Grivalia Properties : Response letter to shareholder information request regarding EGM of 17.12.2018

GRIVALIA PROPERTIES REIC

117, Kifisias Avenue &

Agiou Konstantinou Street Maroussi, GR 151 24 Athens-Greece

Tel: (+30) 210 8129 600 Fax:(+30) 210 8129 670

VAT n. GR094048855 General

Comm.Registry 000239101000 Reg. act 11/352/21.9.2005

Ref.No: 1812.40134.1776

To: Lilium Sarl

33 Rue Sainte Zithe

L-2763 Luxembourg, Luxembourg

Athens, 14.12.2018

Dear Sirs,

Re: Reply to your request of information dated 12.12.2018

We refer to your request for information pursuant to article 39 par. (4)(a) of law 2190/1920, dated 12.12.2018 (the "Request").

Our below answers to your Request will also be read to the shareholders present at the Extraordinary General Assembly of 17.12.2018.

(1) Additional information on the Related Party Transaction and the new company to be established by company executives

(i) more information on the exact agreement to be concluded

Per the disclosures already in relation to the related party transaction, on pages 21 and 9 of the presentation published on 26 November 2018 on Eurobank's website titled "Eurobank's transformational plan - Merger with Grivalia / NPE reduction Acceleration Plan" the new company ("Grivalia Management Company") will enter into a management agreement (the "Management Agreement") with Eurobank Ergasias SA ("Eurobank") that will have absorbed

Grivalia Properties REIC ("New Group"). The Management Agreement will have a term of ten (10) years. Grivalia Management Company will charge market level fees based on cost and performance criteria.

All Grivalia personnel will be transferred to Grivalia Management Company resulting in savings of €6m of operating expenses for the New Group. This will be offset by the market level fees of the Management Agreement.

Based on the current real estate holdings of the New Group amounting to €2.2bn assets (vs. approximately €1.1bn for Grivalia standalone), the net incremental cost expected to beincurred by the combined New Group will be c.€3.5m (before VAT) per annum (i.e. incremental to the current Staff costs of Grivalia of €6m per 9 month 2018 annualised figures). The fees paid by the New Group to Grivalia Management Company will be subject to a cap of €12m (before VAT) per annum.

A preliminary head of terms of the Management Agreement will be presented for approval by the shareholders, at the relevant item of the agenda, during the Extraordinary General Assembly of 17.12.2018.

(ii) the timing of the entering into such contract

The Management Agreement will become effective only upon and subject to completion of the merger by absorption of Grivalia Properties REIC by Eurobank (the "Merger").

(iii) Information regarding the company which will be established

Grivalia Management Company may be established prior to the completion of the Merger by key members of Grivalia's management team. Mr. Chryssikos will be the Executive Chairman and one of the key founding partners of Grivalia Management Company with a stake of circa 70%.

Grivalia Management Company is expected to employ the personnel of Grivalia, such employment becoming effective only upon and subject to completion of the Merger.

(2) Additional information on the merger constituting specific information on affairs of the company which is necessary in order to make a fair assessment of items 3 and 4 of the agenda

(i) provide additional information in relation to how the exchange ratio for the merger was determined and why the Board believes the proposed share exchange ratio is fair and equitable and in the best interest of Grivalia shareholders

We note that according to Article 39 par. 4(a) of law 2190/1920, the information requested by the minority shareholders must be useful for the actual assessment of the items of the agenda. We do not believe that your query as regards the exchange ratio is per se useful for the actual assessment of the items of the agenda of the Extraordinary General Assembly of 17.12.2018. However, acting with good faith and in order to assure the complete and accurate information of our shareholders, we reply in detail to your query regarding the exchange ratio including Grivalia's Board of Directors rationale as regards the captioned matter.

The exchange ratio is an outcome of extensive negotiations between the parties and we believe it represents an attractive transaction for Grivalia shareholders. In particular we would point to the following references:

• - The exchange ratio of 15.8:1 Eurobank shares for each Grivalia share was determined based on the 1 week volume weighted average share price ("VWAP") of Grivalia (€7.2846) and Eurobank (€0.4610)1.

