Extraordinary General Meeting of Shareholders

The Executive Board of Polish Energy Partners Spółka Akcyjna headquartered in Warsaw (hereinafter referred to as “the Company”) hereby informs that the Extraordinary General Meeting of Shareholders shall be held on 4 July 2005 at 10:00 a.m. in Warsaw, Hotel Kyriad Prestige, at ul. Towarowa 2.

Agenda of the General Meeting:

1. Opening of the Extraordinary General Meeting;

2. Appointment of the Chairman of the Extraordinary General Meeting;

3. Arriving at an agreement as to whether the Extraordinary General Meeting has been convened in a proper manner and whether it is able to adopt resolutions;

4. Appointment of the voting committee members and selection of resolutions to be adopted;

5. Adoption of the agenda of the Extraordinary General Meeting;

6. Adoption of a resolution to authorise the Company to acquire perpetual usufruct of a real estate and buildings located there;

7. Adoption of a resolution to amend the Rules of Order of the Supervisory Board;

8. Adoption of a resolution to amend the Company’s Articles of Association;

9. Adoption of a resolution to authorise the Supervisory Board to adopt a consolidated text of the Company’s Articles of Association.

10. Closing of the Extraordinary General Meeting.

Proposed amendments of the Company’s Articles of Association:

Under Resolution referred to in section 7 of the agenda, the following amendments are suggested:

Deletion of Art. 5.2a of the Company’s Articles of Association, which currently reads:

“5.2.a. None of the Company’s shareholders may use more than 35% of votes at the General Meeting of Shareholders, irrespective of the number of shares actually held”.

Deletion of Art. 5.2b of the Company’s Articles of Association, which currently reads:

“5.2.b. The above restriction shall not apply to shareholders who announced and carried out public invitation to subscribe for shares, after shares are admitted to public trading by the Securities and Exchange Commission, pursuant to provisions of the Law on Public Trading of Securities of 21 August 1997 (consolidated text: Journal of Laws of 2002, No 49 item 447).”

Deletion of Art. 5.2c of the Company’s Articles of Association, which currently reads:

“5.2.c. If the Company’s shares are not admitted to public trading, the restriction referred to in 5.2.a shall not apply to shareholders who offered to acquire shares held by all other shareholders at arm’s length. If the bidder became the Company’s shareholder after acquisition of shares within 2 months before such bid is made, the bid should be made on the same terms and conditions as those adopted for the original transaction of share acquisition.”

Art. 5.3 of the Company’s Articles of Association now reads:

“The Company may issue registered shares and ordinary bearer shares. On the date when shares are admitted for public trading by the Securities and Exchange Commission, shares series A to L become bearer shares.”

Suggested text of Art. 5.3 of the Company’s Articles of Association:

“The Company may issue registered shares and ordinary bearer shares.”

Deletion of Art. 5.5a of the Company’s Articles of Association, which currently reads:

“5.5.a. Each Fund may assign its right to take over new shares to any of its Associates or any third person designated by the Fund. For the purposes of these Articles of Association, Associate of the Funds means any entity with at least 50% of share capital/capital issued held by the Fund either directly or indirectly, or controlled by the Fund based on authorisation to manage this entity or influence on this entity’s management. Associates of Funds shall also include entities related to Enterprise Investors Sp. z o.o. or “Enterprise Investors Corporation” (headquartered in the USA) under a management contract, or any shareholders in these entities. For take-over of new shares issued by the Company by any entity other than the Company’s shareholders, approval of the General Meeting of Shareholders based on the majority of 91% (ninety-one per cent) of votes will be required.”

Deletion of Art. 5.5b of the Company’s Articles of Association, which currently reads:

“5.5.b. Provision 5.5.a shall become null and void on the date when shares are admitted for public trading by the Securities and Exchange Commission.”

Art. 6 of the Company’s Articles of Association currently reads:

“6.1. The Company’s shares are transferable subject to limitations referred to in sections 2-17 in effect until the Securities and Exchange Commission admits shares for public trading, or until 29 June 2011, whichever comes first.

