SETTLEMENT WITH MONDI ŚWIECIE S.A.

Polish Energy Partners S.A. (‘PEP’) hereby notifies that on 19th July 2012 PEP with its subsidiaries Grupa PEP – Finansowanie Projektów Sp. z o.o. (‘GPFP’) and Interpep Sp. z o.o. (‘IP’), hereinafter referred to as ‘PEP party’, and Mondi Świecie S.A. (‘Mondi’) with Saturn Management Sp. z o.o. (‘SM Sp. z o.o.’) and Saturn Management Sp. z o.o. i Wspólnicy, Spółka Komandytowa (‘SM Sp.k.’), hereinafter referred to as ‘Mondi party’, concluded a settlement and an agreement of sale of a biomass grinder to Mondi (‘Settlement’). The Settlement exhausts the claims of PEP party against Mondi party and of Mondi party against PEP party on account of all issues related to the cooperation of these parties within the so-called Saturn project, which means that the cooperation of the parties has been finished in a consistent manner. The waiver referred to in the preceding sentence does not apply to any claims of Mondi against PEP in the event when, after the conclusion of the Settlement, any statements of PEP on the condition of SM Sp. z o.o. or SM Sp.k., submitted to Mondi by PEP in the process of implementation of exercising of the so-called Voluntary Call Option, prove to be incorrect. As a result of the conclusion of the Settlement, all the legal proceedings between Mondi party and PEP party come to an end. The dispute between PEP and Mondi referred to the price (‘Price’) of exercising by Mondi of the so-called Voluntary Call Option (‘Option’). On 30th April 2012 PEP submitted to Mondi the calculation of the Price which was PLN 172 441 219. The Price referred to in the preceding sentence included also the amount of PLN 17 029 006.91 representing fair value of the receivables of GPFP against SM Sp.k. on account of the promissory notes issued by SM Sp.k. (‘GPFP receivables’). On 2nd May 2012 Mondi notified PEP that in its opinion the Price should be PLN 118 627 340.90 and also declared its willingness to pre-purchase GPFP receivables at fair value, i.e. PLN 17 029 006.91. Thus, the total amount Mondi was willing to pay was PLN 135 656 347.81. On this day Mondi paid the Price calculated by PEP and amounting to PLN 172 441 219, subject to reimbursement, as wrongly received, the difference between this amount and the Price calculated by Mondi. On 4th June 2012, through acquisition, the above-mentioned promissory notes issued by SM Sp.k. were delivered to Mondi. Thus, Mondi and PEP agreed that the promissory notes delivery would result in reduction of the amount in dispute between Mondi and PEP by PLN 17 029 006.91. This fact was reported by PEP in Current Report No. 28/2012. In the Settlement agreement, apart from confirmation of the total satisfaction of PEP claims on account of the above-mentioned promissory notes, PEP and Mondi agreed, among others, on (i) the proper PEP share in the profits generated by SM Sp.k. in the period when PEP was still its partner (the total amount due to PEP from SM Sp.k. on this account, settled under the concluded Settlement, was PLN 19 566 575.13), (ii) the manner of determination and rules of settlement in the Price of the final amount of the component of the income tax refund due to PEP from Mondi on account of the Option exercising, (iii) the purchase of the Beast type biomass grinder (on this account IP will receive from Mondi the net amount of PLN 500 000.00), and (iv) the reimbursement to Mondi by PEP of the part of the Price paid by Mondi in the amount of PLN 2 890 907.91. Therefore, in accordance with the Settlement, the price for all the rights and obligations of PEP in SM Sp.k. and 100% of shares in SM Sp. z o.o. amounts to PLN 137 000 107.50. This price does not include the amount of PLN 17 029 006.91 on account of the delivery of the promissory notes issued by SM to Mondi. Consequently, the total amount received by PEP – on account of the transfer to Mondi of (i) all the rights and obligations of PEP in SM Sp.k. and 100% of shares in SM Sp. z o.o. within exercising of the purchase Option, and (ii) GPFP receivables – is PLN 154 029 114.41. This price may change after the above-mentioned final calculation of the component of the income tax refund. It should be noted that the final amount of the component of the income tax refund did not and will not affect PEP financial results and cash flow due to the fact that this component will be equal to the amount of the tax payable by PEP on account of the Price payment. The effect of the conclusion and implementation of the Settlement on PEP financial results will be published in a separate current report.