The Management Board of Rank Progress S.A. ("Issuer") informs that on June 7, 2018, the Issuer's associated entity - Winhall Investments sp. Z o. O. ("Ordering Party"), implementing the residential development project Port Popowice at Popowicka and Bialowieska Street in Wroclaw ("Investment"), concluded with ERBUD SA ("Contractor"), a contract for construction works and general contracting in the formula "Design and build" worth PLN 114.5 million net ("Agreement"). On the basis of the Contract, the Contractor was obliged to design, build and commission a complex of three multi-family residential buildings with an underground garage in the Port Popowice project, stage I, along with development and utilities, including small architecture and greenery, accompanying structures, as well as technical infrastructure and connections. Stage I of the Investment will include at least 415 apartments and 5 service premises and will be divided into two phases: Phase I will cover the design of the whole stage I and construction of building A, Phase II construction of buildings B and C. Completion of works Phase I was provided for until 15 October 2019, while completion of all Phase II works within 75 weeks from the date of delivery of the work commencement order.
At the same time, the Issuer's Management Board informs that on June 7, 2018, a work commencement order was issued covering the design of the whole stage I and the implementation of Phase I. The remuneration due to the Contractor for the implementation of the above work is PLN 43.6 million net. The order to commence works for Phase II may be issued by 31 March 2019 at the latest. If the Ordering Party does not issue an order commencement of Phase II works within the above period, the Contract expires in the part concerning the construction of Phase II, unless the reason for not commencing the work commencement for Phase II is a delay in obtaining a building permit for Phase II, and the Contractor is not entitled to: the right to withdraw from the Agreement, charge contractual penalties or any other claims for damages.
The Ordering Party is entitled to issue an order to commence work for Phase II to withdraw from the Agreement by 31 March 2019 in the part concerning Phase II without giving a reason and without the right to charge a contractual penalty for withdrawal, and the Contractor in this case no claims are due, including compensation. In case ofexpiration of the Agreement due to the Ordering Party not ordering commencement of works for Phase II or withdrawal by the Ordering Party in the part relating to Phase II, the Contractor shall transfer to the Ordering Party the rights and obligations arising from the contract concluded by the Contractor with the design studio responsible for investment design. In addition, the Employer may withdraw from the Agreement until 31 December 2020, in the case of, delays in the implementation of individual stages of work or the Contractor's request for postponements of key dates. In the event of withdrawal from the Agreement by the Employer or the Contractor for reasons attributable to the Contractor, the Contract provides for a contractual penalty of 10% of the total remuneration. The total amount of all contractual penalties charged may not exceed 10% of remuneration. The Employer is entitled to claim damages exceeding the amount of the contractual penalty on the general principles of the Civil Code.
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