6.2. Subject to provisions of sections 6.14-6.17, if any shareholder (hereinafter referred to as the “Selling Shareholder”) intends to sell all or a part of its shares to any third party other than the Company’s shareholder (“Proposed Buyer”), other shareholders shall have pre-emptive rights to these shares under terms and conditions defined in Art. 6 (“Pre-emptive Right”).

6.3. The Selling Shareholder shall inform all other shareholders of the intended sale of shares to Proposed Buyer in writing. As a minimum, this written statement shall define:
a) number and type of shares to be sold (“Shares”), the intended selling price (“Price Offered”), as well as other important terms of the agreement and data of the Proposed Buyer;

b) the bid for sale of all Shares at Price Offered (“Sale Offer”); such a Sale Offer cannot be cancelled or changed.

6.4. Each of the remaining shareholders shall have the right to accept the Sale Offer within 45 (forty-five) working days after its receipt (“Acceptance Period”) at the Price Offered or any other price agreed between the Selling Shareholder and Accepting Shareholder (“Agreed Price”) in the Acceptance period by submitting a relevant written declaration to the Selling Shareholder (“Sale Offer Acceptance Declaration”).

6.5. If, under relevant legal provisions, prior approvals or authorisations are required for any of the remaining shareholders to take over the Company’s shares, the Acceptance Period referred to in the previous section shall be prolonged until the case is analysed and a decision on this matter is issued by a relevant authority, and shall be completed after 30 (thirty) working days after such a decision is received, but not later than after 180 (one hundred and eighty) working days after the Sale Offer is placed, on condition that the shareholder applies to a relevant authority to issue such approval of authorisation within 14 (fourteen) working days after the Sale Offer is received.

6.6. If more than one of the remaining shareholders (“Accepting Shareholders”) accepts the Sale Offer, Accepting Shareholders shall take over all Shares sold by the Selling Shareholder in proportion to their interest in the Company’s share capital as at the date of acceptance of the Sale Offer. Within 7 (seven) working days after the Acceptance Period is over, the Selling Shareholder shall inform Accepting Shareholders of the number of Shares to be taken over by each Accepting Shareholder and the Agreed Price to be paid by each Accepting Shareholder, by sending a written notification to each Accepting Shareholder (“Share Allocation Notice”).

6.7. Transfer of ownership rights to Shares to each Accepting Shareholder shall be effective after the Agreed Price is paid, i.e. within 7 (seven) working days after the Share Allocation Notice is delivered, but not later than 30 (thirty) working days after the Sale Offer Acceptance Declaration is received. If any Accepting Shareholder fails to pay the Agreed Price within the period specified above, acceptance of the Sale Offer by this Accepting Shareholder shall be considered ineffective and Shares which were to be taken over by this Accepting Shareholder may be sold by the Selling Shareholder to the Proposed Buyer.

6.8. The above provisions also apply to transfer of ownership rights to Shares in exchange for non-cash benefits, subject to restriction that such a transfer requires a prior approval of the Company’s Supervisory Board in the form of a Resolution voted for by at least two members appointed by Polenergy Investments BV headquartered in Amsterdam, the Netherlands (“Polenergy”) and at least two members appointed by the Funds. The said Resolution shall define Agreed Price for Pre-emptive Rights or a procedure adopted to define the Agreed Price (by an external consultant or otherwise).

6.9. If the Sale Offer is not accepted by any of the remaining shareholders, such shareholders shall have the right to join the transaction of sale of Shares on terms and conditions specified below “Right to Join”).

6.10. Within 30 (thirty) working Days after the Acceptance period is over and the Sale Offer is not accepted, the Proposed Buyer (at the request of the Selling Shareholder) shall place a bid to each of the remaining shareholders to take over their shares in the amount corresponding to the percentage of Shares against the total number of shares held by the Selling Shareholder (“Offer to Join”).

6.11. Each of the remaining shareholders shall have the right to accept the Offer to Join within 45 (forty-five) working days after its receipt by submitting a relevant written declaration to the Selling Shareholder and Proposed Buyer (“Declaration of Acceptance of the Offer to Join”). If no declaration is received after 45 (forty-five) working days, it is assumed that the Offer to Join is not accepted by the shareholder.

