I.
The Treasury holds 100% of total shares, i.e. 5,500,000 (say: five million five hundred thousand) shares of nominal value of PLN 10 (say: ten zlotys) per share in the Company of Kopalnie i Zakłady Chemiczne Siarki
„Siarkopol” Spółka Akcyjna in Grzybów.
The Minister of Treasury, acting on behalf of the Treasury, in line with Article 33 item 1(3) of the Act of 30 August
1996 on commercialization and privatization (Journal of Laws of 2002 no. 171 item 1397 as amended), intends to sell a package of 4,675,000 (say: four million six hundred seventy five thousand) shares comprising 85% of the total number of the Company’s shares.
The remaining part of shares, i.e. 825,000 (say: eight hundred twenty five thousand) shares, comprising 15% of the total number of the Company’s shares, shall be acquired in line with Article 36 item 1 of the Act of 30 August
1996 on commercialization and privatization (Journal of Laws of 2002 no. 171 item 1397 as amended) free of charge by entitled employees of the Company.
The Minister of Treasury plans to sell the shares not acquired by the entitled employees to an Investor selected in the course of these negotiations in the event of expiry of the rights of the persons entitled to acquire the shares free of charge.
The negotiations may also concern the Investor’s obligation to purchase shares intended for the entitled employees and not take up by them, provided there is a legal basis for this.
Public invitation to negotiate was published in Gazeta Wyborcza daily on 13 th January, 2012.
In reply to the invitation to negotiate, each Potential Investor interested in participation in the negotiations should report to PKF Consult Sp. z o.o. acting as the Minister of Treasury’s Advisor in the process of sales of the
Company’s shares, in order to sign the "Confidentiality Clause" and obtain "The Company's Offering
Memorandum".
Based on the information related to structure of the reply to the invitation to negotiate, each Potential Investor will be allowed to submit their reply to the invitation to negotiate at the seat of the Ministry of Treasury. The address for submitting replies to the invitation to negotiate is specified further in this Section.
The Minister of Treasury will consider only replies to the invitation to negotiate the purchase of the Company’s shares submitted by the Investors who have met the following conditions: a) signed the “Confidentiality Clause” and obtained “The Company’s Offering Memorandum”. b) submitted a reply to the invitation to negotiate in line with the requirements stipulated in section
1.3.

Replies to the invitation to negotiate should be submitted in a sealed envelope in two copies, either in person or by a courier, by the deadline of 16 th February 2012, 2 pm Warsaw time to the following address
Ministerstwo Skarbu Państwa,
Sekretariat Departamentu Prywatyzacji, ul. Krucza 36/Wspólna 6, pokój nr 501
00-522 Warszawa
The envelope should bear the following inscription: „Odpowiedź na zaproszenie do negocjacji w sprawie nabycia akcji spółki Kopalnie i Zakłady Chemiczne Siarki „Siarkopol” S.A. z siedzibą w Grzybowie – NIE
OTWIERAĆ” (Reply to the invitation to negotiate the purchase of shares of the company Kopalnie i Zakłady
Chemiczne Siarki “Siarkopol” S.A. in Grzybów – DO NOT OPEN), as well as the identifying data of the
Potential Investor.
Replies to the invitation to negotiate should be made solely in Polish, be printed with page numbers, initialled on each page by persons authorised to represent the Potential Investor and signed by such persons. A reply to the invitation to negotiate submitted by a Consortium should be signed by authorised representatives of each of the
Consortium’s members or an appointed attorney-in-fact of the Consortium.
Replies to the invitation to negotiate submitted after the deadline indicated above shall not be accepted.
Until the lapse of the deadline to submit replies to the invitation to negotiate, the Minister of Treasury shall not provide any written explanations.
Following submission of a reply to the invitation to negotiate, the Minister of Treasury may require additional information and explanations as well as additional documents concerning each of the Potential Investors or any proposal contained in a reply to the invitation to negotiate.
In the case of a change to this procedure of submitting replies to the invitation to negotiate, all interested entities that signed the "Confidentiality Clause" and obtained "The Company's Offering Memorandum" will be notified thereof in writing.
A reply to the invitation to negotiate should include the following items:
1.
