Concluding a significant agreement with Ferrum S.A.

Date of issue: 2014-01-09

Legal basis: Art. 56 Clause 1 Item 2 of the Offering Act - current and periodic information.
 
SUBJECT: Concluding a significant agreement with Ferrum S.A.

CONTENT OF THE REPORT:
The Management of Izostal S.A. (the Company) informs that on January 8, 2014 it concluded subsequent contracts with Ferrum S.A. seated in Katowice. As a result of the transactions the total value of sales and purchase contracts signed by the Company with Ferrum S.A. since July 15, 2013 (current report no. 21/2013) has exceeded 10% of the Company’s equity capital and amounted 16.923 thousand PLN (net).

Within the period stated, the contract of the highest value was the transaction of sale of coated steel pipes by Izostal S.A. (Supplier) to Ferrum S.A. Company (Buyer) concluded on January 8, 2014 of the total value of 1.285 thousand EUR (net) which, when converted at the average exchange rate of NBP on the day of signing of the contract, constitutes approximately 5.371 thousand PLN (net).

In the case of failure to provide or improper provision of contractual obligations both Parties established contractual penalties in the amount of and under following, whereas any penalties and/or their constraints expressed as a percentage shall be accrued in relation to base amount of 9.273 thousand EUR which, when converted at the average exchange rate of NBP on the day of signing of the contract, constitutes approximately 38.750 thousand PLN:
a) The Supplier shall pay to the Purchaser the contractual penalty for delays of the agreement in amount of 0,5% of base amount mentioned above per each day of delay, but no more than 20% of this amount.
b) In the case when the Supplier will be unable to provide the subject of the agreement within the time specified in the contract and when any of the alternative dates will not be defined between Parties or when the Supplier will be unable to accomplish the delivery within prolonged deadline, the contract is considered as unenforceable. In the case of the agreement not being performed the Supplier shall be obliged to pay the penalty to the Buyer for failure of executing the agreement in the amount for 20% of base amount mentioned above. In the case of the agreement not being performed the Supplier does not have a right to any claims against the Buyer for a part of the contract which was covered in the above paragraph and he waives any claims.
c) If, for any other reason, implementing the agreement is not consistent with conditions of the contract (excluding paragraph a) and b) ), the Supplier is obliged to pay of the contractual penalty which equals the amount of contractual obligations which are falling under faulty agreement execution occurrence - if the amount of money cannot be established, the contractual penalty equals 20% of base amount. In the case of failure to provide or improper provision of contractual obligations by the Supplier, in particular in the case of Supplier’s delay of meeting commitments or part of commitments, the Contractor is authorised to order execution of contract commitments to other contractor at cost and risk of the Supplier. However, the Contractor shall keep claim to compensate damages which resulted lack of execution or improper execution of the commitments by the Supplier, especially for the delay due to reasons attributable to the Supplier.
d)    If the Supplier having possibility to oversee its inability to fulfil the agreement according to resolutions (delayed delivery or lack of delivery) will not inform the Buyer about this fact, he shall pay contractual penalty of 20% of the base amount for lack of information.
e)    If the Supplier breaks the obligation of confidentiality which is defined in the agreement then he will pay the penalty of 20% of the base amount. The Buyer is empowered to make contractual liability claims for damages higher than the contractual penalties.

The order delivery date mentioned in the contract was designated to February 28, 2014.
Other terms of the transaction do not vary from the commonly applied for this type of agreement.

Transactions with FerrumS.A. Company signed in the above mentioned period meet the criterion of a significant agreement as their total value exceeds 10% of the equity capital of the Company.

Specific legal basis: §5 clause 1 item 3 of the Ordinance of the Minister of Finance of February 19, 2009 on current and periodic information disclosed by the issuers of commercial papers and the conditions for recognizing as equivalent the information required by the laws of a non-member state (Journal of Laws No. 33, item 259 as amended).

SIGNATURES OF PERSONS REPRESENTING THE COMPANY:
Management Board President, Marek Mazurek 2014-01-09
Management Board Vice President, Michał Pietrek 2014-01-09

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