Company Articles of Association

Articles of Association

§1
Company Name, Registered Office, Duration, Fiscal Year, and Announcements
(1) The company operates under the name
European Breeders Trust AG
(2) Its registered office is in 87 480 Weitnau. The board of directors is authorized to choose an administrative office within the Federal Republic of Germany that differs from the registered office.
(3) The company is established for an indefinite duration.
(4) The fiscal year runs from January 1st to December 31st each year. The first fiscal year is a short fiscal year, which begins with the registration of the company in the commercial register and ends on December 31st of the registration year.
(5) Mandatory announcements of the company are made exclusively in the electronic Federal Gazette. Voluntary announcements may instead be made on the company's website.
§2
Object of the Company
(1) The object of the company includes
- The promotion and improvement of the buying and selling situation (market access) and the breeding of Arabian horses and the related services for the shareholders.
- Conducting auctions for the purpose of selling Arabian horses.
- Mediating buyers and sellers for Arabian horses.
- Negotiating purchases of all goods needed for the keeping of horses for the shareholders.
- Organizing and distributing breeding rights (marketing purchased stallions, purchased breeding rights, or leased stallions) worldwide and negotiating their prices.
- Organizing training measures for breeders of Arabian horses in the countries listed in §4 (2).
- Buying and selling Arabian horses, but without breeding activities by the company.
- Creating optimal conditions for the preparation and presentation of Arabian horses at breeding shows for the shareholders.
(2) The company is entitled to conduct all transactions and measures that appear suitable to serve the object of the company. For this purpose, it may establish branches, found other companies domestically and internationally, manage such companies uniformly, or limit itself to managing its investments. It may spin off its operations in whole or in part into affiliated companies.

Page 1 Articles of Association European Breeders Trust AG

§3
Share Capital, Shares
(1) The share capital of the company amounts to
400,000 EURO (four hundred thousand euros)
and is divided into 4,000 shares
and is split into:
- 3,040 registered ordinary shares with voting rights and
- 960 registered preference shares without voting rights
The preference shares are structured with a profit preference according to § 11 No. 1 of these articles of association.
(2) The form of the share certificates and the profit share and renewal coupons are determined by the board of directors. There is no entitlement to individual certification of shares. Collective certificates or a global certificate and a multiple certificate over all shares held by a shareholder can be issued.
(3) A transfer in the share register does not take place in the last six days before the general meeting.
(4) The board of directors is authorized for five years from the registration of the company in the commercial register to increase the share capital by issuing new shares against cash or non-cash contributions once or multiple times, but in total by no more than 200,000.00 euros in registered shares (authorized capital). The board of directors decides on an exclusion of subscription rights with the approval of the supervisory board. The Supervisory Board is
authorized to amend the wording of the articles of association according to the scope of the
capital increase from authorized capital. The issuance of
preference shares within the legal framework is expressly permitted. These may be
equivalent to existing preference shares but not precede them.
(5) In the event of a capital increase, the entitlement to profits of new shares for the
fiscal year in which the capital increase is carried out can be determined differently from §60
paragraph 2 AktG.
§4
Share register, transfer of shares
Only those who are registered as such in the share register are considered as holders of registered shares in relation to the company. Registered shares can only be transferred with the consent of the
company (restricted registered shares). The consent is granted by the
board with a simple majority. It must be granted if a shareholder transfers
to their spouse or legitimate descendants. In the case of
transfers to other persons, consent can only be refused for an important
reason. The following important reasons in this sense are
in particular if

Page 2 Articles of Association European Breeders Trust AG

 

