STRICTLY PRIVATE AND CONFIDENTlAL cvc

Capita!Partners

WTC Luchthaven Schiphol Tower B, 6th floor Schiphol Boulevard 285

1118 BH Luchthaven Schiphol

The Netherlands

BYE-MAIL

Att. Mr W. Raab

Director Financing Directorale at Ministry of Finance

Schiphol, January 31,2012

Dear Mr. Raab,

Many thanks for taking the time to speak to us today. We appreciate the continued time and effort from your team in reviewing our private sector solution to help facilitate the recapitalisation of SNS and to avoid nationalisation.

We are proposing several adjustments further improving the transaction for the State:

I. State participation: We would be willing to grant the benefit of the first €150m pre­ emption investment by the Foundation and Free Float to the State. In the expectation that the pre-emption rights will be taken up this would rednee the required investment in SNS to €340m for a 24.7% share. The next €50m will be diluting the Consortium stake.

2. Risk-Reward sharing: First of all we want to emphasize that the proposed co­ investment by the State in SNS and the New Bank will take place on effectively same terms as from the Consortium. Having said that, we would welcome the opportunity to engage properly with you on agreeing a reasonable set of deal protections and gavernanee arrangements that are fair and in line with market precedents. In addition the Consortium is willing to discuss with the State an anti-embarrassment clause customary to a private equity investment.

3. New Bank seniority: The State ownership in the New Bank will be in the fonn of preferenee shares while the consortium and the Foundation wil!hold ordinary shares. The State preferenee shares will carry the same economie and voting rights as the ordinary shares but will have liquidation preferenee in case of distributions, dissalution or winding-up of the New Bank. This effectively protects the State investment by a further €170m cushion provided by the Consortium and Foundation ordinary shares.

88466-4-1O-v0.3 - I- 55-40527746

4. Deal certainty: we believe that working together it would be possible to provide you with certainty that the European Commission and DNB would provide their support for the transaction in very short order. We believe you will be receiving a letter from the three Grootbanken confirming their support for the transaction. The other pre­ signing and pre-c!osing conditions of our proposal remain the same as in previous discussions and remain highly deliverable and we would we!come an opportunity to allay any concerns you might have on each step. You wil! receive tomorrow a detailed infonnation package that wil! also be discussed by SNS with the DNB.

5. Attachment point: our proposa!achieves an incremental provision capacity (on top of HI 2012 provision on €800m for PF including SME portfolio) of €2.8bn. If we assurne the ASR merger this could further be enhanced to c. €3.2bn.

Souree of Funding

€m

Amount Pre-Tax

Comments

Capita!injection

€2,400(!)

Over-capita!isation of the New Bank

on day one given State senior equity

position

€230

Foundation and

Consortium investment pre-tax

Going concern absorption capacity

€!20

New Bank is anticipated

to generate pre-tax profits ofc. €!20m through to

2015 which could be used to offset incremental

losses

Total SNS Standalone

€2,750

Incremental provision from capita/

synerJ;ies followinK ASR merJ;er

€400m

Total

€3,150

(I) Note that as per the Term Sheet this refers to the balance sheet as of30 June 2012 and that provisions of c.€350m have been incurred by SNS in the second half of2012

Finally, to avoid miscmnmunication we would like to clarify that the €550m provided by the three Grootbanken wil! be used entirely to the benefit of the State and the company as highlighted be!ow:

• €400m wil! be down-streamed as CT! Securities carrying no value and contributing to increase the attachment point by €400m (pre-tax) and reducing the Holdeo leverage by

€1OOm. Therefore the State wil! have an immediate benefit and commensurate with the

Consortium.

• €!SOm wil!be used to capitalise the New Bank with equity securities subordinated to the State investment therefore providing further proteetion to the State. The Consortium wil! have no economie benefit from its investment in the New Bank as any proceeds wil! be used to repay the !oan to the three Grootbanken.

88466-4·1O·v0.3 - 2- 55-40527746

We stand ready to discuss this proposal and any queries emerging from it at your earliest convenience.


