The execution of underwriting agreement by Grupa LOTOS S.A.
Report no. 30/20142014-11-13

The Management Board of Grupa LOTOS S.A. (the “Company”) hereby announces that on 12 November 2014, in connection with a rights issue by way of a public offering of 55,000,000 ordinary series D shares with a nominal value of PLN 1.00 per share in the Company (the “Offer Shares”) (the “Offering”), the Company and Société Générale, with its registered office in Paris, Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie, with its registered office in Warsaw (the “Joint Offering Agents”), Bank Zachodni WBK S.A., with its registered office in Wrocław, ING Bank N.V., with its registered office in Amsterdam, UniCredit CAIB Poland S.A., with its registered office in Warsaw (together with the Joint Offering Agents, the “Underwriters”) and ING Securities S.A., with its registered office in Warsaw (jointly with the Underwriters, the “Managers”) entered into an underwriting agreement (the “Underwriting Agreement”). On the terms defined therein, the Managers undertook, each of them individually, to use all of their reasonable efforts to procure subscribers for the Offer Shares, which have not been subscribed for in the exercise of the pre-emptive rights to the Offer Shares (the “Pre-emptive Rights”) or under the additional subscriptions for such shares (the “Additional Subscriptions”), and if that does not occur, the Underwriters will be required to personally subscribe for such Offer Shares in a number not greater than that determined in the Underwriting Agreement at the determined issue price (firm underwriting agreement). The Underwriters’ obligation to subscribe for the Offer Shares (not subscribed for in the exercise of the Pre-emptive Rights or under the Additional Subscriptions) does not cover the Offer Shares which are intended to be validly subscribed for by the State Treasury pursuant to the agreement on granting support that is not state aid executed by the Company and the State Treasury on 15 October 2014 of which the Company notified in in the current report No. 21/2014 of 15 October 2014.

The Underwriting Agreement contains, inter alia, the following conditions precedent to the performance of the commitment to underwrite the Offering: (i) no changes or events having occurred which could result in any material adverse change in the Group’s legal or financial standing, profits, business, or economic forecasts, as compared to the status described in the Prospectus; (ii) the agreement between the Company and the State Treasury on granting certain non-state-aid support not being terminated, by notice or otherwise; (iii) the Company having confirmed its representations and warranties contained in the Underwriting Agreement as at the date of performance of the underwriting commitment; (iv) the Company or its advisers having delivered legal opinions, disclosure letters and comfort letters with such contents as have been agreed with the Joint Offering Agents; (v) the Company having performed the obligations set out in the Underwriting Agreement.

If any of the conditions to the performance of the underwriting commitment is not satisfied and is not waived by the Joint Offering Agents prior to the placement of subscription orders for the Offer Shares subject to the Underwriting Agreement, the Underwriters’ obligation to place subscription orders for the Offer Shares pursuant to the Underwriting Agreement will expire. The Joint Offering Agents, in their own name and on behalf of the other Managers, may also terminate the Underwriting Agreement in the situations described therein, in particular if any of the representations or warranties of the Company is or becomes incompatible with the actual or legal status or in the event of any material change in the situation on the financial markets.

The Underwriting Agreement contains customary lock-up provisions as applied in offerings similar to the Offering. Specifically, the Company agreed that, within the period of 360 days from the first day of the listing of the Offer Shares, without the prior written consent of the Joint Offering Agents, it will not: (a) directly or indirectly offer or issue and pledge, sell, lend, enter into any purchase agreements, or otherwise use, grant options or execute purchase agreements, or enter into agreements regarding the sale or granting of options, rights or warrants for the purchase of the shares in the Company or any convertible securities or securities that are linked to any other right to purchase the shares in the Company or to announce such transactions; or (b) enter into any swap transactions or other agreements or transactions transferring in full or in part, directly or indirectly, the economic consequences of the ownership of the Company’s shares whether or not such swap or transaction described in (a) or (b) above is to be settled by way of the delivery of the shares in the Company or other securities, cash or otherwise or (c) present  any proposal of such transaction to the shareholders of the Company.

The Underwriting Agreement contains other customary undertakings of the Company including an undertaking regarding the use of proceeds in the manner determined in the prospectus which was prepared in connection with the Offer.

Additionally, the Underwriting Agreement includes the Company’s undertaking to indemnify the Managers and certain other persons and to hold them harmless against certain claims, undertakings or costs which may be demanded from or incurred by the Managers or certain other persons in connection with the Offering (the indemnification clause).

The Underwriting Agreement is governed by English law.

This current report is being released pursuant to Article 56 Section 1 Clause 1 of the Act of 29 July 2005 on public offering and on the conditions for introducing financial instruments to an organized trading system and on public companies (consolidated text: Dz. U. of 2013, item 1382).

Legal notice:

Not for release, publication or distribution, directly or indirectly, in or into the United States of America, Australia, Canada or Japan.

This communication is for informational and promotional purposes only and under no circumstances shall constitute an offer or invitation to make an offer, or form the basis for a decision, to invest in the securities of Grupa LOTOS S.A. (the “Company”). The prospectus which was prepared in connection with the offering of the Company’s shares (the “Shares”) subject to pre-emptive rights (the “Prospectus”) and approved by the Polish Financial Supervision Authority, is the sole legally binding document containing information about the Company and the offering of its Shares in Poland. The Prospectus was made available in an electronic format on the website of the Company (www.lotos.pl) and, additionally, for information purposes, on the website of Powszechna Kasa Oszczędności Bank Polski S.A. Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie (www.dm.pkobp.pl).

This communication does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers Thereof dated 19 October 2005.

This communication (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States, Australia, Canada or Japan, or any other jurisdiction. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States of America, unless registered under the Securities Act or unless an exemption from the registration requirements set forth in the Securities Act applies to them. No public offering of the securities will be made in the United States of America.

Neither the Company nor any of its subsidiaries or any other related entities shall be held accountable for any damage resulting from the use of this communication or a part thereof, or its contents or in any other manner in connection with this communication.

Société Générale, Powszechna Kasa Oszczędności Bank Polski S.A. Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie, BZ WBK, ING Securities and Unicredit The Managers are acting exclusively for the Company and no one else in relation to the proposed Offering and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Offering and will not be responsible to any other person for providing the protection afforded to their respective clients or for providing advice in connection with the Offering.