Alior Bank S.A. — M&A Activity 2016

Apr 30, 2016

Outsourcing Agreements relating to the planned acquisition of thedemerged business of Bank BPH S.A.

Pursuant to Article 56 Section 1 item 2 of the Act of 29 July 2005 onPublic Offering, Conditions Governing the Introduction of FinancialInstruments to Organized Trading, and Public Companies (the "PublicOffering Act") in conjunction with § 5 Section 1 item 3 of the Ordinanceof the Minister of Finance of 19 February 2009 on current and periodicinformation provided by issuers of securities and on conditions underwhich information required by legal regulations of a third country maybe recognised as equivalent (the "Ordinance"), the Management Board ofAlior Bank S.A. (the "Bank") hereby announces that on 29 April 2016 theBank entered into: (i) an outsourcing agreement concerning the servicingof a portfolio of mortgage receivables (the "Ops SLA") and (ii) an ITservices outsourcing agreement (the "IT SLA") (together jointly the"Agreements") with Bank BPH S.A.

The Agreements were executed in connection with the preliminary sharepurchase and demerger agreement regarding the acquisition of the corebusiness of Bank BPH S.A. (the "Bank BPH Core Business"), which wasdisclosed by the Bank on 1 April 2016 in current report No. 14/2016.

The IT SLA concerns the provision of IT services to Bank BPH S.A.required by Bank BPH S.A. to operate and conduct its business as usualfollowing the transfer of the Bank BPH S.A. IT platform to the Bank as apart of the Bank BPH Core Business. The IT services shall include: (i)services supporting Bank BPH S.A. business processes; (ii) IT processservices, (iii) user support services and (iv) ad hoc / projectservices. The Bank shall be obliged to maintain a separate IT platformto provide services under the IT SLA.

The Ops SLA concerns the provision of a wide scope of administration andoperation services related to the servicing of the mortgage portfolioretained by Bank BPH S.A. following the demerger and transfer of theBank BPH Core Business to the Bank.

Under the Agreements the Bank shall receive reimbursement of the actualcosts incurred in relation to the provision of services, calculated inaccordance with the agreed methodology (the "Costs"). Additionally, eachyear the Bank shall receive a fee paid in 12 instalments. In the case ofthe IT SLA, the yearly fee has been fixed in the amount of PLN1,960,000. In the case of the Ops SLA, the yearly fee shall be equal to10% of the Costs incurred in a given year (margin based fee). Based onthe Costs forecast specified in the schedules to the Ops SLA, the Bankestimates that the fee for the provision of services during the firstyear of the Ops SLA shall amount to PLN 1,530,000. Due to the variableamount of the Costs borne and the Bank's prediction that the value ofthe annual fee under Ops SLA in future years will gradually decreasecompared to the fee for the first year in which the Ops SLA is in force(as a result of the Cost optimization), it is not possible to preciselydetermine the amount of the fee for the entire term of the Agreements.

The Bank's fee may be subject to variation depending on the actualperformance of the service under the Agreements. Should the Bank exceedthe agreed service levels, the yearly fee may be subject to increases upto twice its amount. In case of a failure to achieve the agreed servicelevels, contractual penalties will be imposed and the Bank's fee may besubject to a decrease up to no more than the amount of the yearly fee.

The services under the Agreements will be provided as of the date of theregistration of the demerger and the transfer the Bank BPH Core Businessto the Bank (the "Effective Date"). In case of the Ops SLA, thecondition precedent of the entry of the agreement into force is either aPolish Financial Supervision Authority permit for the outsourcing of theservices covered by the Ops SLA by Bank BPH S.A. to the Bank or acomfort letter from the Polish Financial Supervision Authority that suchpermit is not required.

Both Agreements were concluded for a limited period of time and shallexpire upon the earlier of: (i) the full settlement of the Bank BPH S.A.mortgage receivables; or (ii) 30 (thirty) years following the EffectiveDate. Each agreement may be terminated earlier by either party in thecircumstances set out therein such as e.g.:(a) with respect to Bank BPHS.A., in case of: (i) a change of control over Bank BPH S.A. understoodalso as a sale of 50% of the portfolio mortgage receivables; (ii) theBank's default under the Agreement which is irremediable; (iii) receiptof a bona fide offer to assume the services covered by a given agreementfrom a third party, provided however that such termination may not takeplace before 31 December 2018; (iv) an increase of the Costs by 15%(other than as a result of compliance with the regulatory requirementsor changes in the applicable law) in comparison to the level of Costsfor the first year of providing the services under a given agreement;(b) with respect to the Bank, in case of: (i) Bank BPH S.A's defaultunder the Agreement which is not remedied within a period of 30 days;(ii) submission of a termination notice regarding another of theAgreements.

The Agreements jointly constitute a "significant agreement" within themeaning of the Ordinance because of their value (including thereimbursement of the Costs and the Bank's fee), which exceeds 10% of theBank's equity.