**Exhibit****1.1**
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# **Unofficial****Translation****of****the****Amended****and****Restated**

# **Articles****of****Association****of****Magyar****Telekom**

# **Telecommunications****Public****Limited****Company**

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# **Contents**

| 1.   | The Company Data                            | 4 |
|------|---------------------------------------------|---|
| 1.1. | The Registered Name of the Company          | 4 |
| 1.2. | The Company’s name in English          | 4 |
| 1.3. | The Registered Office of the Company        | 4 |
| 1.4. | Sites and Branch Offices of the Company     | 4 |
| 1.5. | The Duration of the Company                 | 4 |
| 1.6. | The Scope of Activities of the Company      | 4 |
| 1.7. | The Company’s Registered Share Capital | 5 |

 

  

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| **Articles****of****Association****of  Magyar****Telekom****Plc.** |   |  |
|--------------------------------------------------------------------|--------|--|

 
| **2.**  **The****Shares****of****the****Company**                                                                   | **6**                                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|
| 2.1                                                                                                                      | Share Capital                                                                                             | 6 |
| 2.2.                                                                                                                     | Series “A” Shares                                                                               | 6 |
| 2.3.                                                                                                                     | Series “B” Voting Preference Share and Rights  Attached Thereto                                 | 6 |
| 2.4.                                                                                                                     | The Nominal Value of Shares and the Certificate  issued on the Dematerialized Share                       | 8 |
| 2.5.                                                                                                                     | Transfer of Shares                                                                                        | 8 |
| 2.6.                                                                                                                     | Shareholders’ Register                                                                               | 9 |
| 2.7.                                                                                                                     | Interim Share Certificates                                                                                | 9 |
|                                                                                                                     |                                                                                                      |   |
| **3.**  **Payment****for****shares**                                                                                | **9**                                                                                                     |
| 3.1.                                                                                                                     | Effecting Payment for Shares                                                                              | 9 |
| 3.2.                                                                                                                     | Recognition of Payment                                                                                    | 9 |
| 3.3.                                                                                                                     | Contributions in Kind                                                                                     | 9 |
| 3.4.                                                                                                                     | Recognition of Contributions in Kind                                                                      | 10 |
| 3.5.                                                                                                                     | Delay in Payment for Shares and Contributions in  Kind                                                    | 10 |
| 3.6.                                                                                                                     | Full Payment for Shares                                                                                   | 10 |
| 3.7.                                                                                                                     | Termination of Shareholders’ rights                                                                  | 10 |
|                                                                                                                     |                                                                                                      |   |
| **4.**  **Rights****of****Shareholders****and****the****Means****of****Exercising****Shareholders’****Rights** | **10**                                                                                                    |
| 4.1.                                                                                                                     | Dividends                                                                                                 | 10 |
| 4.2.                                                                                                                     | Distribution of Assets in Case of the Termination of  the Company                                         | 10 |
| 4.3.                                                                                                                     | Voting Rights                                                                                             | 10 |
| 4.4.                                                                                                                     | Limitation of the Rights of Shareholders                                                                  | 11 |
| 4.5.                                                                                                                     | Payment of Dividends                                                                                      | 11 |
| 4.6.                                                                                                                     | Right to Convene the General Meeting                                                                      | 11 |
| 4.7.                                                                                                                     | Conditions for a General Meeting resolution  resulting in the delisting of shares from the stock exchange | 11 |
|                                                                                                                     |                                                                                                      |   |
| **5.**  **Rights****to****Information****and****Closing****of****the****Shareholders’****Register**            | **12**                                                                                                    |
| 5.1.                                                                                                                     | Mandatory Dissemination of Information                                                                    | 12 |
| 5.2.                                                                                                                     | Shareholders’ Rights to Information                                                                  | 12 |
| 5.3.                                                                                                                     | Closing of the Shareholders’ Register                                                                | 12 |
|                                                                                                                     |                                                                                                      |   |
| **6.**  **The****General****Meeting****of****the****Company**                                                       | **12**                                                                                                    |
| 6.1.                                                                                                                     | Supremacy of the General Meeting                                                                          | 12 |
| 6.2                                                                                                                      | Matters within the Exclusive Scope of Authority of  the General Meeting                                   | 12 |
| 6.3.                                                                                                                     | Passing Resolutions                                                                                       | 13 |
| 6.4.                                                                                                                     | Right to Convene General Meetings                                                                         | 13 |
| 6.5.                                                                                                                     | Notification of the Supervisory Board on the  convocation of the General Meeting                          | 13 |
| 6.6.                                                                                                                     | Occurrence and Agenda of a General Meeting                                                                | 14 |
| 6.7.                                                                                                                     | Convocation of the General Meeting                                                                        | 14 |
| 6.8.                                                                                                                     | Notice of General Meetings                                                                                | 14 |
| 6.9.                                                                                                                     | Supplements to the agenda of a General Meeting                                                            | 14 |
| 6.10.                                                                                                                    | Attendance List                                                                                           | 14 |
| 6.11.                                                                                                                    | Quorum                                                                                                    | 14 |
| 6.12.                                                                                                                    | Opening of the General Meeting                                                                            | 14 |
| 6.13.                                                                                                                    | The Chairman of the General Meeting                                                                       | 15 |
| 6.14.                                                                                                                    | Election of the Officials of the General Meeting                                                          | 15 |
| 6.15.                                                                                                                    | Order and Discussion of Items on the Agenda                                                               | 15 |
| 6.16.                                                                                                                    | Suspended General Meeting                                                                                 | 15 |
| 6.17.                                                                                                                    | Voting Procedures                                                                                         | 15 |
| 6.18.                                                                                                                    | Passing Resolutions                                                                                       | 16 |
| 6.19.                                                                                                                    | Minutes of the General Meeting                                                                            | 16 |
| 6.20.                                                                                                                    | Attendance by Officials of the Company                                                                    | 16 |
|                                                                                                                     |                                                                                                      |   |
| **7.**  **Board****of****Directors**                                                                                | **16**                                                                                                    |
| 7.1.                                                                                                                     | Status of the Board of Directors                                                                          | 16 |
| 7.2.                                                                                                                     | Members of the Board of Directors                                                                         | 17 |
| 7.3.                                                                                                                     | Interim Election                                                                                          | 17 |
| 7.4.                                                                                                                     | Rules of Procedure and Chairman of the Board of  Directors                                                | 17 |
| 7.5.                                                                                                                     | Quorum, Passing Resolutions                                                                               | 18 |
| 7.6.                                                                                                                     | Minutes                                                                                                   | 18 |
| 7.7.                                                                                                                     | Resignation, Death                                                                                        | 18 |
| 7.8.                                                                                                                     | Liability of Directors                                                                                    | 18 |
|                                                                                                                     |                                                                                                      |   |
| **8.**  **The****Supervisory****Board**                                                                             | **18**                                                                                                    |
| 8.1.                                                                                                                     | Status of the Supervisory Board                                                                           | 18 |
| 8.2.                                                                                                                     | Members of the Supervisory Board                                                                          | 18 |
| 8.3.                                                                                                                     | Duties                                                                                                    | 19 |
| 8.4.                                                                                                                     | Rules of Procedure                                                                                        | 19 |
| 8.5.                                                                                                                     | Convocation of the General Meeting by the  Supervisory Board                                              | 20 |

 

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| 8.6.                                                                                                                              | Liabilities of Members of the Supervisory Board                                            | 20     |
|-----------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|--------|
| 8.7.                                                                                                                              | Audit Committee                                                                            | 20     |
|                                                                                                                              |                                                                                       |   |
| **9.**  **The****Auditor**                                                                                                   | **21**                                                                                     |
| 9.1.                                                                                                                              | Election                                                                                   | 21     |
| 9.2.                                                                                                                              | Duties of the Auditor:                                                                     | 21     |
| 9.3.                                                                                                                              | The rights and the responsibilities of the Auditor                                         | 21     |
| 9.4.                                                                                                                              | Auditor’s Conflict of Interest                                                        | 21     |
|                                                                                                                              |                                                                                       |   |
| **10.**  **Proper****Signature****on****Behalf****of****the****Company**                                                     | **21**                                                                                     |
|                                                                                                                              |                                                                                       |   |
| **11.**  **Increase****in****the****Registered****Capital****of****the****Company**                                          | **22**                                                                                     |
| 11.1.                                                                                                                             | Cases                                                                                      | 22     |
| 11.2.                                                                                                                             | Subscription preference right                                                              | 22     |
| 11.3.                                                                                                                             | Prohibited Subscription                                                                    | 22     |
| 11.4.                                                                                                                             | Private Placement                                                                          | 22     |
| 11.5.                                                                                                                             | Conversion of Capital Reserves into Registered  Capital                                    | 23     |
| 11.6.                                                                                                                             | Conditional capital stock increase by means of  converting the convertible bonds to stocks | 23     |
|                                                                                                                              |                                                                                       |   |
| **12.**  **Decrease****of****the****Registered****Capital****of****the****Company**                                          | **23**                                                                                     |
|                                                                                                                              |                                                                                       |   |
| **13.**  **Conflict****of****Interest**                                                                                      | **24**                                                                                     |
|                                                                                                                              |                                                                                       |   |
| **14.**  **Indemnification****of****Members****of****the****Board****of****Directors****and****the****Supervisory****Board** | **24**                                                                                     |
| 14.1.                                                                                                                             | Indemnification                                                                            | 24     |
| 14.2.                                                                                                                             | Advancing Expenses                                                                         | 24     |
| 14.3.                                                                                                                             | Insurance                                                                                  | 24     |
|                                                                                                                              |                                                                                       |   |
| **15.**  **Oher****Provisions**                                                                                              | **24**                                                                                     |
| 15.1.                                                                                                                             | Financial Year                                                                             | 24     |
| 15.2.                                                                                                                             | Notices                                                                                    | 25     |
| 15.3.                                                                                                                             | Interest                                                                                   | 25     |
| 15.4.                                                                                                                             | Modification of Law                                                                        | 25     |
| 15.5.                                                                                                                             | Universal electronic communications service  providing obligations:                        | 25     |
| 15.6.                                                                                                                             | Miscellaneous                                                                              | 25     |
|                                                                                                                              |                                                                                       |   |
| **Annex****1**                                                                                                                    | **26**                                                                                     |
|                                                                                                                                   |                                                                                            |        |  |

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**1. The Company Data**

## **1.1.****The****Registered****Name****of****the****Company**

The registered name of the Company is Magyar Telekom TávközlésiNyilvánosan Működő Részvénytársaság

The Company’s abbreviatedname is Magyar Telekom Rt.

## **1.2.****The****Company’s****name****in****English**

The Company’s name in English is Magyar Telekom TelecommunicationsPublic Limited Company

The Company’s abbreviatedname: Magyar Telekom Plc.

