SZABÓ KELEMEN & PARTNERS ATTORNEYS H-1132 Budapest, Váci út 20.

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1 SZABÓ KELEMEN & PARTNERS ATTORNEYS H-1132 Budapest, Váci út 20. Hungary Phone: Fax: Re: Act LXI of 2007 on the Modification of Act V of 2006 on Public Company Information, Company Registration and Winding-up Proceedings Dear Client, Act LXI of 2007 on the Modification of Act V of 2006 on Public Company Information, Company Registration and Winding-up Proceedings (hereinafter: the Act ) was published on June 15, The Act entered into force, with the exceptions determined therein, on September 1, 2007 and it amended in addition to Act V of 2006 on Public Company Information, Company Registration and Winding-up Proceedings (the Company Registration Act ), inter alia Act IV of 2006 on Companies (the Companies Act ), Act XLIX of 1991 on Bankruptcy Proceedings, Liquidation Proceedings and Voluntary Dissolution (the Bankruptcy Act ) and Act XCIII of 1990 on Duties (the Act on Duties ). In our present summary, we only indicate the commencement date separately where it is not September 1, 2007 (but June 16, 2007, January 1, 2008 or July 1, 2008). Pursuant to section 28(7) of the Act, the provisions of the Company Registration Act amended by the Act must be applied in company registration procedures initiated after their commencement. Companies already registered in the Companies Register are obliged to report their data not earlier shown in the Companies Register in their first application for the registration of changes following the commencement date with the proviso that if the document serving for the verification of data has been already submitted to the Court of Registration, this document does not have to be filed again. We highlighted those provisions in red concerning which companies must take action most frequently. In our present summary, we will acquaint you with the most significant changes introduced by the Act, however, at your request, we are ready to give you more detailed information. Please note that our present summary contains only information of a general nature. Your company data and corporate statutes may be actually reviewed on the basis of our summary and, if necessary, after discussions conducted with us and based on your instructions. Naturally, we are pleased to be of assistance to you. Please also note that our present summary does not touch upon an analysis of the individual modifications, or the exploration and presentation of consequences. We are pleased to give further information concerning these consequences in the course of our future discussions, in the knowledge of the changes you wish to implement. Yours sincerely, Szabó Kelemen and Partners Attorneys

2 SZABÓ KELEMEN & PARTNERS ATTORNEYS 2 Annex no. 1: The amendments of the Companies Act and the closely-connected amendments to other legislation 11(4) 12(1)b) and 208(2)g) 20(2), 93(2), 147(1) 242(1) and 302 e) 22(2),(3) and 334(1) 114(1) and 167(3) Foundation of a Zrt. 1 standard form by a Mother s maiden name of a natural person Passing resolutions without holding a meeting even in relation to the report according to the Act on Accounting Employed in the capacity of executive officers Founding a Kft. with an initial capital of five hundred thousand forints From now on, not only a Kkt. 2, Bt. 3 and Kft. 4, but also a Zrt. may be founded by a standard form articles of association. In this case, the articles of association may contain only what is contained in the standard form. From now on, it will not be necessary to indicate the mother s maiden name of a natural person member and the executive officer in the articles of association, but, on the basis of section 30(1) of the Company Registration Act, the Companies Register must contain it in the future, as well (i.e. these data must be reported in the application for final registration/registration of changes, and the Court of Registration may prescribe the filing of documentary evidence in connection therewith). Due to the modification of the Companies Act, it will become possible for the quotaholders meeting/general meeting to pass its resolutions without holding a meeting, but in the case of a Kft. and Zrt., the precondition of this is that the articles of association should (i) expressly provide for this possibility and (ii) determine the matters in which the members may vote without holding a meeting in writing or by using any other instrument suitable for verifying legal declarations made during the passing of the resolutions. In the case of a Nyrt. 5, however, the shareholders may not pass any resolutions without holding a meeting and it was expressly determined by way of the amendment of the Companies Act that it belongs to the exclusive competence of the general meeting also in the case of a Nyrt. to approve the report according to the Act on Accounting. It has become possible again that executive officers carry out their duties in employment relationship, however, the question whether the employer s rights may only be exercised by the highest organ of the company has not been regulated by the amended Companies Act contrary to the rules of the old Companies Act. The new provisions do not exclude the fact that even members of the Boards of Directors of a company limited by shares may carry out their duties in employment relationship. As a consequence of the modification, a Kft. may even be founded with an initial capital of HUF 500,000. In the case of a one-member Kft., it is sufficient to make available to the company a smaller proportion of the cash contribution than determined by the general rule if the deed of foundation provides in such a way (instead of the half of the total cash contribution, only HUF 100,000) before reporting to the Court of Registration. 1 Private company limited by shares 2 General partnership 3 Limited partnership 4 Limited liability companies 5 Public company limited by shares

