Investor relations

Current report 11/2010

Report concerns: Conclusion of significant agreements Acting pursuant to section 5.1 point 3 of the Minister of Finance on Current and Periodical Reporting by Issuers of Securities and on Conditions of Accepting as Equivalent of the Information Required by Legal Regulations of a Non-member Country of 19 February 2009 (Journal of Laws No. 33/2009, item 259) (“the Ordinance") J.W. Construction Holding S.A. with its seat in Ząbki ("the Company") reports that in the course of the last 12 months concluded the agreement for the total value of PLN 40,774,126.76 net with a subsidiary J.W. Construction S.A with its seat in Ząbk ("the Contractor"). The agreement with the highest value is the agreement of 2 March 2010 whose subject is to provide a general construction of the ivestment as the project for construction of an office building with parking space and technical infrastructure on the property belonging to the Company and located in Al.Jerozolimskie/Badylarska Street (in a plot with issue no.62/2 within 2-08-31 („the Investment”).

Deadline for completion of the work by the Contractor was defined in the Agreement as at 1 April 2011. The salary for the implementation of the Agreement was established on the amount of PLN 15,994,691 netand constitutes the sum ofall items in the scope of works and expenditures. The Contractor’s fee shall be payable based on invoices received by the Company and issued based on acceptance protocols of complete contractual works of appropriate quality, accepted in line with their progress.
The Contractor granted a 36-month statutory warranty on the building construction and 12-month statutory warranty on the rest of works, whose term begins from the final acceptance of the Agreement. Under each invoice issued by the Contractor, the Company will withhold 2% of the value of the executed and accepted works net as a guarantee deposit. The guarantee deposit will be reimbursed to the Contractor in two equal portions – the first within 21 days from the final acceptance and removal of any potential defects and faults, and the second following the term of the statutory warranty.

The parties have agreed that the Contractor will be entitled to a contractual penalty in the amount of 10% of the remuneration specified in the Agreement in the event of Contractor's withdrawing from it due to reasons for which the Company takes responsibility. The Contractor may withdraw from the Agreement if: (i) the Company refuses, without a justified reason, to accept the works or sign the hand-over report; (ii) the Company informs the Contractor that due to occurrence of circumstances which could not be predicted in advance, it will not be able to meet its contractual obligations towards the Contractor; (iii) liquidation or bankruptcy proceedings are initiated against the Company.
In the case of delayed payment for invoices, the Company shall pay the Contractor statutory interest.
The parties have agreed that the Company will be entitled to a contractual penalty in the amount of 10% of the value of uncompleted works in the event of withdrawing from the Agreement due to reasons for which the Contractor is to blame. The Company may withdraw from the Agreement if: (i) the Contractor, without a justified reason, fails to continue the works for over 14 days despite having been asked by the Company in writing to continue them; (ii) the Contractor is in delay with part of or the whole Agreement for more than 60 days as compared to the schedule; (iii) liquidation or bankruptcy proceedings are initiated against the Contractor. For each day of delay in completing the works as compared to the schedule, the Contractor shall pay the Company a contractual penalty in the amount of 0.01% of the remuneration for the delayed phase for each day of delay. For each day of delay in removing faults and defects during the statutory warranty period, the Contractor shall pay the Company a contractual penalty in the amount of 0.01% of the value of the element in which a defect occurred.

The parties have reserved the right to supplementary compensation which transfers the amount of contractual penalties to the amount of the actual damage incurred.

In other respects the terms and conditions of the Agreement do not vary significantly from those generally used in such agreements.

The basis for recognizing the Agreement as a binding agreement is section 2.1(5)(a) of the Ordinance, since the value of the concluded agreement exceeds 10% of the Company’s equity.