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Current report:

The Signing of a Major Credit Contract by a Dependent Company

Report number: 24/2007 day: 2007-08-07

Legal basis

Art. 56 par. 1 pt 2 of the Bidding (current and periodic information) Act

Contents of the report:

The management of Barlinek S.A. hereby announces that August 6th 2007 an investment credit contract was signed between Barlinek Inwestycje Spółka z o.o. (a dependent body of Barlinek S.A.) ("the Credited Party") and Bank Polska Kasa Opieki S.A., based in Warsaw ("the Bank") with a value of 35,000,000 (in full: thirty five million) PLN. This credit is intended to finance and/or refinance expenditure on the realisation of:

1. construction of a boiler and pellet production plant,
2. purchase of a single-fuse production line and construction of a hall,
3. purchase of a drier with extra flattening.

The credit was granted for the period until December 31st 2012. The credit will be used by April 30th 2008 at the latest.

The interest rate on the credit is variable, based on the WIBOR 1M rate from the first day of each month, increased by the Bank’s profit margin.

Repayment of the credit is guaranteed by:

1. a register lien on the pellet production line,
2. entry of a contractual deposit mortgage of a value of 20,000,000 (in full: twenty million) PLN to guarantee the capital, interest and incidental dues other than interest, which has been set by the Credited Party on the premises located in Barlinek at Szosa Street to Lipiany, Szosów, Przemysłów plot no. 200/41, for which the District Court in Myśliborz holds land and mortgage register KW 37345, along with the cession of the rights to the insurance policy,
3. a guarantee from Barlinek S.A.,
4. right of attorney to the Credited Party’s current accounts in PLN, EUR and USD held with Bank Polska Kasa Opieki S.A.,
5. the Credited Party’s declaration of being subject to enforcement.

The credit will be activated once the Credited Party fulfils the following conditions: - establishment of the legal guarantees mentioned above in pts. 3), 4) and 5), - submission to the Bank of Court-confirmed application for the entry in the land and mortgage register described above in pt. 2),