Articles of association

Adopted at the Extraordinary General Meeting on 23 January 2017.

 

§ 1 Registered name

The registered name of the company is East Capital Explorer AB (publ).

 

§ 2 Registered office

The company’s registered office is located in the municipality of Stockholm.

 

§ 3 Operations

The object of the company’s operations is to acquire, manage and sell real property and chattels and to conduct other activities compatible therewith.

 

§ 4 Accounting currency

The company’s accounting currency shall be Euro.

 

§ 5 Share capital

The share capital of the company shall amount to not less than EUR 2,000,000 and not more than EUR 8,000,000.

 

§ 6 Number of shares, classes of shares and rights between the classes of shares

 

1.             Number of shares

The number of shares shall be not less than 20,000,000 and not more than 80,000,000.

2.             Classes of shares

Shares may be issued in two different classes: ordinary shares and preference shares. Ordinary shares may be issued up to a number equal to the highest number of shares that may be issued under these articles of association. No more than 2,000,000 preference shares may be issued.

3.             Number of votes

Each ordinary share carries one (1) vote. Each preference share carries one-tenth (1/10) vote.

 

4.             Restrictions on new issue of preference shares and value transfers in certain events

For as long as there are preference shares issued and the Preference Share Ratio (calculated as set out below) exceeds [•], it may not be resolved to:

(i)            issue additional preference shares; or

(ii)         make a value transfer to holders of ordinary shares.

The Preference Share Ratio is calculated as follows:

A x B

C

 

whereas:

A

is equal to the redemption price set out in section 6 ii. below as at the resolution date (including any accrued portion of the Preference Distribution and any Retained Amounts and regardless of how long time has passed since the First New Issue);

B

is equal to the total number of registered preference shares plus any additional preference shares that (a) have not yet been registered, but have been validly resolved to be issued, (b) may be issued through a conversion or exercise of convertible instruments or warrants then outstanding and (c) may be issued under any other financial instrument then outstanding, but less any such preference shares that (d) are held by the company or (e) are subject to a redemption validly resolved by a General Meeting or the Board of Directors; and

C

the book value of the equity of either the group of companies in which the company is the parent company or the company, whichever is the lower, as recorded in the most recent interim report presented by the company, less any proposed but not yet validly resolved or effectuated (a) value transfer under paragraph (ii) above and (b) Preference Distribution under section 5 below, in each case converted to SEK in accordance with the exchange rate as of the balance sheet date of the most recent interim report presented by the company.

 

 

5.             Preference shares’ right to distribution of profits

If a General Meeting resolves on a distribution of profits, the preference shares shall have a priority over the ordinary shares as follows.

For each payment, the priority to distribution of profits per preference share (the “Preference Distribution”) shall amount to one-fourth (1/4) of the annual Preference Distribution (“Annual Preference Distribution”). The record date for each such distribution is set out below.

As from the first payment of a Preference Distribution, the Annual Preference Distribution shall amount to SEK 100 per preference share.

As from the first payment of a Preference Distribution that occurs after the Annual General Meeting subsequent to the fifth (5th) anniversary of the first new issue of preference shares (the “First New Issue”), the Annual Preference Distribution shall be adjusted on the basis of the Reference Interest as at the relevant Recalculation Day. The adjustment is made upon the Board of Directors determining a new Annual Preference Distribution by applying the following formula:

(Margin + New Interest) x First Subscription Price

whereas such product shall be rounded up or down to the nearest whole number SEK amount and the following terms shall have the meanings set out below:

“Banking Day”

means any day that is not a Sunday or a public holiday or any such other day that is considered to be a public holiday when repaying a debt (Saturday, Midsummer’s Eve, Christmas Eve and New Year’s Eve are currently considered to be such days);

“First Subscription Price”

means the SEK amount paid for each preference share under the First New Issue;

“Initial Interest”

means the Reference Interest at 12:00 noon CET on the day the First Subscription Price was validly set;

“Margin”

means (100 / First Subscription Price) – Initial Interest;

“New Interest”

means the Reference Interest at 12:00 noon CET on the Recalculation Day in the calendar year in which a new Annual Preference Distribution shall be determined;

“Recalculation Day”

means the anniversary of the First New Issue in such calendar year in which a new Annual Preference Distribution shall be determined, or if such day is not a Banking Day, the immediately preceding Banking Day; and