(1) - through the acquisition, a shareholder would own more than 15% of the registered ordinary shares.
(2) - the ordinary shareholder is not a citizen of one of the following countries.
Portugal, Spain, France, Andorra, Monaco, Corsica, Malta, Italy, Switzerland,
Austria, Slovenia, Croatia, Bosnia and Herzegovina, Montenegro, Serbia, Kosovo
Albania, Macedonia, Greece, Turkey, Bulgaria, Romania, Moldova
Hungary, Slovakia, Czech Republic, Ukraine, Belarus, Poland, Germany, Belgium
Netherlands, United Kingdom, Ireland, Denmark, Sweden, Norway
Finland, Lithuania, Latvia, Estonia, Liechtenstein, Luxembourg, Iceland, San Marino
(3) - the shareholder cannot prove to the board at the time of
share acquisition an affiliation with the Arabian horse (active breeder
of at least 3 foals in the past 3 years).
(4) - the total participation of a shareholder does not include at least 25 ordinary and/or
preference shares.
§5
Corporate bodies
The corporate bodies are:
1. The Board
2. The Supervisory Board
3. The General Meeting
§6
Board/Representation
(1) The Board consists of one or more natural persons. Only those who are citizens of one of the countries in § 4 (2) can become board members. The number of
board members is determined by the Supervisory Board. If there are several board members,
the Supervisory Board appoints a chairman of the board. If only one board member
is appointed, they represent the company alone.
(2) Board members can only be appointed in compliance with the provisions of the AktG. The board represents the company in and out of court.
(3) The board members should generally be appointed for a term of three years.
(4) Each board member is always authorized to represent alone. The Supervisory Board can
determine that individual or all board members are only
authorized to represent jointly, whether with other board members and/or
procurators. The Supervisory Board can determine that individual or all

Page 3 Articles of Association European Breeders Trust AG

 

board members are exempt from the prohibition of multiple representation of § 181 Alt. 2 BGB.
(5) The Supervisory Board can allow board members to be managing directors and/or
board members of another or affiliated company (§ 15 AktG), to which each board is generally subject. A remuneration has he or do not have to pay for this.
(6) If the board consists of several people, the board can establish rules of procedure, which require the approval (=subsequent consent) of the supervisory board to become effective.
(7) In the event that the board consists of two or more people, the following applies to management: Decisions are made by a simple majority of the board members present, unless the law requires a larger majority. If decisions are to be made by a simple majority, the chairman's vote is decisive in the event of a tie, if a chairman is appointed. Decisions can also be made in writing, by telegraph, fax, email, or verbally.
(8) The board's remuneration is determined by the supervisory board in the employment contract. These should, like the supervisory board's remuneration, primarily depend on the company's earnings.
(9) The following transactions require the approval of the supervisory board to be effective internally:
a) Investments exceeding €25,000 individually.
b) Establishment, acquisition, or sale of business premises or branches.
c) Conclusion of corporate contracts or contracts that grant a share in the company's earnings in any form.
d) Taking or granting financial loans if the loan amount exceeds €25,000.
e) Acquisition, sale, or encumbrance of real estate and similar rights exceeding €25,000 individually.
f) Conclusion, modification, or termination of rental, lease, or license agreements if the annual fee exceeds €10,000 net.
g) The supervisory board can expand the scope and amount of transactions requiring approval in the board's rules of procedure.
§7
Supervisory Board
(1) The supervisory board consists of seven members. The general meeting can decide on a different number. Only those who are citizens of one of the countries in § 4 (2) can be a member of the supervisory board.
(2) The election is for the period until the end of the general meeting that decides on the discharge for the third fiscal year. The fiscal year in which the election takes place is not counted. The general meeting can decide on a shorter term of office during the election.
(3) Substitute members can be elected for a specific or several supervisory board members at the same time as the ordinary supervisory board members. The substitute member joins the supervisory board if the supervisory board member for whom it was elected as a substitute leaves the supervisory board before the end of the term. The supervisory board office of the substitute member ends with the conclusion of the next general meeting following their appointment. If there is no substitute election at the next general meeting, the term is extended until the end of the term of the prematurely departed supervisory board member. Substitute elections are held for the remainder of the term of the departed member.
(4) Each supervisory board member can resign from their office without an important reason by written declaration to the board. A notice period of three months must be observed. The right to resign for an important reason remains unaffected.
(5) The supervisory board members can be removed from office before the end of their term by a simple majority vote of the voting capital. comprehensive resolution of the
general meeting from their office.
(6) If a member elected by the general meeting leaves the supervisory board before the end of their
term, a new election should be held for this member at the next
general meeting. The term of office of the newly
elected member applies for the remainder of the term of the departing member.
(7) The supervisory board elects, following the general meeting in which the
supervisory board members have been elected, in a meeting held without special convocation,
from among its members a chairman and a deputy
for the upcoming term. If the chairman or his deputy
leaves office prematurely, the supervisory board must promptly hold a new election for the
remainder of the term of the departing member.
(8) Resolutions of the supervisory board are adopted in meetings convened by the
chairman with a notice period of ten days between sending the invitation and
the day of the meeting. The day of sending the invitation and the day of the meeting are not included in the calculation of the period. The
chairman may shorten the period and convene the meeting verbally, by telephone, telegraphically, by
fax, or by email if no supervisory board member objects to this procedure.
(9) The supervisory board has a quorum if all members participate in the resolution, provided the
supervisory board consists of three members, otherwise at least three and
at least half of the members participate. A member also participates in the resolution
if they abstain from voting. Absent or prevented supervisory board members can participate in the voting of the
supervisory board by submitting written votes. For this purpose, the absent or prevented
supervisory board member must authorize a person, who does not have to be a member of the supervisory board, for
the specific meeting in text form (written, by email, or fax).
Proxy voting is not possible. Under the conditions mentioned in sentence 3,
persons can participate in meetings of the supervisory board

