In August and September 2005 UNIPETROL, a.s. received letters from DEZA, a.s. requesting to enter into share purchase agreements related to their shares of AGROBOHEMIE, a.s. and ALIACHEM, a.s.. The companies: UNIPETROL, a.s. and DEZA, a.s. are each the owner of 50% from the total amount of shares in AGROBOHEMIE, a.s.. In ALIACHEM, a.s. AGROBOHEMIE, a.s. owns 55,01%, UNIPETROL, a.s. - 38,79% and DEZA, a.s. - 4,67% shares. Remaining 1,53% shares are in hands of minority shareholders of ALIACHEM, a.s. The received letters from DEZA, a.s. referred to the agreements on future share purchase agreements signed between UNIPETROL, a.s. and DEZA, a.s. on 12 October 2000 and 15 August 2001, regarding AGROBOHEMIE, a.s. and ALIACHEM, a.s. shares, respectively. Having thoroughly analyzed the signed agreements and the received letters the Board of Directors of UNIPETROL, a.s. concluded about their serious legal defects and their non-conformity with good market practices. Consequently, the Board of Directors of UNIPETROL, a.s. proposed DEZA, a.s. to modify the transaction documents to assure their compliance with relevant Czech legislation as well as market standards and practices. UNIPETROL, a.s. was doing its best (via correspondence exchange and direct meetings) to convince DEZA, a.s. to introduce the modifications towards removal of the identified legal defects and assurance of compatibility with market practices and standards. Despite these efforts DEZA, a.s. has rejected UNIPETROL’s proposals. In these circumstances the Board of Directors of UNIPETROL, a.s. has decided to submit the controversial agreements under court’s judgement.

DEZA’s claims on the one hand and interpretation of the agreements related to shares of AGROBOHEMIE, a.s. and ALIACHEM, a.s. on the other hand could potentially lead to legal and financial consequences such as shares transfer (at price which is not currently determined) or settlement of penalties as well as damages. Due to the legal defects of the agreements and significant doubts regarding their validity any financial effects for UNIPETROL, a.s. are difficult to assess.