Parties, that Contracting Party undertakes, within a reasonable period, to notify the other Contracting Party of such a change of banking details in writing.
  2. The price for the supply of electricity in accordance with Article III. of this Contract is exclusive of VAT and of taxes onelectricity. VAT will be invoiced in the amount stipulated by Act No. 235/2004 Coll. OnValue Added Tax,as amended (hereinafter referred to as "the VAT Act"). The tax onelectricity will be applied inaccordance with Act No.261/2007 Coll. On the stabilisation of public budgets, asamended, and other generally binding legal regulations.
  3. The Supplier will charge for electricity supplied to the Contractor in accordance with this Contract on a monthly basis, in accordance with Articles II. and III. of this Contract.
  4. The Contractor shall pay the Supplier the price for the supply of electricity, inclusive of VAT, in accordance with Articles II. and III. of this Contract, on the basis a tax document, issued by the Supplier at the latest 15 (fifteen) days after the date of the taxable event.
  5. The Contracting Parties shall consider the date of the taxable event as it is defined in the provisions of § 21, of the VAT Act, i.e. the last day of the calendar month for which the billing is carried out.
  6. The tax on the tax document shall be defined in accordance with the VAT Act.
  7. Maturity of the tax document - the invoice due date is within 14 (fourteen) days from the date of its delivery to the Contractor. If theSupplier cannot meet the deadline for billing in accordance with Paragraph 4 of this Article for reasons for which the Contractor is responsible, the maturity of the invoice shall be reduced by the number of days of delay by the Contractor.The minimum maturity period, however, inthis case will be 7 (seven) days.
  8. Understood as the total monthly payment is the payment for the delivery of the agreed amount of electricity equal to the monthly amount of the deliveries, in accordance with Article II. of this Contract, multiplied by the unit price, pursuant to Article III. of this Contract.
  9. The tax document must include the appurtenances of a common tax document, in accordance with the Vat Act and§ 435 of the Commercial Code. Beyond the details of the tax document provided for by generally binding legal regulations the invoice must include:

a) the signature of the authorised person and the stamp of the invoicing Contracting Party

b)the number assigned to this Contract,

c) the bank account number of the invoicing Contracting Party which must be identical to the bank account number specified in this Contract and that, in accordance with the Act on VAT, must be published by the tax authority or it must be notified in writing together with the signature of the person who signed the Contract and delivered to the Customer no later than upon the delivery of an invoice and published at the same time by the tax authority, in accordance with the Act on VAT.

d)variable symbol of the payment

  1. The Contracting Parties may agree that the transfer of tax documents shall be carried out in electronic form, i.e. the scanned invoice will be forwarded as a .pdf document with all the requisite features in points a)-d) of this Article or that the invoice in the form of a .pdf document will be secured by an electronic signature. Each invoice including its attachment constitutes one document in .pdf format.In this case, the invoices will send and receive by the Contractor to the e-mail address: .

In this case, the Supplier shall send invoices to the e-mail address: .

  1. Should the Supplier become an unreliable payer, at the discretion of the relevant tax authority and in accordance with § 106a of the Act on VAT, it immediately, but no later than on the next business day from the date of entry into force of this decision, inform the Contractor concerning this fact. Together with the written notice in accordance with this Point, the Supplier shall also send a notice electronically to the Contractor, to the e-mail address: . The Supplier is also obliged to inform the Contractor in the same manner in the event that proceedings are initiated against the Supplier by the relevant tax authority pursuant to § 106a of the Act on VAT.
  2. Should the Supplier be listed as an unreliable payer as of the date of the taxable event or should the Supplier becomes an unreliable payer prior to the payment of the invoice issued by the Supplier in accordance with this Article or in the event of any doubt as to whether the Supplier is an unreliable payer, in accordance with the Act on VAT the Contractor makes a part of the payment in accordance with the invoice corresponding to the amount of the value added tax directly to the account of the relevant tax authority in accordance with the provisions of § 109a of the Act on VAT. The total amount of the payment due in accordance with the invoice shall be reduced by this amount.
  3. The Contractor is entitled to return an invoice prior its due date without payment if it does not contain the particulars referred to in the preceding paragraph or has other defects in its content, while always stating the reason for its return. The Supplier is obliged, in accordance with the nature of the defect, to correct such an invoice or prepare it anew. With the legitimate return of an invoice - tax document the original maturity period ceases to run. The new payment period runs again from the date when the Supplier delivers a revised or newly-made copy of the invoice - tax document to the Contractor. In the case of the legitimate return of the payment schedule - the tax document, the Supplier is obliged to modify the due date of the 1st (first) instalment of the advance so that it would occur at the earliest on the 10th (tenth) working day following the receipt of a revised or newly prepared copy of the payment schedule - the invoice from the Contractor.
  4. Should the due date of the invoice fall on a day of rest, the next working day is then considered as the maturity date.
  5. The claiming Contracting Party shall be entitled, if no other agreement occurs within 14 (fourteen) days following notification of the intention, to charge the other Contracting Party a contractual penalty in accordance with this Contract, to include such a contractual penalty with other mandatory financial performances against the liable Contracting Party.