## **1.3.****The****Registered****Office****of****the****Company**

1013 Budapest  Krisztina krt. 55.

## **1.4.****Sites****and****Branch****Offices****of****the****Company**

### **(a)****Sites****of****the****Company:**

1117 Budapest, Neumann János krt. 1/G

1122 Budapest, Maros u. 32.

1107 Budapest, Zágrábi u. 1-3.

1013 Budapest, Krisztina krt 32.

1122 Budapest, Maros u. 19-21.

1107 Budapest, Bihari u.6.

1082 Budapest, Horváth Mihály tér 17-19.

1052 Budapest, Városház u. 18.

1117 Budapest, Magyar tudósok krt.9.

1073 Budapest, Dob u. 76-78.

1051 Budapest, Petőfi Sándor u. 17-19.

1117 Budapest, Kaposvár u. 5-7

1117 Budapest, Budafokiu. 103-107

### **(b)****Branch****Offices****of****the****Company:**

4026 Debrecen, Bethlen u. 1.

3525 Miskolc Régiposta u. 9.

9400 Sopron, Széchenyi tér 7-10.

7601 Pécs, Rákóczi út 19.

8174 Balatonkenese, Partisétány 51.

## **1.5.****The****Duration****of****the****Company**

The Company isestablished for an indefinite period of time.

## **1.6.****The****Scope****of****Activities****of****the****Company**

### **1.6.1.****Main****activity:**

| 64.20. ‘03 | Telecommunications |   |
|-----------------|--------------------|--------|

 

### **1.6.2.****Other****activities:**

| 22.11. ‘03 | Publishing of books                               |   |
|-----------------|---------------------------------------------------|--------|
| 22.12. ‘03 | Publishing of newspapers                          |   |
| 22.15. ‘03 | Other publishing                                  |   |
| 22.25. ‘03 | Other activities related to printing              |   |
| 22.33. ‘03 | Reproduction of computer media                    |   |
| 32.20. ‘03 | Manufacture of industrial transmission apparatus; |   |

 

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| 40.11’03   | Production of electricity                                                                                                       |   |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------|--------|
| 45.11. ‘03 | Demolition and wrecking of buildings, earth moving                                                                              |   |
| 45.21. ‘03 | General construction of buildings and civil  engineering works                                                                  |   |
| 45.31. ‘03 | Installation of electrical wiring and fittings                                                                                  |   |
| 50.10. ‘03 | Sale of motor vehicles                                                                                                          |   |
| 51.14. ‘03 | Agents involved in the sale of machinery, industrial  equipment, ships and aircraft (except for the sale of ships and aircraft) |   |
| 51.43. ‘03 | Wholesale of electrical household appliances and  radio and television goods                                                    |   |
| 51.47. ‘03 | Wholesale of other household goods                                                                                              |   |
| 51.86. ‘03 | Wholesale of other electronic parts                                                                                             |   |
| 51.87. ‘03 | Wholesale of other machinery for use in industry,  trade and navigation                                                         |   |
| 51.90. ‘03 | Other wholesale                                                                                                                 |   |
| 52.12. ‘03 | Other retail sale in non-specialized stores                                                                                     |   |
| 52.45. ‘03 | Retail sale of electrical household appliances and  radio and television goods                                                  |   |
| 52.47. ‘03 | Retail sale of books, newspapers and stationery                                                                                 |   |
| 52.48. ‘03 | Other retail sale in specialized stores                                                                                         |   |
| 52.61. ‘03 | Retail sale via mail order houses;                                                                                              |   |
| 52.63. ‘03 | Non-store retail sale;                                                                                                          |   |
| 52.74. ‘03 | Repair n.e.c.                                                                                                                   |   |
| 55.10. ‘03 | Hotel services                                                                                                                  |   |
| 55.23. ‘03 | Other provision of lodgings                                                                                                     |   |
| 55.30. ‘03 | Restaurants                                                                                                                     |   |
| 55.52. ‘03 | Catering                                                                                                                        |   |
| 63.12. ‘03 | Storage and warehousing                                                                                                         |   |
| 63.30. ‘03 | Activities of travel agencies and tour operators                                                                                |   |
| 65.23. ‘03 | Other financial intermediation n.e.c.                                                                                           |   |
| 67.13. ‘03 | Other financial auxiliary activities                                                                                            |   |
| 67.20’03   | Other insurance activities                                                                                                      |   |
| 70.11. ‘03 | Development and selling real estate                                                                                             |   |
| 70.20. ‘03 | Letting of own property                                                                                                         |   |
| 70.31. ‘03 | Real estate agencies                                                                                                            |   |
| 70.32. ‘03 | Management of real estate on a fee or contract basis                                                                            |   |
| 71.10. ‘03 | Renting of automobiles                                                                                                          |   |
| 71.21. ‘03 | Renting of other land transport equipment                                                                                       |   |
| 71.33. ‘03 | Renting of office machinery and equipment including  computers                                                                  |   |
| 71.34. ‘03 | Renting of other machinery and equipment n.e.c.                                                                                 |   |
| 71.40. ‘03 | Renting of personal and household goods.                                                                                        |   |
| 72.10. ‘03 | Hardware-consultancy                                                                                                            |   |
| 72.21. ‘03 | Issuing software                                                                                                                |   |
| 72.22. ‘03 | Other software consultancy and supply (web page  design)                                                                        |   |
| 72.30. ‘03 | Data processing (on-line publication)                                                                                           |   |
| 72.40. ‘03 | Data base activities                                                                                                            |   |
| 72.50. ‘03 | Maintenance and repair of office, accounting and  computing machinery                                                           |   |
| 72.60. ‘03 | Other computer related activity                                                                                                 |   |
| 73.10. ‘03 | Technical research and experimental development                                                                                 |   |
| 74.12. ‘03 | Accounting, book-keeping and auditing activities,  tax consultancy                                                              |   |
| 74.14. ‘03 | Business and management consultancy activities                                                                                  |   |
| 74.20. ‘03 | Architectural and engineering activities and related  technical consultancy                                                     |   |
| 74.30. ‘03 | Technical testing and analysis                                                                                                  |   |
| 74.40. ‘03 | Advertising                                                                                                                     |   |
| 74.85. ‘03 | Secretarial and translation activities                                                                                          |   |
| 74.86. ‘03 | Call center activities                                                                                                          |   |
| 74.87. ‘03 | Other business activities n.e.c.                                                                                                |   |
| 80.42. ‘03 | Adult and other education                                                                                                       |   |

##  

## **1.7.****The****Company’s****Registered****Share****Capital**

The registered capital ofthe Company is HUF 104 276 831 500  (that is One hundred and four billion twohundred and seventy-six million eight hundred and thirty-one thousand fivehundred HUF), comprised of  HUF46 010 642 500 (that is forty-six billion and ten million six hundredand forty-two thousand five hundred HUF) cash contribution and HUF58.266.189.000, that is Fifty Eight Billion Two Hundred and Sixty Six MillionOne Hundred and Eighty Nine thousand in-kind contributions.

1.8 Magyar TelekomTelecommunications Public Limited Company is the general legal successor ofT-Mobile Hungary Telecommunications Company Limited by Shares (1117 Budapest, Kaposváru. 5-7.; Corporate Registry No.: 01-10-042361)

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# **2.****The****Shares****of****the****Company**

## **2.1.****Share****Capital**

The total share capitalof the Company consists of (i) 1 042 768 215 registered ordinarySeries “A” Shares each having a nominal value of HUF 100 and (ii) 1 registeredSeries “B” Voting Preference Share with a nominal value of HUF 10.000.

The shares of the Companyare put out in a dematerialized form.

Dematerialized shares aresuch registered shares that do not have serial numbers and the name and otherdata to clearly identify their owners are contained on the securities account.

## **2.2.****Series****“A”****Shares**

The holder of each Series“A” Share shall be entitled to one vote at the General Meeting of the Companyand to all such rights attributed to such shareholder by Act IV of 2006  on Business Associations (hereinafter: the “CompaniesAct”) or these Articles.

## **2.3.****Series****“B”****Voting****Preference****Share****and****Rights****Attached****Thereto**

### **2.3.1.****The****“B”****Share**

(a) The Company has one(1) registered Series “B” Voting Preference Share (hereinafter: “B” Share) witha nominal value of HUF 10 000 issued for the benefit of the Hungarian State.According to Act LXXVI of 1997, Act CXXXIII of 2000 and Act XXIII of 2002regarding the amendment of the Annex of Act XXXIX of 1995 on selling the assetsof state-owned business associations and the Act LV of 2006, the ownershiprights in connection with the “B” Share are exercised by the Minister ofEconomics and Transport.

(b) The “B” Share carriesthe same rights as the “A” Shares and additional rights as determined theseArticles. The “B” Share may not be redeemed in the course of a reduction of theregistered capital of the Company.

### **2.3.2.****Rights****attached****to****the****“B”****Share**

2.3.2.1. The holder ofthe “B” Share shall have the right to nominate for election and propose theremoval of one (1) member of the Board of Directors (the “B” Director) and one(1) member of the Supervisory Board (the “B” Supervisory Board Member).

The “B” Director and the “B”Supervisory Board Member shall be elected by the General Meeting.  On resolutions for the election or removal ofthe “B” Director and/or the “B” Supervisory Board Member (the right to removeor elect applies to any person who was initially nominated as a “B” Director ora “B” Supervisory Board Member) the “B” Share entitles its owner to fiftybillion (50,000,000,000) votes at the General Meeting.

In order to secure theright of the “B” shareholder enumerated in this Section 2.3.2.1, in the eventof an increase of the Company’s registered capital, the issuance of a new classof shares or the changing of the rights attached to a certain class of shares,these Articles shall be amended so that the voting rights of the “B” Share onthe resolutions described in this Section will be sufficient to ensure that theholder of the “B” Share may approve any such resolutions without requiringadditional votes.

The holder of the “B”Share has the right to request the Company’s Board of Directors to convene ageneral meeting for the purposes of electing and/or removing a “B” Director ora “B” Supervisory Board Member in the event the “B” Director or the “B”Supervisory Board member dies, resigns or becomes incapacitated or his removalis necessary.  The Board shall convenethe General Meeting for the earliest possible date in accordance with theprovisions of the Companies Act and the Articles.  In case of removal, the reasonable costs ofthe General Meeting shall be borne by the holder of the “B” Share.

2.3.2.2. The holder ofthe “B” Share has the right at any time to directly inspect the Shareholders’Register and any books maintained by a depository for the Company’s sharesappointed by the Company and may request copies thereof, which copies shall beprovided within the shortest period of time possible but not later than thirty(30) days of receipt of such written request.

2.3.2.3. In the event ofdissolution (végelszámolás) of the Company without a legal successor, theholder of the “B” Share, or any person designated by the holder of the “B”Share, acting on behalf of the Hungarian State for this purpose shall have anoption to purchase all or any portion of the assets of the Company (including,without limitation, equity interests in other companies).  The purchase price for such assets shall bethe appraised fair market value of such assets at the time of dissolution asdetermined by an independent appraiser mutually agreed upon by the holder ofthe “B” Share and the Company, or, if not so agreed, the Auditor of theCompany.  The right to purchase describedherein shall become exercisable upon determination of the purchase price forsuch assets in accordance herewith.

