Minister of Treasury
invites to a public electronic auction
for the purchase of shares of
Kopalnie Odkrywkowe Surowców Drogowych
Spółka z ograniczoną odpowiedzialnością
with registered office in Wilków

Minister of Treasury, ul. Krucza 36/Wspólna 6, postal code: 00-522 Warszawa, acting on behalf of the Treasury, pursuant to Article 31(a), in conjunction with Article 33(1)(5) of the Commercialisation and Privatisation Act of 30 August 1996 (Journal of Laws of 2002 No. 171 item 1397, as subsequently amended), hereinafter referred to as the “Act” and the Resolution of the Council of Ministers of 17 February 2009 on the Detailed Procedure of Disposal of Treasury-owned Shares (Journal of Laws No. 34 item 264, as subsequently amended) invites all interested parties to participate in the auction concerning the sale of 28,900 shares for one buyer, with a nominal value of PLN 50.00 each, constituting 85% of the share capital of Kopalnie Odkrywkowe Surowców Drogowych Spółka z ograniczoną odpowiedzialnością with registered office in Wilków (hereinafter referred to as the “Shares”), address: Wilków, 59-500 poczta Złotoryja, registered under the KRS no. 0000246335, with Tax Identification Number 694-00-03-546, hereinafter referred to as the “Company.”

The auction will be open, held on the internet auction platform at:
https://aukcjemp.marketplanet.pl/servlet/HomeServlet

The Company's core activities are mining of gemstones and quarrying of stone for the building industry.

The highest bidder shall be obliged to purchase the shares that were not acquired free of charge by the Company’s eligible employees under the Act, subject to terms and conditions of the share purchase agreement attached hereto, hereinafter referred to as the “Share Purchase Agreement.”

Entities interested in the purchase of Company shares through the public auction may purchase the “Company Memorandum.” To do so, interested entities should:

• visit the Ministry of Treasury, room 728, on working days from 24 May 2010 to 14 June 2010, between 10:00 AM and 3:00 PM;

• produce a transcript from the Register of Entrepreneurs of the National Court Register / certificate of entry in the register of business activity, reflecting the current standing of the entity (issued not earlier than three months prior to the date of submission), or an identity document if the interested party is a natural person who is not an entrepreneur,

• sign “Confidentiality Obligation” document through their duly authorised representatives.

The “Company Memorandum” contains information concerning the Company’s legal, financial and economic standing. The price for the Memorandum is PLN 100.00, payable at the cashier’s desk, room 372, Division of General Accountancy and Reporting of the Department of Budget and Finances of the Ministry of Treasury from 12:00 noon to 2:00 PM or to the account of the Ministry of Treasury, maintained in Bank Gospodarstwa Krajowego, Branch No. 1 in Warsaw, account no. 83 1130 1017 0019 9426 2520 0008.

The person responsible for providing access to the said documentation is:

- Mr. Jakub Wielgus, room 728, tel. (022) 695 83 45.

Entity interested in the purchase of Company Shares may be granted the right to conduct due diligence on the Company and its enterprise. To obtain such right, interested entities should submit, by 7 June 2010, a request to inspect the Company’s documents to the Department of Privatisation Projects at the Ministry of Treasury (room 739, fax: (22) 695 88 18) along with a statement from a bank or a savings and credit union where the entity holds an account (issued after 31 March 2010), confirming that the entity has financial resources equal to the starting price for the stake of 28,900 Shares or has creditworthiness to that amount.

Entities granted the right to conduct due diligence on the Company shall be required to sign a “Confidentiality Obligation” document.

Registration and identification requirements for entities taking part in online auction, including hardware and software requirements

1) Entities permitted to participate in the auction will receive, free-of-charge, an e-mail from the auction platform operator – Otwarty Rynek Elektroniczny S.A. – containing instructions for use of the auction platform, including terms and conditions of participation in an online auction as well as login and access password.

2) Otwarty Rynek Elektroniczny S.A. provides training for entities permitted to participate in the auction based on a written application delivered by e-mail.

3) The following hardware and software requirements apply for participants of the online auction:

a) PC computer,

b) Windows 2000 / XP / Vista,

c) working Internet connection

d) Internet Explorer 5.5 or higher, Firefox, Opera or Google Chrome.

Auction procedure:

1) The starting price for the stake of 28,900 Shares is PLN 2,257,090 (two million two hundred fifty-seven thousand and ninety zloty).