Page 5 Articles of Association European Breeders Trust AG

 

to deliver formulated declarations and motions of the absent or
prevented supervisory board members.
(10) Resolutions can be adopted, if all supervisory board members agree and no
supervisory board member objects to the resolution, also verbally,
by telephone, in writing, by fax, or email or by other
electronic means. In any case, minutes of the adopted resolutions
must be prepared, which must be signed by the chair of the respective meeting.
(11) Minutes must be prepared of the negotiations and resolutions of the supervisory board,
which must be signed by the chairman of the meeting or, in the case of votes outside
meetings, by the leader of the vote.
(12) The chairman of the supervisory board and, in the event of his prevention, his
deputy, are authorized to make necessary declarations of intent on behalf of the supervisory board. He is the permanent representative of the supervisory board
towards third parties as well as towards the executive board.
(13) The supervisory board can form one or more committees from among its members according to §
107 para. 3 AktG, as far as legally permissible.
(14) The supervisory board should adopt rules of procedure for its activities. These
are independent of the term of office of the supervisory board members until the supervisory board adopts new rules of procedure. valid.
§8
Remuneration of the Supervisory Board
(1) Each member of the Supervisory Board shall receive remuneration for the past financial year, as determined by the General Meeting, depending on the company's economic situation. The Chairman of the Board of Management shall propose a resolution to the General Meeting for this purpose and enter the resulting amount as a provision in the balance sheet. The remunerations may vary from one Supervisory Board member to another.
(2) In addition, each member of the Supervisory Board shall receive an annual fixed amount of 500 euros. The Chairman receives double this amount, and his deputy receives one and a half times this amount.
(3) Retiring or newly elected Supervisory Board members shall receive only the portion of the above remuneration corresponding to the duration of their membership on the Supervisory Board in the relevant financial year. This also applies to substitute members. For Supervisory Board members who are taxable in Germany, VAT will be paid additionally if they are entitled to it. For Supervisory Board members taxable in other countries, additional VAT payment is possible only if a VAT ID number can be provided.
(4) The company does not reimburse any cash expenses such as travel or other transportation costs, nor accommodation costs and expenses, as these are included in the above remunerations.

