Concluding a preliminary fixed property sale agreement

Date

2015-05-12

Current report no.

13/2015

The Board of TIM S.A. with its seat in Wrocław (hereinafter referred to as “the Company”) informs that on 11 May 2015 TIM S.A. concluded a preliminary fixed property sale agreement (“the Agreement”) with HE Enterprises spółka z o.o. with its seat in Warszawa, Al. Jerozolimskie 56 C (hereinafter referred to as “the Purchasing Party”) regarding a part of a fixed property located in Siechnice, ul. Kwiatkowskiego 24, limited to:

1) record parcels no. 544/60 and 544/73 as well as designed parcels 544/83, 544/84, 544/85, 544/86, 544/88, and 544/89, which will be created after dividing record parcels no. 544/53, 544/56, and 544/57 of the total surface of 69,910 square meters, for which the District Court in Oława, 5th Land and Mortgage Register maintains the land and mortgage register No. WR1O/00037080/6; TIM S.A. is the Perpetual Lessee of these parcels,

2) record parcels no. 544/75 and 544/47 as well as designed parcels 544/80 and 544/81, which will be created after dividing record parcel no. 544/49 of the total surface of 17,249 square meters, for which the District Court in Oława, 5th Land and Mortgage Register maintains the land and mortgage register No. WR1O/00043002/1; TIM S.A. is the Owner of these parcels (hereinafter referred to as “the Fixed Property”) together with buildings and constructions located on this Fixed Property, as well as other moveable assets and property rights related to the Fixed Property (hereinafter referred to as “the Subject of the Sale”).

In the above-mentioned Agreement the Parties agreed on the following price of sale of the above-mentioned assets:

1) the sales price of one square meter of the land and the right of perpetual usufruct of the land shall amount to PLN 110.00 (say one hundred and ten zlotys) net. The total surface of the sold land (both land owned by TIM S.A. and the land that TIM S.A. has the right of perpetual usufruct to) which is to be the Subject of the Sale is 87,159 square meters (say: eighty seven thousand, one hundred fifty nine square meters). As of the day of concluding the said Sale Agreement the final surface of the sold land/right of perpetual usufruct of the land shall be set on the basis of the final division decision,

2) price for the buildings and constructions, assets, and property rights related to the Fixed Property shall be in total PLN 32,319,060 (say: thirty two million, three hundred nineteen, sixty zlotys) net,
The above-mentioned price shall be increased by the due VAT in accordance with the rate applicable as of the day of concluding the Agreement.
The sales price shall be paid on the day of concluding the said Sales Agreement.

Concluding the said Sales Agreement of the Fixed Property and other rights and assets included in the Agreement depends on fulfilling a number of conditions described in the Agreement; the most significant conditions are: i) dividing the plots in conformity with the plots division design agreed on by the Parties, ii) obtaining the administrative decisions set forth in the Agreement regarding the Fixed Property.
Both the Selling Party and the Purchasing Part have right to withdraw from the Agreement in case the circumstances specified in the Agreement are met/ are not met, among others, untruthfulness of assurance to the Agreement, filing bankruptcy of the other Party, initiating liquidation proceedings against the other Party, breaching obligations resulting from the Contract, and establishing compulsory mortgage on the Fixed Property.
Moreover, the Purchasing Party shall be entitled to withdraw from the Agreement by 10 June 2015 in case after executing the analysis of business assumption for transactions specified in the Agreement the Purchasing Party decides that after terminating the Lease Agreement further potential commercialization of the Subject of the Sale will not ensure return on investment.
In the opinion of the Board of TIM S.A. the Agreement does not include any specific conditions other than those described in this Report.
There are no connections between the Company, Managers, and Supervisors and the Purchasing Party other than connections resulting from the Agreement.
The Sales Agreement shall be concluded not earlier than on 1 August 2015 and not later than 2 December 2015.
Together with the Sales Agreement a Lease Agreement shall be concluded; pursuant to the Agreement the Selling Party shall rent from the Purchasing Party the storage building located in the Fixed Property together with the storage yard for the period of 15 years and 9 months. On the remaining part of the Fixed Property the Purchasing shall build a warehouse of 29,500 square meters that shall be rented by the Purchasing Party to the Selling Party. The estimated monthly rent for the existing storage building and the storage building to be built by the Purchasing Party shall amount to EUR 129,717. The final rent shall be settled on the basis of the actual costs of investment including developing the new storage building.
The Agreement has been considered a reference agreement and the assets sold on its basis – assets of significant value since their value exceeds 10% of the equity capital of TIM S.A.
The Company informed about the intention of selling the Fixed Property in the following current reports no. 10/2014 of 14.04.2014, 16/2014 of 13.05.2014, 27/2014 of 21.10.2014, 29/2014 of 26.11.2014, and 2/2015 of 14.01.2015.

2015-05-12, Krzysztof Folta – President of the Board
2015-05-12, Anna Slobodzian-Pula – Member of the Board