Investor relations

Report's text: Conclusion of a significant agreement

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 LawsNo. 33, 2009 item. 259) ("the Ordinance"), J.W Construction Holding S.A with its seat in Ząbki ("the Company") announces that during the last 12 months concluded an agreement with a subsidiary J.W Construction S.A with its seat in Ząbki ("Contractor ") with a total net value ofPLN 46,629,747.14. The agreement with the highest value is the agreement of 17 March 2011 whose subject is to provide a general construction of the investment as the project for construction of a housing estate "Łódź Tymienieckiego II" in Łódź, a plot with number 96/3; 96/7, 96/8 fromwithin the S -09, consisting of nine multi-family buildings with garages, parking lots and necessary infrastructure for the network, connections, heating substations, roads, parking lots, sidewalks, greenery and landscaping elements with a connection to the infrastructure with obtaining an occupancy permits ("the Agreement ").

The deadline for obtaining the occupancy permit was defined in the Agreement on 30 September 2012. The remuneration for the Agreement performance was agreed for the amount of PLN 35,441,434.60 net, equal to a fixed fee compensation based on a scope of works. The remuneration of the Contractor will be paid on the basis of invoices received by the Company, issued on the basis of acceptance protocols of complete contractual works resulting from the schedule of works and expenditures, annexed to the Agreement, which are to be signed by the Construction Site Supervisor and Construction Site Manager.

The General Contractor granted the Company a 36-month statutory warranty whose term begins from the final acceptance of the Agreement.Under each invoice issued by the Contractor, the Company will withhold 5% of the value of the executed and accepted works net as a guarantee deposit. The guarantee deposit will be reimbursed to the Contractor in three portions – the first within 30 days from the final acceptance and removal of any potential defects and faults in the amount of 2%, the next ones in the amount of 1.5% each:

- after one year from the date of the final acceptance and removal of any potential defects and faults;

- after the warranty period, it is after 36 months from the date of the final acceptance.

The parties agreed that the Company will be entitled to a contractual penalty, in case of cancellation due to the fault of the General Contractor for execution of works grossly inconsistent with the project, standards and technical conditions of performance in the amount of 5% of the Agreement value.The Contractor will pay the Company a contractual penalty for each day of delay over 30 days in the performance of works in relation to the identified elements of the schedule in the amount of 0.1% of remuneration for a delayed stage, for each day of delay. The Contractor will pay the Company a contractual penalty for each day of delay in removing defects during the warranty period in the amount of 0.1% of element in which the defect occurred.

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

In the case of delayed payment for invoices, the Company shall pay the Contractor statutory interest.

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 2.1.44 (a) of the Ordinance - the value of the concluded agreements in the last 12 months exceeds 10% of the Company’s equity.