3 SZABÓ KELEMEN & PARTNERS ATTORNEYS 3 115(1) and section 30(5) of the Company Registration Act 131(3) 207(1) and 288(1) 250(2), 251 and 267(2) 284(1) Opening a bank account after the registration of a Kft. Statement of the managing director becomes obligatory prior to a disbursement to the members to the debit of the equity Founding a Zrt. with an initial capital of five million forints Pre-condition for the capital increase/decrease to take effect, and preferential rights in the case of a capital increase of a Zrt. 6 Providing a capital contribution prior to the submission of the application for registering a single-member Zrt. In the case of a Kft., cash contribution does not necessarily have to be fulfilled to the company s bank account any more, it is sufficient to pay in to the benefit of the company, the occurrence of which may be verified by a declaration of the managing director countersigned by an attorney or incorporated in a public deed by a notary public. Nevertheless, the managing director shall be obliged to open the company s bank account also, within eight days after the registration of the company and to pay in the account the amount of the cash contribution made available. In the case of any disbursement made to the members on account of their membership to the debit of the equity, it is not only required by a provision of the articles of association, but it is obligatory for the managing director in each case to issue a statement declaring that such disbursement shall not jeopardize the company s solvency or creditors interests and to submit this statement to the Court of Registration within 30 days (free of duty or fee payment obligation). It became possible to found a Zrt. with an initial capital of only five million forints, whereas the initial capital of a Nyrt. may still not be less than twenty million forints. By virtue of these provisions entering into force, it shall be regulated in the articles of association in respect of the capital increase or decrease of a Zrt., whether the express consent of holders of the affected types or classes of shares shall qualify as a pre-condition for the capital increase to take effect. In the case of a capital decrease, it is also possible to stipulate rules on express consent in the articles of association. It shall also be regulated in the articles of association of a Zrt., whether in the case of a capital increase by way of a cash contribution, the shareholders holding convertible bonds and bonds with subscription rights should be provided with preferential rights for the subscription of shares. The relevant rules applicable for a Nyrt. have not been modified by the Act. A capital contribution to a single-member Zrt. does not have to be fully provided prior to the submission of the application for company registration, only the in-kind contribution must be made fully available. It is however not clearly determined by the modification enacted by the Act whether the cash contribution does not have to be paid in at all i.e. not even to the extent determined by section 210(1)a) of the Companies Act prior to the submission of the application for the company registration. 6 These provisions entered into force on June 16, 2007.

4 SZABÓ KELEMEN & PARTNERS ATTORNEYS e) 336(2) and (3) Approval of the annual report according to the Accounting Act at a Nyrt. The deadline for harmonizing the articles of association with the Companies Act has been changed to July 1, Due to the modification of the Companies Act it has been specified that the approval of the annual report according to the Accounting Act shall fall within the exclusive competence of the general meeting of a Nyrt. According to this modification, the final deadline for harmonizing the articles of association with the Companies Act has been changed to July 1, 2008 instead of September 1, 2007, furthermore the reference to the first meeting of the supreme body has been omitted (i.e. stating that it depends on the decision of the supreme body at what time the company amends its articles of association before July 1, 2008 in order to comply with the Companies Act). If there is no need to amend the articles of association, the company is entitled, without paying any duty or publication fee, to declare this to the court of registration. In the absence of such a declaration or the amendment of the articles of association in compliance with the Companies Act, companies already registered in the Companies Register before July 1, 2006 (as well as companies whose registration was pending at that date) must apply the Companies Act from July 1, This provision entered into force on June 16, 2007.

