9/2014 – Information on Conclusion of Material Agreement

The Management Board of Trakcja PRKiI S.A. (“Company” or “Subcontractor”) hereby informs that yesterday, i.e. on 17 March 2014, the Company and Pomorskie Przedsiębiorstwo Mechaniczno-Torowe Sp. z o.o. in Gdańsk (“Contractor”) concluded a subcontracting agreement (“Agreement”) with regard to the performance by the Contractor:

1. within the consortium composed of Przedsiębiorstwo Napraw Infrastruktury Sp. z o.o. in arrangement bankruptcy in Warsaw, PKP Energetyka S.A. in Warsaw and Pomorskie Przedsiębiorstwo Mechaniczno-Torowe Sp. z o.o. w Gdańsk (1) of the contract concluded with PKP Polskie Linie Kolejowe S.A. in Warsaw (“Contracting Entity”) for the design and modernisation of the Warszawa-Łódź railway line, stage II, Warszawa Zachodnia-Miedniewice (Skierniewice) section under the OPIE Project 7.1 – 24.1 “Modernisation of the Warszawa-Łódź Railway Line, Stage II, Lot A – Warszawa Zachodnia-Skierniewice Section”;

2. within the consortium composed of PKP Energetyka S.A. in Warsaw, Pomorskie Przedsiębiorstwo Mechaniczno-Torowe Sp. z o.o. in Gdańsk (2) the contract with the Contracting Entity for the performance of the follow-up works related to the works on civil engineering structures and track bed works and the installation of technology elements in the section from km 6.500 to km 54.100 of the Warszawa Centralna-Katowice railway line no. 1 performed under the OPIE Project 7.1 – 24.1 “Modernisation of the Warszawa-Łódź Railway Line, Stage II, Lot A, Warszawa Zachodnia-Miedniewice (Skierniewice) Section”, and (3) the contract with the Contracting Entity for the performance of the follow-up works related to the strengthening of track bed and the reconstruction of track systems at the Pruszków station, the Pruszków-Grodzisk Mazowiecki route, the Grodzisk Mazowiecki station, the Żyrardów station and the electrical and power works at the Pruszków station, Żyrardów station of the Warszawa Centralna-Katowice railway line no. 1 performed under the OPIE Project 7.1.- 24.1 “Modernisation of the Warsaw-Łódź Railway Line, Stage II, Lot A, Warszawa Zachodnia-Miedniewice (Skierniewice) Section”.

Subject of the Agreement:

The subject of the Agreement is to perform track works and drainage works in accordance with the Detailed Design that constitutes Appendix No. 1 to the Agreement . Under the Agreement, the Subcontractor shall carry out, in particular, the following works: the strengthening of the track bed through the installation of gravel piles, the injection of cement solution, the anchoring of the buttress base with the PVC sheet piles and the reconstruction the medium pressure gas pipeline at km 22.957.

Value of the Agreement:

In keeping with the Subcontractor’s business proposal, the amount of remuneration is PLN 77,710,780.90 (in words: seventy seven million seven hundred ten thousand seven hundred and eighty Polish zlotys, 90/100). The amount shall be increased by the due VAT. The aforementioned remuneration does not cover the strengthening of the track bed through the installation of gravel piles, the injection of cement solution and the anchoring of the buttress base with the PVC sheet piles, for which the Subcontractor shall present a separate business proposal or business proposals of further subcontractors. If the actually performed works differ from the works specified in Appendix No. 5 to the Agreement, the aforementioned remuneration shall be decreased or increased on a pro rata basis according to the prices provided in the Subcontractor’s business proposal, i.e. by multiplying the actually performed works by their unit prices.

Completion of the subject of the Agreement:

The subject of the Agreement shall be completed by the Subcontractor, including the performance of final tests, by 31 December 2014.

Term of Guarantee:

1 year from the Final Acceptance of Works. The term of guarantee and warranty for individual components of the subject of the Agreement shall be extended by the period, in which any of its components or systems is excluded from its normal use, and by the period, in which any repairs are performed under guarantee, and if any component or system is replaced, its term of guarantee shall begin again.

Contractual penalties:

The Subcontractor shall pay the Contractor the contractual penalties in the following events and amounts:

1. for delay in implementing the subject of the Agreement with regard to the deadline specified in the Schedule of Works, in the amount of 0.05% of gross remuneration specified in the Agreement, for each day of delay;

2. for delay in eliminating any defects or failures detected at the acceptance, during the guarantee period or during the warranty period, in the amount of 0.05% of gross remuneration specified in the Agreement, for each day of delay in eliminating such defects;

3. for withdrawing by the Contractor from the Agreement for reasons wholly attributable to the Subcontractor, in the amount of 15% of gross remuneration specified in the Agreement;

4. for failing to provide the Contractor with the performance guarantee or the collateral for warranty and the guarantee of quality, the Contractor shall be entitled to deduct such amounts from the Subcontractor’s remuneration.

If the Contractor is charged by the Contracting Entity with contractual penalties or compensation due to the improper completion of the subject of the Agreement by the Subcontractor, the Subcontractor shall be obliged to remedy any damage suffered by the Contractor as a result thereof.

Other terms and conditions of the Agreement do not differ from those commonly applied to this type of agreements.

The Agreement has been considered to be material due to the fact that its value exceeded 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.