2) The minimum bidding increment for the entire stake of 28,900 Shares is PLN 12,000.00 (say: twelve thousand zloty).

3) Entities permitted to participate in the auction place their bids using a bidding form available on the internet auction platform at: https://aukcjemp.marketplanet.pl/servlet/HomeServlet.

4) Successive bids are listed automatically on a price basis.

5) A bid placed during auction is binding until a higher bid has been placed by another participant.

6) During the auction, the system will automatically supply the participants with current information on:

a) position of bids placed by participants;

b) number of bidders;

c) minimum bidding increment;

d) the currently highest bidder;

7) The identity of participants will not be revealed by the system until the auction has closed.

Successive stages of the auction:

1) The auction shall be a single-stage auction with the following duration:

a) 60 minute, in case where no further bids have been placed between 55th and 60th minute of the auction;

b) if a bid has been placed during the last 5 minutes, the auction shall be extended by 5 minutes calculated from the time of placing the last bid (duration of extended bidding). There may be unlimited number of bidding extensions in a single auction.

2) The duration of the auction shall be calculated according to server time at https://aukcjemp.marketplanet.pl/servlet/HomeServlet.

Applications for participation in the auction must be made in the Polish language and contain:

1. name, surname and address or name and registered office of the interested entity;

2. Regon number;

3. Tax Identification Number;

4. e-mail address;

5. address for correspondence;

6. phone number;

7. fax number;

8. attached evidence of payment of the bid security, along with an indication of the bank account number to which the bid security should be refunded;

9. a statement that the entity is authorised to place bids during auction the template of which is available on the website at http://bip.msp.gov.pl/portal/bip/105/4497/Upowaznienie_do_skladania_postapien_oraz_oswiadczenie_osoby_upowaznionej.html;

10. if the entity interested in participation in the auction is a natural person:

a. a photocopy of an identity document confirming the identity of the holder, certified by a notary public to be a true copy of the original,

b. if the natural person is engaged in a business activity – a valid certificate confirming entry in the Register of Business Activity, if separate provisions of law require the entity to be entered in the Register of Business Activity, submitted in original, transcript or as a certified copy made by a notary public,

c. information on the method of financing of the share purchase transaction;

11. if the entity interested in participation in the auction is a legal person:

a. a valid extract from the relevant register,

b. details of the person(s) entitled to participate in the auction, along with a power of attorney,

c. details of the person(s) entitled to represent the entity in signing the agreement, along with a duly executed power of attorney, in the event that the identity of the signee is different than the identity of the person specified in item 11(b),

d. information on the method of financing of the Share purchase transaction;

12. declaration that the entity interested in participation in the auction:

a. does not default on payment of any taxes, or a declaration that the entity obtained, in accordance with the law, the required exemption, deferral, division of overdue amounts into instalments or a stay of execution (in full) of the decision of a relevant authority,

b. does not default on payment of fees or premiums for social or medical insurance, or a declaration that the entity obtained, in accordance with the law, the required exemption, deferral, division of overdue amounts into instalments or a stay of execution (in full) of the decision of a relevant authority,

c. is not in breach of any other privatisation agreements and that the entity is not a party to any court disputes in this regard,

d. is not in breach of any other agreements concluded with the Treasury, and is not a party to any court disputes in this regard,

e. is not subject to liquidation proceedings and that no bankruptcy was announced, apart from entities which upon announcement of bankruptcy made an arrangement approved under a valid court decision, provided that such arrangement does not provide for satisfaction of creditors by liquidation of the assets of the bankrupt entity,

f. is not entered in the Register of Insolvent Debtors,

g. is not registered in the Credit Information Bureau as an unreliable borrower.

The documents specified in the invitation must be submitted in writing as original documents or the copies thereof, which were certified by a notary public to be true copies of the original.

The documents made in a foreign language should be submitted along with their translation into the Polish language made by a sworn translator.

An apostille should be additionally attached to the documents that are public documents within the meaning of the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents (Journal of Laws of 2005 No. 112, item 938), which were made in accordance with the applicable laws of a country that is party to the Convention.

Public documents within the meaning of the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, which were made in accordance with the applicable laws of a country that is not party to the Convention should be legalised before they are submitted.

Apostille or legalisation are not required insofar as a bilateral or multilateral agreement that is binding for the Republic of Poland abolishes or simplifies the legalisation procedure or exempts the documents from legalisation within the scope of such agreement.

