Echo Investment S.A.

M&A Activity • Sep 17, 2018

Current report no. 34/2018

Completion of the joint venture agreement with R4RS.à r.l.("R4R"),a company controlled by a fund managed by one of the world's premierinvestment managers.

Following the information on entering into a jointventure agreement ("Agreement") based on which afull-function joint venture company - R4R Poland sp. z o.o. ("JVCo")under the joint control of R4R andEchoInvestment S.A. (the "Company") has been created (currentreport no 18/2018) and the information on amendment of the Agreement,acquisition of shares in the JVCo and entering into shareholders'agreement regulating corporate governance in the JVCo (current report no29/2018), the Management Board of the Company hereby informs that on 14September 2018, the following actions have been undertaken in exerciseof the Agreement:

(1)the Company or its subsidiary companieslisted below, as the case may be, entered into preliminary saleagreements as sellers with the following subsidiary companies of JVCo asbuyers with respect to four development projects under construction(approx. 1,200 apartments) for the total net price of PLN338.669.808:

(a)Dellia Investments - Projekt Echo - 115sp. z o.o. (subsidiary of the Company) entered into a preliminary saleagreement with R4R Warszawa Browary sp. z o.o. (subsidiary of JVCo) withrespect to Browary Warszawskie project, being realised on the realproperty located in Warsaw at Grzybowska 58 street;

(b)Projekt Echo - 137 sp. z o.o.(subsidiary of the Company) entered into a preliminary sale agreementwith SO SPV 103 sp. z o.o. (subsidiary of JVCo) with respect toRychtalska project, being realised on the real property located inWrocław at Rychtalska street;

(c)Echo-Property Poznań 1 sp. z o.o.(subsidiary of the Company) entered into a preliminary sale agreementwith R4R Wrocław Kępa sp. z o.o. (subsidiary of JVCo) with respect toKępa project, being realised on the real property located in Wrocław atKępa Mieszczańska island;

(d)the Company entered into a preliminarysale agreement with SO SPV 101 sp. z o.o. (subsidiary of JVCo) withrespect to Wodna project, being realised on the real property located inŁódź at Wodna 23 street;

(2)JV and its subsidiary companies listedabove entered into the loan and facilityagreementwith Bank Polska Kasa Opieki S.A. and other financial institutions forthe total loan amount of PLN258,668,000;

(3)in exercise of its obligation toco-finance the JVCo under the Agreement, the Company injected to JVCothe total amount of PLN 41.354.269 by subscribing for newly issuedshares in JVCo and granting it a shareholder loan.

Pursuant to the Agreement, JVCo will operate as adevelopment platform for residential real estate for rent in Poland. TheJVCo will develop apartments for rent in four locations in Warsaw, Łódźand Wrocław. After its establishment and take over of four projectsbeing under development (construction of appeox. 1,200 apartments), inthe next stage of the JVCo development it will take over from theCompany another development projects with approx. 1,700 apartments whichare ready for construction commencement in the next 12 months. The firsttenants will be able to move in during the third quarter of 2019. Underthe Agreement, the Company will provide planning, design anddevelopments services, while JVCo will lead the operational management.