Cyfrowy Polsat S.A. — M&A Activity 2018

May 25, 2018

Subject:Conclusion of an agreement onthe acquisition of a majority stake in Eleven Sports Network sp. z o.o.

With reference to Current Report No. 19/2018of 24 May 2018, the Management Board of Cyfrowy Polsat S.A. (the "Company")hereby announces that following the negotiations on 24 May 2018,Telewizja Polsat sp. z o.o. ("Telewizja Polsat"), i.e. adirect subsidiary of the Company, entered into an agreement with ElevenSports Network LTD with its registered office in London (the "Seller")on the acquisition of 3,340 shares with the nominal value of PLN 50 (the"Shares") in Eleven Sports Network sp. z o.o. with itsregistered office in Warsaw (the "Agreement", "ESN").Pursuant to the Agreement, Telewizja Polsat will acquire the Shares atthe moment of payment of the first tranche of the price, which shouldtake place within two business days from the date of concluding of theAgreement. In the case where the Shares are not transferred to TelewizjaPolsat during this period, the Company shall inform of this fact in aseparate current report.

The Shares to be acquired by TelewizjaPolsat, following the registration of the share capital increase setforth in the Agreement, will represent 50% + one share in the sharecapital of ESN. The total price for the Shares acquired under theAgreement has been set at EUR 38 million (the "Share Price").The Share Price is payable in two tranches. The first tranche of EUR 18million (the "First Tranche") will be paid within twobusiness days from the date of concluding the Agreement.

The second tranche of EUR 20 million (the "SecondTranche") is to be adjusted for the net debt of ESN and paid whenthe conditions for its payment reserved in the Agreement are satisfied.The payment of the Second Tranche should take place during a period notexceeding four months from the date of payment of the First Tranche. IfTelewizja Polsat fails to pay the Second Tranche, the Seller will havethe right to repurchase the Shares (call option) from Telewizja Polsatfor the Share Price reduced by the unpaid Second Tranche and increasedby EUR 750,000.

If the value of ESN based on the results for2020 exceeds the amount of EUR 80 million, Telewizja Polsat will berequired to pay the Seller an additional earn-out payment equal to 25%of the surplus of ESN's value over the amount of EUR 80 million (withESN's value calculated as 9x adjusted EBITDA based on the financialstatements of ESN for the financial year ending 30 June 2020).

In addition, Telewizja Polsat, the Sellerand ESN executed a shareholders' agreement governing the rights andobligations between the shareholders and ESN (the "Shareholders'Agreement"). The Shareholders' Agreement provides for contractualpenalties for a breach of material provisions of the Shareholders'Agreement and the maximum contractual penalty set forth therein is EUR10 million. Under the Shareholders' Agreement the shares in ESN aresubject to certain transferability restrictions and in specifiedcircumstances Telewizja Polsat and the Seller have the right to acquirethe stake of the other shareholder at market price or to dispose oftheir respective stake to the other shareholder at market price (putoptions and call options).

The acquisition of the Shares will befinanced with own funds of Telewizja Polsat.

The turnover of ESN had not exceeded theamount of EUR 10 million in either of the two preceding financial years.

ESN produces and distributes sports contentwithin the territory of Poland and owns attractive sports rights whichare sold as program packages to pay TV operators, including the Company,active on the Polish market. The acquisition of the Shares constitutes along-term strategic investment by the Company's capital group. In themedium term, gaining access to the portfolio of sports rights held byESN will strengthen the position of the Company's capital group in theincreasingly fragmented television market, while concurrently securingaccess to ESN's sports content for the Company's and other Groupcompanies' customers within their Group.