Aktuální report č. 70 / 2013

A significant agreement concluded by the issuer and the issuer’s subsidiary

Further to the current report no. 68/2013 of 6 November 2013, the Management Board of Budimex SA (“Budimex”) announces that on 6 November 2013 Budimex and Budimex’s single member subsidiary – Budimex B Sp. z o.o. (“Transferor”, “Budimex B”) concluded an agreement with Barwick Investments Sp. z o.o. (a direct subsidiary of Polish Enterprise Fund VII LP) (“Transferee”) a binding share transfer agreement (“Agreement”) concerning 20,779 shares, which represent 100% of the share capital and give the right to 100% votes on the General Meeting (“Transferred Shares”) in Budimex Danwood Sp. z o.o. with its registered office in Bielsk Podlaski (“Danwood”).
Budimex B acquired the Shares on 16 September 2013 following the payment of a contribution in kind by Budimex to cover the increased share capital of Budimex B. Budimex announced this fact in its current report no. 60/2013 of 17 September 2013.
The total nominal value of all Transferred Shares is PLN 20,779,000. The carrying value of the Transferred Shares in accounting books maintained by Budimex B is PLN 238,600,000. The value of Budimex B’s shares in accounting books maintained by Budimex is PLN 20,854,000. The value of Danwood’s equity as at 30 September 2013 was PLN 30,699,000.
The Transferred Shares transfer transaction will be conducted in two stages: (i) conclusion of an agreement requiring the ownership of shares to be transferred onto the Transferee (concluded on 6 November 2013), (ii) conclusion of a dispositive agreement, i.e. an agreement transferring shares onto the Transferee, on 2 December 2013. In accordance with the Agreement, Budimex is jointly and severally liable for the Budimex B’s obligations towards the Transferee.
The Share transfer price of approximately PLN 238,600,000 is payable by the Transferee on the day when the dispositive agreement is concluded, the price will be subject to adjustment equal to the difference between the estimated and the actual value of cash and working capital of Danwood as at 30 November 2013. The said adjustment will be settled by the parties to the transaction within 60 days after the conclusion of the dispositive agreement. 
The Agreement sets forth a contractual penalty payable by Budimex or Budimex B (joint and several debtors) to the Transferee in the amount of PLN 1,000,000 if the Transferee rescinds the Agreement for reasons attributable to Budimex or Budimex B only, owing to: (i) failure to perform contractual obligations by Budimex or Budimex B in the period between the conclusion of the Agreement and the conclusion of the dispositive agreement or (ii) failure to conclude the dispositive agreement on the day specified in the Agreement.
The Agreement sets forth a contractual penalty payable by the Transferee to Budimex or Budimex B (joint and several creditors) in the amount of PLN 1,000,000 if Budimex and Budimex B rescind the Agreement for reasons attributable to the Transferee only, owing to failure to credit the transfer price on the Transferor’s bank account on the day of concluding the dispositive agreement concerning the transfer of Shares. However, if the Share transfer price is not credited on the Transferor’s bank account due to technical reasons only, Budimex and Budimex B will have the right to rescind the Agreement only if the price is not credited on the Transferor’s bank account on the business day following the day of concluding the dispositive agreement concerning the transfer of Shares.
The Agreement also sets forth a contractual penalty in the case Budimex or Budimex B fail to perform their obligation not to conduct any competitive activity for three years after the conclusion of the dispositive agreement concerning the transfer of Shares. The contractual penalty is PLN 1,000,000 for each commenced month of failure to perform the obligation not to conduct competitive activity and is payable by Budimex or Budimex B (joint and several debtors).
The payment of the contractual penalties specified above does not exclude the right to claim compensation exceeding the amount of the penalty.
No affiliation between Budimex, members of the Management Board and the Supervisory Board of Budimex, and Barwick Investments Sp. z o.o. and officers or directors of Barwick Investments Sp. z o.o. is known to exist. 
The Agreement has been deemed significant within the meaning of the regulation concerning current and periodical information announced by issuers of securities in view of the fact that the value of the Agreement exceeds 10% of the equity of Budimex.