5 SZABÓ KELEMEN & PARTNERS ATTORNEYS 5 Annex no. 2: The most important amendments of the Company Registration Act and the closely-connected amendments to other legislation 3(1) and (2) 6(2), (3) and (4) 7(2) 7(2) Company name without an attachment referring to the main activity Modified rules of the reservation of name The registered office and the place of central administration may be different The concept of business establishment/branch has changed: the place of pursuing the activity differing from the registered office does not have to be obligatorily registered in the Companies Register as business establishment/branch As opposed to earlier regulations, according to the new provisions of the Company Registration Act, the company name must only contain the lead word and the name of the company form obligatorily, thus adding a reference to the main activity to the company name is merely a possibility. An application to reserve a name may not be submitted on paper any more, only electronically. At the same time, the deadline open for the Court of Registration to check the name has decreased from 3 working days to 1 working day. Furthermore, the reservation of a name shall be automatically extended by eight days, on one occasion, past the sixty-day original deadline, if the applicant s application for registration was refused and re-submitted within eight days. The registered office shall not automatically qualify as the place of central administration; these two may be different according to the new regulations: by virtue of law, the registered office shall only qualify automatically as the company s main office (i.e. the company s mailing address, where all business and official documents are received, filed, safeguarded and archived, and where the obligations set out in other specific legislation for corporate headquarters are satisfied). Accordingly, it must be regulated in the articles of association where the central administration is located, and whether it is the same as the registered office. If the company s registered office and main office of central administration are not the same, the office of central administration shall be indicated in the articles of association and in the Companies Register. The place of pursuing the activity differing from the registered office shall not automatically qualify as business establishment/branch: the company s business establishment/branch is the place of pursuing the activity, fixed in the articles of association as a permanent and independent business (operational) establishment that is located in a venue other than the company s registered office. Accordingly, it is not obligatory to have a place for pursuing the activity differing from the company s registered office registered as a business establishment/branch with the proviso that the definition of the business establishment in taxation law remains unchanged, in respect of which the rules of Act XCII of 2003 on the Rules of Taxation (the Act on the Rules of Taxation ) remain applicable.

6 SZABÓ KELEMEN & PARTNERS ATTORNEYS 6 7/A and sections 25/A and 133/A of the Attorneys Act 7/B 9 (1) and point 7. c) of Schedule No. I of the Company Registration Act Registered seat provided by an attorney-at-law (attorneys office) Principally engaging in activities in any Member State of the European Union Using a signature sample countersigned by an attorney instead of a specimen of signature exclusively in the company registration procedure As a result of the modification, the Company Registration Act expressly provides for the fact that the registered office of the attorney-at-law (attorneys office) whom the company has engaged in accordance with other specific legislation to provide for receiving, filing, safeguarding and archiving the business and official documents of the company, where the obligations set out in other specific legislation for corporate headquarters are satisfied, such as in particular to comply with forced measures of the authorities relating to company headquarters and company documents (headquarters services) may also be registered as the company s registered office. In connection with this change, Act XI of 1998 on Attorneys (the Attorneys Act ) has also been modified, thus the attorney-at-law (attorneys office) shall be required to keep the company s documents and any assets of the company separate from the documents and other assets of itself and all other clients. IRM Decree no. 49/2007 (XI. 14.) issued by the minister in charge of the judicial system, as well as the bars, are authorized to establish more detailed regulations concerning headquarters services. As a consequence of the modification introduced by the Act, a company registered in the Companies Register according to the Company Registration Act may principally engage in activities in any Member State of the European Union, or may relocate to any Member State of the European Union as the primary place of activity, even without changing its registered office, unless otherwise provided in other specific legislation. Instead of an authentic specimen of signature prepared by a notary public, a signature sample countersigned by an attorney may also be used in the registration procedure. The attorney shall be entitled to countersign the signature sample in the course of registration (registration of change) procedure only if he is appointed to draw up and countersign the company s articles of association or the amendment of the articles of association, and the signature sample is annexed to the application for registration (registration of change). According to the comments on this modification of the Act, based on this provision, the attorney is not entitled to countersign any signature sample apart from the registration procedure and is not entitled to issue any certified copies of the signature sample, either. No obligatory regulation is contained in section 9 regarding the fact that the authorized signatory should definitely have an authentic specimen of signature/ signature sample, and pursuant to the new wording of point 7 c) of Schedule No. I of the Company Registration Act the filing of this is not obligatory either, according to the main rule. Nevertheless it remains obligatory to submit the specimen of signature of the liquidator or the person in charge of dissolution.

