Agents’MUTUAL

Agents’ Mutual Limited. A Company limited by Guarantee.

INFORMATION MEMORANDUM12th February 2014

www.AGENTSMUTUAL.co.uk

Disclaimer

The information contained in this confidential document (“IM”) has been prepared by Agents’ Mutual Limited (the “Company”). It has not been fully verified and is subject to updating, revision and further amendment. This IM has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and it is being delivered for information purposes only to a very limited number of persons and companies who are bona fide estate agents. Any other person who receives this IM should not rely or act upon it. This IM is not to be disclosed to any other person or used for any other purpose and is to be treated as confidential. While the information contained herein has been prepared in good faith, neither the Company nor any of its members, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this IM, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its members, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this IM. Neither the issue of this IM nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective members or investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this IM, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this IM or to correct any inaccuracies in, or omissions from, this IM which may become apparent. This IM should not be considered as the giving of investment advice by the Company or any of its members, directors, officers, agents, employees or advisers. In particular, this IM does not constitute an offer or invitation to subscribe for or purchase any membership interest in the Company and this IM nor anything contained herein shall form the basis of any contract or commitment whatsoever. Each party to whom this IM is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters. Neither this IM nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a “Restricted Territory”), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe for any membership interest in the Company or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

CONTENTS

INTRODUCTION Page 4COMPANY STRUCTURE AND GOVERNANCE Page 5STRATEGY Page 6SILVER MEMBERSHIP Page 8GOLD MEMBERSHIP Page 9FUNDING AND FINANCIAL PROJECTION Page 10OPERATIONS & MANAGEMENT Page 11AGENT RECRUITMENT Page 12MARKETING Page 12SUMMARY AND HOW TO JOIN Page 13Appendix 1 – LISTING REQUIREMENT Page 14Appendix 2 - TEXT OF SILVER LETTER OF INTENT Page 15

Agents’MUTUAL

INTRODUCTION

Agents’ Mutual Ltd has been formed by leading estate and lettings agents to create a new residential property portal, launching in January 2015, to challenge the two existing major portal groups, Rightmove and Zoopla. They are now an effective duopoly, generating super-profits at the expense of their agent customers, and there is concern at the impact they are already having onresidential agency as a whole. Many agents feel they are no longer in control of their advertising costs and their data.

The Company will be owned 100% by ALL the agent firms which list on its portal and each such agent firm will become a member of the Company and will have an equal interest in it. One firm = one member = one vote, irrespective of the number of offices a firm has. The Company aims to set listing fees at the minimum level consistent with developing and then maintaining itself as one of the leading portals in the UK. The brand name of the new portal will be determined in due course but will reflect the intention to cover ALL parts of the residential sales and lettings markets. It will focus on providing the best possible service to member agents, their customers and the wider, property-seeking public rather than on maximising portal profits. It is the intention not to carry third-party advertising nor promote services which would compete with those of its members.

The founder members were Savills, Knight Frank, Strutt & Parker, Chesterton Humberts, Douglas & Gordon and Glentree Estates. They have been joined as members – on equal terms – by over 500 estate and lettings agent firms and the combined office numbers total more than 1800 across the UK, as shown on the map. The membership now includes more of the largest agency groups in the country, such as Spicerhaart, Winkworth, Kinleigh Folkard & Hayward and Jackson-Stops & Staff, many prominent multi-office London and regional firms, and hundreds of smaller firms.

These 500+ member firms have provided funding of more than £6M to enable the new portal to be developed. This has been provided by a combination of loan finance and pre-launch subscriptions. Each firm has contributed in proportion to its office numbers. They have also made a medium term commitment to list with and pay fees to the new portal once it is launched. The scheme under which these members have joined is the Gold membership and a similar new scheme is being offered to agents wishing to enter a contract now on such a basis. Having gathered sufficient funding for the next phase, we are also ready to offer membership to agents who simply wish to commit to supporting the new portal from the point it is launched. These will be ourSilver members and details of this scheme and how to sign up (on a non-binding basis, at this stage) are in the following pages.

