Concluding a significant agreement with Ferrum S.A.

Date of issue: 2014-03-10
 
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:
On March 10 2014, Izostal S.A. (the Company), concluded another trade agreement with Ferrum S.A. seated in Katowice. As a result of the transaction, total value of sales and purchase contracts concluded by the Company with Ferrum S.A. since January 9, 2014 (current report no. 1/2014) exceeded 10% of equity of the Company and equaled net PLN 26.382 .

Within the period stated, the agreement of highest value was sales contract of March 10, 2014 for coated steel pipes entered by Izostal (Seller) and Ferrum S.A. (Buyer) of total worth EUR net 2.728 thousand, which after the conversion based on the mean NBP exchange rates on the day of conclusion equaled PLN net 11.428 thousand.
The concluded agreement provides that each of the parties is liable for non-performance or unduly performance of their contractual obligations.
1.    The Seller shall pay to the Buyer the following contractual penalties:
a)    for delays in supplying each batch of the agreement’s subject, in an amount of 0.2% of net remuneration for such batch of the subject per each day of delay
b)    for delays in repairing pipes or delivering new items in case of defects discovered upon receipt, within the warranty period, in an amount of 0.2% net remuneration for batch of the defective agreement’s subject, per each day of delay,
c)   for terminating the agreement by any of the parties for reasons attributable to the Seller, in an amount of 10% of net contractual remuneration.
2.    Total amount of contractual penalties shall not exceed 30% of net contractual remuneration.
3.    If the contractual penalty does not cover the damage incurred, or if the cause for damage is not included in the provision on contractual penalties, the parties may claim compensation according to the Civil Code.
4.    If the contractual penalty does not cover the damage incurred, the Buyer shall have the right to claim compensation in excess of the penalty.

The order performance deadline stated in the agreement is June 6, 2014.

Other terms of the transaction do not vary from the typically adopted for this kind of contracts.

All transactions concluded with Ferrum S.A. stated above may be classified as significant contracts, because their value exceeds 10% of the Company’s equity.

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 2014-03-10
Management Board Vice President, Michał Pietrek 2014-03-10

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