Current Report 19/2018

Only the Polish version of this document is legally binding.
This translation is provided for information only.
Every effort has been made to ensure the accuracy of this publication.

Further to current reports Nos. 13/2018 of 12 June 2018 and 18/2018 of 18 June 2018, the Management Board of INPRO Spółka Akcyjna with its registered office in Gdańsk ("INPRO", the "Company" ) informs that today, i.e. 22 June 2018, the management board of the Company's subsidiary i.e. Hotel Mikołajki Sp. z o.o ("Hotel Mikołajki") signed a conditional lease agreement (the "Agreement") with Dobry Hotel Mięczkowski Spółka komandytowa with its registered office in Sopot ("Dobry Hotel"). Under the Agreement, Dobry Hotel Mięczkowski Spółka komandytowa with its registered office in Sopot will lease a five star (*****) hotel facility in Mikołajki, belonging to Hotel Mikołajki Sp. z o.o. and called the "Hotel Mikołajki," located at 11 Spacerowa Street in Mikołajki, and take over the rights and obligations under apartment lease agreements for apartments located in the same building as the hotel, but constituting separate real property owned by third parties, and will step into other obligation relationships concerning the operation of that hotel facility (the "Transaction").

In the Agreement, the Parties stipulated a condition causing the termination of the Agreement if, by 30 June 2018, Powszechna Kasa Oszczędności Bank Polski S.A. (the bank to have financed the construction of the facility in Mikołajki) does not give consent to the Transaction. Failure by Hotel Mikołajki Sp. z o.o. to obtain the bank's written consent by 30 June 2018 will result in the termination of the Agreement effective on 30 June 2018. If the Agreement is terminated for the cause mentioned in the previous sentence, the Parties have waived their claims and undertook not to pursue any claims including those for indemnity and contractual penalties.

The Company will inform in a relevant report that the above condition has or has not been met.

Please also be informed that pursuant to the provisions of the Agreement, Hotel Mikołajki and Dobry Hotel fixed the term of the Agreement for 10 years from the date of issue of the facility i.e. from 1 July 2018. The tenant will pursue hotel activity at the facility under lease on the assumption that the previous name of the hotel as Hotel Mikołajki will be retained. The tenant will also take over the employees of Hotel Mikołajki Sp. z o.o. performing work at the above facility under Article 231 of the Labour Code.  The tenant will also take over the tasks and duties related to managing the facility and the condominium owners' association located in the building in which the hotel is situated.

The lease of the facility is chargeable, and the tenant is obliged to pay the base rent and, if the assumptions to the algorithm given in the agreement are fulfilled, to calculate the annual rent, and the value of the rent on the annual scale should not exceed 5 % of the issuer's equity. In accordance with the analyses, the revenues of Hotel Mikołajki Sp. z o.o. in relation to the lease agreement will cover the company's current liabilities (e.g. in relation to credit agreements, taxes, costs of accounting services etc.), and allow the financial surplus to accumulate. 

Information on signing the Agreement has been classified by the Company as confidential due to the significant importance of the Transaction for Hotel Mikołajki Sp z o.o. as INPRO's subsidiary, in particular with regard to a change of the nature and profile of its activity, now consisting in hotel activity, to the lease of own assets by Hotel Mikołajki.

Detailed legal grounds: Article 17 par. 1 of the Regulation of the European Parliament and of the Council (EU) No 596/2014 of 16 April 2014 on market abuse (the market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (also referred to as the MAR)