Raport 39/2021 Informacja dotycząca warunków ugody z Nowe Jaworzno Grupa TAURON sp. z o. o.

03 grudzień 2021

Information on the Settlement Terms the With Nowe Jaworzno Grupa TAURON sp. Z o. o.

The Mostostal Warszawa S.A.  Management Board ("Company") informs that the Company has been notified by RAFAKO S.A. ("RAFAKO" or "Leader", the Company and RAFAKO jointly "Contractor") being the Consortium Leader (99.99% share in the Consortium) in which the Company is a partner (0.01% share in the Consortium) that on 2 December 2021, the Leader acting on behalf of the Consortium, E003B7 sp. z o.o., signed and Nowe Jaworzno Grupa TAURON sp.z o.o. ("NJGT") of the settlement regarding Contract No. 2013/0928 / Ri for the " Development of new coal-fired generation capacities at TAURON Wytwarzanie S.A. – Construction of a 910 MW supercritical power generation unit at the Jaworzno III Power Plant – Power Plant II: Steam boiler, turbine generator set, main building, electrical and I&C systems "(" Contract "and" Settlement "), as well as between the Contractor and NJGT, related to the conclusion of the Settlement of Annexes 13 and 14 to the Contract ("Annex 13" and "Annex 14").

In accordance with to the information received from RAFAKO, the most important provisions of the Settlement, Annex 13 and Annex 14 (the "Settlement Documentation") include:

1. Amendment of the Schedule of Works and Expenditures (the "SWE") and the Framework Contract Timetable ("FCT"), including change of the date for resynchronisation of the unit covered by the Contract (the "Unit") to 29 April 2022 and change of the date of expiry of the Transition Period to 30 October 2022;
2. Ordering additional services and works from the Contractor the performance of which by the Contractor will bring technical, technological and economic benefits to NJGT, such as reduction of the Unit’s operating costs, and acquisition by NJGT from the Company of the licence for the workshop documentation of the Unit’s boiler components;
3. Ordering further additional services and works from the Contractor, provided that the Contract performance phase defined in the SWE as "Post-Shutdown Unit Synchronization" is completed within the time limit specified in the amended SWE and FCT and statements by the financial institutions providing financial security for the performance of the Contract, required by the Settlement Documentation, are submitted;
4. NJGT’s agreement – on condition that a Transition Period Expiry Report is executed by 15 November 2022 and the investor acquisition process, understood as the effective and unconditional acquisition of control (directly or indirectly) by the entities specified in the letter of intent referred to in the RAFAKO’s Current Report No. 38/2021 of 7 October 2021 to not charge the contractual penalties that are in dispute between the Parties to the Contract for the period before the Settlement Documentation;
5. The Contract Parties’ agreed to refrain from asserting against each other any other claims that have arisen or may arise from events occurring prior to the date of the Settlement Agreement, excluding any claims under the warranty and liability for defects, any claims under the joint and several liability for payment of amounts due to the subcontractors or further subcontractors, and any claims the Contractor may have against NJGT in respect of remuneration for works duly completed prior to the date of the Settlement Agreement;
6. Sharing of costs of the Unit’s repair, i.e., repair of damage to the tubes of the combustion chamber funnel, as well as repair of the switchgear station indicated in the Settlement Documentation;
7. Granting NJGT an additional 12-month warranty period for the Unit components and equipment specified in the Settlement Documentation;
8. Non-imputation, at the stage of execution of Settlement Documentation, of liability for the Unit failure which occurred on 11 June 2021 and for defects detected while the Unit was shut down;
9. Providing for contractual penalties under the Contract:

1. in case of failure to sign the report confirming expiry of the Contract performance phase defined in the SWE as "Post-Shutdown Unit Synchronization" within the period specified therein – in the amount of 0.02% of the Contract Price for each commenced day of delay;
2. in case of failure to sign the report confirming expiry of the Contract performance phase defined in the SWE as "Performance of PSE Acceptance Tests group II part 3" within the period specified therein – in the amount of 0.01% of the Contract Price for each commenced day of delay;

with the proviso that NJGT will entitled to charge such contractual penalties on or after the first day following a period of 45 days from the expiry of completion deadlines for the phases referred to in subsections i. and ii. above, as set forth in the SWE;

10. Granting NJGT the right to submit, as of 31 March 2023, a notice of withdrawal from the Contract with regard to the non-performed part if the Contractor, for reasons for which it is liable under the Contract, causes a delay in the Contract performance phase defined in the SWE as "Post-Shutdown Unit Synchronization" of more than 60 days from the deadline specified in the SWE, as well as the right to assume the rights and obligations of the Contractor under contracts with key subcontractors in the event of withdrawal from the Contract;
11. Agreeing that (i) the remuneration for the additional services and works and licence acquisition referred to in Section 2 above and the Unit repair referred to in Section 6 above is approximately PLN 91,000,000.00 net, and (ii) the remuneration for the further additional services and works referred to in Section 3 above is approximately PLN 23,000,000.00 net.

The entry into force of the Settlement Agreement and Annex 14 is conditional on:

1. Submission by Leader on behalf of the Contractor to NJGT of extended or new performance bonds in respect of the Contract and of new or extended advance payment guarantees, consistent with the provisions of the Settlement Agreement;
2. Obtaining by the Parties to the Settlement Agreement of corporate approvals necessary to execute the Settlement Agreement;
3. Obtaining of consents the financial institutions which provided financial security for the Contract by the Leader on behalf of the Contractor in order to execute Annex 14;
4. Final approval of the Settlement Agreement by the competent court of general jurisdiction.

The entry into force of Annex 13 is conditional on:

1. Obtaining by the Parties to the Settlement Agreement of the necessary corporate approvals in order to execute Annex 13;
2. Obtaining consents by the Leader on behalf of the Contractor from the financial institutions which provided financial security for the Contract in order to execute Annex 13.