6.12. Ownership rights to shares under the Right to Join shall be transferred within 7 (seven) working days after the Proposed Buyer receives a Declaration of Acceptance of the Offer to Join; Pre-emptive Right shall have no effect on shares covered by the Right to Join.

6.13. The Selling Shareholder shall have the right to sell (or otherwise transfer) Shares to the Proposed Buyer no sooner than after the ownership rights to Company’s shares are transferred under the Right to Join as specified in section 6.9., with the following restriction: if the Selling Shareholder fails to sell (or otherwise transfer) Shares to Proposed Buyer within 90 (ninety) working days after the date of acceptance of the Sale Offer as defined in section 6.4 or 6.5 above, these Shares can only be sold or otherwise transferred under the procedure specified herein.

6.14. The above provisions notwithstanding, if Shares sold by the Selling Shareholder carry more than 50% of votes at the General Meeting, only the Funds and Polenergy shall have Pre-emptive Rights to these Shares.

6.15. The above provisions notwithstanding, if the Funds and Polenergy intend to sell all their Company shares to the Proposed Buyer, the Funds and Polenergy (acting together) shall have the right to demand the remaining shareholders to sell all their Company shares to the Proposed Buyer, and the remaining shareholders shall be required to sell all their Company shares to the Proposed Buyer together with the Funds and Polenergy, at the same price and on the same terms as those agreed between the Funds, Polenergy and the Proposed Buyer (“Drag-Along Rights”). If Drag-Along Rights are executed, provisions referring to Pre-Emptive Rights and Right to Join shall not apply.

6.16. The procedure described herein shall not apply if:
a) ownership rights to Company shares are transferred by any shareholder to its Related Party; the term “Related Party” means any entity controlling or controlled/jointly controlled by the shareholder, or any person acting as the Executive Board Member of an officer of any shareholder or its subsidiary; except for investors and/or partners/shareholders of the Funds and Central and Eastern Europe Power Fund, the term “Control” means a possibility (direct or indirect) to (a) hold shares carrying at least 25% of the total vote in the election of members of the Executive Board of such an entity – based on rights arising from ownership of shares, agreement, proxy, or any other authorisation, or (b) take part in or influence the Executive Board and the business of such an entity – based on rights arising from ownership of shares, agreement, proxy, or any other authorisation;

b) Company shares are transferred under an incentive scheme (share option) for members of the Company’s Executive Board, Company employees and consultants, as agreed in separate agreements between shareholders and such entities, or as approved by the Company’s Supervisory Board;

c) Company shares are transferred under agreements between the Company and its individual shareholders, as agreed with other shareholders.

6.17. Each shareholder may waive their Pre-emptive Right or Right to Join in the form of a written statement addressed to other shareholders.

Suggested text of Art. 6 of the Company’s Articles of Association:

“The Company’s shares are transferable.”

Art. 10 of the Company’s Articles of Association currently reads:

“10.1. The Supervisory Board has six members.

10.2 Until the date of sale of the Company’s shares by Polenergy Investments B.V. headquartered in Amsterdam, the Netherlands (“Polenergy”) or by any of the Funds, which must be disclosed, members of the Supervisory Board are appointed and recalled as follows:
a) Polish Private Equity Fund I, Polish Private Equity Fund II and Polish Enterprise Fund appoint and recall three members of the Supervisory Board, including the Chairman;

b) Polenergy Investments B.V. appoints and recalls three members of the Supervisory Board.

10.3 After the sale of the Company’s shares by Polenergy or any of the Funds, which must be disclosed, members of the Supervisory Board shall be appointed and recalled as follows:
a) shareholder holding shares representing at least 33% of the Company share capital shall appoint and recall two members of the Supervisory Board;

b) other Supervisory Board members are appointed and recalled by the General Meeting of Shareholders.”

Suggested text of Art. 10 of the Company’s Articles of Association:

“10.1. The Supervisory Board has five or six members. The number of Supervisory Board members for a given term is determined by the General Meeting of Shareholders.

