CEZ A.S.

Legal Proceedings Report • Oct 20, 2016

Internal Information

ýEZ and Sokolovská uhelná have reached an agreement and put an end to their long commercial disputes.

The agreement foresees a new purchase contract for the supply of brown coal from Sokolovská uhelná and the sale of the Tisová Power Plant by the CEZ Group to Sokolovská uhelná. In addition, both parties have agreed to take steps to put an end to all existing lawsuits and not to raise any more claims.

Both parties expect the agreement to rectify their mutual business relationship and to facilitate future generation of power and heat from the brown coal extracted in the Sokolov region. The acquisition of the power plant enables Sokolovská uhelná to consolidate their activities in the Sokolov region and to reap synergies from interconnecting the entire supply chain, from coal extraction to heat and power supply to consumers. The sale of the Tisová Power Plant will allow the CEZ Group to concentrate in particular on operating its upgraded power plants in Tušimice, PrunéĜov and Ledvice, which take coal from Severoþeské doly, a member of the CEZ Group.