AAA

Current report:

Modification of a major agreement signed by a subsiary

Report number: 9/2008 day: 2008-02-19

Legal basis

Art. 56 paragraph 5 of the Bidding (updating information) Act

Contents of the report:

The management of Barlinek SA, based in Kielce, (“the Company”), with regard to current report no. 60/2006 of November 7th 2006, hereby announces that on February 18th 2008 it received information about the signing on February 15th 2008 by Barlinek Invest Spółka z o.o., based in Vinnitsa, Ukraine (a dependent of Barlinek SA) of an agreement with the European Bank for Reconstruction and Development ("the Bank") in the matter of changing the contract for investment credit and renewable credit financing working capital. The Parties have decided to increase the limit of the previously issued investment loan by an amount of Euro 9.5 Million assigned to co-finance the Barlinek Invest investment, represented by the pellet and timber factory in Kosiv, a city situated in the west of Ukraine.

The interest rate was established on the basis of the Bank’s rate (EURIBOR for EUR, and LIBOR for USD) plus the Bank’s profit margin. Repayment of the sum by which the credit limit was increased will take place as 9 equal half-yearly instalments in the years 2010-2015.

In accordance with the resolutions of the aforementioned agreement, Barlinek Invest will ensure the change, maintenance and appropriate renewal of the safeguards established to secure the original credit contract, and will additionally mortgage, on behalf of the Bank, the premises on which the Kosiv plant is situated.

In connection with the signing of the agreement and as a security for the credit agreement, Barlinek S.A. renewed and increased guarantee issued to the bank by and amount of 9.5 million euros. The guarantee given is valid until December 31st 2008 .

The agreement contains no resolutions regarding contractual penalties. This conditions of the agreement do not differ from those generally applied in such agreements. A suspension condition of the agreement is the registration of the increase in the credit sum with the National Bank of Ukraine.

This is considered to be a major agreement because its value exceeds 10% of Barlinek SA’s equity capital.

Legal basis:

art. 56 paragraph 5 of the Public Tendering/Conditions for Introducing Financial Instruments into Organised Turnover Systems/Public Companies Act of July 29th 2005