Yours sincerely

RollyvanRapp . Manag ing Parlntf. · -:;::::---- CIO /

_,;'

884664·I O·v0.3 - 3 - 5540527746

NON-BINDING AND SUBJECT TO CONTRACT STRICTLY PRIVATE & CONFIDENTlAL
Adjusted Draft Terms Sheet for an investment in SNS REAAL Group N.V. ("SNS") and the potential combination with ASR Nederland N.V. ("ASR") for discussion with the Dutch State, the European Commission and De Nederlandsche Bank
Following the discussionsof the last few weeksin relation to our previous proposals, the Consortium remains highly motivated in becoming an investor in SNS and supporting its next phase of growth and development. We have amended the term sheet to reflect the feedback and comments where possible.
Overall we believe our proposal:

farms a salution that minimizes state aid;

• represents a fair package for the Dutch State;
• involves appropriate burden sharing by all existing capitaI stakeholders;
• preserves the Dutch financial services landscape (and enhances the competitive landscape);
• maximises the viability of the ongoing businesses;
• provides deal certainty on a swift closing and transformation of SNS into a well capitalised institution. We are highly confident that we would be a bie to sign and announce a transaction as soon as possible.

•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1

This proposed Term Sheet is made on the basis that the State, SNS and its afficers and advisers wil/ keep the infarmation contained herein con[idential and wil/ nat disclose ar publish such infarmatian ta any ather person (ather than as is necessary in conneetion with the contemplated transactian) without aur prior written consent.

Nathing in this prapased Term Sheet sha/1 give rise to ar be capab/e af giving rise ta any /ega/ obligatians whotsoever on the part af CVC ar the CVC Funds, but the preceding paragraph is intended to be binding an the State, SNS, its afficers and advisers, and any ather party to wham the infarmation set out herein is disc/ased.

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1. Consortium

1.1. Consortium members
In order to support the recapitalisation of SNS we have formed a Consortium of blue-chip institutional investors including the following members:
1. CVC CapitaI Partners Funds (large st capitaI contributor)

2.

3.

4.

5.

The Consortium would invest in SNS through one or more special purpose vehicles
incorporated for the purpose of the transaction.

2. Treatment of State Core Tier 1Securities in SNS

2.1.

Conversion

The €565m of face value plus €283m of penalty payment (totalling to €848m) to

the State on these securities will be converted into ordinary shares of SNS at a

price of €2.00/ share.

The State would have no further claims under the Care Tier 1Securities following

such conversion.

3. Treatment of Foundation Securities in SNS

3.1. Care Tier 1 The €422m of face value plus €64m of penalty payment (totalling to €486m) to the securities Foundation on these securities will be converted into ordinary shares of SNS at a
price of€2.00/ share.
The Foundation would have no further claims under the Care Tier 1 Securities following such conversion.
3.2. B shares
100% write off by the Foundation.

4. Discounted Rights Issue and private placement by SNS

4.1. Quanturn €1,400m in total to be underwritten 65% from the Consortium (€910m) and 35%
from the State (€490m).
4.2. Pricing Structure and pricing of the capitaI injection to be confirmed; however end result should be a 98% dilution for the ordinary shareholders post rights-issue
4.3. Pre-emption rights

4.4. State

Participation
The Consortium and the State will make available shares to the Foundation and the Free-Fioat to allow for tradable pre-emption rights of up to €200m. The State will have the option to be diluted for the first €150m and the Consortium for the residual €SOm
Depending on whether the Foundation and the Free-Fioat will take up their rights
the State investment will be ranging between €340m and €490m.
4.5.
Post rights­
issue ownership

Assuming na free float and Assuming full free float ond

Faundatfan take up under the rlghts Faundation take up under the rights

issue: issue 1 :

The Consortium Dutch State Foundation
Free float
63.7%
35.2%
0.8%
0.3%
60.2%
24.7%
4.3%
10.8%

4.6. Underwriting and transaction tees

(1) Assumes Foundation witl invest€50m and Free-Fioat€150m

The rights issue underwriters will charge a market-tested appropriate underwriting fee and agreed ongoing monitoring I director tees relating to the transaction.

2

4.7. Rights issue proceeds usage

The proceeds wiJl be allocated for the following usage:

lmmediate provision of €2,000m (before taking into account the tax loss associated with the provision) on the Property Finance Division portfolios basedon the balanee sheet as at Hl2012.

For the avoidanee of doubt, any provisions taken against the Property Finance portfalias between 30 June 2012 and closing would adjust the €2,000m above on

a Euro for Euro basis.

