The Management Board of Grupa LOTOS S.A. hereby reports that on December 21st 2007 LOTOS Biopaliwa Sp. z o.o. (wholly owned by LOTOS Czechowice S.A., a subsidiary of Grupa LOTOS S.A., which holds 80,04% of LOTOS Czechowice S.A. shares) entered into an agreement with Zakłady Tłuszczowe Kruszwica S.A. of Kruszwica, providing for annual deliveries of raw rapeseed oil to LOTOS Biopaliwa Sp. z o.o. The parties to the agreement agreed upon a supply of at least 12,000 tonnes of raw rapeseed oil in the annual period 2007/2008 and at least 40,000 tonnes in the subsequent annual periods. The purpose of the agreement is to secure supplies of the key feedstock for the new FAME unit, currently under construction, whose expected production capacity is 100 thousand tonnes annually. The agreement was concluded for a definite term from December 21st 2007 to July 31st 2012, and provides for contractual penalties, equal to 10% of the gross value of the supplies, for failure to perform the contractual obligations. In the event of withdrawal from the agreement, the contractual penalty equals 5% of the total agreement value. The agreement provides that the payment of the contractual penalties does not preclude the possibility of seeking compensation in excess of the penalties. The estimated value of the agreement over its term is PLN 500,000 thousand. The other terms of the agreement do not differ from the standard terms used in this type of agreements. The agreement is deemed significant as its estimated value exceeds 10% of Grupa LOTOS S.A.’s equity. Legal basis for the publication of this report: Par. 5.1.3 of the Regulation of the Minister of Finance on current and periodic information to be published by issuers of securities, dated October 19th 2005.
Execution of a Significant Agreement between LOTOS Biopaliwa Sp. z o.o. and Zakłady Tłuszczowe Kruszwica S.A.
Report no. 96/20052007-12-21