Investor relations

Legal basis:Art. 56, par. 1, item 2 of Offer Act - current and periodic information

Report Subject:conclusion of a significant agreement

Acting on the basis of § 5, par. 1, item 3) of the Regulation of the Minister of Finance of 19 February 2009 on current and periodic information provided by issuers of securities and the conditions for recognition as equivalent the information required by the law of the country which is not a member state (Journal of Laws No. 33, 2009, item 259) (“Regulation”) J.W. Construction holding S.A. with its registered office in Ząbki (“the Company”) hereby reports that on 14 June 2016, an agreement was concluded between the Company as the Ordering Party and INSTALBUD – RZESZÓW Sp. z o. o. with its registered office in Rzeszow (“the Contractor”), whose subject matter includes the comprehensive performance (with the Contractor's own materials), in the general Contractor's system of performance, of construction and assembly works on 25 multi-family buildings, including land management, roads, pavements, fences, greenery and land development elements, in accordance with the building permit, the executive project and the finishing standard in the Zielona Dolina II housing estate (stage II) in Warsaw, in Warsaw, near Zdziarska and Verdiego streets, together with obtaining a final decision on the permit (Agreement).

The date of completion of the entire scope of works of the subject matter of the Agreement, including the obtaining of the occupancy permit, was fixed after the lapse of 23 months from the date of commencement of works which are supposed to commence within 14 days from the date on which the Contractor receives construction logs and the construction terrain. The remuneration for the performance of the Agreement was set at PLN 71,267,774 (seventy one million two hundred and sixty seven thousand seven hundred and seventy four) + VAT in the rates applicable on the scope of the works. The Contractor's remuneration shall be payable on the basis of invoices received by the Ordering Party, issued on the basis of the works acceptance protocols signed by the Parties as regards the elements resulting from the technical and financial schedule, constituting Appendix to the Agreement, which will be accepted by the Company.

The Contractor has provided the Ordering Party with a 60-month guarantee for the works executed, and a 24-month warranty for embedded devices, the date of which begins from the date of obtaining the licence for use. In order to secure the Ordering Party’s claims for the improper performance of the Agreement, a guarantee deposit will be blocked in each issued invoice at the amount of 3% of its net value. Such sum to be returned to the Contractor following the lapse of the guarantee period. The guarantee deposit - at the request of the Contractor - may be converted into a Bank guarantee.

The Parties agreed that the Company would be entitled to a contractual penalty of 10% of the contractual remuneration in the event of withdrawal from the Agreement for reasons attributable to the Contractor. The Parties agreed that the Contractor would be entitled to a contractual penalty of 10% of the contractual remuneration in the event of withdrawal from the Agreement for reasons attributable to the Company. Each Party may claim supplementary compensation, transferring the amount of stipulated contractual penalties to the amount of damage actually suffered.

The Company shall be entitled to a contractual penalty from the Contractor for each day of delay in the completion of all the works, amounting to 0.1% of the value of the remuneration, the penalty for exceeding the deadlines for completion of the steps by fault of the General Contractor, amounting to 0.2% of the net value of the building, resulting from the schedule, as well as a contractual penalty for each day of delay in the removal of defects and failures during the warranty and guarantee period in the amount of 0.5% of the value of the element in which the defect occurred.

Otherwise, the terms and conditions of the Agreement do not differ significantly from those commonly used for such contracts.

The basis of considering the Agreement as an agreement is the significant value thereof exceeding 10% of the Company's equity.