NAEA and ARLA have given their exclusive support to Agents’ Mutual and it has also received practical assistance from a range ofwell-known and trusted agent affiliate and marketing groups. Whilst this has helped get the message out to many agents, the progress made so far has been made with only limited resources. The Company has now appointed its executive team and has the financial resources in place which will allow a more thorough-going approach to member recruitment in parallel with developing a major new portal platform. 4

Agents’MUTUAL

COMPANY STRUCTURE AND GOVERNANCE

Agents’ Mutual Ltd is a Company limited by Guarantee. There is no share capital nor shareholders. Each member has an equal interest in the Company and equal voting rights. A member’s liability is limited to a guarantee of £1 in the event of aliquidation. This structure has been chosen to underpin the purpose of the Company which is to create a fully-national residential property portal which is driven not by maximising shareholder returns but by providing the best possible service to agents, their customers and the property-seeking public at the lowest possible cost consistent with achieving and maintaining a leading position in the portals market.

Each agent firm listing with the portal, irrespective of its size or number of offices, will become a member of the Company and there will be no non-agent members. The Articles of Association and the Membership Rules include provisions requiring 90% of members to vote in favour of a disposal of the Company or significant business assets before it can take place.

The Company has a board which is responsible for the development and running of the portal. It is answerable to members and must seek re-election from time-to-time in the normal way as governed by the Articles. The Board will ensure that it is managed in a fully commercial manner and is a dynamic competitor in the market. However, unlike its two major competitors, any surpluses generated by the Company will be used either to develop the portal or to reduce the listing fees paid by the member agents.

The Company’s directors are: Paul Jarman, who is a director of Savills UK Ltd; Noel Flint, who is a partner at Knight Frank; Michael Fiddes, who is a partner at Strutt & Parker; Robert Bartlett, who is Chief Executive of Chesterton Humberts; Michael Hodgson, who is a director of Douglas & Gordon; Trevor Abrahmsohn, who is a director of Glentree Estates Ltd; Paul Masters, who is a director of Kinleigh Folkard & Hayward; Paul Smith, who is Chief Executive of Spicerhaart Group; and Mark Hayward, who is Managing Director, NAEA. Each of the directors is investing considerable time and effort in developing the Agents’ Mutual proposition but all are and will continue to be unpaid and they have no personal interests in the Company. It is recognised that the Board composition will need to evolve further as the Company grows so that it can continue to direct the business in the best interests of the members.

The Company’s legal advisers are Eversheds and its bankers are National Westminster Bank plc.

Agents’MUTUAL

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Company limited by Guarantee.

No shareholders or shares.

All firms listing on the portal are Members.

Maximum liability of Members = £1.

One firm = one Member = one vote.

All firms get one vote, irrespective of size.

Directors must be approved by the Members. They are unpaid.

Directors stand for re-election on rotation.

90% vote required to approve a Sale.

Exclusively endorsed by:

STRATEGY

The directors recognise the scale, strength and backing of the two main portal groups already in the market. A dominant market leader, Rightmove, has been joined by a second powerful group, Zoopla, created by acquisitions and an OFT-approved merger. The creation of a strong competitor to Rightmove was seen by the OFT as likely to create price competition but, in practice, this has not occurred. Zoopla has stated publicly that its aim is to avoid price competition and move price levels towards those of Rightmove which, itself, continues to move prices rapidly upwards. The directors and their advisers believe the Company’s entry to the market to create a sustainable, lower-priced alternative to Rightmove and Zoopla will increase competition.

The directors have considered and rejected a high risk, high cost strategy of simply launching a new portal and then trying to attract agents. This approach has been attempted by many other entrants to the portals market, some with considerable financial backing, but all have failed to gain traction with agents and consumers. Instead, the Company aims to capitalise on its unique 100% agent ownership and control structure to attract the advance commitment of a critical mass of agents to support the new portal. The commitment period needs to be long enough to allow the portal to establish itself in the market and has been set at five years from the launch date. Development funding has been raised via the Company’s Gold membership scheme but once launched, it will be self-funding from listing fees and other income from the portal services it will provide to member agents. The loan finance raised by the Company under the Gold membership scheme is repayable by the end of the five-year commitment period whilst the pre-launch subscription fees payable by Gold members are non-refundable.