2.3.2.4. The holder ofthe “B” Share has the right to request from the Board of Directors at any timedetailed information regarding the activities of the Company with respect tomaterial questions affecting significantly the financial position of theCompany.  Information requested in thismanner from the Board of Directors shall be provided in writing to the holderof the “B” Share within a period of thirty (30) days from receiving suchrequest; provided, however, that the Board of Directors has received a writtenacknowledgement of the holder of the “B” Share that material which isproprietary or which constitutes a business secret will be treated in aconfidential manner.

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2.3.2.5. The holder ofthe “B” Share has the right to request the Company to carry out an audit orother investigation, or to prepare any report or provide information, on anyissue within the scope of the activities of the Auditor or the SupervisoryBoard pursuant to the law or these Articles. Any such request shall be reasonable and shall specify in reasonabledetail the subject of the audit or other investigation.  Such audit or investigation shall be carriedout by the Auditor of the Company or by the Supervisory Board, respectively,or, with respect to an investigation, if so requested by the holder of the “B”Share, an independent expert designated by the Supervisory Board of theCompany.  Any reasonable request of theholder of the “B” Share for an audit or investigation or for a report orinformation shall be complied with by the Auditor or the Supervisory Board andsuch audit, investigation, report or information shall be carried out orprovided within the shortest possible time period. Any audit or otherinvestigation shall be carried out at the cost of the holder of the “B” Sharerequesting such audit or investigation, to the extent that the audit orinvestigation does not reveal any act or omission constituting materialshortcomings in the operations or financial affairs of the Company in the areain which the audit or investigation was requested.

2.3.2.6. The consent ofthe holder of the “B” Share and shareholders holding at least a simple majorityof the outstanding voting stock of the Company (excluding the shares theacquisition of which is subject to the approval specified in this Section2.3.2.6) shall be required to approve the acquisition, direct or indirect, ofshares of the Company which, on a cumulative basis, would result in any person,or persons acting in concert (by virtue of agreement, ownership or otherwise),holding, directly or indirectly, 10% or more of the outstanding voting stock ofthe Company. The foregoing notwithstanding, no consent shall be required for:(i) acquisitions directly from persons holding 10% or more of the Company’soutstanding voting stock as at September 29, 1997  (ii) acquisitions directly from thetransferees of the Existing Shareholders, (iii) acquisitions by aninternationally recognised underwriter acquiring the Company’s shares for theexclusive purpose of distributing such shares in a public offering, (iv)acquisitions by depositories for the Company’s shares or certificatesrepresenting such shares appointed by the Company (but only (a) to the extentthat the acquisition of such shares by the person or persons ultimatelyexercising shareholder’s rights attached to the shares held by the depositoriesdo not require the consent set forth in this Section 2.3.2.6 and (b) on thecondition that such depository undertakes to provide the list of such personsto the Company and the holder of the “B” Share upon request), or (v) direct orindirect sales or transfers of interest in any Existing Shareholder.

2.3.2.7. The priorwritten consent of the holder of the “B” Share shall be required to a transferof shares in the Company if, as a result of such transfer, the transferee, directlyor through a group of persons acting in concert (by virtue of agreement,ownership or otherwise), would acquire, on a cumulative basis, more than 49.9 %of the voting share capital of the Company.

2.3.2.8. The holder ofthe “B” Share shall be promptly notified by the Company of the receipt by theCompany of a request to register any shares of the Company in the Shareholders’Register of the Company the transfer of which the Company knows is subject tothe consent requirement under the provisions of these Articles.

2.3.2.9. For any matterslisted hereunder to be considered at the General Meetings of the Company, thepresence of the holder of the “B” Share is necessary to constitute a quorum (inaddition to the requirements of section 6.11. hereunder), and the affirmativevote of the holder of the “B” Share shall be required:

(a) increase and decreaseof registered capital, unless otherwise provided by the Act on BusinessAssociations or the Articles of Associations;

(b) change of rightsattached to any class of shares, including, for the avoidance of doubt, anyamendment to the rights of the “B” Share or the creation of a new class ofshares with rights superior or equal to the rights or adversely affecting therights of the “B” Share, or any amendment to the rights attached to anyexisting class of shares by providing them with rights superior or equal to therights attached to the “B” Share;

(c) merger into orconsolidation with another business entity, de-merger, transformation intoanother form of business association and termination of the Company without alegal successor;

(d) transfer, assignment,lease or the granting of permanent right to the use of, the creation of anencumbrance or security interest in a valuable right enabling the continuationof a specific activity of the Company to another business entity - i.e.  rights granted in the Contract regarding theprovision of universal electronic communications services defined in Sections117-118 of Act C. of 2003;

(e) election and removalof the “B” Director and the “B” Supervisory Board Member;

(f) conversion of type ofshares;

(g) transfer of the totalor a substantial part of assets of the Company. For the purposes of thisSection “substantial” shall mean the transfer of assets which would render theCompany incapable of performing its obligations pursuant to the  universal telecommunications service asdefined in the Contract regarding the provision of Universal TelecommunicationsServices;

(h) any amendment tothese Articles which would impinge the rights of the holder of the “B” Sharegranted by these Articles, including the authorization of the Board ofDirectors of the Company to increase the Company’s registered capital;

(i) issuance ofconvertible bonds or bonds conferring pre-emptive rights;

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(j) decision on approvalpursuant to Section 2.5(b) of these Articles.

## **2.4.****The****Nominal****Value****of****Shares****and****the****Certificate****issued****on****the****Dematerialized****Share**

Shares belonging to thesame share type shall have the same nominal value.

The security account ofthe owner of dematerialized shares must include the data specified by therelevant laws:

A certificate — whichdoes not qualify as a security — shall be issued on each type of dematerializedshare and deposited in the central treasury, bearing the signatures of twomembers of the Board of Directors.

## **2.5.****Transfer****of****Shares**

(a) The acquisition andtransfer of the dematerialized share shall only be effected through creditingor debiting the securities account. The owner of the security — unless the contraryis proved — shall be the person on whose account the security is registered.The transfer of registered or Interim Share Certificates shall be effectivewith respect to the Company when the name of the new owner of the shares hasbeen entered in the Shareholders’ Register.

(b) The consent of theholder of the “B” Share and shareholders holding at least a simple majority ofthe outstanding voting stock of the Company (excluding the shares theacquisition of which is subject to such approval) shall be required to approvethe acquisition, directly or indirectly, of the shares of the Company which, ona cumulative basis, would result in any person, or persons acting in concert(by virtue of agreement, ownership or otherwise), holding 10% or more, directlyor indirectly, of the outstanding voting stock of the Company. The foregoingnotwithstanding, no consent shall be required for: (i) acquisitions directlyfrom the Existing Shareholders, (ii) acquisitions directly from the transfereesof the Existing Shareholders, (iii) acquisitions by an internationallyrecognised underwriter acquiring the Company’s shares for the exclusive purposeof distributing such shares in a public offering, (iv) acquisitions bydepositories for the Company’s shares or certificates representing such sharesappointed by the Company (but only (a) to the extent that the acquisition ofsuch shares by the person or persons ultimately exercising shareholder’s rightsattached to the shares held by the depositories do not require the consent setforth in this Section 2.5(b) and (b) on the condition that such depositoryundertakes to provide the list of such persons to the Company and the holder ofthe “B” Share upon request), or (v) direct or indirect sales or transfers ofinterest in any Existing Shareholder.  Noholder of any shares shall exercise any rights in respect of any sharesacquired in violation of this Section and the Company shall not register suchacquisition in the Shareholders’ Register of the Company.

(c) If as a result of atransfer of shares, the transferee, directly or through a group of partiesacting in concert (by virtue of agreement, ownership or otherwise), would, on acumulative basis, acquire more than 49.9 % of the voting share capital of theCompany, the prior written consent of the holder of the “B” Share shall berequired.  No holder of any shares shallexercise any rights in respect of any shares acquired in violation of thisSection and the Company shall not register such acquisition in the Shareholders’Register of the Company.

(d) In the event oftransfer of shares the custodian shall notify the registrar as to the transferwithin two days upon such event (i.e. transfer of shares to the securitiesaccount). If the shareholder wishes so the custodian will not announce the saiddata. The shareholder shall provide evidence that he acquired the shares inaccordance with the conditions set forth in these Articles. In the event thatthe new owner of the shares provides the appropriate documents, the Companyshall, within a period of fifteen (15) days, examine such documents and decidewhether the new owner acquired the shares in accordance with the provisions ofthese Articles. If the Company establishes that the transfer occurred inviolation of the Articles, it shall not register such transfer of shares. TheCompany shall promptly notify the new owner of its reasoned decision and thenew owner shall have the right to request, within thirty (30) days of therendering of such decision, the competent court to review the decision.

(e) Those shareholderswho wish so, shall not be registered in the Shareholders’ Register in additionto those who obtained the shares in violation of laws or this Articlesregarding the transfer of shares.

(f) The registrar, exceptin case set forth in Section 2.5. (d) and (e), shall not refuse prompt registryand shall promptly delete such shareholder who wishes so.

# (g) If the ownership of theshareholder ceased to exist with the transfer of shares the custodian shallnotify the registrar on this fact within two working days upon such event. Theregistrar, based on the notification, shall promptly incorporate such changesin the Shareholders’ Register.

(h) The shareholder mayreview the Shareholders’ Register and may request a copy on parts relevant tohim from the Board of Directors or from the representative thereof. Suchrequests shall be met within five days by the registrar. Third parties mayreview the Shareholders’ Register as well.

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## **2.6.****Shareholders’****Register**

2.6.1. The Boardof Directors of the Company through the registrar assigned by the Boardaccording to Section 202.§ (2) of the Act, maintains a Shareholders’ Registerof the holders of registered shares (including holders of Interim ShareCertificates or Preliminary Share Certificates) and shareholders’ proxies bythe class of shares, in which the name - in case of a joint representative therelevant data of the joint representative respectively - and address (seat) ofeach shareholder (shareholder’s proxy) as well as the shareholding of eachshareholder by the share series is recorded. The Company maintains acomputerized Shareholders’ Register.

2.6.2. The registrar,assigned by the Board of Directors of the Company, fulfils the written requestsof the not-yet-registered acquirer or his representative on registering thetransfer of shares in the Shareholders’ Register - if it was not requested bythe custodian — if the acquirer of the shares or his representative producesthe securities account statement under his name that certifies the ownership ofthe share towards third parties at the time of its issuance and complies withthe provisions of Section 2.5 of these Articles.