Page 6 Articles of Association European Breeders Trust AG

 

§9
General Meeting
(1) The General Meeting generally takes place at the company's registered office. However, if the Supervisory Board decides to hold it at another location, this is possible within Germany within a radius of 150 km from the company's registered office, as well as at a German stock exchange location or within a radius of 150 km around it, or in Paris, Milan, Monaco, or within a radius of 150 km to the aforementioned cities.
(2) It is convened by the Board of Management with a notice period of at least 30 days between the sending of the invitation and the day of the General Meeting (§123 AktG)
(3) The invitation can be sent by registered letter if all shareholders are known to the company. If an email address of the shareholders is known, the invitation can also be sent by email. Otherwise, the invitation is made by publication in the electronic Federal Gazette. The invitation can be informal and without notice if all shareholders participate in or are represented at the General Meeting and no shareholder objects to the procedure.
(4) Resolutions can be passed, insofar as this is legally permissible and if all shareholders vote in favor and no shareholder objects to the resolution, also orally, by telephone, by telex, by fax or email, or by other electronic media. In any case, a record of such resolutions must be made, which must be signed by the chairman of the respective meeting.
(5) A shareholder may be represented at the General Meeting, particularly for the exercise of voting rights, by an authorized representative in writing, but only if the representative is also a shareholder or a person obligated to professional confidentiality.
(6) In the General Meeting, the Chairman of the Supervisory Board presides. In the event of his inability to attend, the members of the Supervisory Board elected by the General Meeting shall elect the chairman from among themselves by a simple majority. If no member elected by the General Meeting is present or willing to take over the If the chairperson is not ready at the general meeting, the oldest shareholder by age opens the meeting and allows it to elect a chairperson. The chairperson of the general meeting determines the method of voting and, unless another resolution is adopted by the general meeting, the order in which the discussion and resolution on the items on the agenda are to take place.
(7) Resolutions of the general meeting require a simple majority of the votes cast, unless otherwise stipulated by law or these articles of association.
(8) Resolutions of the general meeting on the dissolution of the company, on the merger with another company, a change in the company's purpose, as well as on the transfer of the company's assets require a majority of 75% of the total voting share capital of the company.

Page 7 Articles of Association European Breeders Trust AG

 

(9) The general meeting is quorate if 51% of the share capital is represented. If this is not the case, another general meeting with the same agenda must be convened with a notice period of 30 days. This is then quorate regardless of the number of voting rights present. This must be indicated in the invitation.
(10) An extraordinary general meeting must be convened if a resolution of the general meeting is required by law or by the articles of association or if the welfare of the company necessitates a convening. Furthermore, an extraordinary general meeting must be convened if shareholders whose share alone or together corresponds to at least half of the share capital request this in writing, stating the purpose and reasons.
(11) For the participation and exercise of voting rights by registered shareholders entered in the company's share register, their registration for the meeting with the company by the last day of the deposit period is sufficient.
(12) Each no-par value share issued as a common share grants one vote. The voting right begins when the statutory minimum contribution has been made on the share.
(13) Preferred shares only grant a vote in legally mandatory cases. If preferred shares then have a voting right, paragraph 12 applies accordingly.
(14) The general meeting resolves only within the scope of the competence established by law and the articles of association. It can only decide on matters of management if the board of directors requests it.
(15) If a simple majority of votes is not achieved in the first ballot, a narrower election takes place among the persons who received the two highest numbers of votes. In the narrower election, the highest number of votes decides, in the event of a tie, the lot drawn by the chairperson decides.
§10
Annual Financial Statements
(1) The board of directors must prepare the annual financial statements and the management report (situation report) for the past financial year within the statutory period and submit them to the auditor, if one must be appointed. After receiving the audit report, the annual financial statements, the management report, and the audit report must be submitted to the supervisory board without delay. At the same time, the board of directors must submit to the supervisory board the proposal it intends to make to the general meeting for the use of the balance sheet profit. The supervisory board must examine these documents.
(2) After receiving the report of the supervisory board on the result of its examination, the board of directors must immediately convene the ordinary general meeting, which has to take place within the first eight months of each fiscal year. It decides on the discharge of the management board and the supervisory board, as well as on the use of the balance sheet profit and elects the auditor, if legally required.