4.8. Other use of rights issue

proceeds

Any excess investment wiJl be kept as excess capitai in SNS to further capitalise the

Group and repay the current double leverage.

4.9. Publief private

status

Post transaction, SNS is expected to remain public.

4.10. Mechanics

Transaction to be approved by shareholders under SNS existing corporate gavernanee rules. The proposed investment will likely create the need for a mandatory offer from the Consortium at an equitable value (which we would expect to be the sa me as the discounted rights issue share price). The Foundation and the State wilI commit nat to take up any offer.

5. Loan from the ABN, ING and Rabobank (the "Grootbanken")

5.1. Amount

The Grootbanken wili provide a €550m laan to the Consortium Holding, an entity

set-up for the purpose of investing in SNS and the New Bank.

5.2. Terms

The laan will be perpetual in nature and pays a 2.5% PIK coupon. The accrued interest is payable upon the Consortium having achieved a minimum return on its investment in SNS of 2.5xMoM and 20% IRR.

The principal is repaid from distributions received by the Consortium Holding from its investment in the New Bank. Upon the completion of the run-off of the New Bank any outstanding principal wilI be written off.

We would consicter technica! adjustments to such a laan as might be required by the EC to ensure the laan does nat create any unnecessary State Aid.

5.3. Use of proceeds

The Consortium Holding wiJl use €400m to downstream in SNS Group inthefarm of perpetual Core Tier 1securities with no coupon and no future value (and hence for the benefit of all investors in SNS - bath the State and the Consortium shareholders). This would support an incremental write-down of €400m to the Property Finance bringing the total write-down to €2,400m.

The residual €150m wiJl be used by the Consortium to capitalise the New Bank.

6. Treatment of Hybrid lnstruments in SNS Group and SNS Bank

6.1. Burden sharing

As part of the overall deal burden sharing, which is regardedan important element by the EC, holdersof Tier 1instruments at the SNS Group and SNS Bank subsidiary wili be required to forego some of their rights.

3

4

7.5. Reset fee and "go-shop" provision

MinFiniNLFI will have the option to consider alternative proposals on ASR from other parties or to decide not to proceed a long the termsof the MOU, however, in such a situation the State would agree to pay a €SOm reset fee to SNS.

Once SNS has provided a firm commitment to merge with ASR on terms in-line with the MOU, the State wilI also commit not to accept alternative proposals from other parties unless the purchase price is at least 7.5% higher than the valuation agreed with SNS of €1,729m.

7.6. Publief private

status

The combined entity is expected to remain publicly listed.

7.7. lntegration plan

The management of ASR and SNS wilI jointly develop and commit to an integration plan (with appropriate support from Works Council) which will be approved by the Consortium and the State before signing ofthe transaction.

As discussed, the Consortium is willing to consider an orderly split of the banking and insurance activities over a reasonable time-period.

7.8. Due diligence on ASR

We expect management of SNS together with the support of CVC to complete the due diligence on ASR in a timely fashion. We would ask the NLFI and the State to support our ability to undertake this diligence with access to the necessary members of the managementand information required on a timely basis.

8. Managementand Governance, assuming the merger will take place

8.1. Combined We would expect the Supervisory Board to reflect the ongoing ownership structure entity of the combined business, consisting of the following:
Supervisory
Board composition
• 1independent Chairman, jointly appointed by the Consortium and the State;
• 3 members appointed by the Consortium;
• 3 members appointed by the State I NLFI; and
• 2 members appointed by the Works Council.
The Consortium would also have the right to appoint a Board observer that would be tilled by one of the Consortium co-investors.
The State and the Consortium will receive vetoes on all major corporate decisions
including, but not limited to, acquisitions, divestitures, annual remuneration.
budgets and
We would also welcome the opportunity to discuss the possibility of other
independent non-executive directars with relevant expertise (including current
members of SNS or ASR Supervisory Boards) to be jointly
appointed by
shareholders. We would see this as important in giving comfort to the Free Float that their interests are being adequately safeguarded through sound corporate
governance.

Should the merger not take place we expect the Consortium to number of board members to 4 directars and the State/ NLFI to
increase the reduce to 2
directors. We note such an allocation of directars would still provide the State with a higher proportion of board seats in relation totheir expected shareholding compared with the Consortium.