The directors believe the commitment of the Company’s agent members to support the new portal will not be sufficient alone to make an effective market entry. The new portal cannot work simply by positioning itself as a third-string player on agents’ portal rosters. This would involve extra monthly costs to agents who, in very many cases, are already listing with the two main portal groups and suffering rapid increases in the costs of doing so. In the absence of an unaffordably large marketing programme, there would be insufficient incentive for consumers to switch from the established portals and possibly insufficient impetus for them even to trial the Company’s new portal. It is essential that the launch of the new portal disrupts the market and gives consumers a good reason to come to it. The ideal way to achieve this would be to require agents listing with it to do so exclusively so that consumers could not find those properties on any other portal. Both Rightmove and Primelocation entered the market using this method and Primelocation maintained it for more than five years until it was sold out of agent ownership. However, the directors do not consider that such a requirement would now be viable for agents given their current reliance on existing portals both for gaining instructions and for lead generation. Accordingly, the Company’s new portal will require all members to list exclusively save that they may also list on a maximum of one other competing portal of their choosing. This requirement will be effective from the date the Company’s portal launches (planned for January 2015). Such choice of other portal must apply across all offices and properties of the member firm and be advised to the Company. A definition of what constitutes a portal for this purpose is at Appendix 1 together with other details of how the requirement will be operated. The effect of this requirement will be that the Company’s new portal will have a unique collection of properties – i.e. consumers will not be able to find all of them on any other portal.

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Agents’

MUTUAL

In a duopolistic market…

..a new entrant must disrupt.

Agents’MUTUAL

CORPORATES

CORPORATES

STRATEGY – continued.

Both Rightmove and Zoopla have as ‘anchor tenants’ the three large corporate estate agency groups, Countrywide, Connells and LSL Holdings which operate more than 2000 offices between them. Their commitment is underpinned by attractive contract terms and also, in the case of Zoopla, by equity interests. Independent agents are simply ‘rent-payers’ on these portals and have had little option but to continue listing with them in the absence of a portal geared to prioritising their interests.

Agents’ Mutual now has more than 500 committed member firms which will act as the initial ‘anchor tenants’ for its business. However, every additional firm which commits to supporting the portal becomes a further ‘anchor tenant’ as they will be members with an equal interest in the Company with all other members.

In the majority of cases, firms joining Agents’ Mutual will be leaving one or other of the two existing portals, transferring both property listings and listing fees from them to Agents’ Mutual.

The graphics below illustrate the progressive impact if the choice of ‘other portal’ made by agents joining Agents’ Mutual were split equally between Zoopla and Rightmove.

INDEPENDENTAGENTS

INDEPENDENTAGENTS

INDEPENDENTAGENT MEMBERS

CORPORATES CORPORATESCORPORATES

INDEPENDENTAGENT MEMBERS

INDEPENDENTAGENTS

INDEPENDENTAGENTS

INDEPENDENTAGENTS

INDEPENDENTAGENTS

Anchor tenants - before Anchor tenants – Jan 14 Anchor tenants - Jan 15?

INDEPENDENTAGENT MEMBERS

Agents’MUTUALAgents’

MUTUAL

Agents’MUTUAL

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SILVER MEMBERSHIP

Although it is the intention that the listing fees payable by agents for the new portal will be lower than those charged by the two existing major portal groups, they will not be dramatically lower during the initial 5-year period. This is to ensure that the business can fund the necessary marketing expenditure to establish itself, repay the funds borrowed to develop the portal and build up some reserves. However, for those committing as Silver members, the listing fees will be fixed for the 5-year commitment period, so will fall in real terms. At the end of the period, it is expected that rates will be reduced, subject to the portal having achieved the support of sufficient numbers of agent firms. By contrast, fees charged by the two existing major portals are expected to rise at rates well above inflation over the same period and beyond.

The Silver tariff, opposite, follows established market principles, varying by location and with volume discounts for firms with multiple offices. For the purposes of comparison with competitor charges, please note that these listing fees include branded listings and listing across all platforms including mobile.

For agents which make no term commitment to list with the portal in advance, listing fees will be set shortly before launch. They will be higher than the tariff for Silver members and will not be fixed.