7 SZABÓ KELEMEN & PARTNERS ATTORNEYS 7 9(4) and point 7.c) of Schedule No. I of the Company Registration Act 13(3)a) and 125(7) 20(1) and 125(7) 21/A and 25(1)e) 21/B, 24(1)e) and 29(2)h) Electronic certificate Since October 1, 2007, the company data are available electronically, as well From January 1, 2008, the Companies Gazette will be published on a website and may be inspected free of charge Publishing notices on the company s website instead of the Companies Gazette Publishing the activity permit instead of having it registered in the Companies Register The Companies Register may contain an indication of the certificate of the authorized signatory s electronic signature registration. An electronic signature registered in the Companies Register with its certificate shall be construed as the authorized signatory s official signature. Pursuant to the new wording of point 7. c) of Schedule No. I of the Company Registration Act, where an electronic signature is used, the electronic signature registration certificate must be filed with the Court of Registration. Since October 1, 2007, any data (current or deleted) from the Companies Register, and any data contained in an application for registration (registration of change) which are recorded electronically, pending registration, the company documents submitted by way of electronic means or converted into electronic format furthermore the annual reports according to the Accounting Act filed electronically or converted into electronic format are available both on the Government website and the website of the company information service. The Companies Gazette has been published electronically since January 1, 2008 on a website maintained for this purpose, providing the possibility to inspect and download individual issues of the Companies Gazette free of charge. In order to obtain information on the public data published in the Companies Gazette by groups (e.g. with the help of a search engine), however, a fee must be paid. By virtue of the new rules, where a company is required by the Companies Act to publish a notice in the Companies Gazette, the company shall have the option to satisfy this obligation by publishing the notice on its official website, and is entitled to verify publication by indicating the website address where the notice was displayed. Upon publication of a notice on the website, the company shall also send the same information to known creditors by way of electronic means, if the creditor provided an electronic address. If a company opted to display its notices on its official website instead of publishing them in the Companies Gazette, this shall be so indicated in the Companies Register along with the company s electronic address (website). Furthermore the company affected shall keep its website operational at all times and display notices on the website with facilities to verify the date of publication. The detailed regulations for website publication are laid down in IRM Decree no. 50/2007 (XI. 14.). From now on, instead of having the data of the authority permit necessary for performing a business activity registered in the Companies Register, it is sufficient to publish the permit in the Companies Gazette or on the webpage of the company, at the same time as the commencement of the activity at the latest. This provision shall not apply as pertaining to foundation permits, which still have to be filed with the Court of Registration.