5

8.2. Management

The Consortium wiJl appoint the CEO and CFO of the Group and its subsidiaries, subject to veto of the State and a ppraval by DNB.

8.3. Board

Committees

Maintain SNS' current number of committees (Nomination, Remuneration, Audit, Risk), with the possible addition of an Asset and Liability committee to be discussed. Composition to be agreed with the Consortium to reflect shareholdings, but wiJl include at least one Consortium appointed director and one State appointed director.

8.4. Quorum and logistics

A Consortium appointed director and a State appointed director must be present (in person or by proxy) at any Supervisory Board meeting for that meeting to be quorate. The Supervisory Board continuestomeet at least six times a year.

8.5. Gavernanee rights of Supervisory Board

Maintain Supervisory Board rights basedon current SNS set up, with clear inclusion of monitoring of business performance against budget,a ppraval of major strategie decisions and reserved rights for the Consortium and the State.

8.6. Deadlock

resolution

Agreed arrangements for dispute resolution.

8.7. Interaction with

DNB and other regulators

Daily interactlans wiJl continue to be led by managementand relevant compliance officers. The Consortium and the State directars expect to be involved in all Supervisory Board level interactlans with the regulators.

8.8. Publicity

Gavernanee arrangements between SNS,the Consortium, the State and others wiJl need to be documented in (a combination of) the articles of association and contractually. Certain key terms may need to be made public.

9. Share Issue and Transfers

9.1. lnvestment Within the first two years after the investment, no saie of shares would be allowed holding period by the Consortium or the State unless explicitly agreed amongst by all parties.
9.2. Distribution Subject to discusslons with regulator, SNS's operating subsidiaries wiJl distribute
Policy shareholder funds in excessof regulatory or other prudent capita! requirements by way of dividends to SNS holding.
Post transaction it is expected that the retail banking actlvities wiJl be
initially

capitalised with a Care Tier 1 capita! ratio of at least 12% and the
insurance
actlvities with a Solvency I Ratio reflective of their respective risks on bath assets and liabilities. Our preliminary proposal which would require approval from the DNB would be at least 200% for REAAL and at least 280% for ASR, subject to appropriate minimum Solvency IJ ratios.
Distributable profits available at SNS holding wiJl first be used to reduce double leverage to below 105%, with residual funds available to shareholders as dividends, subjecttoappraval by the regulator.
9.3. Share transfers The shareholder agreement between the State and the Consortium wiJl contain the relevant clauses effectuating a 'samen-uit, samen-thuis' principle (i.e. the appropriate tag- and drag along provisions)
9.4. Risk-reward The Consortium is willing to discuss with the State an anti-embarrassment clause sharing customary toa private equity investment.

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10. 'New Bank'-structure for SNS Property Finance Division

10.1. Ownership A new entity is set-up (the New Bank) of which the equity will be owned by the structure Consortium (47% or €150m), the State (47% or €150m) and the Foundation (6% or
€20m) fora total capitalisation of€320m. The State ownership wiJl be in the form
of preferenee shares while the consortium and the Foundation will hold ordinary shares. The State preferenee shares wilI carry the same economie and voting rights as the ordinary shares but will have liquidation preferenee in case of distributions, dissalution or winding-up of the New Bank.
The New Bank will be organised with two subsidiaries:
• PF- will hold the French and German porttollos (€520m pre write-down) and will remain a bank and capitalised with 12% Core Tier 1 ratio (required capita! of c.€60m).
• New PF- wilI hold the remaining portfolio (€8.5bn pre write-down) and will be organised as an asset managerand will not be a regulated entity therefore will nothave any capitaI requirements.
As a result of the proposed structure, the New Bank will have excess capita! of
€260m prior to any required use of the state guarantee. Furthermore, as a result of the proposed liquidity preferenee the State investment wiJl be protected by a
€170m of equity cushion provided by the Consortium and Foundation ordinary shares (on a pre-tax basis equivalent of incremental provisions of€227m) before it
would suffer any loss associated withits equity investment in the New Bank.
10.2. Scope of the
Following an immediate provision corresponding to the attachment
point at

