IAlbatros : Conclusion of the Sale Agreement of the indirect subsidiary’s – iAlbatros Poland S. A. – shares

Current report No 6/2017

Date of preparation: 2017-03-02

Abbreviated name of the Issuer: iALBATROS GROUP S.A.

Subject: conclusion of the Sale Agreement of the indirect subsidiary's - iAlbatros Poland S. A. - shares

Legal basis Article 17(1) MAR Report content:

The Management Board of iAlbatros Group S. A. with its registered office in Warsaw ("the Issuer", "the Company") informs that on 1st March 2017 the conditional Sale Agreement of the indirect subsidiary's - iAlbatros Poland S. A. with its registered office in Warsaw ("iAlbatros Poland") ("the Agreement") - shares was concluded by and between the Issuer's subsidiary, Holding Inwestycyjny Akesto Sp. z o. o. with its registered office in Warsaw ("Akesto"), and the entity which will control iAlbatros Poland ("the Buyer").

In accordance with the authorisation contained in the resolution No 6 of the Extraordinary General Meeting of the Company of 28th December 2016 on the consideration of the request and giving a consent by the Management Board for the disposal of the indirect subsidiary's - iAlbatros Poland S. A. with its registered office in Warsaw - shares, the Company negotiated with the Buyer the sale of shares of iAlbatros Poland, which resulted in the conclusion of the Agreement.

In accordance with the Agreement, closing and settlement of the transaction, i.e. transfer of 100% of the shares of iAlbatros Poland (together with all rights attached to them) shall be made at the latest on 21st March 2017, provided that the conditions precedent are fulfilled until the date of closing and settlement of the transaction and the price for 100% of the shares of the iAlbatros Poland is paid.

The price which the Buyer will pay in exchange for 100% of the shares of iAlbatros Poland amounts to PLN 124,000,000 (in words: one hundred and twenty-four million zloty).

In addition, the Buyer or any other entity from its capital group shall do the following before handing over of the object of sale:

• repay loans and other liabilities, payable to Akesto by iAlbatros Poland, amounting to PLN 49,594,236 (in words: forty-nine million five hundred ninety-four thousand two hundred and thirty-six zloty), which shall be paid to Akesto;

• repay outstanding amounts of loans and other liabilities, due to the Company and to companies from the capital group of the Company by iAlbatros Poland, amounting to PLN 10,869,548 (in words: ten million eight hundred and sixty-nine thousand five hundred and forty-eight zloty), which shall be paid to the Company;

• make a payment on account of the loan provided to the Company, amounting to PLN 8,000,000 (say: eight million zloty), the repayment of which is foreseen until 31 December 2017 at the latest. The loan is secured by a pledge on the shares of Satis GPS Sp. z o. o. totalling up to 150% of the loan amount and the interest rate of 6% p. a.

Enterprise Value calculated as the total value of the funds received within the transaction minus cash, plus the external debt is greater than 140 million zloty.

The total amount received within the above-mentioned operations, as long as all the conditions precedent as described below are fulfilled, will help to achieve the repurchase of shares by the Issuer only in the minimum amount provided for by resolutions of the General Shareholders' Meeting dated 28th December 2016.

Conditions precedent, which, under the Agreement, should be fulfilled by Akesto immediately, however no later than until 20th March 2017, and by the Buyer until the date of closing and settlement of the transaction, i.e. at the latest by 21st March 2017, are reserved in the Agreement. Among other things, conditions precedent are the following:

• obtaining the necessary corporate approvals, including the approval of the management body of the dominant entity of the Buyer;

• submitting the relevant disclosures related to the situation of iAlbatros Poland and its subsidiaries to the Buyer;

• the absence of crucial adverse change in the situation of iAlbatros Poland and its subsidiaries;

• fulfilling by iAlbatros Poland the conditions on the regularity of the financial parameters crucial for the transaction, such as the debt ratio to third parties or iAlbatros Poland's balance of cash as of 28th February 2017;

• non-violation of the representations and warranties made in the Agreement, in respect of which the loss exceeds or may exceed the amount indicated in the Agreement;

• signing the agreements with the Buyer by key managers;

• confirmation by the Buyer of the correct approach of the Company and Akesto to certain issues related to the transaction;

• transferring by iAlbatros Poland, Akesto and the Issuer documents set out in the Agreement confirming, inter alia, the transfer of the intellectual property rights, the conclusion of the relevant Annexes to the existing agreements or their termination, with regard to iAlbatros Poland and its subsidiaries, which remains partially out of the Issuer's control.

In addition, the Issuer agreed to ensure a proper implementation of obligations under the Agreement by Akesto, including covering any damage resulting from the breach of the Agreement by Akesto.

On the basis of the Agreement, the liability on account of defects warranty and the liability of the Company and Akesto (except for the cases defined in the Agreement) was limited to the amount of PLN 1,240,000 (say: one million two hundred forty thousand zloty).

The parties to the Agreement shall be entitled to the withdrawal from it in the specific circumstances and under the conditions laid down in the Agreement.

The Issuer shall inform on the performance of the Agreement and settlement of the sale of 100% of iAlbatros Poland's shares, which, in accordance with the Agreement, should take place at the latest on 21st March 2017, in a current report including information on the identity of the Buyer.

Legal basis: Article 17(1) of the Regulation No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council as well as Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.