The Management Board of Mostostal Warszawa S.A. (Company, Issuer) notifies that on 14 June 2016, the Issuer terminated contract No. ZUO/5/2012 for the construction of a Thermal Waste Neutralisation Facility for the Szczecin Metropolitan Area (Contract), concluded with Zakład Unieszkodliwiania Odpadów Sp. z o.o. (Employer) with respect to the non-performed work as of the date of termination. The Issuer informed about conclusion of the Contract in current report No. 33/2012.

The cause for termination was failure to submit, by the Employer, of the demanded payment guarantee within the stipulated deadline. The document presented by the Employer does not secure receipt, by the Issuer, of remuneration due to it on the basis of the Contract (Art. 649’1 Par. 2 of the Civil Code).

Furthermore, the decision on Contract termination was justified by absence of required and necessary cooperation of the Employer during Contract implementation (Art. 640 Par 1 of the Civil Code, Art. 354 Par 2 of the Civil Code, Art. 491 Par 1 of the Civil Code), which was primarily manifested in failure to accept technological solutions and documents containing such solutions, prepared by the Contractor in line with the Contract; this resulted in the fact that implementation of the Contract by the Company turned out to be impossible. Another obstacle for continuation of work were the Employer’s activities undertaken in relation to the Company’s attempts aimed at settlement of disputes resulting from the Contract, which, in particular, was manifested in blocking the work of the Arbitration Commission.

Due to the fact that termination of the Contract was exclusively due to the Employer’s fault, any negative consequences related to it shall encumber the Employer. The Issuer reserved the right to seek compensation in the amount of loss (including lost profits) suffered by the Contractor as a result of Contract termination.

Along with delivery of the declaration on Contract termination to the Employer, the Issuer summed the Employer to perform stock-taking of the works and supplies executed or commenced by the Company as of the date of delivery of the declaration on termination, as well as to secure the construction site of the Investment at the cost and risk of the Employer until the commencement of stock-taking, which is to be understood as securing of completed and commenced works and supplies, as well as securing materials, machines and equipment located in the investment area. The Issuer also summoned the Employer to return the performance bond for the Contract.

As of the date of Contract termination, financial Committment amounted to approx. PLN 420 million, which constitutes approx. 78.72% of the total Contract value.

The value of the Contract exceeds 10% of the value of the Company’s sales revenues for the period of the last four financial quarters.

The Management Board of Mostostal Warszawa S.A. (Company, Issuer) notifies that on 14 June 2016, the Issuer terminated contract No. ZUO/5/2012 for the construction of a Thermal Waste Neutralisation Facility for the Szczecin Metropolitan Area (Contract), concluded with Zakład Unieszkodliwiania Odpadów Sp. z o.o. (Employer) with respect to the non-performed work as of the date of termination. The Issuer informed about conclusion of the Contract in current report No. 33/2012.

The cause for termination was failure to submit, by the Employer, of the demanded payment guarantee within the stipulated deadline. The document presented by the Employer does not secure receipt, by the Issuer, of remuneration due to it on the basis of the Contract (Art. 649’1 Par. 2 of the Civil Code).

Furthermore, the decision on Contract termination was justified by absence of required and necessary cooperation of the Employer during Contract implementation (Art. 640 Par 1 of the Civil Code, Art. 354 Par 2 of the Civil Code, Art. 491 Par 1 of the Civil Code), which was primarily manifested in failure to accept technological solutions and documents containing such solutions, prepared by the Contractor in line with the Contract; this resulted in the fact that implementation of the Contract by the Company turned out to be impossible. Another obstacle for continuation of work were the Employer’s activities undertaken in relation to the Company’s attempts aimed at settlement of disputes resulting from the Contract, which, in particular, was manifested in blocking the work of the Arbitration Commission.

Due to the fact that termination of the Contract was exclusively due to the Employer’s fault, any negative consequences related to it shall encumber the Employer. The Issuer reserved the right to seek compensation in the amount of loss (including lost profits) suffered by the Contractor as a result of Contract termination.

Along with delivery of the declaration on Contract termination to the Employer, the Issuer summed the Employer to perform stock-taking of the works and supplies executed or commenced by the Company as of the date of delivery of the declaration on termination, as well as to secure the construction site of the Investment at the cost and risk of the Employer until the commencement of stock-taking, which is to be understood as securing of completed and commenced works and supplies, as well as securing materials, machines and equipment located in the investment area. The Issuer also summoned the Employer to return the performance bond for the Contract.

As of the date of Contract termination, financial Committment amounted to approx. PLN 420 million, which constitutes approx. 78.72% of the total Contract value.

The value of the Contract exceeds 10% of the value of the Company’s sales revenues for the period of the last four financial quarters.