EQS-News: MediClin AG: Disclosure of Significant Transactions with Related Parties pursuant to Section 111c of the German Stock Corporation Act (AktG)

Offenburg, October 27, 2022

Disclosure of Significant Transactions with Related Parties pursuant to Section 111c of the German Stock Corporation Act (AktG)

MEDICLIN Aktiengesellschaft

As announced on October 25, 2022, MEDICLIN Aktiengesellschaft (MEDICLIN or Company) has reached an agreement with PATRIZIA Frankfurt Kapitalverwaltungsgesellschaft mbH as trustee for the OIK-Fonds MediClin, in which (also former) shareholders or companies affiliated with them hold a significant stake, on an early renewal of the existing lease agreements for 20 clinic locations. In addition, as part of this agreement, MEDICLIN agreed with its current or former shareholders ER-GO Group AG (ERGO), DKV Deutsche Krankenversicherung Aktiengesellschaft (DKV) and Provinzial Rheinland Lebensversicherung Aktiengesellschaft (Provinzial) on a settlement of the lawsuit filed by the Company in mid-2016 with the Offenburg Regional Court to reclaim rent payments that, in the Company's opinion, were above market rates.

The agreement was concluded on October 26, 2022 by way of a court settlement. The Supervisory Board of the Company had approved the conclusion of the settlement on October 25, 2022.

Parties to the court settlement are in addition to the Company, MediClin GmbH & Co. KG and MediClin Immobilien Verwaltung GmbH ERGO, DKV and Provinzial as well as PATRIZIA Frankfurt Kapitalverwaltungsgesellschaft mbH as trustee of the OIK-Fonds MediClin.

ERGO, among others, holds a 70.71% (indirect) stake in the OIK-Fonds MediClin via its wholly owned subsidiary DKV. DKV and ERGO also each hold direct interests in MEDICLIN of 11.81% and 23.19% respectively. ERGO's (indirect and direct) shareholding in MEDICLIN thus totals 35%, with the result that ERGO and DKV, as well as the OIK-Fonds MediClin, are to be classified as related parties of the Company within the meaning of Section 111a para. 1 sentence 2 AktG in conjunction with the relevant accounting standards.

In the lawsuit filed in mid-2016, the company had demanded that the (former) shareholders be or-dered jointly and severally to repay rent payments that, in the Company's opinion, were above mar-ket rates for the period from January 1, 2005 to August 31, 2015 in the amount of around 181 mil-lion euros plus interest, citing a violation of the prohibition on the return of capital contributions un-der stock corporation law (Sections 57, 62 AktG).

Within the scope of the agreement, the involved parties agreed in particular on

• the conclusion of long-term leases for 20 clinic locations (with the cancellation of existing leases),
• the cancellation of the property management agreement between PATRIZIA Frankfurt Kapitalverwaltungsgesellschaft mbH and MediClin Immobilien Verwaltung GmbH with effect from the end of December 31, 2022,
• the termination of the legal dispute and the associated settlement of all possible claims of MEDICLIN for repayment of the portion of the payments under the disputed purchase and lease agreements that may have been above market rates, including interest thereon for the period from January 1, 2005 up to and including September 30, 2015 (irrespective of the legal basis),
• the settlement of all possible claims of MEDICLIN for repayment of the portion of the payments under the disputed purchase and lease agreements that may be above market rates for periods that were not the subject of the legal dispute (irrespective of the legal basis), and
• the settlement of all claims of PATRIZIA Frankfurt Kapitalverwaltungsgesellschaft mbH as trustee of OIK-Fonds MediClin for back rent payments for the years 2005 to 2007 and for rent payments in arrears from 2020 totalling approximately 30 million euros.

In addition, the Company and the defendants have each waived their right to reimbursement of costs and expenses.