2.6.3. The condition ofparticipating at the General Meeting is that the shareholder or the nominee(except proxy holders acting on the basis of the authorization of theshareholder issued in the form of a public instrument or a private document offull probative force) is registered as such in the Shareholders’ Register atleast six (6) working days prior to the date of the General Meeting. Theregistry of shareholders in the Shareholders’ Registry may be at the OwnerCompliance Turning Date prior to the GM or at the shareholder’s individualrequest. Those shareholders can exercise their voting rights at the GM who areentered into the Shareholders’ Registry and froze their shares up until the dayof the GM. No entry in the Shareholders’ Register shall be made in the periodof six (6) business days prior to the General Meeting.

2.6.4. The registrar,assigned by the Board of the Company may refuse the request for registrationinto the Shareholders’ Register by a person acquiring shares who omits toprovide the supporting evidence that such a person is obliged to submit to theCompany in accordance with Section 2.5 of these Articles. The registration intothe Shareholders’ Register based on untrue, false or misleading statements maybe deleted by a reasoned resolution of the Board of Directors.

## **2.7.****Interim****Share****Certificates**

# Upon registration of anincrease in the capital of the Company by the Court of Registration, theCompany may issue Interim Share Certificates (“ideiglenes részvény”) if theamount of the contribution either undertaken to be acquired or registered bythe shareholder until the shares are fully paid. The Interim Shares aresecurities, subject to the same rules that are applicable to shares. Thetransfer of Interim Shares are effected when the shareholder is registered inthe Shareholders’ Register. Subsequent to the full payment of the share valueand the production of new shares, the Board of Directors invalidates theInterim Shares in accordance with the provisions of the Companies Act.

# **3.****Payment****for****shares**

## **3.1.****Effecting****Payment****for****Shares**

Unless otherwise providedby the resolution of the General Meeting regarding an increase in the Company’scapital,

a) in the case ofincrease of share capital by way of closed issue the subscribers for sharesshall be obliged to pay at least 25% of the subscription price

b) in the case ofincrease of share capital by way of the public issue of new shares if the issueprice of shares exceeds their face value the subscribers must fully pay thedifference to the Company at subscription and provide written proof thereof,within a period of 15 days after the subscription for shares.

## **3.2.****Recognition****of****Payment**

Unless otherwise providedby the resolution of the General Meeting, cash payment for shares subscribedfor shall be recognized when the total amount of the issue price has beencredited to the Company’s account with a bank that is registered in Hungary.

## **3.3.****Contributions****in****Kind**

Subscribers shall beobliged to transfer any asset comprising contribution in-kind to the Company orplace such assets at the Company’s disposal before the request for theregistration of the Company is filed with the Court of Registration.

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## **3.4.****Recognition****of****Contributions****in****Kind**

The Board of Directorsshall issue a receipt in respect of any contributions in kind.

## **3.5.****Delay****in****Payment****for****Shares****and****Contributions****in****Kind**

Should a shareholder failto make the contribution due to be paid to the Company as stipulated by Section3.6, the Board of Directors shall set a 30-day deadline and call on theshareholder for compliance.”

## **3.6.****Full****Payment****for****Shares**

Subject to the provisionsof Section 3.1., each shareholder shall be obliged to pay up the full amount ofthe issue price of the shares subscribed by it to the Company as per Section3.2 and 3.2. within one year from the registration date of the capital increaseby the Court of Registration, unless the General Meeting provides for a shorterperiod at the commencement of the subscription period.

Shareholders shall beobliged to pay up the requested amount prior to the expiration of such one yearperiod only if the Board of Directors, acting in accordance with the provisionsof these Articles, or the resolution of the General Meeting increasing thecapital of the Company, calls upon the shareholders to do so by means of apublic announcement.  In such casesshareholders shall perform their obligations to pay up the issue price ofshares within the applicable deadline set forth in such notice.  Any notice issued under this paragraph shallbe published by the Company in accordance with these Articles governing the publicationof notices and advertisements.  Thestipulated period for payment shall commence upon the publication of therelated notice.

Any notice issued underthis paragraph shall contain a warning to shareholders of the consequences ofdelay in payment, non-payment or the failure to make a contribution in kind asset out in Section 3.7.

Subject to the provisionsof Section 3.7, shareholder rights with respect to shares not fully paid forshall be exercised proportionately to the amount of payment made.

## **3.7.****Termination****of****Shareholders’****rights**

Should any shareholderfail to observe the deadline set under Section 3.5 herein, his membership(respectively his shareholder rights on the share(s) not paid up) shall ceaseon the following day and if no other person assumes the obligation of payinghis financial contribution, the share capital of the company shall be loweredby the General Meeting by the amount of the financial contribution.

The conditions ofassuming such obligation shall be determined at the same time when adopting aGeneral Meeting resolution on capital increase, considering the provisions ofSection 11 of the Company’s Articles of Association.

The defaultingshareholder is entitled to redemption of his paid up financial contributioneither when his successor shareholder has paid his financial contribution tothe company or after the decrease of the share capital.

# **4.****Rights****of****Shareholders****and****the****Means****of****Exercising****Shareholders’****Rights**

## **4.1.****Dividends**

Whenever a dividend orinterim dividend is declared by the General Meeting, shareholders shall beentitled to such dividend or interim dividend in proportion to the nominalvalue of their shares pursuant to Section 4.5. herein.

## **4.2.****Distribution****of****Assets****in****Case****of****the****Termination****of****the****Company**

In the event ofdissolution (végelszámolás) of the Company, the assets of the Company,including but not limited to the proceeds of purchases made in accordance withthe provisions of Section 2.3.2.3, shall be distributed, after satisfyingcreditors, among all of the shareholders of the Company, such distribution tooccur in accordance with the ratio of the nominal value of each shareholder’sshares to the total registered capital of the Company.

## **4.3.****Voting****Rights**

Shareholders shall beentitled to voting rights attaching to their shares as described in Section 2of these Articles.

 

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## **4.4.Limitation of the Rights of Shareholders**

Shareholders whose nameshave not been entered into the Shareholders’ Register and shareholders whoacquired their shares in violation of the restrictions in these Articlespertaining to the transfer and the acquisition of shares shall not be allowedto exercise their rights attached to such shares vis-á-vis the Company.

## **4.5.Payment of Dividends**

If the Annual General Meeting establishes that thecompany has made profit and determines that dividends should be paid only thoseshareholders or shareholder representatives shall be entitled to such dividendsthat are registered in the  Shareholders’Register with respect to the Owner Compliance Turning Date and the statutoryrequired data of which are available for the payment of dividends.

The Company pays the dividends to the shareholdersfrom the date specified by the relevant resolution of the GM via wire transfer.The dividend payment period commences at the date specified by the resolutionof the GM that decides on the approval of the report according to theAccounting Act and the use of the profit after tax, however, at least 10working days must lapse between the first publication of the GM resolutionregarding the commencement date of the dividend payment and the first day ofpaying the dividends.

Shareholders may claim dividends during the lapseperiod specified in the Civil Code (5 years). After that time their claim fordividends will lapse. Dividends not claimed by the shareholders shall be addedto the capital reserve of the Company.

Aninterim dividend may be disbursed between the approval of two consecutivereports under the Accounting Act, if

—              on the basis ofthe interim balance it can be stated that the Company possesses sufficientcoverage to pay the interim dividend and that the sum to be paid does notexceed the profit generated since closing the books according to the lastbusiness year’s annual report under the Accounting Act plus the unused profitreserve, and subsequent to the said outpayment the own capital of the sharecompany — adjusted according to the Accounting Act— must not fall under theregistered capital, and

—              Shareholdersundertake to return the interim dividend if later, according to the reportunder the Accounting Act - and pursuant to Section 223 (1) of the Act onBusiness Associations — the law would not allow the outpayment of suchdividend.

No dividend shall be paidthe Company for its own shares, at specifying the amount due to theshareholders entitled to dividends the Company does not take the dividend ofown shares into account.

## **4.6.Right to Convene the General Meeting**

The General Meeting shallbe convened if shareholders representing at least five percent of the votes or,in cases described in Section 2.3.2.1. of these Articles, the holder of the “B”Share requests the Board of Directors in writing to convene the GeneralMeeting, stipulating the reason for and the object of their request.  The Court of Registration shall convene theGeneral Meeting if the convocation of the General Meeting is requested incompliance with the above outlined procedure and the Board of Directors failsto act within a period of 30 days or fails to convene the General Meetingwithin the shortest notice period required by the law or these Articles aftersuch action.

## **4.7.Conditions for a General Meeting resolution resulting in the delisting ofshares from the stock exchange**

The General Meeting mayonly make a resolution resulting in the delisting of shares from the stockexchange — including the decision resulting in the delisting a series of sharesas a sanction - if any shareholder previously undertakes the obligation tosubmit a public bid for purchasing the shares in relation to delisting,according to the Regulations of the Budapest Stock Market for Listing,Continued Trading and Disclose.

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# **5. Rights to Information and Closing of the Shareholders’Register**

## **5.1.Mandatory Dissemination of Information**

# In accordance with the rulesof these Articles governing the publication of notices the report preparedaccording to the Accounting Act, the summaries of the Board and SupervisoryBoard reports, the summary of the submissions regarding the agenda items, theresolution proposals and the extract of the management report shall bepublished at least 15 days prior to the date of the GM.

## **5.2.Shareholders’ Rights to Information**

Each shareholder has theright to attend the General Meeting, request information and comment on issuesat the General Meeting.  Holders ofvoting shares have the right to make proposals and to vote.

The Board of Directorsshall provide the necessary information to any shareholder with respect to anymatter on the agenda of the General Meeting upon the request of suchshareholder submitted in writing to the Board of Directors at least 8 daysprior to the General Meeting. The Board of Directors may refuse to provide suchinformation only if that would violate a substantial business interest orbusiness secret of the Company.

As part of the rights ofShareholders to information shareholders may not  have access to the business books and otherbusiness documents of the Company.

## **5.3.Closing of the Shareholders’ Register**

Shareholders, orshareholders’ proxies shall be entitled to exercise their voting rights at anyGeneral Meeting (1) if they have been duly registered as owners of shares orshareholders’ representatives in the Shareholders’ Register at least 6 (six)business days prior to such General Meeting. Subsequent to closing theShareholders’ Register shareholders are not entitled to transfer their sharesuntil the closing of the General Meeting.

# **6. The General Meeting of the Company**

## **6.1.Supremacy of the General Meeting**

The General Meeting isthe highest decision-making body of the Company.  The decisions of the General Meeting, whichare referred to as resolutions, are binding upon the shareholders, the otherorgans and the officers of the Company.

