Gobarto : Current report nr 35/2016

Current report no.: 35/2016

Subject: Gobarto S.A. -concluding a conditional agreement for the sale of shares in a limited liability company by a subsidiary of the Issuer -public disclosure of confidential information

Date: 29/11/2016

Legal basis: Art. 17 Point 1 of the MAR -submission of confidential information

Acting pursuant to Art. 17 Point. 1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on Market Abuse (the Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and the Commission Directive 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU No. L 173/1) ("the MAR"), the Management Board of Gobarto S.A. of Warsaw (hereinafter "the Issuer") hereby informs that on 29 November 2016 the Issuer's subsidiary - AGRO DUDA sp. z o.o. of Grąbkowo, as the buyer (hereinafter "the Buyer", "AGRO DUDA"), and the State Treasury of the Republic of Poland, represented by Mr Henryk Kowalczyk - Minister - a Member of the Council of Ministers, who replaces the Minister of the State Treasury, as the seller (hereinafter "the Seller"), concluded a conditional agreement for the sale of shares in the company under the business name of Przedsiębiorstwo Produkcyjno-Handlowe "Ferma- Pol" spółka z ograniczoną odpowiedzialnością with its registered office in Zalesie (hereinafter "Ferma- Pol") (hereinafter "the Agreement").

Ferma-Pol is an entity with many years of experience in breeding and farming of pigs.

The Agreement regulates the acquisition by AGRO DUDA of 38,148 shares of Ferma-Pol with the nominal value of PLN 500.00 (five hundred zloty) each, forming 100% of the share capital of Ferma- Pol and representing 100% of votes at the General Meeting of Shareholders of Ferma-Pol ("the Shares"), for the price of PLN 577,00 (in words: five hundred seventy-seven zloty 00/100) per share,

1. for the total price of PLN 22,011,396 (in words: twenty-two million eleven thousand three hundred and ninety-six zloty 00/100) (hereinafter "the Price").

   The transfer of ownership of the Shares will be made upon:

2. signature by the Parties of a declaration confirming the transfer of ownership of the Shares from the Seller to the Buyer, and

3. subject to a failure by the Agricultural Property Agency, acting on behalf of the State Treasury (hereinafter "the APA"), to exercise its pre-emptive right to buy the Shares arising from Art. 3a. 1 of the Act on Shaping the Agricultural System of 11 April 2003 (Journal of Laws of 2012, Item 803, as amended),

4. payment of the Price by AGRO DUDA.

Payment of the Price must be made within 5 working days from the date of notification of the Buyer by the Seller on the receipt of the APA's declaration on a failure to exercise the pre-emptive right or the ineffective expiry of the statutory deadline for exercising the pre-emptive right by the APA. Failure to pay the Price within the above term will result in the Seller's right to renounce the Agreement for reasons attributable to the Buyer within 30 days of the expiry of the above term.

According to the Agreement, the Buyer agrees that in the period of 48 months from the Closing Date (the date at which, at first, the Seller will provide confirmation of crediting the Seller's account with the amount of the Price to the Buyer, and then, the Parties will sign the declaration as referred to in Point 2 above) (hereinafter "the Investment Period"), Ferma-Pol will realize the investments in the Tangible Fixed Assets of Ferma-Pol in the amount not lower than PLN 10,000,000 (ten million zloty 00/100) (hereinafter "the Guaranteed Investments").

In case of non-performance or improper performance of the above obligation, the Buyer shall pay to Seller the guaranteed amount representing 100% of the difference between the amount of the Guaranteed Investments and the value of the investments made.

Under the provisions of the Agreement, the Buyer agrees, within 48 months from the Closing Date ("The Guaranteed Term"), to retain ownership of the Shares and not to encumber them under any legal title, unless the Seller agrees thereto in writing, on pain of payment to the Seller of the guarantee amount of 100% of the Share multiplied by the number of shares that have been sold or encumbered.

Moreover, the Buyer agrees that - in the Guaranteed Term - Ferma-Pol:

1. will not cease its core business, except as provided in the Agreement,

2. will not be liquidated or dissolved, merged or divided or transformed, except as provided in the Agreement,

3. will not dispose of the whole or part of the assets, so that Ferma-Pol would be deprived of the opportunity to conduct its core business,

4. will not take any other actions or make omissions which would prevent FERMA-POL from conducting its core business,

5. will not make any other enterprise, which - in one or more transactions - would constitute a disposition of the Ferma-Pol enterprise or its organized part used for conducting the core business of FERMA-POL,

   and also that

6. the Buyer will not decrease the share capital of FERMA-POL, unless the Seller agrees thereto in writing.

In case of non-performance or improper performance of the obligations specified in Points 1-5 above, the Buyer will pay the guarantee amount equal to 100% of Price to the Seller. In case of non- performance or improper performance of the obligation specified in Point 6 above, the Buyer will pay - to the Seller - the guarantee amount equal to 100% of the amount by which the share capital of Ferma-Pol was decreased.

Payment of the above specified guarantee amounts, and any statutory interest for delay in their payment, will be secured by the Buyer's submission to the debt collection procedure directly from the notarial deed in accordance with Art. 777 § 1 Point 5 of the Civil Procedure Code.