65/2013 – Information on Conclusion of a Significant Agreement

The Management Board of Trakcja S.A. (the “Company”) informs, with reference to current report No. 35/2013 of April 3, 2013, that the Company and the Company’s subsidiaries have concluded an agreement with PKP Polskie Linie Kolejowe S.A. from April 4, 2013, contracts with a total net value of PLN 63,419,694.05 (say: sixty-three million four hundred nineteen thousand six hundred ninety-four zlotys 5/100 zlotys). The contract of the highest value is the contract concluded on July 30, 2013 between PKP Polskie Linie Kolejowe S.A. (“Ordering Party”) and the Company’s subsidiary, i.e. Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych S.A. (“PRKiI”, “Contractor”) [“Agreement”]. Contract value: The total net value of the Agreement is PLN 59,760,708.61 (say: fifty-nine million seven hundred sixty thousand seven hundred eight zlotys 61/100). The total gross value of the Agreement is PLN 73,505,671.59 (say: seventy-three million five hundred five thousand six hundred seventy-one zlotys 59/100). Subject of the Agreement: Based on the Agreement, PRKiI will perform works, in accordance with the Agreement, related to the reconstruction of the Strzałki station, carried out as part of the task entitled “Modernization of railway line No. 4, Central Railway Main Line”. Agreement implementation deadline: The deadline for completing the works is November 28, 2014. Liquidated damages: The Contractor will pay contractual penalties to the Ordering Party in the following cases and in the following amounts:

1)      in the amount of 0.01% of the gross value of the Agreement for each day of delay in the implementation of the subject of the Agreement, in relation to the date of completion of the works, less any contractual penalties referred to in point 3; 2)                 in the amount of 0.01% of the gross value of the Agreement for each day of delay in the fulfillment of obligations related to submitting to the Ordering Party a schedule for the implementation of design works, a material and financial schedule, and design documentation in accordance with the Agreement; 3)                 for each day of delay in the implementation of individual parts of the subject of the Agreement, specified in the material and financial schedules for the implementation of works, in the amount of 0.05% of the value of the works specified in these schedules for a given part of the works; 4)                 in the amount of 0.1% of the gross value of the Agreement for each day of delay after the deadline for removing defects identified in the final acceptance report; 5)                 in the amount of PLN 500.00 for delay in the development of design documentation in relation to the deadline specified in the schedule in accordance with the Agreement; 6)                 in the amount of 10% of the gross value of the Agreement in the event of termination of the Agreement by the Ordering Party due to circumstances for which the Contractor is responsible; 7)                 in the amount of PLN 1,000 if the Ordering Party’s request to convene a coordination meeting in accordance with the Agreement is not accepted;

8)                  in the amount of PLN 1,000 for each commenced hour of extension of the assigned track closure which occurs for reasons attributable to the Contractor; 9)                 in the amount of PLN 1,000 for each hour of allocated but not used track closure due to reasons attributable to the Contractor; 10)               in the amount of PLN 100.00 for each commenced day, for each reduction in speed by 10 km/h in relation to the scheduled speed or speed limit indicated in the “Temporary Regulations on traffic management during the execution of works”, resulting from reasons attributable to the Contractor in during or after the works, regardless of the contractual penalties specified in point 12; 11)               in the amount of PLN 1,000.00 for each commenced hour, in connection with a break in train traffic for reasons attributable to the Contractor during or after the works; 12)               in the amount of PLN 100 for each commenced hour of an extended additional closure that occurs due to the fault of the Contractor, ordered in an emergency after the Employer’s acceptance, without observing the advance deadline in accordance with the “Rules for organizing and granting track closures – Ir 19”; 13)               in the amount of PLN 10.00 for each minute of train delay caused by: implementation of an emergency closure; extension of track closure time; speed limitation in relation to the scheduled speed or speed limitation included in the “Temporary Traffic Regulations during the execution of works”, arising for reasons attributable to the Contractor during or after the works; operational difficulties arising for reasons attributable to the Contractor; 14)               in the amount of PLN 10,000.00 if the Contractor allows the works to pose a direct threat to human life or health and to create a threat to the safety of railway traffic, regardless of other contractual penalties.

If the Contractor fails to perform its contractual obligations within the agreed deadline, the Ordering Party will set an additional deadline for fulfilling this obligation. In the event of failure to fulfill this obligation within an additional period, the amount of penalties referred to in points 1, 2, 3, 4 and 5 is increased by 50%. The parties reserve the right to additional compensation, increasing the amount of contractual penalties to the amount of actual damage suffered as a result of non-performance or improper performance of the contract in accordance with the principles set out in Art. 484 CC The total amount of contractual penalties referred to in points 1 to 5 and 7 to 12 may not exceed 5% of the gross value of the Agreement.

Other terms of the Agreement: The remaining terms and conditions of the Agreement do not differ from those commonly used for this type of agreements. The basis for the publication of this report is the fact that the total value of contracts concluded between the Company and the Company’s subsidiaries with PKP Polskie Linie Kolejowe S.A. exceeds 10% of the Company’s equity. Legal basis: § 5 section 1 point 3Regulation of the Minister of Finance of February 19, 2009 on current and periodic information submitted by issuers of securities and the conditions for recognizing as equivalent information required by the laws of a non-member state.