Signing up for SilverAgents can sign up for Silver membership now without entering any binding contracts at this stage. Prospective Silver members are asked to give a non-binding Letter of Intent in good faith stating that they understand the obligations involved and intend to contract, subject to sufficient overall numbers of agents also giving Letters of Intent for Silver and/or contracting for Gold membership. The threshold for this purpose is 4000 agent offices. Once this level is reached we will review the terms of the membership offers – so if you wish to secure the current terms, please do not delay.

The Letter of Intent for Silver membership can be downloaded as a Word document from the information section of our website or is available on request from contracts@agentsmutual.co.uk The Letter of Intent text is also herewith for reference at Appendix 2.

Please make sure your firm’s Lead Contact is registered at our website, AgentsMutual.co.uk

Firm size Office Location

Offices in

Firm

Volume

Discount

Prime London

Other London

Prime Country

Other Country

1-3 0% £595 £495 £395 £295

4-6 5% £565 £470 £375 £280

7-12 10% £536 £446 £356 £266

13-19 15% £506 £421 £336 £251

20-49 20% £476 £396 £316 £236

50+ 25% £446 £371 £296 £221

Sales-only offices and offices with both sales and lettings departments will be charged at the above rates.

Lettings-only offices will be charged at 50% of the above rates.

Prime London is: SW1, SW3, SW5, SW7 SW10, NW1, NW3, NW8,W1, W2, W8, W9, W11.

Other London is: All other London postcodes starting with E, EC, N NW, SW, SE, W WC.

Prime Country is: Bedfordshire, Berkshire, Buckinghamshire, Cambridgeshire, Cornwall, Devon, Dorset, Essex, Gloucestershire, Hampshire, Hertfordshire, IoW, Kent, Norfolk, Oxfordshire, Somerset, Suffolk, Surrey, Sussex, Wiltshire.

Other Country is:All other counties in England, Scotland and Wales.

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FIXED TARIFF FOR SILVER MEMBERSAgents’MUTUAL

Firm size Office Location

Offices in Firm

VolumeDiscount

Prime London

Other London

Prime Country

Other Country

1-3 0%£595 £495 £395 £295

£506 £421 £336 £251

4-6 5%£565 £470 £375 £280

£480 £400 £319 £238

7-12 10%£536 £446 £356 £266

£455 £379 £302 £226

13-19 15%£506 £421 £336 £251

£430 £358 £285 £213

20-49 20%£476 £396 £316 £236

£405 £337 £269 £201

50+ 25%£446 £371 £296 £221

£379 £316 £252 £188

Sales-only offices and offices with both sales and lettings departments will be charged at the above rates. Lettings-only offices will be charged at 50% of the above rates.

Prime London is: SW1, SW3, SW5, SW7 SW10, NW1, NW3, NW8,W1, W2, W8, W9, W11.

Other London is: All other London postcodes starting with E, EC, N NW, SW, SE, W WC.

Prime Country is: Bedfordshire, Berkshire, Buckinghamshire, Cambridgeshire, Cornwall, Devon, Dorset, Essex, Gloucestershire, Hampshire, Hertfordshire, IoW, Kent, Norfolk, Oxfordshire, Somerset, Suffolk, Surrey, Sussex, Wiltshire.

Other Country is:All other counties in England, Scotland and Wales.

GOLD MEMBERSHIP

For those firms wishing to enter a contract now to list with Agents’ Mutual and to help fund its development, we offer a new Gold membership scheme.

Gold members make the same 5-year listing commitment as Silver members but, in addition, help fund the development in two ways:

- a monthly pre-Launch subscription of £75 per office per month for eight months, commencing May 2014. This is payable by Direct Debit. It is non-refundable and contributes to running costs while the portal is developed.

- A Loan Note subscription of £2000 (Lettings-only offices £1000) per office, repayable within six years or earlier at the Company’s option, to coincide with the listing commitment period for Gold and Silver members. The Loan Notes pay interest at 10% per annum.

As well as the interest on their Loan Notes, Gold members will receive a 15% discount on the fixed Silver tariff as shown in the table opposite.

Committing to Gold

The Gold membership contract documents are available on request from contracts@agentsmutual.co.uk

The current Gold offer is available for a limited period – it will close on Thursday 17th April – and to a maximum of 1000 agent offices.

