Echo Investment S.A.

Regulatory Filings • Dec 23, 2016

Inreference to the information disclosed in current report No. 32/2016,the management board of the Company informs that on 23 December 2016,the Company and its subsidiaries along with Echo Polska Properties N.V.("EPP") and its subsidiaries, and Fidelin Development sp. zo.o. sp. k. (the "Seller") concluded several agreements,including: (i) the final agreement regarding the sale of (a) 13(thirteen) real properties located in the area of ul. Towarowa in Warsaw(the "Real Properties"); and (b) the Towarowa shoppingcentre situated on a part of the Real Properties (the "ShoppingCentre") in favour of Projekt Echo - 138 sp. z o.o. sp. k. ("PE138SK"); and (ii) the agreement regarding the sale of shares in ProjektEcho - 138 sp. z o.o. ("PE138 ZOO"), being thegeneral partner of PE138 SK (the "Transaction")

TheTransaction involved the execution of the following agreements:

i.Thefinal purchase agreement for the Real Properties concluded by the Sellerin favour of PE138 SK (the "Final Agreement").

Thepurchase price for the Real Properties was set at EUR 77,400,000,however, it may be increased up to EUR 119,400,000 in the case where therelevant conditions set out in the Final Agreement have been satisfied(the "Real Properties Price"). The Real Properties Pricewas deposited in an escrow account.

Pursuantto the Final Agreement, the Seller provided PE138 SK a securityinstrument for the guarantee deposit (the "Security Instrument")along with a scan of a so-called capacity opinion regarding theguarantor of the Seller's liabilities arising under the Final Agreement.

ii.Thefinal agreement for 70 shares in PE138 ZOO representing 70% of the sharecapital of PE138 ZOO executed by the Company in favour of EPP (the "SPA").

Thepurchase price for 70 shares in PE138 ZOO was set at PLN 3,500 (the "SharePrice").

Under theSPA, the parties agreed that the sole general partner of PE138 SK wouldcontinue to be PE138 ZOO, whereas the following entities would remainthe limited partners: (i) Strood sp. z o.o., a subsidiary of the Company(the "Echo's LP"); and (ii) Pebworth sp. z o.o., asubsidiary of EPP ("EPP's LP"). Pursuant to the SPA,the contribution of Echo's LP will amount to EUR 35,820,000, whereas theaggregate contribution of EPP's LPs will amount to EUR 36,580,000.

Theprofit of PE138 SK will be distributed as follows: (i) 0.01% to PE138ZOO; (ii) 45.995% to Echo's LP; and (iii) 53.995% to EPP's LP. In theevent that the Purchaser has made all of the payments in respect of theReal Properties Price, the profit of PE138 SK will be distributed asfollows: (i) 0.01% to PE138 ZOO; (ii) 29.995% to Echo's LP; and (iii)69.995% to EPP's LP.

The FinalAgreement and the SPA contain representations of warranties of theseller and the purchaser customarily used in such types of transactionsas well as standard issues concerning the liability of the parties. Theother terms of the agreements are standard terms applied in such typesof transactions.