Abadon Real Estate : The annex to the report 1/2017

CONSOLIDATED TEXT OF THE ARTICLES OF ASSOCIATION OF ABADON REAL ESTATE SPÓŁKA AKCYJNA (JOINT STOCK COMPANY) WITH ITS REGISTERED OFFICE IN BIELSKO-BIAŁA

including the amendments under resolution no. 4 and 7 of the EGM of 27 September 2016

1. GENERAL PROVISIONS §1.

2. The business name of the company shall be: Abadon Real Estate spółka akcyjna (joint stock company).

3. The company may use the abbreviated business name Abadon Real Estate S.A. and a distinguishing graphic sign, as well as the equivalent of the business name and its abbreviated form in foreign languages.

4. The registered office of the Company shall be in Bielsko-Biała.

   §2.

5. The Company shall operate on the area of the Republic of Poland and abroad.

6. The Company may open: plants, branches, agencies and other organisational units in Poland and abroad.

7. The Company may be a shareholder or a stockholder of other companies and business entities in Poland and abroad and incorporate companies, as well as create and participate in other organisations provided for by the legal regulations.

8. The duration of the Company shall be indefinite.

9. OBJECT OF THE COMPANY §3.

10. The objective of the Company is to conduct operations focused primarily on the comprehensive service, directly or indirectly, of investment processes in real estate projects.

11. The object of the Company shall include:

12. architectural and engineering activities;

13. technical testing and analyses;

14. activities of head offices;

15. consultancy related to management;

16. real estate market activities;

17. management of real estate on a contract basis;

18. services related to buildings and landscape activities;

19. construction and investments related to real estate;

20. construction of residential units and sale of those units to legal and natural persons;

21. purchase, sale and manufacture of raw materials, finished products and semi-finished industrial products, in particular related to the construction industry;

22. building works related to erection of buildings;

23. works related to construction of civil engineering and water projects;

24. specialised construction activities;

25. export and import of any products, articles and technologies, in particular related to the construction industry;

26. providing advertising and consulting services;

27. conducting other activities and providing other services intended for the activities listed hereinabove or related thereto;

28. accounting and bookkeeping services;

29. information service activities;

30. publishing activity;

31. financial lease;

32. advisory and intermediation services concerning mortgage loans.

33. Should the Company intend to start an activity with respect to which previous obtaining of a licence or any other permit of a public-private nature is required, the Company shall start this activity upon obtaining such permit.

34. Change of the object of the Company may take place without the obligation to buy out stocks, providing that the requirements stipulated in Art. 417 § 4 of the Code of Commercial Companies are observed.

35. SHARE CAPITAL §4.

36. The share capital shall amount to PLN 28,067,522.00 (twenty eight million sixty seven thousand five hundred twenty two zloty).

37. The share capital shall be divided into:

38. 1,000,000 (one million) class A registered shares of the nominal value 1.00 PLN (one zloty) each,

39. 5,227,142 (five million two hundred and forty-nine thousand one hundred and forty- two) class B bearer shares of the nominal value 1.00 PLN (one zloty) each,

40. 6,591,238 (six million five hundred and ninety-one thousand two hundred and thirty- eight) class C registered shares of the nominal value 1.00 PLN (one zloty) each,

41. 15,249,142 (fifteen million two hundred and forty-nine thousand one hundred and forty-two) registered shares class D of the nominal value 1.00 PLN (one zloty) each.

42. Share capital has been fully paid up.

    §5.

43. The share capital of the Company may be increased by the issuance of new stocks under a resolution of the General Meeting. The stock capital may be also increased by transferring into the share capital of the amounts from the supplementary capital and by increasing the nominal value of the existing stocks.

44. The Company shall have the right to issue registered stocks and bearer stocks. Change of registered stocks into bearer stocks may be performed at the request of a stockholder. Change of bearer stocks into registered stocks is unacceptable.

45. Stockholders shall have the priority right to take up stocks in the increased share capital of the Company proportionately to the number of stocks held. In the interest of the Company, the General Meeting may deprive current Stockholders of the pre-emptive right in part or in full, in accordance with applicable laws.

46. The Company may issue securities, including convertible bonds and senior bonds. The Company shall also have the right to issue subscription warrants.

47. REDEMPTION OF STOCKS §6.

48. Company's stocks may be redeemed upon the consent of a Stockholder by means of purchasing them by the Company (voluntary redemption). Apart from the consent of the Stockholder whose stocks are to be redeemed, a resolution of the General Meeting shall be required for the redemption of the Company's stocks, subject to Art. 363 § 5 of the Code of Commercial Companies.