10.2 The Supervisory Board members are appointed and recalled as follows:
a) shareholder holding shares representing at least 33% of the Company share capital shall appoint and recall two members of the Supervisory Board;

b) other Supervisory Board members are appointed and recalled by the General Meeting of Shareholders.”

Art. 11.3 of the Company’s Articles of Association currently reads:

“11.3. Vice-Chairman of the Supervisory Board, and – after the sale of the Company’s shares by Polenergy or any of the Funds, which must be disclosed – also the Chairman of the Supervisory Board, shall be elected by the Supervisory Board from among its members.”

Suggested text of Art. 11.3 of the Company’s Articles of Association:

“11.3. Chairman and Vice-Chairman of the Supervisory Board shall be elected by the Supervisory Board from among its members.”

Art. 12.2 k)-dd) of the Company’s Articles of Association currently reads:

“k) until the date of admission of the Company’ shares to public trading by the Securities and Exchange Commission: to approve exchange of shares into assets other than cash;

l) to approve any credits incurred by the Company, loans granted or incurred by the Company, or any other borrowings except for (i) trade payables incurred in the course of ordinary operations, (ii) taxes not yet payable, (iii) short-term payables under other obligations if the amount payable not included in the Company’s approved budget does not exceed the equivalent of USD 250,000 (two hundred fifty thousand) converted into PLN at the Exchange Rate;

ł) to approve any expenditure in excess of the amount equal to USD 100,000.00 (one hundred thousand) converted into PLN as at the Exchange Rate, in one transaction or a series of related transactions, save for amounts approved and specified in the Company’s approved annual budget, or made in the course of ordinary operations, provided that investment outlays are not understood as expenditure made in the course of ordinary operations;

m) to approve the Company’s participation in any legal transaction if any the following entities act as the other party to such legal transaction:

i) any entity where the Company holds shares or interest (either directly or indirectly), unless the Company holds 100% (one hundred per cent) of share capital of such an entity;

ii) the Company’s shareholder;

iii) any entity with capital relations with the Company’s shareholder, or – if shares of this entity are listed on the Stock Exchange – any entity where the shareholder holds at least 10% (ten per cent) of shares (either directly or indirectly), if known by at least one member of the Executive Board in each of these cases;

iv) member of the Company’s Executive Board;

v) member of the Company’s Supervisory Board;
Provisions of (ii) and (iii) above are no longer valid on the date of admission of the Company’ shares to public trading by the Securities and Exchange Commission.

n) to approve any partnership, register partnership, or limited liability partnership agreement concluded by the Company, interest in profits or revenues, or any other similar agreement based on which the Company’s revenues or profits are or may be shared with other entities or persons;

o) to approve any actions arising from rights or duties of the Company as a shareholder or partner in other entities;

p) to approve establishment of branch offices and subsidiaries by the Company, acquisition or take-over of shares in other companies, as well as entering into partnership agreements;

r) to approve any sureties, guarantees, or any encumbrances on the Company’s assets in each case when the total amount of these sureties, guarantees, or encumbrances is or would be in excess of the amount equal to USD 100,000.00 (one hundred thousand) converted into PLN as at the Exchange Rate, unless such encumbrances are included in the Company’s approved budget;

s) to appoint or change the Company’s certified auditor;

t) to approve any authorised representations (proxy) and amount of fees paid to authorised representatives;

u) to approve any expenditure related to Projects, included in the Project Budget or the Company’s Budget, if the expenditure is in excess of the amount equal to USD 25,000.00 (twenty-five thousand) converted into PLN as at the Exchange Rate;

v) deleted;

w) to approve conclusion, significant amendment, or cancellation of any agreement related to supply of power services, purchase of energy, management of facilities, lease, turn-key works and supplies, maintenance and operation of equipment, credits and loans, supplies of fuel, and any other Project-related agreements, including any changes of orders under contracts for supply and turn-key works;

x) to approve Project financing terms and any significant changes of these terms;