Please make sure your firm’s Lead Contact is registered at our website, AgentsMutual.co.uk

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Agents’MUTUAL

£21M+ income

3000+ offices

1st post-launch year

3000+offices

1800+ offices

12 months – Launch Jan 15

£35M+income

A credible alternative to the No.1 Portal match cost base and capability undercut prices

£6M+ funding

£7M+ income

Become the No.2 Portal take listings and income drive awareness & traffic

Assemble the initial ‘Anchor Tenants’ development funding committed listings and income

6 months – Jan 14

FUNDING AND FINANCIAL PROJECTION

Agents’ Mutual announced its proposals in June 2013. It set out to assemble Gold members firms with at least 1000 offices so as to raise a minimum of £3M development funding. After just 6 months, it has Gold members with over 1800 offices and funding in excess of £6M. As well as providing funding, the Gold members have also signed 5-year agreements to list with the new portal. The listing fee income from these firms will be in excess of £7M per annum.

To make a strong and effective entry to the market in January 2015, Agents’ Mutual is aiming to have at least 5000 committed agent offices listing, which means adding over 3000 offices over the next 12 months. The chart below assumes that all these offices will be Silver members and shows that they would add £14M to the new portal’s annual listing fee income. Over £15M of this income will be spent on marketing and advertising the portal in the post-launch year. This central spend will support the efforts of all our member offices in promoting the new portal using window displays, use of the portal logo in agent marketing and advertising materials, websites and digital communications (and ceasing to support other portals in this way).

Following launch, Agents’ Mutual will drive further recruitment of member agents with the aim adding 3,000 offices in the first post-launch year. Achieving this would produce annual listing fee income going into the second post-launch year of £35M - which would cover an equivalent cost base to those of Rightmove and Zoopla. In other words, Agents’ Mutual would be positioned to provide the same service over the medium term but at listing fees to members of less than one-third of what the existing major portals will be charging if left unchallenged. At that point we would still have less than 8000 independent agency offices listing against our overall target of 10,000. But our portal would already be the only place to view every property from the country’s leading independent agents.

Agents’MUTUAL

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OPERATIONS & MANAGEMENT

The intention is to build a sustainable business. This involves a great deal more than simply creating a website. In only a few years, the Company is targeting operations of a similar scale to those of the current market-leader, Rightmove, which has a cost base of over £30M per annum, employs 325 staff and serves over 12,000 agent customers, several thousand developers and millions of consumer visitors. The business must be run commercially with the main difference from Rightmove being that the listing prices charged to agent members for the service will be sufficient to cover the operating costs rather than maximised for profit. As an illustration, operating costs of £30M could be covered by 10,000 agent offices each paying an average of £250 per month. An agent-owned venture will not carry some of the overheads of a publicly-quoted company nor will it offer all of the services – for example those to non-agents – currently offered by Rightmove. Accordingly, it is estimated that operating costs for Agents’ Mutual would be at least 20% lower, translating to average monthly fees of £200 per agent office. This will be our medium term target following the initial 6-year build phase.

The venture is being led by Ian Springett as Chief Executive. He is not a director or member of the Company. Ian is an experienced leader across a range of business sectors and was a founding shareholder and Chief Executive of Fastcrop plc/Primelocation. He developed Primelocation from scratch and led it for 5½ years under agent ownership and for a further 2½ years under the ownership of DMGT to whom it was sold for £48M. Ian Springett has worked closely with the founder member firms of Agents’ Mutual to develop its business plan and the communication of the proposal to all agents. The directors have also received legal advice from Eversheds on key aspects of the Company’s strategy and proposals.

With the necessary funding and commitments are in place, Ian has assembled an experienced executive team to develop, launch and run the new portal. It will take 12 months to launch, during which time further agent member recruitment activity is taking place and the team will build up. An in-house operation is being built in the UK which will make full use of technology to maximise efficiency in the running of the portal. As no non-agent advertising or commercial database marketing is planned on the portal, the team is focused entirely on delivering the best-possible property search experience to consumers. The team will also ensure a high quality of service to the agent members.

Agent members must take responsibility for ensuring that their property data is fed to the portal in a timely and accurate manner by those they employ to carry this out for them. It is the intention to use industry-standard formats for our data feeds which should ease the process and minimise costs to agents. We will work constructively with current providers of agency software systems and have no intention of competing with them.

