Echo Investment S.A.

M&A Activity • Jun 30, 2022

The Management Board of Echo Investment S.A. (Issuer)informs you that on 30 June 2022, a subsidiary of the Issuer, i.e.Projekt Echo - 130 spółka z ograniczoną odpowiedzialnością with itsregistered office in Kielce, as the seller (Seller) and theGerman law company FARKAS Grundst_#252;cksgesellschaft mbH _amp; Co KG, an entitymanaged by an institutional real estate manager, as the buyer (Buyer,whereas the Buyer and the Seller shall be jointly referred to as theParties),concluded a transfer agreement for the sale of a real property locatedin Łódź held in perpetual usufruct by the Seller (TransferAgreement).

Subject of the transaction

On the basis of the concluded Transfer Agreement, theBuyer purchased the Seller's real property and other assets, includingin particular:

(a)_#160;_#160;_#160;_#160;_#160;_#160;theright of perpetual usufruct of the plot of land bearing registrationnumber 158/54 located in Łódź at Milionowa Street (Land),the ownership of two office buildings known as "C" and "D" developed onthe Land (Buildings), along with the structures developed on thisLand for which the District Court for Łódź-Śródmieście in Łódź, 16thLand and Mortgage Register Division keeps the land and mortgage registerno. LD1M/ 00338912/8;

(b)_#160;_#160;_#160;_#160;_#160;_#160;theownership of the specified movable property.

The Transfer Agreement was concluded in theperformance of the preliminary sale agreement concluded between theParties on 23 December 2021, and the Issuer has informed about it withthe current report no. 3/2022 dated 11 January 2022, after thefulfilment or waiver of the relevant conditions precedent and in theperformance of the conditional sale agreement concluded between theParties on 15 June 2022 after the fulfilment of the condition specifiedtherein.

As part of the transaction, the Seller undertook tocomplete (after Closing), the construction of Building "J", which willbe located on the Land.

As part of the transaction, the Parties alsoconcluded quality guarantee agreements for Buildings and Building "J" (QualityGuarantee Agreement), a rental guarantee agreement (RentalGuarantee Agreement) and a fit-out agreement (Fit-Out Agreement).The basic provisions of the Quality Guarantee Agreement provide forgranting the Buyer a quality guarantee for the Buildings, Building J andstructures located on the real property. The basic provisions of theRental Guarantee Agreement provide for a guarantee to the Buyer that theSeller will cover rent payments and service charges for individual partsof the Buildings that have not been rented to third parties on the dateof signing the Transfer Agreement and those that have been rented, andfor which rent reductions or rent-free periods have been applied. Thebasic provisions of the Fit-out Agreement provide for the Seller'sobligation to carry out arrangement and construction works on the realproperty.

The Transaction Value and the Price

The value of the transaction (Transaction Value)at the conclusion of the Transfer Agreement was EUR 56,701,267 plus VAT.

The amount to be paid at the Closing was calculatedon the basis of the Transaction Value reduced, inter alia, by the valueof the rent-free periods, the value of rents on premises not handed overto tenants, the value of arrangement works, and other costs. Inaddition, the Price will be reduced by the amount of arrangement andconstruction works (including works related to the removal of anydefects). As a result, the Price payable at Closing was EUR 42,989,316plus VAT.

In addition, after the Closing, as part of the amountof the Transaction Value, the Seller will receive a separate fee relatedto the completion of arrangement works on the tenants' premises and therepair of defects in the total amount of EUR 3,055,768 plus VAT.

In addition, after the Closing, as part of the amountof the Transaction Value, the Seller will receive a separate fee relatedto the obtainment of occupancy permit for Building "J" and the repair ofdefects in the total amount of EUR 4,100,889 plus VAT.

The provisions of the Transfer Agreement do notdiffer from the provisions used in this type of transaction. TheTransfer Agreement contain standard provisions for this type oftransaction regarding the warranties and representations of the Sellerand the Buyer, and the liability of the Parties.