y) to approve participation in joint-ventures, conclusion of any agreements in relation to set-up of joint-ventures, participation in companies, or any other agreement related to set-up or participation in any Project if such an agreement involves financial obligations for the Company;

z) to approve any business taken up by the Company other than acquisition and operation of power facilities in Poland and set-up of related Projects;

aa) to approve significant changes in accounting principles adopted by the Company;

bb) to initiate any legal actions or institute any proceedings, including arbitration proceedings, save for proceedings related to claims of value below the equivalent of USD 100,000 (one hundred thousand) as at the Exchange Rate;

cc) deleted;

dd) until the date of admission of the Company’ shares to public trading by the Securities and Exchange Commission: to approve any pledge or other encumbrances on the Company’s shares;”

Suggested text of Art. 12.2 k)-dd) of the Company’s Articles of Association:

“k) to approve any credits incurred by the Company, loans granted or incurred by the Company, or any other borrowings except for (i) trade payables incurred in the course of ordinary operations, (ii) taxes not yet payable, (iii) short-term payables under other obligations if the amount payable not included in the Company’s approved budget does not exceed the equivalent of USD 250,000 (two hundred fifty thousand) converted into PLN at the Exchange Rate;

l) to approve any expenditure in excess of the amount equal to USD 100,000.00 (one hundred thousand) converted into PLN as at the Exchange Rate, in one transaction or a series of related transactions, save for amounts approved and specified in the Company’s approved annual budget, or made in the course of ordinary operations, provided that investment outlays are not understood as expenditure made in the course of ordinary operations;
m) to approve of the Company’s participation in any legal transaction if any the following entities act as the other party to such legal transaction:

i) any entity where the Company holds shares or interest (either directly or indirectly), unless the Company holds 100% (one hundred per cent) of share capital of such an entity;

ii) member of the Company’s Executive Board;

iii) member of the Company’s Supervisory Board;

n) to approve any partnership, register partnership, or limited liability partnership agreement concluded by the Company, interest in profits or revenues, or any other similar agreement based on which the Company’s revenues or profits are or may be shared with other entities or persons;

o) to approve establishment of branch offices and subsidiaries by the Company, acquisition or take-over of shares in other companies, as well as entering into partnership agreements;

r) to approve any sureties, guarantees, or any encumbrances on the Company’s assets in each case when the total amount of these sureties, guarantees, or encumbrances is or would be in excess of the amount equal to USD 100,000.00 (one hundred thousand) converted into PLN as at the Exchange Rate, unless such encumbrances are included in the Company’s approved budget;

s) to appoint or change the Company’s certified auditor;

t) to approve any authorised representations (proxy) and amount of fees paid to authorised representatives;

u) to approve any expenditure related to Projects, included in the Project Budget or the Company’s Budget, if the expenditure is in excess of the amount equal to USD 25,000.00 (twenty-five thousand) converted into PLN as at the Exchange Rate;

v) to approve conclusion, significant amendment, or cancellation of any agreement related to supply of power services, purchase of energy, management of facilities, lease, turn-key works and supplies, maintenance and operation of equipment, credits and loans, supplies of fuel, and any other Project-related agreements, including any changes of orders under contracts for supply and turn-key works;

w) to approve Project financing terms and any significant changes of these terms;

x) to approve significant changes in accounting principles adopted by the Company.”

Art. 14 of the Company’s Articles of Association currently reads:

“14.1. The Supervisory Board adopts resolutions based on simple majority of votes. In case of equal number of votes cast for and against a resolution, the casting vote is exercised by the Chairman of the Supervisory Board, and if the latter is absent – by the Vice-Chairman of the Supervisory Board. Provisions of sections 14.2-6 below shall be effective until the date of sale of the Company’s shares by Polenergy or any of the Funds, which must be disclosed.

14.2. Resolution of the Supervisory Board in cases specified in Art. 12 section 12.2. (c), (f) – (h), (j), (l), (u) – (dd) may be adopted on condition that the Resolution is voted for by at least two members appointed by Polenergy and at least two members appointed by the Funds. In cases referred to in Art. 12 section 12.2. (f) – (h) and (aa) – (dd), approval of such a Resolution shall not be unreasonably withheld.