## **6.2.Matters within the Exclusive Scope of Authority of the General Meeting**

The following mattersshall be within the exclusive scope of authority of the General Meeting:

(a) to draw up and amendthese Articles, unless otherwise provided by the law;

(b) unless otherwiseprovided by the law, the increase or decrease of the registered capital of theCompany;

(c) to amend the rightsattached to individual series of shares;

(d) any merger into,consolidation with another company limited by shares or de-merger of theCompany, or any termination, dissolution, liquidation, or transformation of theCompany into another corporate form;

(e) to decide on theapproval of a public offer on own shares;

(f) decision on issuingconvertible or subscription right bonds, unless otherwise provided by the law;

(g) to elect, remove anddetermine the remuneration of the members of the Supervisory Board, the AuditCommittee and the Board of Directors;

(h) to elect, remove anddetermine the remuneration of the Auditor of the Company and to define thecontents of the essential elements of the contract to be concluded with theauditor;

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(i) to approve the reportpursuant to the Act on Accounting, including the management report and todecide on the utilisation of after-tax earnings;

(j) to approve any changein the Company’s registered scope of activities;

(k) subject to Section11.2, to appoint the person(s), pursuant to Section 255 of the Companies Act, that are authorized to subscribe forshares in any private increase of the Company’s capital;

(l) the alteration of thenumber or par value of the B Share and any rights attached thereto;

(m) decision with respectto an approval pursuant to Section 2.5(b) of the Articles;

(n) to approve theregistering of the Company’s shares on a stock exchange;

(o) transfer, assignment,lease or the granting of permanent right to the use of, the creation of anencumbrance or security interest in a valuable right enabling the continuationof a specific activity of the Company to another business entity - i.e. rightsgranted in the Contract that was concluded for the purpose of providinguniversal electronic telecommunications services pursuant to Articles 117-118of Act C of 2003 on electronic communications;

(p) transfer of the totalor substantial assets of the Company. For the purposes of this Section “substantial” shall mean the transferof assets which would render the Company incapable of performing itsobligations performing its universal service providing obligations as definedin the Contract regarding the provision of Universal TelecommunicationsServices;

(q) to decide on measuresthat are capable of disturbing the relevant process in case of obtaininginformation on a public offer based on and in accordance with a separate Act;

(r) decision on requestto delist the Company’s shares from a stock exchange (see Section 4.7.) ;

(s) to evaluate the workof the members of the Board of Directors in the previous business year,decision on granting relief to the members;

(t) decision on thepayment of interim dividends, unless otherwise provided by the law;

(u) decision on theacquisition of the Company’s own shares;

(v) decision on theexclusion of subscription preference right,

(z) decision on any otherissue that is referred to the authority of the General Meeting by the  law or these Articles.

## **6.3.Passing Resolutions**

The General Meeting shalladopt resolutions by means of the casting of votes by voting shareholders inthe manner stipulated by Sections 6.17. and 6. 18. of these Articles.

## **6.4.Right to Convene General Meetings**

(a) The General Meetingshall be convened by persons authorized by the Companies Act and theseArticles.

(b) In addition to casesstipulated by the Companies Act, the General Meeting also shall be convened:

(i) if the number of themembers of the Board of Directors falls below six (6);

(ii) if the number of themembers of the Supervisory Board falls below six (6); and

(iii) upon the request ofthe holder of the “B” share pursuant to Section 2.3.2.1. of these Articles.

(iv) if the number of themembers of the Audit Committee falls below three (3);

(v) if the auditor andthe Board fails to conclude the assignment contract regarding the auditingactivities within 90 days upon the date of the GM that elects the auditor.

## **6.5.Notification of the Supervisory Board on the convocation of the General Meeting**

If the General Meeting isconvened by the Board of Directors, the Supervisory Board shall be informed ofthe items on the agenda prior to the publication of the notice of the GeneralMeeting and the Supervisory Board may (acting within its statutory scope ofactivity), within eight days of being so informed, propose that further itemsbe added to the agenda provided that it delivers to the Board draft resolutionsproposed by it.  The Board of Directorsshall include such items in the agenda and shall publish the related noticeaccordingly.

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## **6.6.Occurrence and Agenda of a General Meeting**

The Company shall hold aGeneral Meeting at least once each year (the “Annual General Meeting”) wherethe annual balance sheet of the Company shall be approved.  The Annual General Meeting shall occur nolater than April 30 of the year immediately subsequent to the business year inquestion.

In addition to the AnnualGeneral Meeting, the Company may hold extraordinary General Meetings at anytime, if necessary.

## **6.7.Convocation of the General Meeting**

Notice of each GeneralMeeting of the Company — unless otherwise provided by the Act on BusinessAssociations - shall be published in the manner stipulated by the applicablelaw and these Articles for the publication of the Company’s notices andadvertisements 30 days prior to the date of such General Meeting. The publicnotice of the General Meeting of the Company shall be published by the bodyresponsible for the convocation of the General Meeting either by law or bythese Articles.

The members of the Boardof Directors and the Supervisory Board as well as the Auditor of the Companyshall also be notified of the convocation of any General Meeting in writing byregistered mail within eight days after the publication of the announcement ofsuch General Meeting.

## **6.8.Notice of General Meetings**

The public announcementof each General Meeting shall contain:

(a) the name and theregistered office of the Company;

(b) the date and thevenue of such General Meeting;

(c) the items on theagenda of such General Meeting;

(d) the place and thedate of the reconvened General Meeting to be held if the first General Meetingdoes not have a quorum; and

(e) the conditions forthe exercise of the voting rights at such General Meeting.

## **6.9.Supplements to the agenda of a General Meeting**

Shareholders representingat least one percent of the votes may, within eight days from the publicationof the Announcement on the convocation of the General Meeting, request theBoard of Directors in writing to include any issue in the agenda of the GeneralMeeting.

## **6.10.Attendance List**

The Company shall draw upan attendance list of shareholders attending the General Meeting. Theattendance list shall contain the names of shareholders or their proxies orrepresentatives, their addresses (registered offices), the number of shares ofeach series held by them and the number of votes that each is entitled tocast.  The attendance list shall becertified by the Chairman of the General Meeting as well as the minute keeperof such meeting.

## **6.11.Quorum**

Subject to Section2.3.2.9., the General Meeting shall be properly constituted with a quorum ifshareholders representing more than half of the shares carrying voting rightsat such General Meeting are present in person or by proxy within 60 minutes ofthe time stipulated in the public notice convening the General Meeting.  A second General Meeting convened and heldwithin two hours from the time of the original General Meeting without asufficient number of shares present to constitute a quorum shall have a quorumfor the purposes of considering items on the agenda of the postponed GeneralMeeting regardless of the voting rights represented at such meeting, however,for matters listed in Section 2.3.2.9. of these Articles, this shall beapplicable only if the owner of the “B” type share or its attorney is present.

## **6.12.Opening of the General Meeting**

The General Meeting shallbe opened by the Chairman of the Board of Directors or the person designated bythe Board of Directors for such purpose and such person shall be the Chairmanof the General Meeting.  In the absenceof such person, any shareholder may make a nomination for the Chairman of theGeneral Meeting.  Nominations shall notbe discussed in detail by the General Meeting but the Chairman of the GeneralMeeting shall be elected by simple majority vote by reference to the nominalvalue of shares held by those present.

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## **6.13.The Chairman of the General Meeting**

The Chairman of theGeneral Meeting:

(a) shall determine thenumber of shares carrying voting rights represented by shareholders attending theGeneral Meeting and shall determine whether the General Meeting has a quorum;

(b) shall arrange for thepreparation of the minutes of the General Meeting and the attendance list inaccordance with the Companies Act;

(c) shall makerecommendations for the minute keeper of the General Meeting, for the  shareholder, or  its proxy to certify the minutes, and, in theevent of non-computerised voting, for the tellers.  In the event of computerised voting, theChairman of the General Meeting shall act as teller;

(d) shall have theGeneral Meeting adopt the sequence in which items on the agenda, includingitems duly added to the agenda, shall be discussed;

(e) shall chairdiscussions in the General Meeting and shall grant speakers the right to takethe floor in the order corresponding to the sequence of their application forthe floor;

(f) may stipulate a timelimit for contributions to the discussion;

(g) shall put issues to avote in order to adopt resolutions;

(h) shall determine thetotal number of votes cast in respect of, including the number of abstentions,votes for and against, each proposed resolution or amendment;

(i) shall state theresult of each vote and shall declare the resolution of the General Meeting;

(j) shall call forbreaks;

(k) may propose thesuspension of the General Meeting; and

(l) shall declare theGeneral Meeting closed if each resolution on the agenda has been voted on.

## **6.14.Election of the Officials of the General Meeting**

The General Meeting shallelect its Chairman the keeper of the minutes, the person who shall certify theminutes, and, in case of non-computerised voting, the tellers.

## **6.15.Order and Discussion of Items on the Agenda**

By the vote of a simplemajority of the holders of voting shares cast at the General Meeting, shareholdersmay change the order in which items on the agenda are discussed but may noteliminate any item from the agenda.

The General Meeting maybe suspended on one occasion and it must be resumed within 30 days from thedate of the General Meeting.

## **6.16.Suspended General Meeting**

Stipulations in relationto the originally convened General Meeting shall continue to apply to anysuspended General Meeting, provided that it shall be ascertained whether thesuspended General Meeting is properly constituted with a quorum. In all otherrespects, the rules pertaining to the original General Meeting shall beapplied, with the exception of those on the convocation of the General Meetingand the election of the officials of the General Meeting.

## **6.17.Voting Procedures**

6.17.1. At the GeneralMeeting the voting shall be computerised. The Chairman of the General Meeting may propose that some or all of theitems of the agenda be voted upon in lieu of computerised voting by the show ofthe voting cards.  The Chairman’s motionshall be decided by a simple majority vote of the General Meeting.

6.17.2. At the venue ofthe General Meeting prior to commencement the Company shall issue a voting cardor a remote-control for computerised voting (the “voting machine”) to eachholder of voting shares after verification that the shareholder is dulyregistered in the Shareholders’ Register.

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Voting machines or votingcards shall also be issued at the General Meeting to any shareholder in respectof newly-issued shares who has paid the subscription price in accordance withthe resolution of the General Meeting and has been registered in theShareholders’ Register in connection with a capital increase approved by theGeneral Meeting.  Holders of InterimShare Certificates may exercise their voting rights only in proportion to theconsideration already contributed.  Ifany shareholder fails to meet the above conditions, such a shareholder shallnot be issued a voting card or a voting machine.

6.17.3 In the event ofcomputerised voting, the tally of the votes shall proceed electronically.  Prior to the voting taking place, the GeneralMeeting shall be advised by the Chairman or the person designated by him withrespect to the technical details of the computerised voting.  The shareholders shall be advised of theresults of the vote by the Chairman.

6.17.4 In the event ofnon-computerised voting, each shareholder shall receive a voting card.  Voting cards shall contain the name (businessname) of the shareholder or shareholder representative address (seat), as wellas the number and series of shares held by such shareholder and the votes suchshareholder is entitled to cast.  Thevoting shall proceed by the show of the voting cards.