8 SZABÓ KELEMEN & PARTNERS ATTORNEYS 8 23(1) and 23/A 25(1)q) and (4) 25(1) r)-t) 26(1)m) and (3) Keeping records of company data in foreign language Reporting obligation in the case of companies preparing consolidated annual reports Additional reporting obligations Indicating the piercing of a member s limited liability in the Companies Register Pursuant to the new rules, the names of the various fields in the company records may be indicated in the English, German, French and Russian languages as well. The company records and company documents may however be kept in any official language of the European Union (i.e. also in languages other than those which can be used in respect of the various fields of the company records), provided that the company has filed a certified Hungarian translation of the company records and documents prepared by a person duly authorized under other specific legislation into the language selected, enclosed with the application for registration. With regard to the fact that we have no knowledge of any specific legislation concerning the certification of such translations, a certified translation may be prepared according to the general rules, pursuant to section 5 of MT Decree No. 24/1986. (VI. 26.) on Professional Translation and Interpreting by the National Agency for Translation and Certified Translation, as well as according to IM Decree No. 7/1986. (VI. 26.) and section 138(1) of Act XLI of 1991 on Notaries Public by a notary public. If a company is a parent company required to prepare a consolidated annual report, or a subsidiary included in such a consolidated annual report, this fact furthermore the name, address and registration number of all parent companies and subsidiaries involved, for foreign companies also including the registration number and name of the relevant foreign authority must be contained in the Companies Register. The Court of Registration shall ex officio enter this information relying on the notice provided by the resident parent company or by the resident subsidiary of a nonresident parent company under the records of the other resident companies affected. The notice shall be filed simultaneously with the submission and publication of the consolidated annual report according to the Company Registration Act. The Companies Register must contain for all companies, when necessary, (i) the authorized signatories electronic signature registration certificates; (ii) the foreign currency in which the company s subscribed capital is denominated, where applicable; and (iii) the balance sheet date of the company s financial year, if different from the calendar year. Accordingly, the above must be recorded in the Companies Register. In the future, it shall also be recorded in the Companies Register for all companies upon receiving notice from the proceeding court ex officio if an authorized representative of the company or any member with a qualifying holding is to assume unlimited liability for the company s outstanding debts.

9 SZABÓ KELEMEN & PARTNERS ATTORNEYS 9 27(3)c), 61/A and section 267(1) of the Civil Code 30(2) 30(3) and (4) Establishing a lien on a quota Obligation to indicate the name of the foreign authority keeping records of a foreign organization in the Companies Register Determining the effective date of a change by the company In respect of a Kft., the Companies Register shall contain an indication if there is any lien established on a quota, the name (corporate name), home address (registered seat) and registration number of the lien holder. Since due to the modification of the Civil Code (according to which if the right or claim is substantiated by some official record, the lien on a quota shall be construed effective at the time when recorded), the lien on a quota shall be substantiated by recording it in the Companies Register. A lien on a quota shall be registered or cancelled upon the application for amendment of the member (obligor) or of the lien holder. For registration of the lien, an original copy of the lien agreement, or an abstract containing at least each contracting party s name (corporate name), home address (registered seat), a description of the pledged item, a lien clause, place and date of contracting, and the signature of the parties, furthermore, in connection with a request for registration submitted by the lien holder, the consent of the member (obligor) incorporated in a fully certified private document are also necessary. The Court of Registration shall examine the lien contract limited to the data and particulars of the Kft. and its member for compliance with the records of the Companies Register. The scope of the data necessary for identifying the nonnatural person members has been enlarged; thus in the case of foreign companies or other organizations, the registration number, together with the name of the relevant foreign authority, if available, shall also be indicated in the Companies Register. There were no clear regulations among the former provisions of the Company Registration Act concerning time when the changes in the company data would become effective (e.g. on the day of passing the resolution or on the day of registration). In the future, a company may determine, in the application for the registration of changes, the effective date of the change for most of the data to be registered, which, however, may not precede the effective date of the underlying resolution. Failing these, or if the supporting documents are contradictory, the effective date of change shall be the date when the underlying resolution was adopted. Although, according to the Company Registration Act, the date of the change may only be determined in the application for the registration of change, it is advisable to provide for this expressly in the underlying resolution in any event.

