5/2014 – Information on Conclusion of Material Agreement5/2014 – Informacja o zawarciu znaczącej umowy

The Management Board of Trakcja PRKiI S.A. (formerly Trakcja S.A., hereinafter the “Company” or the “Contractor”) hereby informs that within the last 12 months the Company and PKP Polskie Linie Kolejowe S.A. (hereinafter the “Contracting Entity”) have concluded contracts with the total net value of PLN 64,279,588.58 (in words: sixty four million two hundred seventy nine thousand five hundred and eighty eight Polish zlotys, 58/100). The contract with the highest value is the contract concluded on 28 February 2014 between the Company and the Contracting Entity for the performance of the follow-up contract consisting in the carrying out of the design and construction works at the Łódź Widzew railway station from km 4.100 to km 7.2000 of the railway line no. 17 under the OPIE Project 7.1-24.2 “Modernisation of the Warszawa-Łódź Railway Line, Stage II, Lot B – Łódź Widzew-Łódź Fabryczna Section, together with the Łódź Fabryczna Station, and the Construction of the Underground Level of the Łódź Fabryczna Station intended for Accommodation of Train Arrivals and Departures and Passenger Service” (hereinafter the “Contract”).

Value of the Contract:

Net value of the Contract: PLN 15,469,388.14 (in words: fifteen million four hundred sixty nine thousand three hundred and eighty eight Polish zlotys, 14/100). The total gross price is PLN 19,027,347.41 (in words: nineteen million twenty seven thousand three hundred and forty seven Polish zlotys, 41/100).

Subject of the Contract:

The subject of the Contract is the carrying out of the design and construction works at the Łódź Widzew railway station from km 4.100 to km 7.2000 of the railway line no. 17 (hereinafter the “Works”).

Term of the Contract:

The Contract shall remain in force until 30 September 2015.

Contractual Indemnity:

The contractual indemnity for delay shall be understood as the default penalty. For a failure to perform or improper performance of the Contract, the Contractor shall be obliged to pay the Contracting Entity contractual penalties payable in the following amounts and on the following grounds:

(a) for exceeding the Timeline for Finishing the Works, for each day of delay, in the amount of 0.05 % of the gross contractual remuneration;

(b) for exceeding the timelines for performing individual design tasks, works or any other activities specified in the Schedule of Works (Sub-clause 8.3), for each day of delay, in the amount of 0.05% of the gross value of the individual tasks or works subject to acceptance and settlement; however, such penalties shall be returned to the Contractor if the Timeline for Finishing the Works is not exceeded;

(c) for a failure to meet the timeline for removing defects as specified in the Takeover Certificate or subsequently in the defect notification period within the timeline specified in the agreement, in the amount of 1.0% of the gross value of the individual tasks or works to which a given defect relates, for each day of delay;

(d) for withdrawal from the Contract for reasons attributable to the Contractor, in the amount of 30% of the gross contractual remuneration;

(e) in all events, where the Contract imposes on the Contractor the obligation to obtain within a stipulated timeline arrangements or notifications on specific events of the Contracting Entity, and the Contractor (exercising due diligence) fails to meet such an obligation within the stipulated timeline – in the amount of 0.001% of the gross contractual remuneration, separately for each event of the lack of the required arrangement or notification;

(f) for the absence of the Contractor’s representative authorised to take binding decisions at conferences and coordination meetings as required by the Contract, in the amount of PLN 10,000 separately for each event of absence at the indicated date of a conference or meeting;

(g) for delay in providing the report on the progress of works, in the amount of PLN 10,000 for each day of delay in providing this report;

(h) for delay in providing an insurance policy or a premium payment confirmation, in the amount of PLN 25,000 for each day of delay in providing such an insurance policy or a premium payment confirmation;

(i) for breaching any occupational health and safety and fire prevention regulations at the construction site, in the amount of PLN 25,000 separately for each event of a material breach identified by the Contracting Entity;

(j) for the prolongation of rail closures, in accordance with the applicable price list of PKP PLK S.A.

The payment of contractual penalties is without prejudice to the Contracting Entity’s right to claim compensation that exceeds the amount of the stipulated contractual penalties.

The payment of a contractual penalty shall not release the Contractor from the obligation to complete the Works or to fulfil any other of its potential duties, obligations or responsibilities under the Contract.

Furthermore, the Contractor shall pay the Contracting Entity penalties for any such defects, irregularities or non-compliances as specified in the Occupational Safety Rules that constitute Appendix No. 2 to the Contract.

The Contractor consents to the deduction from its net remuneration or from the performance guarantee of any contractual penalties by the Contracting Entity.

The terms and conditions of the Contract do not differ from those commonly applied to this type of contracts.

The basis for the publication hereof is the fact that the total value of contracts concluded between the Company and PKP Polskie Linie Kolejowe S.A. within the last 12 months exceeds 10% of the Company’s equity.

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