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The Management Board of Ciech S.A. ("Issuer ", "Seller"), pursuant to § 5 (1) ( 1) and § 5 ( 1) (3) of the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and the conditions of considering as equivalent of information required by the laws of a country not being a member state, informs that on December 16th, 2010 a contract for sale of shares in a subsidiary was signed. The parties to the contract include Zakłady Azotowe "Puławy" with its registered office in Puławy ("Purchaser") and Ciech SA with its registered office in Warsaw. There are no connections between the persons managing and supervising the Issuer and the Purchaser.

The subject matter of the contract involves the sale to the Purchaser of 51 855 shares, which represent 89.46% of the share capital of Gdańskie Zakłady Nawozów Fosforowych "Fosfory" Sp. z o.o. with its registered office in Gdańsk (GZNF Fosfory), a subsidiary of the Issuer, with the dispositive effect as at the Closing Date, i.e. the second business day following the day on which the last party to the contract is informed about the satisfaction of the last condition precedent or another day agreed by the parties in writing under the pain of nullity.

As at September 30th, 2010 the value of the shares in GZNF Fosfory registered in the records accounted for PLN 20 888 thousand.

The parties agreed on a forecasted acquisition price of the shares of PLN 107.2 million (one hundred seven million and two hundred thousand zloty) based on a specific Value of the Enterprise of “Fosfory” company and a specific Forecasted Net Financial Debt. 
A significant component of the transaction involves the repayment by the Purchaser of the loans given by Ciech SA to companies of the Fosfory Group. The loans as at today and anticipated as at the closing date account for PLN 120.6 million.

The contract was concluded subject to the following conditions precedent:

1. receipt of consent of a relevant competition protection authority;
2. release of “Fosfory” company and subsidiaries of “Fosfory” company, i.e.  Agrochem sp. z o.o. with its registered office in Człuchowo and Agrochem sp. z o.o. with its registered office in Dobre Miasto, from all liabilities, including collaterals arising from the Loan Agreement concluded on April 26th, 2010 between the Seller as the borrower and some of the companies of the Seller’s capital group as guarantors, and a consortium of banks (Lenders), and receipt of a relevant certificate and declarations on release of the aforementioned collaterals;
3. release of “Fosfory” company and subsidiaries of “Fosfory” company from their liabilities, including collaterals arising from the contract concluded on May 17th, 2010 between the Seller as the debtor and some of the companies of the Seller’s capital group as guarantors, and the Lenders under the Loan Agreement and banks being the Seller’s creditors (Contract between the Creditors), and receipt of relevant declarations of the creditors on release of the aforementioned collaterals;
4. deletion of the aforementioned collaterals under the Loan Agreement  and Collaterals under the Contract between the Creditors involving registered pledges and mortgages from the register of pledges and relevant land and mortgage registers, respectively;
5. return assignment of the rights transferred pursuant to contracts for security assignment  entered into on June 15th, 2010 between “Fosfory” company and subsidiaries of  “Fosfory” company and Powszechna Kasa Oszczędności Bank Polski S.A. as the assignee;
6. relevant amendment to the memorandum of association of “Fosfory” company and entry thereof in the register of businesses;
7. acceptance by Bank Handlowy w Warszawie S.A. as the Loan Agent under the Loan Agreement of the Seller’s application for cancellation of the obligation arising from the Loan Agreement concerning the Seller’s liability on account of the Seller’s warrantees contained in the agreement;
8. receipt by the Purchaser of a resolution of a general meeting expressing consent to purchase the Shares;
9. conclusion by the Purchaser and the Seller of a contract for establishment of an escrow account;
10. conclusion by the parties to the contract and “Fosfory” company and subsidiaries of “Fosfory” company of an agreement on subrogation in the rights of the creditor of the Purchaser instead of the Seller as the creditor under loan agreements involving loans for a total value of PLN 120.6 given to “Fosfory” company and subsidiaries of “Fosfory” company by the Seller (Subrogation Agreement); the Subrogation Agreement will be entered into under the condition precedent involving the acquisition by the Purchaser of the Shares on the Closing Date;

The conditions mentioned in Clauses 2-6 above are reserved for the Purchaser, who is entitled to waive any of the conditions by submitting a declaration to the Seller. The final deadline for satisfaction of all conditions is June 30th, 2011.

Prior to the satisfaction of the conditions precedent, the Purchaser has the right to withdraw from the contract in the case of a considerable deterioration in the financial condition, financial results or liabilities of GZNF Fosfory resulting in a loss on the part of the Purchaser in the amount agreed in the contract.

The contract contains representations and warranties of the Seller which are typical of such type of transactions. They concern without limitation the Seller’s status, the Seller’s title to the shares and the condition of the enterprises of “Fosfory” company and subsidiaries of “Fosfory” company, as well as provisions concerning the Seller’s liability on account of infringement of the warranties. The contract confers upon the Purchaser, up to the Closing Date at the latest, the right to withdraw from the contract in the case of occurrence of a Material Adverse Change specified in the contract. Furthermore, the contract confers upon both parties the right to withdraw from the contract if within 60 business days from the effective date of the contract the conditions specified in Clauses 7, 8 and 9 above are not satisfied, and confers the same right upon the Seller if the condition specified in Clause 10 above is not satisfied within the same period of time.

The contract is considered a significant contract since the value thereof exceeds 10% of the Issuer’s equity.