10 SZABÓ KELEMEN & PARTNERS ATTORNEYS 10 31(2) and (3) 16(1), 35(1), 36(1), (3), (5), 37(2), 39(2) and 39/A It is not obligatory any more to designate a delivery agent From July 1, 2008, electronic company registration proceedings shall become obligatory. In connection with this, the person designated to submit specific company documents may proceed in certain cases also without a legal representative. If the application for registration indicates a non-resident legal person or a business entity without legal personality, or the foreign natural person indicated in the application does not have a residence in Hungary, a delivery agent may be designated in the registration application, although this is not obligatory any more. Contrary to the former rules of the Company Registration Act, the delivery agent may also be a person registered in the Companies Register of the given company. If a delivery agent has not been designated, the court shall deliver documents addressed to a foreign person by way of publishing them in the Companies Gazette, whereupon they shall be considered served on the fifth day following publication. From July 1, 2008, electronic company registration proceedings shall become obligatory: the application for registration (registration of change) shall be submitted electronically instead of on paper and the court of registration shall, according to the main rule, keep all documents of a company in electronic format, however, printed copies may still be requested from the competent court of registration, and the legal representative shall still be obliged to produce any document originally printed on paper when requested by the court of registration for comparison with the respective electronic document if there is any doubt on the part of the court of registration. In connection with this, the Act modifies the regulations of the Company Registration Act and determines them more precisely and stipulates new rules in connection with electronic delivery and the electronic certificate issued on the submission of the application for company registration. Thus, among other things, the Act provides for sending the rulings of the Court of Registration on paper in the case of a failure of electronic data forwarding and for the situation where the submission of specific company documents is conferred by law upon a designated person, this person may discharge this obligation himself in the case of a company document prepared as an electronic document, by applying his qualified electronic signature (nevertheless if the company document must be converted into an electronic document, the legal representative shall be entitled to do this and to submit this electronic document to the Court of Registration).

11 SZABÓ KELEMEN & PARTNERS ATTORNEYS and the Schedules of the Company Registration Act; sections 130(1), (2), and section 28(6) of the Act Facilitating the rules on the simplified company registration proceedings and expanding its applicability as well as a more flexible determination of the contents of standard templates The standard templates constituting the Schedule of the Company Registration Act have been modified by the Act and replaced by new documents with provisions ensuring a larger scope of action for companies. Furthermore a standard template for the articles of association of a singleand several-member Zrt. has also been inserted. The number of documents to be attached to the application for registration has also been reduced. Accordingly, the following shall be submitted together with the application for registration: 1. articles of association drawn up in a standard template; 2. a statement required for establishing the tax number; 3. power of attorney for the legal representative, or verification of his right of representation; 4. proof of payment of the registration fee and publication charges in the amount specified by law; 5. for a Kft., list of quotaholders, where capital contributions are made jointly by several persons, also indicating the names of these persons and their representatives; 6. foundation permit, where foundation of the company is subject to prior official authorization by law; 7. in connection with a registration of change, the resolution of the supreme body, or the body vested with decision-making powers, underlying the amendment, furthermore, if it is based on a court or official decision, the related document. Other necessary documents (e.g. auditor s declaration of acceptance, assignment of the delivery agent, company excerpt of a foreign member, if any) supplied need not be annexed to the application for registration; they shall be inspected for lawfulness by the legal representative. A list of documents and the statement of the legal representative of having inspected the documents for lawfulness shall be attached with the application for registration. In the event of any doubt arising in connection with the said documents in terms of content or from a judicial standpoint, the legal representative shall produce them to the competent court of registration when so requested, and supply them to be filed with the company documents. In the process of evaluating an application for registration, the court of registration shall check (i) the power of attorney for the legal representative; (ii) the application for completion; (iii) the legal representative s statement supplied annexed to the application for compliance with legal regulations; (iv) whether the applicant has supplied the necessary documents; (v) furthermore, if the applicant did not exercise the option to reserve a corporate name, whether the company s name selected is in compliance with the law. No insufficient data procedure is conducted in this procedure and the scope of the review performed by the

