AAA

Current report:

Signing of a significant contract

Report number: 32/2008 day: 03.09.2008

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. (the Issuer) hereby announce that on September 3rd 2008 received a long-term contract signed in circulatory mode between the Issuer, Barlinek S.A. based in Kielce (the Seller) and ENERGOKRAK ltd., based in Krakow (the Purchaser), on August 20th 2008 for the supply of biomass to EDF energy group EDF, represented in Poland by the Buyer.

The Buyer belongs to the EDF(Electricite de France) Group, engaged in Poland in the supply of coal and biomass for the needs of the Groups generating units.

The subject of the contract is the sale of biomass in pellet form from the Seller’s plants. The contract price of the biomass for the first year in which the contract applies was calculated based on the price of biomass and the cost of transportation to the Purchaser’s individual Customers. In subsequent years in which the contract applies, the price will be agreed based on the algorithm set in the contract. The contract assumes a delivery amount guaranteeing the Seller sales of pellet produced by the Barlinek Group at a level of 40% of annual production.

The contract for the delivery of biomass comes into effect on January 1st 2009, and was signed for a fixed period, i.e. until December 31st 2012. The estimated value of net receipts resulting from the terms of the Contract, over the four year period in which it applies, is around 77,407,000 PLN net (assuming the amount guaranteed and price established for the first year in which the contract applies). The parties have also provided in the contract for an increase in supply, of 10,000 tons for the first year and 12,000 tons for subsequent years.

The contract contains terms enabling contractual penalties to be imposed of up to 20% of the net value of biomass undelivered or uncollected in a given quarter. The contract does not provide for compensation to be applied for of a value which may exceed the value of the contractual penalties.

The remaining terms of the contract do not differ from the terms generally applied in such contracts.

This is considered to be a major contract on the basis of the Issuer’s ownership capital criteria.

Legal basis:

§ 5 par. 1 pt 3 of the Finance Ministry Decree of October 19th 2005 concerning current and periodic information released by stock issuers (Journal of Laws no. 209 entry1744).