Presentation of the Potential Investor (or Investors in the case of a Consortium): a) business name, registered office and address of the Potential Investor’s company (or Investors in the case of a Consortium) or name and surname of the Potential Investor (in the case of a natural person), b) up-to-date copy of an entry to the entrepreneurs’ register/commercial register along with the company’s memorandum or articles of association; for foreign entities, copy of an entry or its certified copy from an official register equivalent to the Polish court/commercial register and corporate documents equivalent to the company’s memorandum or articles of association in the original version with a certified translation into Polish. an up-to-date copy/certificate of an entry shall mean a document dated at most 3 months prior to the deadline for submitting replies to the public invitation to negotiate; photocopy of a document confirming identity in the case of a Potential Investor being a natural person, c) names, positions, addresses and phone and fax numbers of the persons authorised to act on behalf of the Potential Investor, along with documents confirming the capacity to represent the Potential Investor by these persons or power-of-attorney to act on behalf of the Potential Bidder,

d) information on ownership structure of the Potential Investor (or Investors in the case of a Consortium) and general characteristics of its shareholders and the entity dominating over the Potential Investors, e) information on the structure and areas of activity of the Potential Investor’s company (or Investors in the case of a Consortium), in particular of the branch of industry and activity within the territory of Poland, f) copy of the most recent annual financial statement with an auditor’s opinion if legal regulations impose an obligation to audit financial statements on the Potential Investor, as well as balance sheet, profit and loss account, cash flow for the last month of operations for which they were drawn up; for Potential
Investors not subject to audit, F-01 and current financial statements (balance sheet, statement of financial results), respectively; for foreign entities – relevant financial documents; for natural persons – copy of income tax return.
Note:
 when the Investor is a part of a concern (capital group) or a subsidiary, please present basic information on the concern’s (group’s) operations.
 when the reply to the invitation to negotiate is submitted jointly by several entities, information referred to in item 1 Presentation of the Potential Investor should be specified for each of the entities jointly submitting the reply.
2.
Declaration of will to purchase a package of 4,675,000 shares at the nominal value of PLN 10.00 each, comprising 85% of initial capital. Cash funds for this should originate from sources outside the Company, must not be secured on the Company’s assets (including securities owned by the Company) or shares being the subject of the negotiations.
3.
Price offered per share (which should be a net price in PLN, clearly specifying the amount, not a range of values, and should not be conditioned by any reservations) and the value of the entire package that the
Investor intends to buy should both be expressed in PLN.
4.
Declaration of the Potential Investor as to the period of not disposing of the Company’s shares purchased from the Treasury.
5.
Initial level of capital expenditure declared by the Investor (including expenditure on environmental protection) with an initial time schedule of delivery and indication of source of financing.
6.
Amount of declared increase of initial capital (if planned) and the period when the increase is planned to be made.
7.
Presentation of initial assumptions of activities related to the Company’s growth.
8.
Initial concept of co-operation between the Company and the Potential Investor, new products, technologies and services offered by the Potential Investor to the Company, as well as other benefits for the Company related to association with the Investor.
9.
Key assumptions concerning the social package for the employees.
10.
The method of securing performance of the declared obligations.
11.
Indicated source(s) of financing the purchase of shares and information confirming the ability to ensure the indicated sources of financing (bank opinion or other relevant document confirming creditworthiness and means of the Potential Investor). Up-to-date document shall mean a document dated 3 months at the most prior to the lapse of the deadline to submit replies to the invitation to negotiate.
12.
Relevant considerations affecting the offered price.
13.
Other issues important to the Potential Investor.
14.
Statement of the Potential Investor and persons acting as members of the Bidder’s Management Board (if the
Potential Investor is a legal person) that they are not listed in the Criminal Records of the National Record of
Convictions or a relevant criminal register for foreign entities.
15.
Statement that the Potential Investor is not listed in the Bankruptcy Register or a relevant register for foreign entities.

16.
Statement that the Potential Investor is not listed as an unreliable borrower in the Credit Information Bureau.
17.
Statement of the Potential Investor that submission of a reply to the invitation to negotiate is related solely with the intention to purchase shares of the Company on terms defined in the public invitation to negotiate and is not made for any other purpose, in particular one in conflict with the interest of the Treasury and the
Company.
18.
Statement of the Potential Investor that the purchase of shares by the Potential Investor shall be a long-term capital investment and is not intended for any other purpose, in particular for further resale immediately following the purchase of shares from the Treasury on terms other than allowed in the shares sales agreement to be concluded between the Potential Investor and the Treasury.
19.
Statement of the Potential Investor that his financial standing guarantees performance of obligations under the shares sales agreement.
20.
Validity date of the reply to the invitation to negotiate (should not be sooner than 180 days of the submission date).
Note:
Funds for:
the purchase of shares referred to in section 1.3. item 2 of this Procedure,
capital expenditure referred to in section 1.3. item 5 of this Procedure,
increase of the initial capital referred to in section 1.3. item 6 of this Procedure, should originate from sources outside the Company, must not be secured on the Company’s assets (including securities owned by the Company) or shares being the subject of the negotiations.