Written applications for the auction should be submitted in one written copy placed in a sealed envelope, to the Ministry of Treasury, 00-522 Warszawa, ul. Krucza 36/Wspólna 6, to the front office of the Ministry of Treasury or the front office of the Department of Treasury Property, room 447, on working days, during office hours, i.e. 8:15 AM – 4:15 PM by 5 July 2010.

A respective inscription should be placed on the envelope:

Zgłoszenie do wzięcia udziału w aukcji dotyczącej nabycia udziałów spółki
Kopalnie Odkrywkowe Surowców Drogowych
Spółka z ograniczoną odpowiedzialnością z siedzibą w Wilkowie
Nie otwierać
Zgłoszenie przekazać do
sekretariatu Departamentu Mienia Skarbu Państwa
w Ministerstwie Skarbu Państwa
(Application to participate in the auction for the purchase of shares of
Kopalnie Odkrywkowe Surowców Drogowych
Spółka z ograniczoną odpowiedzialnością with registered office in Wilków
Do not open
Please submit the application to the front office of the Department of Treasury Property of the Ministry of Treasury)

Applications to participate in the auction will not be accepted after the expiry of the stipulated date and/or if no inscription, as indicated above, has been placed on the envelope.

A bid security of PLN 115,000.00 (say: one hundred and fifteen thousand zloty) which corresponds to 5% of the starting price for the Shares shall be paid by bank transfer to the account of the Ministry of Treasury, account no. 13 1130 1017 0019 9426 2520 0007, maintained with Bank Gospodarstwa Krajowego S.A., Branch No. 1 in Warsaw, by 5 July 2010.

The bid security is non-refundable in the event that the highest bidder refuses to sign the Share Purchase Agreement and/or decides not to participate in the auction after application submission deadline.

Failure by an entity allowed to take part in the auction to turn up and failure by auction participants to offer a starting price shall also be regarded as a decision to withdraw from the auction.

Time of opening and terms of closing the online auction

1) The auction will open on 13 July 2010 at 12 noon.

2) The auction shall be a single-stage online auction with possible extended bidding. The duration of one session of extended bidding shall be 5 minutes. The number of possible bidding extensions is unlimited.

3) The auction will close on 13 July 2010 at 1:00 PM provided that no further bids have been place between the 55th and 60th minute of the auction.

4) If a bid has been placed between the 55th and 60th minute, the auction shall be additionally extended by 5 minutes (extended bidding) calculated from the time the last bid has been placed (duration of first extended bidding). The same shall apply to subsequent bidding extensions.

5) The auction shall be closed if no further bids have been placed during the 5 minutes of a subsequent bidding extension.

6) Upon closing the online auction, the date of concluding the Share Purchase Agreement shall be specified by the auction board.

7) The time of the auction refers to the server time, as given on the website https://aukcjemp.marketplanet.pl/servlet/HomeServlet.

Place, terms and conditions and deadline for signing the Share Purchase Agreement

The Share Purchase Agreement will be concluded with the entity placing the highest bid during the auction within up to 5 working days from the date of payment of the full purchase price for the Shares, reduced by the amount of the bid security paid by a bank transfer to the account of the Ministry of Treasury, account no. 03 1010 1010 0025 1213 3920 0000, maintained with National Bank of Poland, Branch in Warsaw.

Payment must be made in full within 10 working days from the date of announcing the highest bidder.

Where the purchase of Shares requires:

1) the decision of the Chairman of the Office of Competition and Consumer Protection (UOKiK) on no impediments to the intended merger of companies;

2) the consent of the Minister of Internal Affairs

• the highest bidder must immediately, and in any case within 60 days from the date of announcing the highest bidder, apply to the relevant bodies to issue the said decisions. In this case, payment must be made in full within 5 working days from the day the above mentioned decisions have been submitted to the Minister of Treasury.

The Share Purchase Agreement will be concluded at the organisational unit of the Ministry of Treasury responsible for budget and finance, address: ul. Krucza 36/Wspólna 6, 00-522 Warszawa after the receipt of the full payment for the shares has been confirmed.

The auction will be closed upon signing the Share Purchase Agreement.

This invitation and the terms and conditions of the auction are subject to change or cancellation by the Minister of Treasury.

The Ministry of Treasury informs that the Four-Year Privatisation Programme is available on the Ministry’s website at www.msp.gov.pl.