51/2013 – Information on the Conclusion of Significant Agreements

The Management Board of Trakcja S.A. (hereinafter: “Company”) informs that on June 11, 2013, the Company’s subsidiary, AB Kauno tiltai (a joint-stock company) based in Kaunas, Lithuania (hereinafter: “AB Kauno tiltai”), concluded significant agreements with Akcinė bendrovė “Lietuvos geležinkeliai,” based in Vilnius, Lithuania (hereinafter: “Client”), with a total net value converted to PLN: PLN 361,330,331.24 (in words: three hundred sixty-one million three hundred thirty thousand three hundred thirty-one zlotys and 24/100).

The highest value agreement was signed on June 11, 2013, by AB Kauno tiltai as the consortium leader, consisting of:

• AB Kauno tiltai, based in Kaunas, Lithuania – consortium leader;
• Uždaroji akcinė bendrovė “Mitnija,” based in Kaunas, Lithuania – consortium partner;

(hereinafter collectively referred to as “Contractor”) and the Client (hereinafter: “Agreement”).

Agreement Value:

• The total gross value of the Agreement converted to PLN is: PLN 324,835,355.62
• The total net value of the Agreement converted to PLN is: PLN 268,458,971.59

The percentage of the Agreement value attributable to AB Kauno tiltai is 60% of the Agreement value.

Subject of the Agreement:

Under the Agreement, construction works were commissioned for the reconstruction of the Marijampole-Šeštokai railway section (from 28+500km to the Šeštokai railway station) in Lithuania.

Term of the Agreement:

The deadline for the completion of the works (including the period for remedying defects) is no later than December 31, 2014.

Warranty Period:

• Construction work: 5 years;
• Hidden elements of the construction work: 10 years;
• Hidden elements of the construction work, if defects were intentionally concealed: 20 years.

Contractual Penalties:

• The penalty for delay in the execution of the works is 0.1% per day of delay, calculated from the gross value of the works specified in the Agreement as a Group, if any works to be performed in this Group are not completed by the agreed deadline, until the penalty amount reaches 10% of the gross value of the Agreement. After reaching 10% of the gross value of the Agreement, the contractual penalty will be calculated at 0.2% of the gross value of the works specified in the Agreement as a Group, for each day of delay, until the penalty amount reaches 20% of the gross value of the Agreement. The maximum amount of penalties is 20% of the gross value of the Agreement.
• If the amount of liquidated damages (penalty interest, contractual penalties) or losses reaches 20% of the gross value of the Agreement, the Client will have the right to unilaterally terminate the Agreement with 14 days’ written notice to the Contractor. In such a case, the Client will have the right to retain the performance bond.
• In the event of non-performance or improper performance of the Contractor’s contractual obligations under the Agreement, the Client’s compensation will not be limited to the gross value of the Agreement or any other amount.

Other terms of the Agreement do not differ from the terms commonly applied in agreements of this type.

The criterion for considering the agreements significant was that their value exceeds 10% of Trakcja S.A.’s equity.

Legal Basis: § 5(1)(3) of the Regulation of the Minister of Finance of February 19, 2009, on current and periodic information disclosed by issuers of securities and conditions for recognizing information required by the laws of a non-member state as equivalent.acji wymaganych przepisami prawa państwa niebędącego państwem członkowskim