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Agents’MUTUAL

Agents’MUTUAL

AGENT RECRUITMENT

In parallel with the 12-month portal development, we are building up resources to contact and communicate our proposition to thousands more agent firms. Our approach will focus broadly on the ITV regions shown on the map and will target a mix of agent offices in line with the overall national distribution. Contact will be face-to-face and by telephone.

In addition to our centrally-managed and targeted agent recruitment programme, we will work closely with our existing members in each region to help build the appropriate resources and to obtain referrals. Wherever possible, we will bring together existing and prospective members to meetings in their local areas as this has proved an effective way of getting commitment to the venture.

We will continue to work with the NAEA and ARLA to attract their members to join up. Agents’ Mutual presentations will be delivered as part of the agenda on a full national schedule of NAEA and ARLA meetings and conferences. These bodies are also using their regular e-mail and newsletter communications to advocate Agents’ Mutual to their 14,000 members.

We have had good support from a range of respected agent marketing and affiliate groups which have given access to their members via meetings and their own communications. We will continue to take all opportunities to promote Agents’ Mutual in this way.

MARKETING

During the coming months we will develop branding and corporate identity, a pre- and post-launch communications strategy, co-branding materials for distribution to member agents and, closer to launch, a detailed marketing and advertising schedule. The focus of the schedule is likely to be on national and regional TV and on major search engines. We believe our member agents will be able to deliver very substantial exposure for the portal in local media and through their own communications activity at branch level. This will mean including the new portal brand in print advertising, stationery and window displays, placing links to it on agent websites, advocating the portal to customers and consumers verbally and via emails and mail and using PR activities to support the portal.

Under our projections, we will be able to more than match the weight of advertising delivered by the two existing portal groups.Moreover, any surpluses generated can, if necessary, be deployed into marketing rather than being distributed in dividends to portal shareholders. Our focus will be on building to full scale to enable us to deliver the leading portal and the sustainably low listing fees and the control over their listings our members want. In doing so, we will emphasise our position as the only major portal which can prioritise property presentation quality and the user experience above the short demands of maximising returns to external shareholders.

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Agents’MUTUAL

MEMBERSHIP OBLIGATIONSMEMBERSHIP

BENEFITS

List on our portal and a maximum of 1 other.

Company member with equal interestwith all other firms.

One member, one vote.

Pay listing fees monthly by Direct Debit.

Co-brand (and cease promoting rival portals).

Commit to listing for the first 5 years from live date.

Fixed rates for 5-year term (see page 8)

Pay pre-launch subscription of £75 + VAT per month for 8 months.

15% discount on Silver fixed rates for 5-year term (see page 9).

Subscribe for Loan Notes: £2000 per office

10% interest payable annually.

SUMMARY

Agents’ Mutual has come into being as a defensive move to counter the imbalance of power between agent firms of all sizes and the two major portal groups. It is structured to recognise that agents do not want to create another monster over which they once again lose control.

ALL firms listing on the portal will be members with an equal interest and voting power, irrespective of firm size. The different membership schemes exist only to allow firms to support the new portal at differing levels of commitment over the first five years as it establishes itself. The new portal could not be developed without the financial investment of the Gold members and cannot make a strong entry to the market without the term commitments made by both Silver and Gold members. Ultimately, it will not flourish without the support of Bronze members who will strengthen its impact in the market and help it reach full national coverage. The differing levels of support attract different levels of benefits during the first 5-year period. If successful, the portal will be able to deliver very low listing fees to all members at (or before) the end of 5 years and will have restored a proper and sustainable balance between portals and their agent customers.

More than 500 firms have joined as Gold members and 1000s more have expressed interest by registering with the AgentsMutual.co.uk website over the last six months. Now that the venture is proceeding and has a target date for launch, we believe many more will sign up and commit to supporting the new portal.

HOW TO JOIN

Firms can support now as either a Gold or a Silver member. Gold membership requires entering a contract now and the current Gold offer is limited to 1000 agent offices. It will close on Thursday 17th

April. The Gold contract documents are available on request from contracts@agentsmutual.co.uk.