“Reference Interest”

means the 5-year annual interest for interest swap transactions in SEK “OMX SEK SWAP 5Y” (or such other interest replacing it) displayed on NASDAQ OMX’ website for Swap Fixing, expressed as a percentage with three (3) decimals. If such reference interest does not exist at the relevant time, the Board of Directors shall set another reference interest, which in the opinion of the Board of Directors is most adequate to properly replace the above reference interest taking into account the principles according to which the reference interest is determined, whereas the Board of Directors shall, as a starting point, determine the other reference interest to be such comparable interest that is displayed by another internationally recognised independent source and, if this is not possible, by consulting no less than three recognised Swedish banks about their respective interests and, on the basis thereof, determine the reference interest as the average of the interests provided by such banks.

The company shall display the Margin and each Annual Preference Distribution on its website.

The distribution of profits on preference shares shall be paid in SEK on a quarterly basis. The record date for such distributions shall be 5 February, 5 May, 5 August and 5 November and, if such day is not a Banking Day, the immediately preceding Banking Day. The payment shall be made on the third (3rd) Banking Day after the record date.

If no distribution of profits on the preference shares is paid, or if the payment of such distribution amounts to less than the Preference Distribution, the preference shares shall carry a right, subject to a General Meeting resolving on a distribution of profits, to receive an amount, in addition to future Preference Distributions, equally apportioned among the preference shares, corresponding to the difference between the amount that should have been paid as set out above and the amount actually paid (“Retained Amounts”) before any value transfers to holders of ordinary shares are made. Retained Amounts shall be adjusted upwards by a factor corresponding to an annual interest rate of twenty (20) per cent, it being understood that such adjustment shall be made as from the quarterly date at which the distribution of profits were paid or should have been paid (that is, if no such distribution has been paid at all). The payment of Retained Amounts is subject to a General Meeting resolving on a distribution of profits.

The preference shares do not carry any other rights to distribution of profits than those set out above.

6.             Redemption of preference shares

The share capital may be reduced (but not below the minimum share capital) by way of a redemption of all or part of the preference shares upon a resolution of the Board of Directors to do so. When resolving upon a redemption, an amount equal to the share capital reduction shall be allocated to the statutory reserve, provided that sufficient funds for this purpose are available.

 

The preference shares shall be redeemed pro rata to the number of preference shares held by each holder of preference shares. If the allocation set out above does not result in an even number of shares, the Board of Directors shall allocate the surplus preference shares to be redeemed. If, however, the resolution is supported by all of the holders of preference shares, the Board of Directors can resolve on which shares to redeem.

 

The redemption price for each redeemed preference share shall be calculated as follows:

 

(i)            Until the third (3rd) anniversary of the First New Issue, the redemption price shall be equal to 120 per cent of the First Subscription Price plus any accrued portion of the Preference Distribution plus any Retained Amounts adjusted upwards with an interest as set out in section 5 above. The redemption price for each redeemed preference share shall in no event be less than the quota value of a preference share.

(ii)         As from the third (3rd) anniversary of the First New Issue and the period thereafter, the redemption price shall be equal to 105 per cent of the First Subscription Price plus any accrued portion of the Preference Distribution plus any Retained Amounts adjusted upwards with an interest as set out in section 5 above. The redemption price for each redeemed preference share shall in no event be less than the quota value of a preference share.

The expression “accrued portion of the Preference Distribution” means accrued Preference Distribution for the period commencing on the day after the most recent record date for a distribution of profits on preference shares up until and including the day the redemption price is paid. The number of days shall be calculated on the basis of the actual number of days relatively to 90 days.

 

7.             Liquidation of the company

Upon a liquidation of the company, the preference shares shall have a priority over the ordinary shares to receive an amount per preference share equal to the redemption price that would have been applicable at the time of liquidation, calculated in accordance with section 6 above, from the company’s assets before any distribution proceeds are distributed to the holders of ordinary shares. The preference shares do not carry any other rights to distribution proceeds than those set out in this section 7.

 

8.             Recalculation upon certain corporate events

Upon a change of the number of preference shares as a result of a consolidation of shares, share split or another similar corporate event, the amounts that the preference shares carry right to under sections 5–7 in this § 6 shall be recalculated in order to reflect such change.

