36/2013 – Information on concluding a material contract

The Management Board of Trakcja S.A. (hereinafter referred to as the “Company”) hereby informs that on 10 April 2013, the Company’s subsidiaries, i.e. UAB “Palangos aplinkkelis”, code of the legal entity: 303036257, with its registered office at ul. Lvovo 25, Vilnius, the Republic of Lithuania, and UAB “Pl?tros investicijos”, code of the legal entity: 302630602, with its registered office at ul. Lvovo 25, Vilnius, the Republic of Lithuania (together hereinafter referred to as the: “Private Entity” entered into material contract for public and legal partnership (hereinafter referred to as the: “Contract”) with the Lithuanian Roads Authority by the Ministry of Communication, code of the legal entity: 188710638, with its registered office at ul. J. Basanavièiaus 36-2, Vilnius, Lithuania (hereinafter referred to as the: “Public Entity”).

Value of the Contract:

The total net value of the contract converted to PLN was: 121,532,320.00.

The total gross value of the contract converted to PLN was:147,054,107.20.

Object of the Contract:

Design and construction works of the building – an arterial road listed as Category 2 – the beltway of the city of Palanga (Lithuania) along with the buildings, traffic equipment and engineering networks, street lighting, traffic control and other buildings and equipment necessary for its operations.

All services and maintenance (supervision) works necessary for proper and safe exploitation of the facility.

Term of the Contract:

Validity period of the Contract: 25 (twenty five) years, including:

–  deadline for completion of design and construction works – 2 (two) years from the effective date of the Contract.

– deadline for rendering maintenance (supervision) services of the facility necessary for proper and safe exploitation of the facility – 23 (twenty three) years.

Liquidated damages:

In the event when the Private Entity fails to perform the construction works, not by fault of the Public Entity, the Private Entity shall be obliged to pay to the Public Entity the penalty interests in the amount of 0.3% of the value of the established facility (the value of the established facility converted to PLN: 54,044,589.93, VAT included), for each day of delay. On the other hand, in the event when the delay in the completion of works is longer than 60 days, the amount of the penalty interests shall be – 0.05% of the value of the established facility, however the contractual penalty due to such delay may not be higher than 5% of the value of the established entity.

In the event when the Private Entity fails to perform periodic maintenance (supervision) services within the deadlines as stipulated in the Contract, not by fault of the Public Entity, the Private Entity shall be obliged to pay 0.03% of the penalty interests for each day of delay, and if the delay in the performance of such services is longer than 60 days – 0.05% of the penalty interests of the amount of the maintenance (supervision) services (the value of periodic maintenance converted to PLN:  9,071,370, VAT included), however, not lower than PLN 1,190 for each day of delay.

In the event when in accordance with the Contract, the Private Entity fails to deliver to the Public Entity the facility corresponding to the requirements outlined in the Contract within the right deadline, the Private Entity shall be entitled to pay 0.03% of the penalty interests for each day of delay after such delay period, and in the event when the delay in the performance of services is longer than 60 days – 0.05% of the penalty interests of the value of the established facility, however, the contractual penalty due to such delay may not be higher than 5% of the value of the established facility.

If after expiration of the term of the Contract, the Private Entity fails to remove the defects, as indicated by the Public Entity, within 3 months, the Public Entity shall be entitled to remove such defects at the expense of the Private Entity, and the Private Entity additionally undertakes to pay the penalty in the amount of 10% of the costs incurred with respect to the removal of the defects.

In cases other than those mentioned above, if the Private Entity by its own fault or due to reasons for which it is responsible does not perform or unduly performs any other obligations hereunder, the Public Entity shall be entitled to demand payment of the penalty of PLN 595 for each day of delay in the performance of the obligation as well as the covering of all direct losses not covered by the above-mentioned penalty.

Guarantee

In accordance with the Contract, UAB “Pl?tros investicijos” shall guarantee due performance of the Contract by UAB “Palangos aplinkkelis”. As of the time of concluding the Contract, it is acknowledged that UAB “Pl?tros investicijos” and UAB “Palangos aplinkkelis” shall be jointly and severally liable before the Public Entity for due performance of the Contract.

The guarantee expires in the event when UAB “Pl?tros investicijos” transfers the counterfoil block of shares to UAB „Palangos aplinkkelis“ according to the terms and conditions outlined in the Contract.

Other terms and conditions of the Contract are similar to those commonly used for these type of contracts.

The criterion for considering the contract as the material contract shall be the fact that its value exceeded 10% of home equities of Trakcja S.A.

Legal basis: § 5 paragraph 1 point 3 of the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-member state.