G Energy Spolka Akcyjna

M&A Activity • Dec 23, 2021

Conclusionof a significant Agreement.ManagementBoard of G-Energy S.A. (GENERGY, Issuer, Subcontractor) with itsregistered office in Warsaw informs that today it received anotification of the Investor's consent to the Subcontracting Agreementconcluded by the Issuer with KOTŁO-REM Sędziszów Ltd with headquartersin Sędziszów (KOTŁO-REM , Contractor), which concernstheperformance of the task under the name: _quot;Comprehensive performance ofworks related to the construction of connections for new customers alongwith the expansion - a branch of the gas plant in Krakow, the area of_#8203;_#8203;operation of the gas plant in Bochnia_quot; The subject of the Agreement isconstruction work consisting in the preparation of design documentationand the implementation of comprehensive works related to theconstruction of connections for new customers along with the expansionof gas pipelines in the premises of Polska Spółka Gazownicza, Branch ofthe Gas Plant in Kraków area of _#8203;_#8203;operation of the Gas Plant in Bochnia(Ordering Party, PSG), on the terms set out in agreement. The OrderingParty allows the Tasks to be carried out outside the area specified inAnnex 1 to the Agreement, and in the areas adjacent to the Gas Workswithin the scope of a given Branch of the Gas Plant in Kraków, with theconsent of the Subcontractor. To the value calculated in the Order inaccordance with the unit prices specified in the offer form, acoefficient will be added that takes into account the costs related tothe mobilization of the Contractor's equipment beyond the area indicatedin Appendix No. 1 to the Agreement. The ratio referred to above will bedepending on the value of the order: 1) 10% - for Orders with a netvalue of up to PLN 10,000.00, 2) 5% - for Orders with a value from PLN10,001.00 net The Subcontractor undertakes to perform the Subject of theAgreement on the basis of the Ordering Party's Orders, which will beeach time issued by the Ordering Party for the execution of specificallydefined connections and gas pipelines (referred to as Tasks). TheContractor will issue Orders during the term of the Agreement asrequired by the Ordering Party within 24 months of signing theAgreement. The implementation of individual ordered Tasks will takeplace taking into account the price rates and price indices included inthe offer form. The tasks will be performed on the basis of separateOrders submitted to the Subcontractor by the Contractor or directly byPSG. The number of Tasks awarded to the Subcontractor under the Orderssubmitted during the term of the Agreement will depend on the actualnumber of gas network connection agreements, For the performance of theSubject of the Agreement, the Issuer will receive a total remunerationof not less than PLN 11,000,000.00 (say: eleven million zlotys), and theorder amount may be increased to the amount of PLN 14,000,000 (fourteenmillion zlotys) without concluding an annex to the Agreement. Thisamount will be increased by the due tax on goods and services (VAT) atthe rate applicable on the date of the performance of the Subject of theAgreement. The contract was concluded for a period of 24 ( twenty-four)months from the date of its signing, with the proviso that within theindicated period, KOTŁO-REM has the right to award Orders, and GENERGYis obliged to accept them, while the Parties agree that the term of theAgreement will expire upon completion of the works performed under allOrders, i.e. also after the date on which, in accordance with the rulefor calculating the terms expressed in months, resulting from the CivilCode. If the Ordering Party confirms the necessity to perform additionalworks, the Subcontractor will prepare a valuation of the works inaccordance with the principles set out in the Regulation of the Ministerof Infrastructure of May 18, 2004 on determining the methods and groundsfor preparing the investor's cost estimate, calculating the plannedcosts of design works and the planned costs of construction worksspecified in functional and utility program. The parties, throughnegotiations, will determine the conditions for the performance ofadditional works, in particular the amount of remuneration for theirperformance - on the basis of the quotation (cost estimate) presentedfor approval.TheOrdering Party is entitled to demand the payment of contractualpenalties, in particular for failure to perform the Task / Tasks coveredby a given Order within the time specified in the Order as the date ofProject development, the date of signing the Report on filling withgaseous fuel or the deadline for final acceptance, for reasonsattributable to the Contractor - in the amount of 0 2% of the netremuneration for each day of delay, but not more than 20% of the netremuneration. For the delayed performance of the Task covered by thegiven Order, the contractor shall pay to the Ordering Party acontractual penalty in the amount equivalent to the contractual penaltypaid by the Ordering Party to the connected entity for delayedperformance of the connection agreement. For delay in deliveringperiodic reports, unless the Contractor is not responsible for failureto perform this obligation on time - 0.1% of the net remuneration foreach day of delay, but not more than 15% of this amount. In the event ofwithdrawal from the Agreement in the event of withdrawal from theAgreement by the Contractor for reasons attributable to theSubcontractor (regardless of the legal basis) - in the amount of 30(say: thirty)% of the net remuneration, and in the event of withdrawalfrom a specific Order for reasons attributable to the Subcontractor (regardless of the legal basis) - in the amount of 30 (say: thirty)% ofthe net remuneration.Theremaining detailed terms and conditions of the above-mentionedagreements do not differ from those commonly used in this type ofagreement.