The interested entities also undertake the following obligations: a) in the lack – at the stage of submitting a reply to the invitation to negotiate – of a final list of entities with whom the Potential Investor would like to finalise the purchase of the Company’s shares while planning to establish such a group (including a special purpose vehicle “SPV” established for the purposes of this transaction), the Potential Investor shall be obliged to clearly indicate this in the reply to the invitation to negotiate and provide any information required by the procedure about co-investors/consortium members not later than at the time of submitting a binding proposal of terms of the Company’s shares purchase agreement following completion of the Company’s audit; b) in the lack – at the stage of submitting a reply to the invitation to negotiate – of final determination which of the Potential Investor's capital group members or which of the consortium members or co-investors will purchase the Company's shares as a result of the privatisation process, the Potential Investor shall be obliged to clearly indicate this in the reply to the invitation to negotiate and provide any information required by the procedure about the entity that will purchase the shares not later than at the time of submitting a binding proposal of terms of the Company’s shares purchase agreement following completion of the Company’s audit; c) if a reply to the invitation to negotiate is submitted jointly with other entities, it shall not be possible following the submission to co-opt entities who did not submit the reply to the public invitation, unless such an intention has been clearly indicated in the reply to the invitation to negotiate; d) in the cases described in items a) and b) above, only the Potential Investor – admitted to negotiations – shall be authorised to present a binding offer of purchase for the Company's shares on behalf of the consortium/co-investors; e) the Potential Investor (in the case described in a), jointly with other entities with whom he submitted the reply to the public invitation to negotiate) acknowledges and accepts that in the cases described in a), b) and c) above:
 entities forming a consortium/co-investor group with the Potential Investor shall be jointly liable for obligations arising under the purchase agreement for the Company’s shares, and

 each entity joining the consortium/co-investor group – following submission of the reply to the invitation to negotiate and following the Company’s audit by the Potential Investor – will be allowed to read the information in "The Company's Offering Memorandum" and information obtained during the Company’s audit by the Potential Investor, upon prior consent of the Seller to joining the consortium/co-investor group and signing "Confidentiality Clause"
Joining the consortium/co-investor group (following submission of the reply to the invitation to negotiate) shall be allowed each time upon prior consent of the Seller and must take place prior to submission of binding proposals of terms of the purchase agreement for the Company’s shares, following completion of the Company’s audit by the Potential Investor.
NOTE: For bidders being foreign entities, the submitted documents in foreign languages should be translated into
Polish by a certified translator, and in addition to this, the copy of an entry to a register relevant in the case of the
Potential Investor and the power-of-attorney to act on his behalf should be – in the case of foreign entities – certified by a Consulate/Embassy of the Republic of Poland (or other relevant authority) at the Potential Investor's home country. The said certification issued by these institutions can be replaced with an apostille.
Any copies of documents attached to the reply to the public invitation to negotiate and to binding proposals of the contractual terms should be certified as true copies of the originals by persons authorised to represent the
Potential Investor.
The key criterion of evaluation and selection of the best reply to the invitation to negotiate shall be the proposed price per share.
The price shall be understood as a net price. Any fees or taxes related to the transaction of purchase of the said shares by the Investor shall be covered by this Investor without the possibility of being recognized by the Minister of Treasury as part of the price per share or being included in the amount of capital expenditure guaranteed by the Potential Investor.
Other elements of the reply to the invitation to negotiate, such as the initial assumption of activities in the area of the Company's growth, initial declared amount of capital expenditure for the Company, financial standing of the
Potential Investor and his experience in the industry, assumptions concerning the Social Package and proposed securities for performance of obligations shall be considered subsequently in the evaluation of replies to the invitation to negotiate.
Replies to the invitation to negotiate submitted in line with the terms of the procedure referred to above shall not be treated as legally binding documents. They shall be treated by the Minister of Treasury solely as a statement of the Potential Investor’s intention to purchase the Company’s shares in good will, on terms defined in the reply to the invitation to negotiate.
Entities submitting replies to the invitation to negotiate should, however, take into account the need to explain any negative differences between the reply to the invitation to negotiate and the binding proposal of terms of the purchase agreement for the Company’s shares. Failure to provide a reasonable cause for such differences may make the Minister of Treasury withdraw from negotiations with the Potential Investor.
The Minister of Treasury shall not consider replies to the invitation to negotiate making any reference to the terms proposed by other Potential Investors.
Potential Investors should acknowledge the fact that the Minister of Treasury shall reserve the right to:
 extend, prior to the lapse of the deadline to submit replies to the invitation to negotiate, the deadline to submit such replies,
 require additional information and explanations concerning contents of the submitted reply to the invitation to negotiate,
 free choice of Potential Investors with whom to undertake negotiations,
 withdraw from negotiations without stating the reason,

 extend the deadline for notifying of having considered the reply to the invitation,
 change the procedure and time schedule of selling the Company’s shares
Evaluation of the submitted replies to the invitation to negotiate shall be the basis for choosing the Potential
Investor or a group of Potential Investors who will be invited to submit a binding proposal of contractual terms.