14.3. Provisions of section 14.2 shall not apply to the increase of the Company’s share capital through issue of new shares within the limits of the target capital.

14.4. If the Investment made by Polenergy is lower than USD 5,000,000 (five million), Resolution of the Supervisory Board in cases specified in Art. 12 section 12.2. (c), (f) – (h), (j), (l), (u) – (dd)\ may be adopted on condition that the Resolution is voted for by at least two members appointed by the Funds. In cases referred to in Art. 12 section 12.2. (f) – (h) and (aa) – (dd), approval of such a Resolution shall not be unreasonably withheld.
The term “Investment” means the total issue price paid by Polenergy for new shares issued by the Company plus the value of all outstanding obligations related to take-over of new shares and payment of the total issue price for these shares; the Investment also includes the amount of loan granted to the Company by Polenergy under contract of 29 June 2001.

14.5. If:
a) the Funds or Polenergy (“Breaching Shareholder”) are in breach of any contract or agreement related to their investment in the Company; and

b) the Breaching Shareholder is notified of such a breach in writing by Polenergy or the Funds, respectively (“Notifying Shareholder”) and requested to remedy such breach; and

c) the Breaching Shareholder fails to remedy such breach within 30 (thirty) days after the date of notification; or

d) the Breaching Shareholder takes no action to remedy the breach with due care (if such remedy is possible) within 90 (ninety) days after the date of notification;
the Resolution of the Supervisory Board in cases specified in Art. 12 section 12.2. (c), (f) – (h), (j), (l), (u) – (dd) may be adopted on condition that the Resolution is voted for by at least two members appointed by the Notifying Shareholder. In cases referred to in Art. 12 section 12.2. (f) – (h) and (aa) – (dd), approval of such a Resolution shall not be unreasonably withheld.

14.6. If:
a) the Notifying Shareholder is at the same time the Breaching Shareholder, and if the remaining conditions referred to in section 14.5 (c) or (d) are satisfied; or

b) Polenergy is the Notifying Shareholder, and the Investment made by Polenergy is lower than USD 5,000,000 (five million);
provisions of section 14.1 shall apply to all Resolutions adopted by the Supervisory Board.

Suggested text of Art. 14 of the Company’s Articles of Association:

“The Supervisory Board adopts resolutions based on simple majority of votes. In case of equal number of votes cast for and against a resolution, the casting vote is exercised by the Chairman of the Supervisory Board, and if the latter is absent – by the Vice-Chairman of the Supervisory Board.”

Suggested text of added Art. 20.4 of the Company’s Articles of Association:

“20.4. Acquisition or sale of any real estate, perpetual usufruct of or share in a real estate requires no approval of the General Meeting of Shareholders.”

The Company’s Executive Board hereby informs that pursuant to Art. 11 of the Law on Public Trading of Securities, the right to participate in the General Meeting of Shareholders is reserved for holders of registered depository receipts. Depository receipts should specify the number of shares held and should include a clause under which the said shares cannot be issued until the General Meeting is closed. The said document must be submitted to the Company’s registered office at ul. Wiertnicza 169, 02-952 Warsaw, not later than 7 days before the set date of the General Meeting, i.e. by 27 June 2005. Depository receipts cannot be collected until the General Meeting is closed. Depository receipts should be submitted to the Company’s registered office by 27 June 2005, 5:00 p.m.

The list of shareholders eligible to participate in the General Meeting (under Art. 407 § 1 of the Code of Commercial Companies) will be available at the Company’s registered office at ul. Wiertnicza 169, 02-952 Warsaw, for three working days before the set date of the General Meeting, i.e. as of 28 June 2005. Materials covering cases included in the agenda will also be made available at the Company’s registered office, at a time and on conditions provided for in the Code of Commercial Companies.

Legal basis:
§ 45 section 1. section 1 of the Ordinance on current and interim information provided by issuers of securities – agenda of the General Meeting of Shareholders

Signatures:
Anna Kwarcińska – Member of the Executive Board
Grzegorz Skarżyński – Vice President of the Executive Board