Silver membership requires giving a non-binding Letter of Intent in good faith that your firm is prepared to enter a contract to support Agents’ Mutual on the terms laid out in this document subject to support for Agents’ Mutual by way of contracted Gold member offices and by way of Letters of Intent from prospective Silver member offices reaching 4000 offices. Once this threshold has been reached, we will provide you with details of all firms supporting in this way and ask all those firms which have given Letters of Intent to enter a binding listing contract. NB. Firms giving Letters of Intent for Silver membership can opt to move to Gold membership at any time that a Gold membership offer is available. The Letter of Intent for Silver membership can be downloaded in Word format from our website or will be sent on request to contracts@agentsmutual.co.uk. The Letter of Intent text is at Appendix 2 for reference.

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Appendix 1

14

LISTING REQUIREMENT

In accordance with the STRATEGY section of this Information Memorandum, the Letter of Intent document includes the obligation on agent members:

‘To list all and only our directly-instructed and available residential properties accurately fully and exclusively (and to remove promptly those no longer available) on the Portal for a minimum period of five years, save that our properties may also be listed on a maximum of one other competing portal of our choosing over this period. Such choice of other portal must apply across all offices and properties of this firm and be advised to the Company.’

This requirement will be implemented by the Company after the Portal goes live.

The definition of ‘portal’ to be applied will be:

'Any internet-based service which aggregates the residential property listings of estate and/or lettings agents and incorporates functionality that allows such properties to be searched for and reviewed as part of that service.‘

The choice of other competing portal may be changed from time to time but any such change must be notified to the Company in advance. At no time must the member firm list with more than one other competing portal and the change must be managed to achieve this.

Where a firm operates multiple agency brands, we will accept one or more of those brands for membership without requiring all the brands of that firm to join but each individual brand must adhere to the Company’s terms of membership as if it were a standalone firm and pay listing fees on that basis. To qualify under this policy, the individual brands must be established, separately-managed agencies and not simply sub-brands addressing a particular market segment and essentially under the same management as the main agency brand.

Agents’MUTUAL

Appendix 2

15

The Directors,Agents’ Mutual Ltd

Dear Sirs

AGENTS’ MUTUAL LIMITED (the “Company”)

We are writing to confirm our non-binding intention to participate as a ‘SILVER’ member firm in the portal proposed to be developed and operated by the Company (the “Portal”) as set out in the Information Memorandum dated 27th January 2014 which we confirm we have considered in full (the “Information Memorandum”). We understand we shall be asked to enter a binding contract only once the total offices of firms having given a Letter of Intent for SILVER membership together with those having contracted as GOLD members reaches 4000.

We understand the obligations of ‘SILVER’ membership which, in addition to the requirement to enter a 5-year contract with the Company, include:

1. To pay subscription fees in respect of all our residential agency offices. We understand that the ‘SILVER’ member tariff set out the Information Memorandum will be the basis for calculating the monthly listing subscription fees payable by us once the Portal is live and monthly until the end of the 5-year period.

2. To list all and only our directly-instructed and available properties accurately, fully and exclusively (and to remove promptly those no longer available) on the Portal for a minimum period of five years save that our properties may also be listed on one other portal of our choosing over this period. Such choice of other portal must apply across all offices and properties of this firm and be advised to the Company.

3. To co-brand our marketing and promotional materials with the logo and/or name of the Portal in a manner authorized by the Company, to promote actively the use of the Portal to our customers and to avoid promoting any competing portal;

4. To participate actively in the Company’s business as voting members and advocates;5. To be bona fide office-based estate or letting agents (i.e. offering the full range of agency services including valuations, attended viewings and liaison between the parties to an agreed sale or

letting in pursuance of exchange of contracts).

We also understand that the Company has the right in its absolute discretion at any time before our name is entered into the register of members of the Company to decline any application for membership to the Company contained herein and the Company shall notify any such decision to us in writing.

We agree not to distribute this letter or any other document relating to the Company and/or our proposed membership of the Company to any third party without the Company’s prior written consent. We understand the Company will not make public our giving of this letter without our prior written consent.

We look forward to hearing from you further once you have gathered sufficient ‘GOLD’ and prospective ‘SILVER’ members.

Yours faithfully

Signed……………………………………………………

Name……………………………………………………..For and on behalf of [name of firm]

On Agent’s LetterheadNB – the Word document can be downloaded from our website.