This group shall comprise Potential Investors whose replies to the invitation to negotiate will be considered the most advantageous.
The Minister of Treasury plans further actions as follows:
 notification of the selected Investors of their admittance into the next stage of the procedure,
 possibility of auditing the Company by Potential Investors,
 submission of binding proposals of contractual terms,
 negotiations with the selected Potential Investor(s).
The Minister of Treasury shall reserve the right to change the above schedule.
Potential Investors who are admitted by the Minister of Treasury into the next stage of procedure based on the submitted reply to the invitation to negotiate, shall have the right to audit the Company’s documents and its enterprise prior to submitting a binding proposal of terms of the purchase contract for the Company’s shares.
Selected Potential Investors shall obtain a written confirmation of qualification to the next stage of the procedure and consent to audit the Company.
Detailed regulations and time schedule of the Company audit shall be presented to Potential Investors admitted into this stage of the procedure.
Terms of admission to audit and its date shall be defined by the Minister of Treasury.
Following the Company audit, Potential Investors shall submit binding proposals of terms of the purchase contract for the Company's shares package.
The deadline for submitting binding proposals of contractual terms shall be provided to Potential Investors in writing. The procedure of submitting and contents of binding proposals of contractual terms shall be notified to
Potential Investors admitted to negotiations in writing.
Binding proposals of contractual terms for the purchase of shares should be defined solely on the basis of information gathered during the Company audit performed by Potential Investors, and not on the basis of information contained in “The Company’s Offering Memorandum”.
Binding proposals of contractual terms for the purchase of shares submitted following the Company audit shall be treated as binding on the Potential Investors for a period defined by them (not shorter, however, than 180 days following submission).
Based on the evaluation of binding proposals of contractual terms for the purchase of shares submitted by
Potential Investors, the Minister of Treasury shall decide and choose Potential Investor(s) for further negotiations on contractual terms for the sales of the Company’s shares.
Negotiations shall be conducted in Polish. The contract of sales of the Company’s shares to third parties shall be drawn up in Polish and the regulations of the Polish law shall apply to it.

Binding proposals of contractual terms for the purchase of the Company’s shares submitted by Potential
Investors in the course of negotiations should be based solely on their verification of the Company’s condition and standing. Verification can be performed solely by a Potential Investor, therefore neither the Minister of Treasury nor the Company shall give any guarantee or warranty on issues that have been or should have been audited as a part of the verification.
Description of the structure and information about the date and place of submitting binding proposals of terms of purchase of the Company’s shares submitted by Potential Investors shall be provided following the selection of entities to participate in further procedure by the Minister of Treasury.
Entity participating in the negotiations may, upon the seller’s written consent, indicate a third party who shall purchase shares if the entity participating in the negotiations undertakes joint liability for the indicated third party’s performance of all obligations under the shares sales contract.
The Minister of Treasury shall not participate in nor guarantee obtaining of permissions, licences and exemptions that are within competence of other central or local administration bodies.
The Minister of Treasury shall notify each of the Potential Investors who submit a reply to the invitation to negotiate of the procedure outcome.
In matters of negotiations, not stipulated in this Memorandum, provisions of the Act of 30 August 1996 on commercialisation and privatisation (Journal of Laws of 2002, No. 171 item 1397 as amended) and
Regulation of the Council of Ministers of 30 May 2011 on detailed mode of selling the Treasury's shares
(Journal of Laws of 2011, No. 114, item 664) shall apply.
In matters related with this transaction, each Potential Investor shall not contact the Company, its authorities or employees, or representatives of state administration and institutions related to the Company’s operations, without a prior written consent of the authorised representatives of the Ministry of Treasury. Any deviations from this rule shall be treated as a breach of the procedure and can be the ground for exclusion of a Potential Investor from negotiations concerning purchase of the Company's shares.
In all matters related to this transaction, the investors should contact with the exclusive Advisor of the Minister of
Treasury’s Advisor in the negotiation process i.e. PKF Consult Sp. z o.o. residing in Warsaw. Any questions and mail should be addressed at:
PKF Consult Sp. z o.o. ul. Elbląska 15/17
01-747 Warszawa
The persons responsible for contact: Mr Jarosław Pietraszko ( jaroslaw.pietraszko@pkfcapital.pl) or Mr Piotr
Urbański ( piotr.urbanski@pkfcapital.pl
).
Correspondence should be conducted in the Polish language
The Minister of Treasury reserves the right to change the above procedure of selling the Company’s shares of which it shall notify as the Potential Investors that signed the “Confidentiality Clause” and obtained “The
Company’s Offering Memorandum”.