The execution of material agreements for the purchase of real properties located in the area of ul. Towarowa in Warsaw

In reference 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. z o.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 shopping centre situated on a part of the Real Properties (the “Shopping Centre”) in favour of Projekt Echo – 138 sp. z o.o. sp. k. (“PE138 SK”); and (ii) the agreement regarding the sale of shares in Projekt Echo – 138 sp. z o.o. (“PE138 ZOO”), being the general partner of PE138 SK (the “Transaction”). The Transaction involved the execution of the following agreements: i.    The final purchase agreement for the Real Properties concluded by the Seller in favour of PE138 SK (the “Final Agreement”). The purchase 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 the relevant conditions set out in the Final Agreement have been satisfied (the “Real Properties Price”). The Real Properties Price was deposited in an escrow account. Pursuant to the Final Agreement, the Seller provided PE138 SK a security instrument for the guarantee deposit (the “Security Instrument”) along with a scan of a so-called capacity opinion regarding the guarantor of the Seller"s liabilities arising under the Final Agreement. ii.    The final agreement for 70 shares in PE138 ZOO representing 70% of the share capital of PE138 ZOO executed by the Company in favour of EPP (the “SPA”). The purchase price for 70 shares in PE138 ZOO was set at PLN 3,500 (the “Share Price”). Under the SPA, the parties agreed that the sole general partner of PE138 SK would continue to be PE138 ZOO, whereas the following entities would remain the limited partners: (i) Strood sp. z o.o., a subsidiary of the Company (the “Echo"s LP”); and (ii) Pebworth sp. z o.o., a subsidiary of EPP (“EPP"s LP”). Pursuant to the SPA, the contribution of Echo"s LP will amount to EUR 35,820,000, whereas the aggregate contribution of EPP"s LPs will amount to EUR 36,580,000. The profit of PE138 SK will be distributed as follows: (i) 0.01% to PE138 ZOO; (ii) 45.995% to Echo"s LP; and (iii) 53.995% to EPP"s LP. In the event that the Purchaser has made all of the payments in respect of the Real Properties Price, the profit of PE138 SK will be distributed as follows: (i) 0.01% to PE138 ZOO; (ii) 29.995% to Echo"s LP; and (iii) 69.995% to EPP"s LP. The Final Agreement and the SPA contain representations of warranties of the seller and the purchaser customarily used in such types of transactions as well as standard issues concerning the liability of the parties. The other terms of the agreements are standard terms applied in such types of transactions. Legal basis: Article 17(1) of the MAR – inside information.