New Bank
10.3. Property Finance lndemnity
10.4. Tax asset
Closing as per Section 4.7,5.3 and Section 7.4,the Property Finance Division is sold to the New Bank at book value and the funding wilI come from the shareholders equity capitai and the issuance of government guaranteed securities. The Property Finance division will include the Core, Non-Core and SME portfolios as per SNS current definition.
The assets wiJl be transferred:
• withall the staff and operations required to operate on a stand-alone basis;
• with a transition agreement covering the continuation of currently centrally provided services at cost for up to two years from Closing.
The New Bank will provide SNS with an indemnity for any residual claim that might arise under the 403-statement that has been given for Property Finance in the past and any future claims made against SNS relating to the Property Finance business. Based on the diligence completed to date, we assume that the SNS write down on the Property Finance Division should qualify to support the creation of a tax asset at SNS Holding level, subject to agreement with company auditars and tax authorities to be obtained formally or in principle before signing.

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11. Transaction Process

11.1. Time line

We would propose to target signing and announcing of the transaction by 14

February 2013.

11.2. Communication with the European

Commission

Prior to announcement, it wiJl be important for the Consortium to confirm the view of the European Commission to the proposed transaction, especially with regard to any remedies that might be required as a result. The Consortium is wiling to provide support as required.

11.3. Conditlans to signing

The signing and announcement of a transaction wiJl be subject to:

the final a ppraval of CVC's lnvestment Committee;

the relevant DNB approvals;

in principle approval to the proposed investment on agreed terms by the

European Commission;

in principle approval from the tax authorities and the auditars on the tax benefit from the write-down of the Property Finance loans.

11.4. Transaction lndemnity

The State wiJl provide SNS with an indemnity relating to claims relating to actions prior to the transaction and any claims relating to the transaction. For the avoidanee of doubt this excludes any claims relating to Woekerpolis. In addition, the initia! €25m of aggregate claims from the above matters wiJl be for the account of SNS.

11.5. DNB approvals

In addition to the camman clearances, specifically DNB wiJl a pprave the following in relation to SNS:

SNS Bank N.V. wiJl be allowed to distribute capita i over 12% CT1 to the Holdco;

REAAL N.V. wiJl be allowed to distribute capita! above the lower of 200% of

Minimum Solvency I and a prudent Solvency IJ SCR (based on parallel-run); and

Disciosure rules wiJl be confirmed to facilitate the investments by the

Consortium members.

11.6. Rating impact

We would aim to hold discusslons with rating agencies (S&P and Moody's) in advance of completion to receive their clear indications on the impact of the transaction on the credit ratings of SNS and the combined group.

Any questions relating to this propaso I should be directed to any ofthe following:

Rally van Rappard Jonathan Feuer Huga von Berekei Peter Rutland Bas Becks





8

SNS Standafone scenario (assumes pre-emption rights are taken)


cvc

""""""""'

€BlOm equ!ty

".. ... "'"'"' • €550m holdco financing

Free float

Consortium

Holding

rnomN(j IIEHffi

•11"

·25%

60%

·nsom pre-emption €SOm pre-emptlon • €340m

(to be repold upon

ASR merr;er)

U,400m capttallnjectlon + €:400m

CT1 securitles

€860m+

€:400mCT1

securitles •47%

·nsom

020mequtty

•47%

·nsom

·6%

•€20m

G,400m 'Mite-off

Note:

The €550m provided by the 3 Grootbanken will be used entirely to the benefit of the State and the company as highlighted below:

• €400m will be down-streamed as en Securities carrying no value and contributing to increase the artachment point by €400m (pre-tax) and reducing the

Holdeo leverage by €100m. Therefore the State will have an immediate benefit and commensurate with the Consortium.

• €150m will be used to capitalise the New Bank with equity securities subordinated to the State fnvestment therefore providing further proteetion to the

State. The Consortium will have na economie benefit from its fnvestment in the New Bank as any proceeds wili be used to repay the laan to the 3

Grootbanken.

9


SNS/ ASR merger scenario

•€1,200m

.". ... "'"' • €550m holdco financlng

Free float

•5%

• €150m pre-emption

""""'

•2%

• €SOm pre-emptlon

Consortium

Holding

€400mCT1

secur1ties •47%

•€150m

•47%

•€150m

STICHTJNG 8fHW

•6%

•€20m

€1,400m capitallnjectlon + UOOm

en secur1tles

€320m equity

so-So% merger ratio

€2,400m wrlte-off

•Upto€300mdtvldend

---------------

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