Agreement with the Treasury

Stalexport S.A. signed with the Treasury, represented by the Finance Minister, an agreement regarding the payment of the debt by virtue of the guarantee granted by Stalexport SA in 1996, for the credit to execute an investment called “The complete modernization of steel production line in Huta Ostrowiec S.A.”.
The total amount of liabilities amounts to 72,59 m zlotys.
The payment will begin in August 2008, in 72 equal, monthly instalments.
The interest on the receivables, as from signing the agreement, amounts to WIBOR 1M increased by 1,5 percentage point.
On 6.09.2004r Stalexport S.A. received an information about signing an Agreement, by the Finance Ministry, representing the Treasury, which settles the principles of the debt payment by virtue of loan guarantee to execute the investment called: “The complete modernization of steel production line in Huta Ostrowiec S.A.”.
The amount of Stalexport S.A. liabilities amounts to 72.591.830,15 zlotys. The parties of the agreement decided that the liabilities would be paid in 72 monthly instalments, starting from August 2008, i.e.:

1. 71 equal monthly instalments, in the amount of 1.008.219,86 zlotys each
2. the last monthly instalment in the amount of 1.008.220,09 zlotys.

The agreement comes into force the moment it is signed, with the exception of the paragraph defining the principles of fulfilling the commitments by Stalexport S.A.
Obtaining the opinion of the Anti-Monopoly Authorities and the European Commission is the suspending condition of the agreement in this respect. The opinion should state that the payment of the Receivables, on conditions defined in this agreement, is not the public aid according to the law about the public aid for the enterprises, or the opinion of the European Commission, which states that the payment of the receivables, on conditions determined in this agreement, is the allowed public aid.
According to the concluded agreement the interest on the receivables, as from the date of its signing , will amount to WIBOR 1M increased by 1,5 percentage point.
The payment of the interests calculated to the date the agreement comes into force, can take place within 7 days since that date, or the interests can be capitalized, increasing the main liability. Since that date the interests will be paid every month.
The signed agreement will not influence the financial result of the company in the 3rd qtr 2004. All the liabilities of Stalexport S.A. resulting from the agreement, had already been shown in the quarterly report of Stalexport for the 2nd qtr 2004. Stalexport S.A. decided to dissolve the reserve in the amount of 37,5 m zlotys in virtue of the guarantees granted for Huta Ostrowiec S.A. and included the amount of 72,7 m zlotys in the costs of the 2nd qtr.