Echo Investment S.A.

M&A Activity • Feb 24, 2022

Conclusion of material conditional agreementsrelating to real properties located in the area of ul. Towarowa in Warsaw

Further to the information published in the form ofcurrent reports No. 32/2016, 39/2016 and 54/2016, the Management Boardof Echo Investment S.A. (the "Company") hereby reports thaton 23 February 2022, the Company and its subsidiaries concluded a numberof conditional agreements relating to real properties located in thearea of ul. Towarowa in Warsaw held by Projekt Echo - 138 sp. z o.o.sp.k., in which the Company indirectly holds a partial interest ("PropCo"),currently developed with the existing shopping centre (the "Properties").In consequence, following the satisfaction of certain conditions set outherein, the other indirect shareholder in PropCo and the partner of theCompany within the joint venture established for the purpose of thedevelopment of the Properties, in place of EPP N.V. together with itssubsidiaries, will be AFI Europe NV (a wholly owned subsidiary of AFIProperties Ltd., being a public company incorporated in Israel andlisted on the Tel Aviv Stock Exchange) ("AFIEurope")(the "Transaction").

The currently envisaged project to be developed byPropCo on a major part of the Properties includes properties withvarious uses, including office and retail areas and buildings withresidential units for rent, as well as, within the remaining part of theProperties, residential buildings with apartments for sale (the latter:the "Residential Quarters").

In particular, the following conditional agreementswere concluded by the Company and/or its subsidiaries as part of theTransaction:

(i)_#160;_#160;_#160;_#160;_#160;a shareholders' agreement to be bindingbetween the Company, AFI Europe and Strood sp. z o.o. (a whollycontrolled subsidiary of the Company being the PropCo's Limited Parter),which regulates the corporate governance principles of Projekt Echo -138 sp. z o.o. (being the PropCo's general partner, the "GP")i PropCo;

(ii)_#160;_#160;_#160;_#160;development management agreementsconcluded by the Company as the developer and PropCo as the investorunder which the Company is to render certain development managementservices;

(iii)_#160;_#160;_#160;a preliminary sale agreement betweenPropCo and Projekt Echo - 137 sp. z o.o. (the "R4SPurchaser"), a wholly owned subsidiary of the Company, pursuant towhich, subject to, among others, the completion of the Transaction andthe formal division of the Property into quarters, the R4S Purchaserwill purchase the Residential Quarters for a price of approximately EUR47,000,000 (net of VAT) being paid according to agreed milestones.

The completion of the Transaction remains subject tothe satisfaction of certain conditions precedent by the date agreedbetween the parties, including the completion of the transactionregarding the acquisition by AFI Europe from EPP N.V. of the interest inPropCo, as well as antimonopoly clearance from the Polish CompetitionAuthority and the final settlement regarding the price increase underthe sale agreement pursuant to which PropCo acquired the Properties.After completion of the Transaction, the Company will be entitled to a30% profit share in PropCo.

Under the Transaction documents, it is envisaged thatcertain agreements currently binding between the Company, EPP N.V. andits respective affiliates in relation to the Properties and the relatedproject are to be finally settled and terminated with effect from thecompletion of the Transaction.

The Transaction involved the establishment of certaincustomary security, including reciprocal parent/corporate guarantees,securing the obligations of the Company and/or its subsidiaries as wellas the obligations of AFI Europe and/or its respective subsidiariesunder the binding Transaction documentation.

The Transaction documentation containsrepresentations and warranties of the parties that are customary fortransactions of this type as well as substantially standard contractualclauses concerning the parties' liability and security. The provisionsof the aforementioned agreements do not materially diverge from theprovisions commonly used in these types of transactions.

Legal basis: Art.17(1)of Regulation (EU) No. 596/2014 of theEuropean Parliament and of the Council of 16 April 2014 on market abuse(market abuse regulation) and repealing Directive 2003/6/EC of theEuropean Parliament and of the Council and Commission Directives2003/124/EC, 2003/125/EC and 2004/72/EC - inside information