12 SZABÓ KELEMEN & PARTNERS ATTORNEYS 12 court of registration is rather narrow, thus the court of registration shall reject the application for registration if: a) the power of attorney of the applicant s legal representative or the completion of the application fails to conform with the relevant regulations, or if the statement of the legal representative of having inspected the documents for lawfulness is not attached to the application for registration; b) the applicant failed to submit any of the required documents; c) the company s name - if the applicant did not exercise the option to reserve a corporate name - fails to conform with the legal regulations. According to the above and the reasoning given in the Act, the proper completion of a standard template shall not be a subject of the court of registration review, thus the proceeding legal representative shall be liable for this. Where a standard template is supplemented or any of its provisions is omitted including the case where a reference to the character of the standard company form is omitted the court of registration shall not proceed according to the rules on the simplified company registration procedure, but according to the general rules. Accordingly, pursuant to the reasoning concerning section 20 of the Act, if a company does not have any of the data, the correct procedure when completing the standard company form is, if this point is not completed, or, if e.g. the company does not have a branch, the sign - is inserted in the dotted part. At the same time, according to the reasoning concerning section 8 of the Act, in the case of a transformation by means of a standard template, it is obligatory to indicate the address in the articles of association, thus it is highly probable that the completion of this point is, contrary to the above, obligatory. Until June 30, 2008, the court of registration shall adopt a decision concerning an application for registration within two working days of the receipt of the application and from July 1, 2008, within one working hour of receipt of the application. If the court of registration does not meet this obligation within the deadline, the leader of the court of registration shall take measures ex officio in order to evaluate the application for registration after the expiry of the deadline, but within one working day at the latest. In the case of an unsuccessful lapse of the deadline for administration, the company registration shall be realized on the next working day with the contents of the application by virtue of law.

13 SZABÓ KELEMEN & PARTNERS ATTORNEYS 13 50(2) and (4) 72(6) Schedules 1 and 2 of the Company Registration Act 45(1), (3) and (4) of the Act on Duties In the case of an articles of association drawn up in a standard template, the rules on simplified company registration procedures shall also be applicable to the registration of change Delivery of documents by way of publication in the judicial review procedure According to the main rule, it is not obligatory to file the company excerpt of a foreign company and the quota transfer contract, however, additional documents have to be filed, among others, in connection with dissolution proceedings and a recognized company group The duty payable in the company registration procedure has changed Due to the modification of the Act, the rules on simplified company registration procedures (and a shorter deadline) may not only apply in the case of a company registration, but also in the course of a registration of change with the proviso that the company s articles of association were drawn up in a standard template. However the rule (applied during the company registration procedure) that if within eight days of the communication of a ruling rejecting the application, the registration of the company is requested again, the legal consequences of rejection could not be applied and the documents filed during the earlier procedure including a certificate on the payment of duty could be used again for the new application of registration, cannot be applied any more. Where the court of registration is unable to deliver any documents in a judicial review procedure by way of the postal service, it shall deliver such documents by way of publishing them in the Companies Gazette, whereupon they shall be considered served on the fifth day following publication. It is only obligatory, in the case of the participation of a foreign company or other organization, to file the foreign company s certificate of incorporation issued within three months of the present date and its official Hungarian translation, or proof of such company or other organization being registered in the country where established, and its official Hungarian translation, and a document to verify the right of representation of the foreign company s representative, where so prescribed by other specific legislation. Subsection aa) of section II./1 of Schedule no. 2 of the Company Registration Act has been deleted, thus in the case of a Kft., it is not necessary to file the quota transfer contract any more. In the case of dissolution proceedings, a certificate from the competent pension insurance administration agency concerning disclosure of the data of the company s insured employees must be filed. In the case of the formation/ dissolution of a recognized company group, the decisions adopted by the supreme bodies of companies participating in a recognized group of companies concerning the formation or dissolution of the recognized group of companies must also be filed. The duty payable for the registration of companies under simplified proceedings and for proceedings of the courts of registration other than those mentioned under sections 45(4)-(7) of the Act on Duties shall be 15,000 forints instead of the former HUF 5,000 and 8,000 respectively. The duty payable for the registration of changes relating to the transformation of companies, the acquisition of qualifying holding, obtaining the status of recognized group of companies, or to changes in the particulars of a Nyrt. shall be 50,000 forints.