• - Note in this calculation, the share price of Grivalia was not adjusted for the €40.5m dividend payment to the Grivalia shareholders before the closing of the proposed merger (corresponding to €0.42 per Grivalia share).

• - Therefore, the implied value of each Grivalia share based on Eurobank's closing price of €0.47 on Friday, 23 November 2018 is €7.4007 representing a premium of 3% over Grivalia's closing share price the same date of €7.17, or a premium of 9% if the Grivalia share price had been adjusted for the dividend distribution namely €7.82.

• - On the same basis of calculation, if we take the 1 month, 3 month & 6 month VWAPs2 the implied exchange ratio would be as per below. Based on the currently proposed exchange ratio that would imply even greater premium for Grivalia, ranging from 18% to 45%:

  • o 14.0:1 based on 1 month VWAP of 7.4992 for Grivalia and 0.5357 for Eurobank.

  • o 13.2:1 based on 3 month VWAP of 7.8768 for Grivalia and 0.5949 for Eurobank.

  • o 11.3:1 based on 6 month VWAP of 8.2732 for Grivalia and 0.7302 for Eurobank.

In addition, please note the following:

Our Board sees the transaction from a relative value standpoint. We do not see the transaction as a sale of Grivalia at a discount to NAV but rather as a merger with Eurobank, creating a New Group in which Grivalia shareholders will have a continued 41% interest and exposure to further potential upside (in addition to an upfront capital return of €40.5m).

Thanks to the merger Eurobank intends to materially accelerate the de-risking of its balance sheet and create the strongest Greek bank, targeting strong sustainable earnings and a return on tangible equity of over 10% in 2020.

In the current market, a wide range of European publicly listed real estate companies across all sectors and geographies are trading at significant discounts to their respective net asset value (NAV). In the office space, REITs with exposure to CEE or Southern Europe are trading at discounts to NAV of up to c.40%. Recent relevant M&A transactions in this space include Fonciere de Regions' take out of its Italian subsidiary, Beni Stabili, at a 10% discount to spot NAV (in April 2018), Starwood Capital's acquisition of 26% of CA Immobilien Anlagen in March 2018 traded at a 2% discount to spot NAV, whilst in Spain (albeit in the residential

• 1 Source: Factset

• 2 Source: Bloomberg

sector) Blackstone's acquisition of 81% of Testa Residencial in October 2018 traded at a 4% discount to NAV. Grivalia has been trading at a discount of c.9.5%-19.3% to its NAV during the last two months before the announcement. Following the announcement, Grivalia stock re-rated, trading at a premium or small discounts to NAV demonstrating that the markets welcomed the Merger and its terms.

Grivalia shareholders are not losing the real estate upside. If we all agree that better days are coming for the Greek real estate then this upside in the combined entity is not forgone and in practice the exposure in that sector remains the same since 41% of the combined estimated real estate of €2.2bn will be owned by Grivalia shareholders. One can argue

Grivalia is coming in with higher quality portfolio but we would note that approximately 20% of Grivalia's portfolio is leased to Eurobank. To capture in full this upside we are setting up the Grivalia Management Company, a partnership belonging to the top executive team of Grivalia under an arm's length 10-year agreement, to manage the combined portfolio and maximize value for the shareholders of the New Group.

Grivalia Management Company will have a similar structure and fees compared to other externally managed REITS globally. It will provide its expertise in capital allocation, disposals, portfolio management, technical management and due diligence, as well as other managerial services needed to maximize value.

For all the above reasons our Board of Directors strongly believes that this is a unique value proposition and unanimously decided to approve it and invite our shareholders to decide on this important milestone for Grivalia.

(ii) confirm whether the Related Party Transaction will be entered into by the company prior to the merger and whether it is the same agreement referred to in the joint announcement of the two boards

As mentioned above, the Management Agreement will become effective only upon and subject to completion of the Μerger. We confirm that the Related Party Transaction included in item (4) of the agenda of the Extraordinary General Assembly of 17.12.2018, is the Management Agreement which is also referred to in the joint announcement of the two boards.

We remain at your disposal for clarifications.

For the Board of Directors of Grivalia Properties REIC

The Chairman

Nikolaos A. Bertsos