Report no. 117/2013

Pursuant to §5 (1) (3) of the Regulation of the Minister of Finances of 19 February 2009 on current and periodic information provided by issuers of securities, the Management Board of EMC Instytut Medyczny S.A. informs that on 23 December  2013 a  Preliminary  Agreement for Sale of shares of the Regional Health Centre limited liability company based in Lubin was entered into. 
 

The agreement  was concluded as the result of negotiations with respect to a public invitation to a tender  as published on 9 September 2013 by the Management Board of the District of Lubin for the sale of shares in the Regional Healthcare Centre limited liability company based in Lubin.
 

The agreement was concluded between the District of Lubin which that owns the shares of the Regional Healthcare Centre limited liability company based in Lubin (the Seller) and the Issuer (the Buyer).

The subject of the preliminary agreement is the purchase of 51,730 shares in the RHC with a nominal value of PLN 500 each from District Office of Lubin by EMC Instytut Medyczny SA, under the terms and conditions as negotiated in the course of the ongoing proceedings.

The Buyer agrees, upon a consent to the concentration being issued by the Office for  Competition and Consumer Protection or the recognition that the obligation to notify  the intention of the concentration shall not apply, to conclude the Final Agreement for  the sale of shares until 31 January 2014.

The Parties intend the term of the conclusion of the Final Agreement be delayed at the request of the Buyer if the obtaining consent for concentration should be extended, provided that this extension will not be the result of negligence or omissions of the Buyer.

 

The sale price of  51,730 Shares in the RHC constituting a block of Shares was fixed at PLN 30,003,400.00, i.e. PLN 580,00 per a sold share.
 

The payment  will be made to the Seller’s bank account  in two installments:

- the first installment amounting to PLN 10,200,000.00 due until 30 December 2013,

- the second installment, remaining amount of the sale price of the Shares due on the working day prior the conclusion of the Final Agreement.
 

Should a  failure to obtain the consent of the Office for Competition and Consumer Protection for the concentration  occur, the Seller shall reimburse to the Buyer  the first installment paid within 14 days.

Having concluded the Agreement, EMC Instytut Medyczny assumed the following obligations:
 

-  to take no actions resulting in a significant reduction of healthcare services provided by the RHC  with respect to in-patient and out-patient treatment to ensure a proper implementation of medical services that are financed from public resources (in accordance with current ranges services (under contracts with the NHF):
 

a) the  Department of Internal Medicine,

b) the Department of General Surgery,

c) the Department Anesthesiology and Intensive Care ,

d) the Department Pediatrics

e) the Department of Neonatology

f) the Department of Obstetrics and Gynecology 

g) the Department of Trauma and Orthopedic Surgery

h) Emergency Room or Hospital Emergency Department,

i) Hospice.

- to complete projects under the adjustment program drawn up for the RHC and specified in the offer made ​​by the Buyer,

- to ensure that the employment in the RCZ will be adequate to the value of contracts and the quantity of medical services resulting from the agreements for providing healthcare services entered into by the RHC which are financed from public resources with respect to the period and the terms specified in the offer. 

-to appoint the persons named by the Seller as Supervisory Board members of RHC for a period of seven years

- not to put the RHC into liquidation, without prior consent of the Seller for a period of 25 years and in case of  insolvency, the Buyer shall be obliged to provide measures necessary for the functioning of the RHC.

-not to take any action which would prevent or limit the implementation of the obligations of the Buyer.

Any changes in the composition of partners of the RHC (disposal of shares, taking up shares in the increased share capital), merger or transformation of the RHC do not absolve the Buyer from  responsibility.

The Buyer agrees to transfer joint and several liability on the other partners  of the RHC or on the partners in the newly established company (the receiving company).
 

In the event of any failure to satisfy its obligations in a timely manner, the Issuer shall pay to the Seller a contractual penalty for each violation in the following amount:

a) a reduction in medical activity of the RHC - 3.125% of sales price - the contractual penalty shall be calculated for each scope of activity, however no more than 25%;

b) the liquidation of medical activity of RHC - 25% of the sales price.

c) failure to implement adjustment programs - 25%  of the sales price.

d) failure to carry out investment projects- 10% of the sales price.

e) failure to ensure a social package - 10% of sales price

f) non-enforcement of the Seller's right to appoint a member of the Supervisory Board - 1% of the sales price.

The total value of contractual penalties shall not exceed 100% of the agreed sales price.

 

The Buyer shall  submit a declaration of execution in the form of a notarial deed to the amount of PLN 15,000,000.00 pursuant to Art. 777 (1) ( 5) of the Civil Code when signing the Final Agreement by way of payment of the price and contractual penalties under the contract. 
 

The Seller is entitled to carry out enforcement proceedings in the vent of  failure to make payment  together with interest rates until specified periods  by the Buyer and, for liquidated damages  failure to make payments within 30 days of receipt of the written notice of the Seller and obtaining a declaration of enforceability by the Seller. 

Moreover, the collateral is a mortgage on real property owned by the RHC up to the amount of PLN 15,000,000.00 ( in words:  PLN fifteen million ).

 

A criterion for a contract to be considered significant: the value of contracts exceeds 10% of the Issuer’s equity capital.