Page 8 Articles of Association European Breeders Trust AG

 

(3) The annual financial statements are determined according to the legal regulations. .
(4) If the management board and supervisory board determine the annual financial statements, they are not authorized to allocate a portion of the annual surplus to reserves other than those prescribed by law. The decision on the formation of other reserves is reserved solely for the general meeting.
(5) The general meeting decides on the proposal of the management board regarding the use of the balance sheet profit resulting from the determined annual financial statements.
§ 11
Profit Distribution
(1) From the balance sheet profit designated for distribution according to the resolution on the use of profits by the general meeting, the preferred shareholders receive a profit share of EUR 3.00 per preferred share (advance dividend). If the balance sheet profit designated for distribution is not sufficient to pay the preferred amount, the arrears must first be paid from the balance sheet profit of the next year without interest, and then the full preferred amount of that year must be distributed to the preferred shares. In the case of arrears of preferred amounts from several years, the arrears are to be paid from the balance sheet profit in the order of their occurrence, and then the preferred amount of that year is to be paid.
(2) From the balance sheet profit remaining after distribution according to paragraph 1 and designated for distribution, the ordinary shareholders receive a profit share of up to EUR 1.00 per ordinary share.
(3) The balance sheet profit remaining after distribution according to paragraphs 1 and 2 and designated for distribution is evenly distributed among the ordinary and preferred shareholders according to the number of shares.
(4) In the event of the dissolution of the company, the assets remaining after settling the liabilities are evenly distributed among the ordinary and preferred shareholders according to the number of shares.
(5) The statutory reserve according to § 150 AktG is set at EUR 100,000. It is to be built according to § 150 paragraph 2 AktG, but at least an amount of EUR 33,333 must be allocated annually, but at most the entire profit of a year.
(6) If the annual profit is distributed to the shareholders, it must generally be done in proportion to the shareholders' participation in the company. However, the annual profit can be distributed differently without regard to this proportion to one, several, or all shareholders, provided the general meeting agrees. In addition to a simple majority, the consent of all shareholders disadvantaged by the disproportionate dividend is required.
§12
Compulsory Redemption, Compensation

Page 9 Articles of Association European Breeders Trust AG

 

(1) Each shareholder must tolerate the compulsory redemption of their shares through capital reduction in the following cases:
(a) insolvency proceedings are opened over the assets of a shareholder, or the opening is denied due to lack of assets;
(b) the shares are pledged, or otherwise enforced against, and the pledge/enforcement measures are not lifted within a period of no more than two months;
(c) the shareholder must affirm the accuracy of their asset list according to § 807 ZPO under oath;
(d) a shareholder roughly endangers the economic goals of the corporation through
breach of confidentiality or similar actions.
(2) The redemption must occur with compensation. The compensation payment corresponds
to the proportional equity of the departing shareholder. The general meeting
may decide on a higher compensation.
(3) The compensation balance is to be paid in two installments, with the first installment
six months after the redemption resolution, and the second installment twelve months after
the redemption resolution. The compensation balance is not to
be interest-bearing until maturity. Additionally, the regulations on capital reduction must be observed.
(4) A departing shareholder has no claim against the company for
indemnification from any liability. He may not demand securities for this,
nor for the compensation balance.
(5) The redemption is resolved by the general meeting with at least 75% of
the votes cast; the affected shareholder has no voting rights in this matter.
(6) The general meeting may decide that within the permissible limits under the German Stock Corporation Act (AktG), instead of redemption through capital reduction, a redemption
for the acquisition of own shares by the company shall occur.
§ 13
Formation Expenses
The formation expenses (notary, court, as well as attorney and
tax advisor costs, translator/interpreter costs, external formation auditor) will
be borne by the company up to a total amount of 15,000 EUR.
§ 14
Severability Clause
If individual provisions of these articles of association are entirely or partially ineffective,
the validity of the articles of association shall not be affected thereby. The
ineffective, void, or contestable provision is to be reinterpreted or amended or supplemented by
amendment of the articles so that the purpose pursued thereby is achieved
as far as possible within the framework of the legal provisions. The same
applies in the presence of gaps.
Page 10 Articles of Association European Breeders Trust AG