## **6.18.Passing Resolutions**

6.18.1. Votes for oragainst a proposed resolution or amendment cast in accordance with theprovisions of these Articles shall be regarded as votes duly cast. Abstentionsshall not be considered as votes duly cast.  The General Meeting shall adopt its resolutions by a simple majorityvote except for resolutions on issues listed in Section 6.2(a)-(f), (k-l), (n),(q), (r) and (u), which shall require at least a three-quarters majority of thevotes cast. Notwithstanding anything herein to the contrary, if the GeneralMeeting decides to override a resolution of the Board of Directors, suchshareholders resolution shall be binding only if a three-quarter majority ofthe votes of the shareholders that are present vote in favour of such aresolution.

Disadvantageousresolutions regarding rights related to a series of shares can only be made bythe General Meeting if the shareholders of the affected share series give theirseparate consent thereto. During this, provisions related to possiblelimitation or exclusion of share related voting rights — including theexclusion from own shares - shall not apply.

6.18.2. Resolutions ofthe General Meeting in matters listed under 2.3.2.9. of these Articles shall bepassed only with the affirmative vote of the holder of the “B” Share.

## **6.19.Minutes of the General Meeting**

6.19.1. Minutes shall betaken of the General Meeting which shall contain:

·                  the business name and registered seatof the Company;

·                  the venue and date of the GeneralMeeting;

·                  the names of the Chairman of theGeneral Meeting, the minute keeper, the shareholder certifying the minutes andthe tellers;

·                  material events of the GeneralMeeting and the proposals made;

·                  the resolution proposals, the numberof votes in favour and against each resolution proposals and the number ofabstentions;

·                  theobjections of shareholders, members of the Board of Directors or SupervisoryBoard against a resolution if so requested by the objecting person, and allmatters expressly requested by the shareholders, the Chairman of theSupervisory Board or the Auditor.

6.19.2. The minutes shallbe signed by the minute keeper and the Chairman of the General Meeting andshall be certified by  one shareholderpresent elected for such purpose.

6.19.3. Any shareholdershall have the right to request the Board of Directors to issue a copy or anextract of the minutes.

Extract of the minutes ofthe General Meeting.

## **6.20.Attendance by Officials of the Company**

The members of the Boardof Directors and those of the Supervisory Board as well as the Auditor of theCompany shall be invited to attend the General Meeting of the Company and shallrespond to questions raised thereat by the shareholders.  The above-mentioned officials of the Companyshall have the right to participate in the discussions.

# **7. Board of Directors**

## **7.1.Status of the Board of Directors**

The Board of Directorsshall be the management body of the Company and the Board of Directors shallrepresent the Company with regard to third parties, in court and before otherauthorities.

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## **7.2.Members of the Board of Directors**

The Board of Directorsshall be comprised of a minimum of six (6), and a maximum of eleven (11)members. The members of the Board of Directors shall be elected by the GeneralMeeting. The assignment of the members of the Board of Directors lasts for aterm of three years from the date of the annual General Meeting until May, 31of the third year subsequent to the date of the said General Meeting with theexception, that if the General Meeting in the third year is held prior to May31 than their assignment lasts until the date thereof*.*Unless otherwise provided by a separate arrangement, the removal of, or failureto re-elect, a member of the Board of Directors shall not affect the employmentrights of such person in respect of the Company where such member of the Boardof Directors is also an employee of the Company.

## **7.3.Interim Election**

If the General Meetingelects a new member of the Board of Directors as a result of an increase in themembership of the Board of Directors, or on removal or becoming incapacitatedof a member of the Board of Directors, the term of office of the new membershall be identical to the original term of office of the remainder of the Boardof Directors.

## **7.4.Rules of Procedure and Chairman of the Board of Directors**

Subject to the provisionsof applicable law and these Articles, the Board of Directors shall draw up itsown Rules of Procedure.

Member of the Board ofDirectors shall elect the Chairman of the Board in accordance with theprovisions of the Rules of Procedure of the Board of Directors.  The Chairman shall perform such duties asdescribed in the law, these Articles and the Rules of Procedure of the Board.

### **7.4.1. TheBoard of Directors shall:**

(a) be responsible forall matters relating to the Company’s management and course of business nototherwise reserved to the General Meeting by these Articles or by the CompaniesAct;

(b) cause a reportincluding the balance sheet and the profit and loss statement of the Companytogether with the management report to be prepared pursuant to the Act onAccounting and submit such report to the General Meeting with a proposal on theutilisation of after-tax earnings;

(c) have the books of theCompany, including accounting records and the Shareholders’ Register,maintained in compliance with applicable regulations;

(d) make such filingswith the Court of Registration and publish such information as may be requiredby applicable law and these Articles;

(e) draw up, at the endof each business year, a report for the General Meeting on the management ofthe Company, the assets of the Company, the financial situation of the Companyand the business policy of the Company;

(f) adopt an annualbusiness plan which shall contain specific authorisations to managementrelating to the operation of the business of the Company;

(g) have the authority tocreate committees of the Board consisting exclusively of Board members and todelegate part of its authority to such committees

(h) have the authority tocreate committees of  Board members andnon-Board members, to designate the individuals who will serve on thesecommittees, and to delegate authority to such committees;

(i) exercise employer’srights towards the employees of the Company pursuant to the Rules onOrganisation and Operation;

(j) have the authority toinitiate and approve on behalf of the Company any amendment to the contractregarding the provision of the Universal Electronic TelecommunicationsServices.

(k) prepare quarterlyreports for the Supervisory Board on the management financial status and thebusiness policy of the Company;

(l) Ensures the purchaseof own shares on the basis of the authorization of the General Meeting andarranges for the alienation of the Company’s own shares.

(m) decide on suchincreasing of the registered capital of the Company that is allocated to itsscope of authority and the related amendment of the Articles of Association

(n) concludes therelevant contract with the auditor to carry out the relevant activities within90 days upon making the resolution on the election of the auditor by theGeneral Meeting.

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7.5.2. Any transactionhaving a value of USD 100,000 or more between the Company and a controllingshareholder or its parent or subsidiary shall promptly be reported to the Boardof Directors.

## **7.5.Quorum, Passing Resolutions**

(a) The quorum formeetings of the Board of Directors shall be at least six (6) Directors.

(b) Each member of theBoard of Directors shall have one vote. The rules of the voting procedure shall be described in details by theRules of Procedure of the Board of Directors.

## **7.6.Minutes**

(a) Minutes of eachmeeting of the Board of Directors shall be kept, which shall contain the namesof those present, the location and the date of the meeting, the principalissues raised in the course of discussion of individual items on the agenda, atranscript of the contribution of individual Directors to such discussions, thetext of proposed resolutions, (if requested in advance by any such Director),the outcome of each vote and the votes cast by individual Directors, includingthe names of those who voted against any resolution. The exact text ofresolutions adopted by the Board of Directors and any objections raised againstresolutions.

(b) The minutes shall besigned by the Chairman of the meeting of the Board of Directors as well as thekeeper of the minutes.  The minutes shallbe certified by another participating Director. The minutes of each meeting shall be distributed to the members of theBoard of Directors and the Chairman of the Supervisory Board irrespective ofwhether or not they attended the meeting.

## **7.7.  Resignation, Death**

If the resignation of amember of the Board of Directors or the death of a member results in a decreasein its membership below six (6), then the Board of Directors shall within theshortest possible time period from the occurrence of such an event convene aGeneral Meeting.  Should the Board ofDirectors fail to do so, the General Meeting shall be convened by theSupervisory Board.

## **7.8.Liability of Directors**

The members of the Boardof Directors shall act with due care as it is generally expected from personsin such positions and - unless it is otherwise provided in the Act on BusinessAssociations — must give priority to the interest of the company. The membersof the Board shall be liable towards the Company pursuant to the generalprovisions of the civil law in case of causing damage to the Company throughbreaching the laws, the Articles, the resolutions of the General Meeting andtheir managerial duties. The indemnification liability of the members of theBoard towards the Company is joint and severable according to the provisions ofthe Civil Code on jointly causing damage. If the damage was caused by theresolution of the management as a body, those members are exempted from suchliabilities who did not participate in the voting or voted against theresolution in question.

The members of the Boardof Directors shall bear unlimited and joint liability for those damages thatarise from the announcement of false data, rights or facts to the CompanyRegister or the late announcement of the same in addition to failing to filesuch announcement at all.

# **8. The Supervisory Board**

## **8.1.Status of the Supervisory Board**

The Supervisory Boardoversees the management of the Company for the General Meeting. Within itsscope of authority provided by the statutes, the Supervisory Board may requestinformation from any member of the Board of Directors or from senior officialsof the Company and may examine the books and documents of the Company.

## **8.2.Members of the Supervisory Board**

8.2.1. The SupervisoryBoard shall be comprised of  3-15members.. The members shall be elected by the General Meeting. The assignmentof the members of the Supervisory Board lasts for a term of three years fromthe date of the annual General Meeting until May, 31 of the third yearsubsequent to the date of the said General Meeting with the exception, that ifthe General Meeting in the third year is held prior to May 31 than theirassignment lasts until the date thereof.

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# 8.2.2. The majority of themembers of the acting SB must be independent. The SB member is independent ifhe has no other legal relationship with the Company than his SB membership.

# 8.2.3. The SB member shallnot be regarded as an independent member, if

# a) he is an employee or anex-employee of the Company, in the latter case the conflict of interest existsfor five years from the termination of the employment;

# b) provides advisoryservices or other activities as a retained advisor for the Company or its seniormanagers in return of remuneration;

# c) he is a shareholder ofthe Company who either directly or indirectly owns at least 30% of the votes oris a close relative/ common-law spouse to such person [Ptk. 685. § b);

# d) he is a close relative toa — non independent — senior manager of the Company;

# e) he is entitled to receiveremuneration in case of the profitable operation of the Company or receives anyother remuneration besides his fee as a SB member from the Company or anaffiliated business association to the Company;

# f) he is in a legalrelationship with a non-independent member of the Company in another businessassociation on the basis of which the non-independent member has controlling orsupervisory rights;

# g) he is the independentauditor of the Company or an employee / partner thereof for three years fromthe termination of this legal relationship;

h) he is a senior managerin a business association where the independent Board member is the seniormanager of the public company.

8.2.4. The employees’representatives in the Supervisory Board are appointed for election by theWorks Council after consultation with the trade unions

8.2.5. If a new member ofthe Supervisory Board is elected by the General Meeting, or as a result of anincrease in the membership of the Supervisory Board, or due to the removal orresignation of a member of the Supervisory Board, the term of newly electedmembers shall be identical to the original term of office of the remainder ofthe Supervisory Board.

## **8.3.Duties**

The Supervisory Boardshall examine every material report of business policy that is on the agenda ofthe General Meeting and every submission on issues within the exclusive sphereof authority of the General Meeting. The General Meeting may pass a resolutionon a report pursuant to the Accounting Act and the use of the profit afterincome tax only upon receipt of the written report of the SB. The proposal ofthe Board of Directors on the payment of dividend and on the management reportcan only be submitted to the GM upon the receipt of the prior approval of theSB.  The Chairman (Deputy Chairman), inhis absence, a member of the Supervisory Board presents the report of theSupervisory Board during the discussion of the given agenda item.