14 SZABÓ KELEMEN & PARTNERS ATTORNEYS 14 65(1) and (2) of the Act on Duties The fee for judicial supervisory procedures The Act on Duties has been modified by the Act in such a way that the special supervisory fee payable for the judicial supervisory procedure conducted by courts of registration is 50,000 forints instead of the former general duty. The supervisory fee shall be payable by any company that is found by the court of registration to engage in unlawful conduct. The supervisory fee shall not be paid in ex officio judicial supervisory procedures, if terminated by the court of registration where the charge is found to be unsubstantiated. In connection with procedures opened upon request, if the court of registration refuses to open a judicial supervisory procedure if it finds the charge unsubstantiated, the applicant shall be liable to pay a supervisory fee of 15,000 forints.

15 SZABÓ KELEMEN & PARTNERS ATTORNEYS 15 Annex no. 3: The most important amendments of the Bankruptcy Act 27(5) 49/D(3) 49/D(4) and (5) Establishing insolvency in a liquidation procedure initiated by the debtor/person in charge of dissolution on the basis of the declaration of the debtor/person in charge of dissolution Increased scope of claims to which the same regulations apply as to claims secured by lien in liquidation proceedings from June 16, 2007 The rules on satisfying members claims secured by lien have changed from June 16, 2007 In addition to other reasons for insolvency, the court shall also declare the debtor insolvent if in the petition for liquidation the debtor declares itself insolvent or it is declared insolvent by the person in charge of dissolution, also stating that the debtor was unable and presumably will not be able to settle its debt (debts) on the date when they are due. According to section 49/D(1) of the Bankruptcy Act, where a lien was filed prior to the opening of liquidation proceedings, the liquidator shall be allowed to deduct from the proceeds from the sale of the property pledged only the costs of safeguarding - including maintenance - and costs of the sale of the pledged property, and the liquidator s fee stipulated in other specific legislation, and shall use the remaining amount to satisfy the claims for which such property was pledged - immediately upon completion of the transaction. Due to the modification of section 49/D(3), the regulations on claims secured by lien shall also apply to any claim that is limited to tolerating use for satisfaction from the pledged property from June 16, According to section 49/D(1), the more favorable judgment of the satisfaction of claims secured by lien shall not apply from June 16, 2007, where the holder of the lien is an executive officer or executive employee, or their close relative (Civil Code, paragraph b) of section 685), or their de facto spouse, or a business entity under the debtor s majority control (Civil Code, section 685/B). Namely, from June 16, 2007, the above list does not contain a member of the business entity anymore, thus member s claims secured by lien may be generally satisfied in the same way as other claims. The more favorable judgment of the satisfaction of claims secured by lien according to section 49/D(1) shall not apply if the lien holder is a member (shareholder) of the business entity (Civil Code, section 685/B) with majority control and the claim secured by the lien was filed before the occurrence of a situation carrying the potential danger of insolvency. A situation is considered to constitute the potential danger of insolvency as of the day when the member (shareholder) of the business entity was or should have been able to predict that the business entity will not be able to satisfy its liabilities when due.

16 SZABÓ KELEMEN & PARTNERS ATTORNEYS 16 57(1)h) The claims of the debtor s member will not be satisfied automatically in the last place in the order of satisfaction from June 16, 2007 in the liquidation procedure Presently, those claims will be satisfied automatically in the last place in the order of satisfaction in the liquidation procedure, which are held by any executive officer or executive employee of the business entity, or their close relative (Civil Code, paragraph b) of section 685), or their de facto spouse, or a business entity under the debtor s majority control (Civil Code, section 685/B), and the claims resulting from the debtor s commitment without consideration, furthermore, claims held by any member (shareholder) of the business entity (Civil Code, section 685/B) with majority control, that were filed before the occurrence of a situation carrying the potential danger of insolvency (section 49/D(5)). Namely, from June 16, 2007, the above list does not contain a member of the business entity anymore, thus not all members claims, but only those claims held by a member (shareholder) of a business entity with majority control will be satisfied automatically in the last place in the order of satisfaction that were filed before the occurrence of a situation carrying the potential danger of insolvency.