The new leases relate to the clinic locations Bad Bodenteich (MEDICLIN Seepark Klinik), Bad Dü-ben (MEDICLIN Reha-Zentrum Bad Düben), Bad Elster (MEDICLIN Klinik am Brunnenberg), Bad Münder (MEDICLIN Deister Weser Kliniken), Bad Orb (MEDICLIN Rehab Center Bad Orb), Bad Wildungen (MEDICLIN Clinics Bad Wildungen), Bayreuth (MEDICLIN Rehab Center Roter Hügel), Blieskastel (MEDICLIN Bliestal Clinics), Burg (MEDICLIN Rehab Center Spreewald), Donaueschin-gen (MEDICLIN Klinik am Vogelsang), Durbach (MEDICLIN Staufenburg Klinik), Königsfeld (MEDICLIN Albert-Schweitzer Klinik / MEDICLIN Baar Klinik), Lingen (MEDICLIN Hedon Klinik), Offen-burg (MEDICLIN Klinik an der Lindenhöhe), Plau am See (MEDICLIN Reha-Zentrum Plau am See), Reichshof (MEDICLIN Klinik Reichshof), Trassenheide (MEDICLIN Dünenwald Klinik), Sankt Wendel (MEDICLIN Bosenberg Kliniken), Bad Tabarz (MEDICLIN Klinik am Rennsteig) and Bad Bellingen (MEDICLIN Seidel-Klinik). With regard to the existing lease agreement for the clinic site in Bad Peterstal (MEDICLIN Schlüsselbad Klinik), an addendum was concluded which, among other things, provides for a special right of termination with the option of terminating the lease at short notice at any time.

The new leases will apply from January 1, 2023 in each case and generally have a fixed term of 15 years, with the exception of three locations, for some of which a longer or shorter term has been agreed. As a result of the new leases, the cash outflows under IFRS 16 in the fiscal year 2023 will amount to about 37 million euros according to preliminary calculations (2022 expected to be 48 million euros based on the old lease agreements). The present value of all lease payments over the entire term as of the reporting date December 31, 2022 totals 387 million euros.

In addition, the new leases contain the following further material provisions: The agreed rent ad-justments are based on the development of the consumer price index and have a cap of 2 % p.a. MediClin GmbH & Co. KG, as the tenant, will assume responsibility for all repair and maintenance work. The costs are borne on the basis of a distribution key negotiated in detail, which compared with the current agreement may lead to a reduction in the burden on MediClin GmbH & Co. KG.

The new lease agreements also provide for the issuance of a letter of comfort by the Company, by which it undertakes to provide MediClin GmbH & Co. KG with the financial means to ensure that it can always properly fulfill its obligations under the lease agreements. In addition, MEDICLIN is liable for the payment obligations of MediClin GmbH & Co. KG arising from the new rental agreements if MediClin GmbH & Co. KG fails to meet these obligations.

The terms of the new leases will result in liquidity relief in the order of 11 million euros p.a. from 2023 onwards.

The Management Board is convinced that the new lease agreements represent a positive negotia-tion result for the Company, which will secure the continuation of hospital operations at the respec-tive sites in the long term.

With regard to the reached settlement concerning the law suit filed with the Offenburg Regional Court, the Management Board of MEDICLIN took into account that a continuation of the legal dis-pute would have been associated with an extraordinarily high expenditure of time and costs, that the legal dispute contained several legal issues that had not yet been clarified by the Federal Court of Justice (Bundesgerichtshof), so that a trial involving several instances would have had to be ex-pected, and that all parties involved wanted to create legal certainty with regard to the appropriate-ness of payments and consideration under the lease agreements.

Finally, it should be noted that the appropriateness of the above-described agreement on the con-clusion of the new leases and the termination of the legal dispute has been assessed by the Management Board of MEDICLIN as part of an overall view.

About MEDICLIN Aktiengesellschaft (Ticker: MED; WKN: 659 510)

MEDICLIN includes 35 clinics, seven care facilities and eleven medical care centers. The Group has around 8,350 beds/care places and employs around 10,200 people. In a strong network, MEDICLIN offers the patient integrative care from the first visit to the doctor through the operation and subsequent rehabilitation to outpatient aftercare. Doctors, therapists and nurses work together in a carefully coordinated manner. MEDICLIN designs the care and support of people in need of care according to their individual needs and personal needs.

MEDICLIN a company of the Asklepios Group.