 

9.             Preferential rights

In the event that the company resolves to, by a cash issue or a set-off issue, issue new shares of different classes, the holders of ordinary shares and preference shares shall have preferential rights to subscribe for new shares of the same class pro rata to their existing shareholding in that class (primary preferential right). Shares not subscribed for on the basis of primary preferential rights shall be offered for subscription to all shareholders (secondary preferential right). If the number of shares offered in this manner is insufficient for subscription based on secondary preferential rights, the shares shall be allocated among the subscribers pro rata to their aggregate existing shareholding, irrespective of whether such shares are ordinary shares or preference shares. To the extent this is not possible as regards a certain share/certain shares, the allocation shall be made by drawing of lots.

 

In the event that the company resolves to, by a cash issue or a set-off issue, issue new shares of only one class, the shareholders of that class shall have preferential rights to subscribe for new shares pro rata to their existing shareholding in that class (primary preferential right). Shares not subscribed for on the basis of primary preferential rights shall be offered for subscription to all shareholders (secondary preferential right). If the number of shares offered in this manner is insufficient for subscription based on secondary preferential rights, the shares shall be allocated among the subscribers pro rata to their aggregate existing shareholding, irrespective of whether such shares are ordinary shares or preference shares. To the extent this is not possible as regards a certain share/certain shares, the allocation shall be made by drawing of lots.

 

In the event that the company resolves to, by a cash issue or a set-off issue, issue new warrants or convertibles, the shareholders shall have preferential rights to the subscription of the new warrants as if the issue related to the shares that may be subscribed for following an exercise of the warrants or, in case of an issue of convertibles, as if the issue related to the shares that the convertibles may be converted into.

 

What is stipulated above shall not restrict the possibilities for resolving on a cash issue or set-off issue with deviation from the shareholders’ preferential rights.

 

An increase of the share capital by a bonus issue, where new shares are issued, may only occur by an issue of new ordinary shares. In such case, only holders of ordinary shares have preferential rights to such new ordinary shares pro rata to their existing holdings of ordinary shares. The above shall not restrict the possibilities for resolving, after necessary amendments of these articles of association, on an issue of shares of a new class.

 

§ 7 The Board of Directors and auditors

The Board shall consist of 3–6 members without deputies. It is elected annually at the Annual General Meeting for the time up to the end of the next Annual General Meeting.

 

1–2 auditors, with or without deputy auditors, are elected at the Annual General Meeting for the period extending to the close of the Annual General Meeting held during the fourth financial year after the election.

 

§ 8 Notice

Notice of a General Meeting shall be given through an announcement in Post- och Inrikes Tidningar and on the company’s website. At the time of the notice, an announcement informing that the notice has been issued shall be published in Svenska Dagbladet.

 

§ 9 Annual General Meeting

The Annual General Meeting shall be held within six months from the end of each financial year. At the Annual General Meeting, the following matters shall be addressed:

 

1.      Election of a chairman of the meeting

2.      Preparation and approval of the voting list

3.      Approval of the agenda

4.      Election of one or two persons to verify the minutes

5.      Determination whether the meeting has been duly convened

6.      Presentation of the annual accounts and the auditors' report and, if applicable, the consolidated annual accounts and consolidated auditors' report

7.      Resolutions:

-          on adoption of the income statement and balance sheet and, if applicable, the consolidated income statement and the consolidated balance sheet

-          on the disposition of the company’s profit or loss as shown in the adopted balance sheet

-          on discharge of liability of members of the Board of Directors and the managing director, as applicable

8.      Determination of the number of board members and, if applicable, auditors and any deputy auditors

9.      Determination of the fees to be paid to the Board of Directors and the auditors

10.  Election of the Board of Directors and, if applicable, auditors and deputy auditors

11.  Other matters that may be brought before the meeting pursuant to the Swedish Companies Act or the articles of association

§ 10 Financial year

The company’s financial year is January 1 – December 31.

 

§ 11 Participation at the General Meeting

To be entitled to participate at the General Meeting, shareholders must give the company notice of their intention to attend the General Meeting and, if applicable, state the number of assistants not later than 4 PM on the day stipulated in the notice of the General Meeting. That day must not be a Sunday, any other public holiday, a Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and must not be earlier than the fifth weekday prior to the General Meeting. Attorneys do not need to notify the number of assistants. The number of assistants may not be more than two.

 

§ 12 Record day

The company’s shares shall be registered in a CSD register (central securities depository) pursuant to the Central Securities Depositories and Financial Instruments (Accounts) Act (SFS 1998:1479).