## **8.4.Rules of Procedure**

8.4.1. The SupervisoryBoard acts as a body. The SB elects a chairman (if necessary, a deputychairman) from among its members. The Supervisory Board sets its own Rules ofProcedures, which are approved by the General Meeting.

8.4.2. Meetings of theSupervisory Board may be convened by the Chairman of the Supervisory Board. Anymember of the Supervisory Board may immediately call a Supervisory Boardmeeting, stipulating in writing the reason for and the objective of suchmeeting if the Chairman of the Supervisory Board fails to fulfil such requestwithin 8 days of receipt thereof and does not convene a meeting to a datewithin 30 days.

8.4.3. The SupervisoryBoard shall have a quorum if 2/3 (two-thirds) of its elected members arepresent. If the Supervisory Board is comprised of three members or if 2/3 ofthe members is less than 3 (three) persons, the presence of three members shallbe necessary to constitute a quorum. If the number of Supervisory Board membersfalls below three or there is no one to convene its meeting the Board ofDirectors shall convoke the General Meeting to restore the proper operation ofthe Supervisory Board.

8.4.4. The meetings ofthe Supervisory Board shall be chaired by the Chairman of the SupervisoryBoard.  The Chairman of the SupervisoryBoard shall appoint the keeper of the minutes and that Supervisory Board memberwho will certify the minutes of the meeting, will put issues to the vote, andwill declare the result of votes.

8.4.5. Minutes shall bekept of each meeting of the Supervisory Board, in accordance with theprovisions hereof governing the minutes of meetings of the Board of Directors.

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## **8.5.Convocation of the General Meeting by the Supervisory Board**

The SB may convene anextraordinary General Meeting with an agenda proposed by itself, if, in itsopinion, the activities of the management infringe the Statutes, the Articlesof Association or the resolutions passed by the General Meeting; or otherwiseinterfere with the interests of the Company or its shareholders.

## **8.6.Liabilities of Members of the Supervisory Board**

The members of theSupervisory Board shall bear unlimited, joint and several liability — accordingto the provisions of the Civil Code regarding jointly causing damage - for alland any damage caused to the Company by non-compliance with their supervisoryobligations.

**8.7. Audit Committee**

8.7.1. The GM elects a3-5 member Audit Committee from the independent members of the SB for the samedurance as the membership of the relevant members in the SB according to Section8.2.1. The Audit Committee shall act within its scope of authorities providedfor the SB in the Act on Business Associations and these Articles as well asthe rules of the Budapest Stock Exchange and the New York Stock Exchange andthe regulations of the SEC.

8.7.2. The Chairman ofthe Committee is elected by the members of the Committee. Only such member canbe elected to be a member who complies with the independency rules of both therules of the SEC and the Act on Business Associations. At least one member mustcomply with the SEC requirements on being a financial expert.

8.7.3. The meeting of theAudit Committee shall have a quorum if three elected members are present. Ifthe number of the AC members falls below three the Board — upon the notificationof the SB — shall convene the GM to restore the proper operation of the body.The Audit Committee shall establish its own rules of procedure that enters intoforce with its approval by the SB.

8.7.4. TheCommittee shall, in particular:

·                  Be directly responsiblefor the oversight of the work of the independent external auditor engaged forthe purpose of preparing or issuing an audit report or performing other audit,review or attest services for the Company;

·                  Evaluate theproposal of the Board of Directors on the election, recall and determining theremuneration of the independent external auditor;

·                  Subsequent toparticipating in the preparation of the auditor’s contract monitors thereasonableness of audit fees and quality (e.g. staffing, experience of auditingpersonnel, man hours expected, timeliness);

·                  Monitors theenforcement of the professional requirements towards the auditor and compliancewith the rules regarding conflict of interest, carries out its duties regardingthe cooperation with the auditor;

·                  Evaluates theoperation of the financial reporting system and - if necessary — proposesmeasures, and within the framework of the above, supports the work of theSupervisory Board with respect to the proper supervision of the financialreporting system;

·                  Review theproposals on the approval of the reports prepared according to the AccountingAct and the use of the profit after tax prior to their submission to the SB;

·                  Review theaudited financial reports prepared according to IFRS and US GAAP standards, theaudit opinion of the independent external auditor prior to its submission tothe SB, especially form the point of view of the changes of accountingguidelines or practice of the IFRS and US Generally Accepted AccountingPrinciples („US GAAP”) standards as well as the accounting adjustments,profitability preconditions, etc.;

·                  Review theManagement Letter;

·                  Review thereports to be submitted to the stock exchanges and financial authorities;

·                  Review theinternal audit environment and the processes applied during the preparation offinancial reports;

·                  Review theefficiency of the internal audit function;

·                  Review theinternal audit workplan prior to its submission to the SB;

·                  Review thereport on the activity of the internal audit area prior to its submission tothe SB;

·                  Review the riskmanagement system and the risk reports;

·                  Establishprocedures for the receipt, retention and treatment of complaints received bythe Company regarding accounting, internal accounting controls or auditingmatters and the confidential, anonymous submission by employees of the Companyof concerns regarding questionable accounting or auditing matters;

·                  Review its taskson a yearly basis;

·                  Completeall those tasks that the SB assigns to the scope of authority of the AuditCommittee.

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# **9. The Auditor**

## **9.1.Election**

The Annual GeneralMeeting of the Company appoints the auditor for a specified period notexceeding two years in duration. The auditor’s assignment is deemed accepted ifthe auditor concludes an assignment contract with the Board of Directors within90 days upon the auditor’s election. If the above deadline lapses without theany result the election of the auditor becomes void and the GM has to electanother auditor.

## **9.2.Duties of the Auditor:**

(a) The Auditor shall beobliged to audit each report prepared pursuant to the Act on Accountingincluding the balance sheet and profit and loss statement, as well as  every material  report to be submitted to the GeneralMeeting, with regard to the  authenticityof data contained therein and their compliance with  Hungarian statutes in force. The Auditorshall submit a report comprising its findings on such matters to the GeneralMeeting.

(b) The Auditor shallprovide all necessary professional support to the activities of the Board ofDirectors and the Supervisory Board.

## **9.3.The rights and the responsibilities of the Auditor**

The Auditor shall haveaccess to all information relating to the activities of the Company.  In connection with the performance of itsduties, the Auditor:

(a) may requestinformation from the members of the Board of Directors, of the SupervisoryBoard and from the employees of the Company;

(b) may verify andexamine the cash in hand, ledgers, the securities portfolio, the inventory, thecontracts and the bank account of the Company;

(c) shall attend theGeneral Meeting that discusses the report of the Company prepared according tothe Accounting Act;

(d) if required, mayattend the meetings of the Board of Directors and the  Supervisory Board with the right to confer.

(e) shall be obliged toinform the Supervisory Board and the Audit Committee  and request the Board of Directors to convenea General Meeting, if:

(i) the Auditor becomesaware that a significant decrease in the Company’s assets is expected; or

(ii) the Auditor becomesaware of a fact that entails the liability of the Board of Directors or theSupervisory Board as set forth in the Companies Act.

(f) If the GeneralMeeting is not convened or the General Meeting does not pass the resolutionsrequired by the statutes the Auditor shall inform the Court of Registrationcarrying out legality supervision to this end.

## **9.4.Auditor’s Conflict of Interest**

The founder,shareholders, members of the Board of Directors or the Supervisory Board andtheir relatives (Section 685(b) of the Civil Code), their common law spouse orany employee of the Company may not be elected as Auditor at any time duringtheir association with the Company and for a period of three years after suchassociation or employed by the Auditor, or have ownership interests in theAuditor, during the term of their association with the Company and for a periodof three years thereafter. Persons included in the register of auditors inaccordance with the relevant legal regulations may be elected as an auditor.Further requirements for auditors in terms of qualifications and conduct, andconflict of interest shall be laid down in specific other legislation.

## **10.Proper Signature on Behalf of the Company**

(1) The firm shall bebound by the signature of (i) two members of the Board of Directors, or (ii) bya member of the Board of Directors and an employee of the Company authorizedfor this purpose by two members of the Board of Directors, or (iii) by twoemployees of the Company authorised for this purpose by two members the Boardof Directors.  Such authorizedsignatories shall jointly sign their full names under the stamped,hand-written, typed or printed name of the company in the same way, that suchsignature appears in the signature book of the Company deposited with the Courtof Registration.

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## **11.Increase in the Registered Capital of the Company**

## **11.1.Cases**

Any increase in theregistered capital of the Company shall be implemented in accordance with theresolution of the General Meeting or in accordance with the Article 11.4.1.with the resolution of the Board of Directors by means of a new issue of newshares either through the public offering or the private placement of shares,by the conversion of the Company’s reserves in excess of the registered capitalinto authorised capital or through conversion of convertible bonds into shares.The holders of the types or classes of shares which are directly affected bythe capital increase, or the holders of shares which are deemed affected by thearticles of association is required for the increase of the share capital as apre-condition for the general meeting resolution adopted for the increase ofshare capital to take effect, that means the affected „A” and „B” series shareowners. During this, provisions related to possible limitation or exclusion ofshare related voting rights — including the limitations related to own shares -shall not apply.

If, in the order ofvoting, the three-quarters majority approval of the „A” series share owners isgranted first, than the three-quarters majority approval of the „B” seriesshare owners is necessary for the validity of the resolution. If thethree-quarters majority can not be obtained in case of any share type theproposal on increasing the registered capital must be withdrawn from theagenda.

## **11.2.Subscription preference right**

11.2.1. Where the sharecapital is increased by way of contribution of cash, within the company’sshareholders first the holders of shares belonging to the same series of issue,and then the holders of convertible bonds and the holders of bonds withsubscription rights in tandem shall be granted preferential rights — in thissequence — for the subscription of shares subject to the conditions laid downin this articles of association.

11.2.2. The Company shall informthe shareholders and the holders of convertible bonds and bonds withsubscription rights concerning their options and the procedure to exercise thepreferential right for the subscription of shares, including the face value orissue price of shares which may be acquired, and the first and last days of the15 days period during which such right can be exercised.

11.2.3. Exercising thesubscription or take-over preference rights can be excluded by the GeneralMeeting — on the basis of the written submission of the Board of Directors. Inthis case the said submission of the Board of Directors must present thereasons of submitting the proposal on excluding subscription preference rightsand the planned issuing value of the shares.

Content of the submissionand its discussion:

The Board of Directorsshall discuss and decide on the approval of the submission according to therules set out in its Rules of Procedure than submits it to the General Meetingfor approval.