49. Stocks may be redeemed by means of a voluntary redemption without remuneration. Stocks may be redeemed by means of a voluntary redemption without remuneration only upon the consent of the Stockholder that the redemption applies to.

50. Conditions for the redemption of stocks shall be determined on a case-by-case basis by a resolution of the General Meeting, which shall specify in particular the legal basis of the redemption, the amount of the remuneration due to the Stockholder of the redeemed stocks or justification for the redemption of stocks without remuneration and the method of decreasing the share capital.

51. A resolution on the redemption of stocks may be preceded by an agreement concluded with the Stockholder, whose stocks are to be redeemed. The agreement shall determine the number of stocks that will be subject to redemption and the price for which the stocks will be acquired. The effectiveness of the agreement shall depend on the adoption of a resolution by the General Meeting.

52. The Company may create a special purpose fund to cover any possible future stock redemption. A resolution of the General Meeting shall be required for the creation of the special purpose fund.

53. BODIES OF THE COMPANY

    The bodies of the Company shall be:

54. Management Board,

55. Supervisory Board,

56. General Meeting.

57. §7.

    A. MANAGEMENT BOARD OF THE COMPANY

    §8.

58. The Management Board of the Company shall be composed of 2 (two) to 3 (three) members appointed for a joint term of office. The term of office of the Management Board shall last for 5 (five) consecutive years.

59. In the period when Murapol S.A. holds at least 25% of the general number of votes at the General Meeting of the Company, Murapol S.A. shall have the right to appoint and dismiss the President and Deputy President of the Management Board. This right shall be exercised in the form of a written declaration of will submitted to the Company.

60. The Supervisory Board shall have the right to appoint and dismiss 1 member of the Management Board.

61. Each member of the Management Board may be also dismissed by the General Meeting at any time. Change of the entire composition of the Management Board,

    resulting from simultaneous dismissal of all current members of the Management Board during their joint term of office and appointing instead of them a new composition of the Management Board, shall constitute termination of the joint term of office of the current members of the Management Board and commencement of the next joint term of office of the persons appointed for the new composition of the Management Board.

62. Except for special cases (death, resignation, dismissal, etc.), the mandate of members of the Management Board shall expire on the date of holding the General Meeting approving the financial statements for the last full fiscal year of acting as a member of the Management Board, and the first fiscal year relevant for calculating the expiry of the mandate of members of the Management Board shall terminate upon the expiry of the fiscal year in which the appointment was made. The fiscal year shall be the year referred to in § 29(2) hereof.

63. A member of the Management Board shall submit a resignation from his/her function to the Company (represented in accordance with the principles of passive representation) and inform the Supervisory Board and the Stockholder - Murapol S.A. (in case of a member of the Management Board appointed under § 8(2) hereof) about the resignation, and the provision of the aforementioned information shall not constitute a condition for the effectiveness of resignation. Resignation shall be made in writing, or else shall be null and void for the Company. Relevant provisions of the Civil Code on the termination of an order by the party accepting it shall apply to the resignation by a member of the Management Board.

§9.

1. The Management Board of the Company shall manage the affairs of the Company and represent it before third parties. Any matters related to conducting the affairs of the Company, not reserved in the act or the provisions hereof to the competences of the General Meeting or the Supervisory Board, shall fall within the scope of activities of the Management Board.

2. The procedure of operations of the Management Board shall be determined in detail by the by-laws adopted by the Management Board and approved by the Supervisory Board.

3. The Management Board shall be composed of the President of the Management Board, who organises the work of the Management Board.

4. For the resolutions of the Management Board to be valid, the presence at the meeting of at least a half of its composition is required. Resolutions of the Management Board shall be adopted by a simple majority of votes of the persons present. In justified cases, voting may be conducted in writing or by using means of distance communication. In the instance of an equal number of votes, the President of the Management Board shall have the casting vote.

5. Resolutions of the Management Board shall be required for all cases exceeding the scope of ordinary activities of the Company, in particular:

6. adoption of the by-laws of the Management Board and amendments thereto;

7. appointment of a proxy, subject to Art. 371 § 4 of the Code of Commercial Companies;

8. distribution of competences among the members of the Management Board;

9. acquisition or disposal of fixed assets, real estate, right to perpetual usufruct or share in the real estate with the value equal to or exceeding EUR 2,000,000 (two million euro);

10. Proxy may be revoked by each member of the Management Board.

11. Plenipotentiaries may be established to perform a specific type of acts or individual