Concluding a significant contract with Stalprofil S.A.

Date of issue: 2011-02-22

Legal basis: Art. 56 clause 1 item 2 of the public offering act – current and periodic information

SUBJECT:
Concluding a significant contract with Stalprofil S.A.

CONTENT OF THE REPORT:
The Management Board of Izostal S.A. (Company) informs that on February 21, 2011 a sales contract was signed between Izostal S.A. seated in Zawadzkie (buyer) and Stalprofil S.A. seated in Dąbrowa Górnicza (seller).

The subject of the contract is the supply of steel pipes for the construction of gas transmission networks DN 500 and lining pipes DN 700 to be made by the seller in favor of Izostal S.A.

Total net value of the contract for the performance of the subject of the Contract is PLN 13.864.550 (ca. PLN 17.053.400 gross)

Supplies of steel pipes will be realized by Stalprofil S.A. in favor of Izostal S.A. in the period from March to April 2011.

Financial conditions of the contract concluded are not different from the conditions typically applied for such contracts.

The contract contains the following provisions concerning contractual penalties:
a) Seller will pay the Buyer a contractual  penalty for a failure to observe delivery dates, equaling 0.5%  of the net value of a delayed batch of goods for each full day of delay. On no account shall the contractual penalty arising therefrom exceed 4.0% of the contract value.
b) the Buyer shall pay to the Seller a contractual penalty for a delay in the receipt of the Object of the contract in the amount of 0.5% of the net price of the uncollected batch of pipes for each full day of delay. On no account shall the contractual penalty arising therefrom exceed 4.0% of the Contract's value.
c)the Seller shall pay to the Buyer a contractual penalty for withdrawal from the contract for reasons attributable to the Seller, in the amount of 25.0% of the price of the contractual remuneration specified in this contract.
d) the Seller shall pay to the Buyer a contractual penalty for delay in rectification of defects attributable to the Seller, in the amount of 1.0% of the net value of the delivery considered defective, for each day of delay calculated from the day indicated as the day of rectifying the defect. On no account shall the contractual penalty arising therefrom exceed 4.0% of the Contract's value.
e) the Buyer shall pay to the Seller a contractual penalty for withdrawal from the contract for reasons attributable to the Buyer, in the amount of 25.0 % of the contractual remuneration specified in this contract.

Irrespective of the contractual penalties, the Parties may claim some supplementary compensation on general principles - up to the amount of the incurred damage. The above provisions are not applicable if a Force Majeure event occurs.

The concluded contract fulfills the criterion of a significant contract since its value exceeds 10% of the Company's equity.

Specific legal basis: §5 clause 1 item 3 of the Regulation of the Minister of Finance of February 19, 2009 on current and periodic information submitted by issuers of securities and conditions of recognizing information required by law of a non-EU state as equivalent (Journal of Laws no. 33 item 259, with further amendments);.

SIGNATURES OF PERSONS REPRESENTING THE COMPANY:
Management Board Vice President, Financial Director Marek Mazurek 2011-02-22
Management Board Vice President, Commercial Director Jacek Podwiński 2011-02-22

INFORMATION ON THE ENTITY:
Full name of the issuer: IZOSTAL SPÓŁKA AKCYJNA
Abbreviated name of the issuer:  IZOSTAL S.A
Sector based on the classification of Warsaw Stock Exchange:  Other industry
Address: 47-120 Zawadzkie Polna 3
Telephone: (77) 405 65 00
Fax: (77) 405 65 01
e-mail:info@izostal.com.pl
www.izostal.com.pl
VAT No. [NIP]:756-00-10-641
Statistical No. [REGON]: 530884678