The following must bedefined in the submission:

·                  nominalvalue, pieces and series of the shares,

·                  incase of issuing new shares in a closed circle the declaration on undertakingthe obligation to take-over of the shares, specifying the person(s) making thedeclaration,

·                  methodof the increase of the registered capital,

·                  subscriptionminimum,

·                  draftmodification of the Articles of Associations,

·                  issuancevalue of the shares and the conditions of their payment,

·                  incase of non-cash contributions the data related to their provision

·                  othersignificant data

## **11.3.Prohibited Subscription**

Any subscription, byexercise of subscription preference rights, by a shareholder for shares of aSeries which  may not be held by suchperson according to these Articles, shall not be effective.

## **11.4.Private Placement**

The General Meeting mayresolve that new shares to be issued in connection with an increase in thecapital of the Company may be subscribed for exclusively by persons, orshareholders stipulated by the resolution of the General Meeting or inaccordance with Article 11.4.1. with the resolution of the Board of Directorsauthorising such increase in capital.  Ifsuch persons or shareholders determined by the General Meeting or the Board ofDirectors have not subscribed for the volume of shares appropriate for the  subscription minimum by the closing date ofthe subscription period, the capital increase shall be deemed to have failed.

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11.4.1. The Board ofDirectors shall be authorized to increase the registered capital of the Companyin order to operate the stock option program by a maximum amount of**490.000. thousand HUF*,*that is FourHundred Ninety Million HUF, offered exclusively to such investors who wish toparticipate in the stock option program to be implemented at MATÁV Rt. Theissue price shall be at least the par value of the share. This authorization ofthe Board of Directors shall be effective for five years until the date of theGeneral Meeting, closing the business year of 2006.

## **11.5.Conversion of Capital Reserves into Registered Capital**

The Company may increaseits registered capital with its assets above the registered capital or a partthereof if according to the previous year’s report under the Act of Accountingor the interim balance the sufficient coverage of the capital increase isavailable and subsequent to the capital increase the amount of registeredcapital does not exceed its own capital, adjusted according to the Act ofAccounting. The statement on the availability of the sufficient coverage fromthe assets above the registered capital, the figures of the annual report andthe interim balance can be applied within six months upon the turning date ofthe above documents.

Shares falling on theincreased registered capital shall be granted to the shareholders of the sharecompany free of charge, in proportion to the nominal value of the shares ofsuch shareholders.

## **11.6.Conditional capital stock increase by means of converting the convertible bondsto stocks**

11.6.1. The GeneralMeeting may decide on a conditional capital increase through the issue ofconvertible bonds. Bond owners may apply for bonds against the conditionallyincreased capital in line with the resolution of the General Meeting. Theapplications must be forwarded in writing to the Board of Directors with asimultaneous submission of the bonds, identifying the number and face value ofthe stocks applied for. If the bonds were issued at an amount below the facevalue or issue price of the shares, simultaneously with their declaration, bondholders shall pay the difference between the face value of the bond and theface value or issue price of the share to the private limited company. Upon theprovision of such statement the bond holder shall be entitled to receive sharecertificates.

Specific terms forissuing bonds shall be set forth in a resolution by the General Meeting.

11.6.2. The resolution ofthe General Meeting accepting the conditional capital increase shall specify:

a) the method of issuingbonds (closed, public)

b) the number and facevalue of the bonds to be issued, as well as the value at issue, the series ofbonds and the place and time of subscription

c) the terms under whichthe bonds can be converted into shares and the date

d) maturity of the bond,terms of payment of interest and other yields

e) procedures to befollowed in the case of under or over subscription as well as the rules ofallocation

f) in case of issuingprivately held bonds the persons, the number of bonds that they can subscribeand otherfeatures thereof.

## **12.Decrease of the Registered Capital of the Company**

The Company is entitledto decrease its registered capital.

The prevailing rules ofdecreasing the registered capital are set out in Title 2 and 3 of Chapter X ofthe Act on Business Associations.

The validity of theresolution aiming to decrease the registered capital is subject to the separateconsent of the affected „A” and „B” series share owners, in each case withthree-quarters majority of the votes cast. During this, provisions related topossible limitation or exclusion of share related voting rights — including thelimitations related to own shares - shall not apply.

If, in the order ofvoting, the three-quarters majority approval of the „A” series share owners isgranted first, than the three-quarters majority approval of the „B” seriesshare owners is necessary for the validity of the resolution. If thethree-quarters majority can not be obtained in case of any share type theproposal on decreasing the registered capital must be withdrawn from theagenda.

The detailed conditionsof exercising shareholder rights must be included in the resolution of theGeneral Meeting regarding the decrease of the registered capital.

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## **13.Conflict of Interest**

Members of the Board ofDirectors and the Supervisory Board and the Auditor, as well as their closerelatives defined in Section 685(b) of the Civil Code, or any business entitywithin which the above persons hold an interest exceeding 10%, may nothold  an ownership interest exceeding 5%in, be employed by, be officers of or have any contractual arrangement with anybusiness entity  competing with theCompany unless it is permitted by the law and the General Meeting grants, witha three-quarter majority voting, an appropriate waiver from the provisions ofthis paragraph.

Members of the Board andthe Supervisory Board as well as their close relatives (Section 685 (b) of theCivil Code) may on their behalf and to their benefit conclude agreements withthe Company relating to the use of public purpose telecommunications servicesavailable to anyone.

In compliance with theauthorization specified in paragraph (1) of Article 25 of the Act on BusinessAssociations, the members of the Board of Directors and of the SupervisoryBoard may be elected as executive officer or members of the supervisory boardof businesses that pursue activities identical with those of the Company and inwhich the Company holds at least 25 % ownership stake and/or voting rights.

Members of the Board andthe Supervisory Board as well as their close relatives (Section 685 (b) of theCivil Code) may on their behalf and to their benefit conclude agreements withthe Company relating to the use of public purpose telecommunications servicesavailable to anyone. The above provisions are not affecting the rules on thematter included in the Act on Business Associations.

## **14.Indemnification of Members of the Board of Directors and the Supervisory Board**

## **14.1.Indemnification**

The Company shall, to thefullest extent permitted by law, indemnify any member or former member of theBoard of Directors or any member or former member of the Supervisory Board whowas or is a party or is threatened to be made a party to any threatened,pending or completed action, suit or proceeding, whether civil, criminal oradministrative, by reason of the fact of his current or former position at theCompany against expenses (including attorneys’ fees), judgments, fines andamounts paid in settlement actually and reasonably incurred by him inconnection with such action, suit or proceeding if he acted in good faith andin a manner he reasonably believed to be in or not opposed to the bestinterests of the Company, and, with respect to any criminal proceeding, had noreasonable cause to believe his conduct was unlawful.

## **14.2.Advancing Expenses**

Expenses (includingreasonable attorney’s fees) incurred by a member of the Board of Directors orthe Supervisory Board in defending any civil, criminal or administrativeaction, suit or proceeding may be paid by the Company in advance of the finaldisposition of such proceedings upon receipt of an undertaking by or on behalfof such person to repay such amount if it shall ultimately be determined thathe is not entitled to be indemnified by the Company pursuant to Section 13.1.

## **14.3.Insurance**

The Company shall havethe power to purchase and maintain insurance on behalf of any person who is orwas a member of the Board of Directors or the Supervisory Board against anyliability asserted against him and incurred by him in any such capacity,whether or not the Company would have the right to indemnify him against suchliability under the provisions of Sections 13.1. and 13.2. or any otherprovisions of law.

## **15.Other Provisions**

## **15.1.Financial Year**

The financial year of theCompany shall correspond to the calendar year.

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## **15.2.Notices**

Notices andadvertisements of the Company shall be published in the nationwide, officialjournal of the Budapest Stock Exchange and in the official publication space ofthe Budapest Stock Exchange Closed Limited Company (i.e. home page of the StockExchange) and the Official Gazette (“Cégközlöny”) in cases required byapplicable law.

## **15.3.Interest**

The Company shall not beliable for interest on the payment of dividends.

## **15.4.Modification of Law**

If the provisions of theCompanies Act in force at the date of the restating  of these Articles, specifically Part I(General Provisions on Business Associations) and Section X of Part II(Regulations Pertaining to the Various Forms of Business Associations)  are amended the review of these Articles andnecessary changes shall be placed on the agenda of the General Meeting to beheld immediately after the amendment of the Companies Act, to avoid anyviolation of the rights of shareholders as a result of the amendment of theCompanies Act.

## **15.5.Universal electronic communications service providing obligations:**

Pursuant to Section119-120 of Act C of 2003 on electronic communications and as a performancethereof the provisions of the Universal Telecommunications Service ProvisioningContract and its Annex 1 (Articles of Associations) concluded between theMinister heading the Prime Minister’s Office and Magyar TávközlésiRészvénytársaság shall remain effective until the conclusion of the universalelectronic communications service provisioning contract between the Minister ofInformatics and Communications and Matáv Magyar Távközlési Részvénytársaság.

## **15.6.Miscellaneous**

15.6.1. On the effectivedate of this amendment of the Articles, all prior versions of the Articles andall resolutions of the Company inconsistent with these Articles shall have noeffect.

“References in theArticles made to Act no VI of 1988 are repealed and replaced by the relevantprovisions of Act CXLIV of 1997.”

Budapest, December 21,2006

This Articles ofAssociations have been worded into a unified structure and the modifications in1.6.2., and 15.2. were countersigned by:

 
|                                  |   |   |        |
|----------------------------------|--------|--------|--------|
| Dr. Tibor  Székelyhídi |   |   |   |

 

#  

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# **Annex 1**

**to theArticles of Association to the Articles of Association approved, amended andlaid down at the General Meeting of Hungarian Telecommunications CompanyLimited held on April 26, 2002**

The major obligationsundertaken in the Universal Telecommunications Service Agreement concludedbetween the Minister heading the Prime Minister’s Office and HungarianTelecommunications Company Limited pursuant to and as a fulfillment of Articles50 and 106 (5) of Act XL of 2001 on Communications
| “5.1.   | General obligations of the Service Provider”                                                 |
|--------------|---------------------------------------------------------------------------------------------------|
| “5.1.1. | Processing of request of establishment of subscriber  access point”                          |
| “5.1.2. | Establishment of subscriber access point”                                                    |
| “5.1.3. | Provision of operator-assisted services”                                                     |
| “5.1.4. | Creation of the conditions of emergency calls”                                               |
| “5.1.5. | Directory”                                                                                   |
| “5.2.   | Quality requirements of the universal service”                                               |
| “5.3.   | Fault report service, fault repair, billing  complaint handling”                             |
| “5.4.   | Installation and operation of public payphones”                                              |
| “5.5.   | Penalty for delay”                                                                           |
| “5.6.   | Keeping of accounting records and statements”                                                |
| “5.7.   | Data supply to authorities”                                                                  |
| “6.     | The service provider’s right to use other technology  when providing universal service” |
| “7.     | Tariffs, tariff packages”                                                                    |
| “8.     | Support to universal telecommunications services”                                            |
| “9.     | The Minister’s obligations”                                                             |
| “10.    | Conditions of service suspension”                                                            |
| “13.    | Settlement of disputes, right to make comments and  proposals”                               |

 

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