Article V.

Contractual penalties and compensation for damages

  1. Should one of the situations envisaged by Article IX., Paragraph 2 of this Contract occur, the Contractor is entitled to charge the Supplier a contractual penalty for any breach of the Supplier's obligation in the amount of 1/12 * 14400 MWh * "price per 1 MWh of electricity in accordance with Article III.. Paragraph 1 of this Contract in CZK per MWh."
  2. Should any of the Contracting Parties demonstrably breach the obligation to protect confidential information, in accordance with the provisions of Article XI., Paragraph 2 of this Contract, it shall pay to the other Contracting Party, for each such breach of this obligation, a contractual penalty in the amount of CZK 20,000 (twenty thousand Czech crowns).
  3. The claiming Contracting Party shall give notice of its intention to charge a contractual penalty in accordance with this Article to the liable Contracting Party, by means of a registered written letter stating the reasons.
  4. A contractual penalty is payable within 21 (twenty one) days of receipt of the notification to pay from the other Contracting Party, appended to which will be the proper settlement of the contractual penalty applied. In the case of a delay by the liable Contracting Partyin payment of the contractual penalty the claiming Contracting Party is entitled to satisfy its claim by drawing from a bank guarantee or by co including debts.
  5. The payment of the contractual penalty in accordance with this article shall not prevent the right of the claiming Contracting Party to compensation for damages exceeding the contractual penalty paid.

Article VI.

Contractual interest forlate payment

  1. For each day of delay in payment hereunder the overdue Contracting Party shall pay interest on late payment at a fixed rate (3M PRIBOR + 2% pa), the amount of which for the purposes of this Contract is always determined f from the first working day of each calendar month of the year with validity for the period of the relevant calendar month.
  2. For the purposes of this Contract, the 3M PRIBOR is defined as the interest rate for a three-monthdepositon the Prague market of interbank deposits. Its value is determined daily by the Czech National Bank.
  3. Should the Supplier or the Contractor pay the other Contracting Party the interest on late payment that has been improperly billed, the relevant Contracting Party is obliged to return such interest on late payment paid to the claiming Contracting Party upon its written request in the form of a bank transfer, without undue delay, however, not later than within 3 (three) working days of receiving the notification.
  4. The interest on late payment in accordance with the provisions of this Article shall be payable within 21 (twenty one) days of receipt of the invoice by the liable Contracting Party.

Article VII.

Settlement of disputes

  1. The Contracting Parties shall make every effort to ensure that any disputes arising from this Contract are settled amicably. Any such disputes are addressed by the representatives for communication referred to in Appendix No. 1 to this Contract. The Contracting Party making the claim shall invite the other Contracting Party in writing to settle the dispute by describing the dispute in the written notice, defining its claim, and submitting the evidence on which its claim is based. In accordance with this Paragraph, the claiming Contracting Party shall deliver the request to discuss the dispute either personally or by Registered Mail.
  2. The representatives for communication referred to in Appendix No. 1 to this Contract shall negotiate concerning the settling of the dispute at an agreed time and at a specified location. Should agreement on a date and a place for the meeting fail to occur, the meetings should be held on the 7th (seventh) working day following the date of delivery of the invitation to the Registered Office/Branch of the Contracting Party towards whom the appeal is directed.
  3. The Contracting Parties shall make and sign the minutes from the meeting of representatives for communication referred to in Appendix No. 1 to this Contract. In the event of partial or full agreement on the proposal for solving the dispute in its entirety, representatives of Contracting Parties shall indicate this fact in the minutes.
  4. If after 2 (two) months from the receipt of the invitation for an amicable settlement of the dispute, the dispute has still not been settled, the appropriate Contracting Parties are entitled to submit the dispute for resolution by a competent court or by another competent state authority determined in accordance with the generally binding legal regulations. The Contracting Party that makes ​​use of this option is obliged to immediately notify the other Contracting Party about this action.

Article VIII.